Q3 2021 Purecycle Technologies Inc Earnings Call
Ladies and gentlemen, this is the operator today's conference is scheduled to begin shortly please continue to standby. Thank you for your patience again todays conference is scheduled to begin shortly please continue to standby. Thank you for your patience.
Speaker 1: Ladies and gentlemen, this is the operator. Today's conference is scheduled to begin shortly. Please continue to stand by. Thank you for your patience.
[music].
Speaker 2: And time.
Speaker 2: And.
Good morning, everyone and thank you for participating in today's conference call I would like to turn the call over to Mr. David Brenner as he reads the company's safe Harbor statement within the meaning of the private Securities Litigation Form Reform Act of 1995 that provides important cautions regarding forward looking.
Speaker 1: Good morning everyone and thank you for participating in today's conference call. I would like to turn the call over to Mr. David Brenner as he reads the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995.
Speaker 1: and provides important questions regarding forward-looking statements.
David Please go ahead.
Speaker 3: Great, thank you, Peter. Welcome to PureCycle Technologies' third quarter earnings conference call update. I'm David Brenner, Chief Commercial Officer. And joining me today are Chairman and Chief Executive Officer Mike Gottworth, Chief Manufacturing Officer Dustin Olson, and Chief Financial Officer Michael Dee. This morning, we will be highlighting our corporate developments for Q3.
Great. Thank you Peter welcome to pure cycle technologies third quarter earnings Conference call update I'm, David Brenner, Chief Commercial officer, and joining me today are chairman and Chief Executive Officer, Mike Got worth Chief Manufacturing Officer, Duston, Olson and Chief Financial Officer, Michael D. This morning, we will be highlighting our corporate developments for Q.
Three this presentation will be available on our IR page of our web site pure cycle Dot com. Many of the statements made today will be forward looking and are based on management's beliefs and assumptions and information currently available to management at this time the.
Speaker 3: This presentation will be available on our IR page of our website, purecycle.com.
Speaker 3: Many of the statements made today will be forward-looking and are based on management's beliefs and assumptions and information currently available to management at this time.
Speaker 3: The statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control, including those set forth in our safe harbor provisions for forward looking statements that can be found at the end of our third quarter 2021 corporate update press release and in our form 10 queue, both of which were filed yesterday, as well as in our other reports on file with the SEC that provide further detail about the risks related to our business.
The statements are subject to known and unknown risks and uncertainties, many of which maybe beyond our control, including those set forth in our safe Harbor provisions for forward looking statements that can be found at the end of our third quarter 2021, corporate update press release and in our Form 10-Q, both of which were filed yesterday as well as in our other reports on file with.
The SEC that provide further detail about the risks related to our business. Additionally, please note that the company's actual results may differ materially from those anticipated and except as required by law. We undertake no obligation to update any forward looking statements. Our remarks. Today May also include non-GAAP financial measures additional details.
Speaker 3: Additionally, please note that the company's actual results may differ materially from those you anticipated and, except as required by law, we undertake no obligation to update any forward-looking statement.
Speaker 3: Our remarks today may also include non-GAAP financial measures. Additional details regarding these non-GAAP financial measures, including reconciliations to the most directly comparable GAAP financial measures, can be found in our slide presentation and in our third quarter 2021 corporate update press release issued yesterday.
Regarding these non-GAAP financial measures, including reconciliations to the most directly comparable GAAP financial measures can be found in our slide presentation and in our third quarter 2021, corporate update press release issued yesterday, you're welcome to follow along with our slide deck, where if joining us by phone you can access it at anytime on pure cycle Dot com.
Speaker 3: You're welcome to follow along with our slide deck or if joining us by phone, you can access it at any time on purecycle.com.
We're excited to share updates from the previous quarter with you and I will now turn it over to Mike Atworth pure cycle, Chairman and Chief Executive Officer, Mike.
Speaker 3: We're excited to share updates from the previous quarter with you, and I will now turn it over to Mike Ottwirth, PureCycle chairman and chief executive officer.
Good morning, and thank you for joining us as David stated today, we will be reviewing highlights from our third quarter. We will review updates to progress on our feedstock strategy. The launch of our peers zero program with the Cleveland Browns discussed the location of our first feedstock preprocessing facility in Florida provide an update on our iron can plant.
Discuss our FDA letter of no objection and we will then dive into our customer pipelines.
Okay.
Now moving to slide number three on slide three you'll see that our 2021 Q3 highlights include wins across operations feedstock commercialization and finance will.
Speaker 4: Now, moving to slide number three on slide three, you'll see that our 2021 Q3 highlights include wins across operations, speed stock, commercialization and finance. I'll take a few moments to highlight a couple of.
I'll take a few moments to highlight a couple of key areas for you.
Executing operationally remains at the heart of everything we do here at pure cycle and despite a challenging supply chain environment, our iron from the Saudi remains on track to begin operations in Q4 of next year, we recently.
Speaker 4: Executing operationally remains at the heart of everything we do here at PureCycle. And despite a challenging supply chain environment, our Ironshore facility remains on track to begin operations in Q4 next year.
Speaker 4: We recently approved a series of additional investments in Ironton that are designed to both de-risk operations and broaden our processing capabilities to handle an ever wider range of feedback.
We approved a series of additional investments in iron term that are designed to both de risk operations and broadened our processing capabilities.
Handle an ever wider range of feedstocks.
Speaker 4: And Q1, we outlined our feedstock strategy regarding how we would target post-consumer feedstock and build an awareness for the value of number five, polypropylene plastic.
In Q1, we outlined our feedstock strategy regarding how we would target post consumer feedstock and building awareness for the value of number five polypropylene plastic.
Speaker 4: I'm excited to report that we are executing that strategy and have identified over 1.6 billion pounds of feed.
I'm excited to report that we've that we're executing that strategy and have identified over $1 6 billion pounds of feedstock since.
Since last quarter, we've signed six LOI is accounting for 168 million pounds of feedstock. These LOI will help supply our first preprocessing facility in Central Florida.
Speaker 4: Since last quarter, we've signed FICT LLIs accounting for 168 million pounds of feed stock. These LLIs will help supply our first pre-processing facility in Central Florida.
Speaker 4: Additionally, we have developed and launched our PureZero program geared toward helping make stadiums, entertainment venues, and retail more sustainable.
Additionally, we have developed and launched our pure zero program geared toward helping make stadiums entertainment venues in retail more sustainable we launched this program in partnership with the Cleveland Browns and we couldnt be more thrilled about this partnership.
Speaker 4: We launched this program in partnership with the Cleveland Browns and we couldn't be more thrilled about this partnership.
We intend for this to represent an actionable pathway for similar organizations to progress their sustainability ambitions.
Speaker 4: You know, we intend for this to represent an actionable pathway for similar organizations to progress their sustainability ambition.
Speaker 4: We launched our first commercial product with EC30, a Procter and Gamble brand that is built around sustainability. We submitted our FDA letter of no objection in September and progressed customer discussions, representing 277 million pounds across existing and new market segments using a feedstock plus pricing model.
We launched our first commercial product with the EC 30, a procter and Gamble brand that is built around sustainability, we submitted our FDA letter of no objection in September and progress customer discussions, representing 277 million pounds across existing and new market segments, using a feedstock plus pricing model.
Speaker 4: And lastly, from a finance perspective, we're ending the third quarter with $494 million in total cash and investments, and have spent $45 million progressing our key project.
And lastly from a finance perspective, we're ending the third quarter with $494 million in total cash and investments and have spent 45 million progressing our key projects.
Moving to slide four you can see pure cycle continues to expand our global footprint into markets that offer the best opportunity, we're progressing toward definitive agreements with our previously announced Mou partners and continue to evaluate additional opportunities.
Speaker 4: Moving to slide four, you can see, pure cycle continues to expand our global footprint into markets that offer the best opportunity. We're progressing toward definitive agreements with our previously announced MOU partners and continue to evaluate additional opportunities.
Slide five we highlight evolving consumer trends that drive demand for sustainable products.
Speaker 4: Slide five, we highlight evolving consumer trends that drive demand for sustainable products.
Speaker 4: As mentioned, our first commercial product hit the digital shells with EC30 shampoo dispens.
As mentioned, our first commercial product hit the digital shelves with E. C 30 shampoo dispenser.
Speaker 4: made of ultra pure recycled polypropylene produced from our irons and the fillings.
Made of ultra pure recycled polypropylene produced from our Ironton facility.
E. C 30 was really the perfect partner for our first product launches. They are equally focused on offering truly sustainable products with the smallest carbon footprint.
Speaker 4: EC30 was really the perfect partner for our first product launch as they are equally focused on offering truly sustainable products with the smallest carbon footprint.
Speaker 4: This type of product demonstrates the brand owners our resins ability to deliver exceptional aesthetic and mechanical properties. A meatboast sustainability goals and delight the consumers.
This type of product demonstrates the brand owners are resins ability to deliver exceptional aesthetic and mechanical properties that meet both sustainability goals and delight the consumer.
Speaker 4: Consumers don't want greenwashing. They don't want corporate greenwashing. They don't want greenwashing committee type. They expect companies to deliver high quality products with high percentages of recycled content. And this one proves that pure cycle products deliver on both points.
Consumers don't want Greenwashing, they don't want corporate Greenwashing. They don't want Greenwashing annuity type they expect companies to deliver high quality products with high percentages of recycled content.
And this launch proves that pure cycle products deliver on both points.
And now just in Olson, our Chief manufacturing officer will discuss our execution progress across these goals Boston. Thank you Mike as you can see we continue to expand our footprint in the United States and around the globe. Our first commercial facility and Ironton, Ohio is well underway and expected to be operational in the fourth quarter of 2022.
Speaker 4: And now Dustin Olson, our chief manufacturing officer, will discuss our execution progress across these goals. Dustin?
Speaker 5: Thank you, Mike. As you can see, we continue to expand our footprint in the United States and around the globe. Our first commercial facility in Irons in Ohio is well underway and expected to be operational in the fourth quarter of 2022. This facility will produce 107 million pounds per year of ultra-pure recycled resin. In the second quarter of next year, in preparation for the start-up of the facility, we plan to begin Irons in feed prep operations. This will be a significant milestone for the company.
This facility will produce 107 million pounds per year of ultra pure recycled resin in the second quarter of next year in preparation for the startup of the facility. We plan to begin ironton feed prep operations. This will be a significant milestone for the company.
During the third quarter pure cycle approved additional investments at irons and focused on derisking in process expansion.
Speaker 5: During the third quarter, Purecycle approved additional investments at Ironson focused on de-risking and process expansion.
Speaker 5: which increases the total project cost by 30 to 40 million relative to the initial budget. Approximately two thirds of the additional cost represent an investment to process higher percentage of feed contaminants and process safety design improvements. While the remaining one third represents an escalation in base material pricing.
Which increases the total project cost by 30 to 40 million relative to the initial budget approximately two thirds of the additional costs represent an investment to process a higher percentage of feed contaminants and process safety design improvements while the remaining one third represents an escalation base material pricing.
Speaker 5: Purecycle has deployed a strategy for constructing plant lines that is designed to allow us to reduce the construction risk and scale more efficiently.
Pure cycle has deployed a strategy for constructing plant lines that is designed to allow us to reduce the construction risk and scale more efficiently to that end, we have invested capital to expand our construction capability to handle the build out of three full plants concurrently and also deployed the born digital platform to streamline <unk>.
Speaker 5: To that end, we have invested capital to expand our construction capability to handle the build out of three full plants concurrently and also deployed the born digital platform to streamline all construction and operational readiness activities.
All construction and operational readiness activities as we look forward to plant operation next year, we have hired approximately 15 operators and staff over the last six months. These individuals' represent critical operational roles for phase two and Ironton and are in line with our operational readiness plan.
Speaker 5: As we look forward to plant operation next year, we have hired approximately 15 operators and staff over the last six months. These individuals represent critical operational roles for phase two in Ironson, and are in line with our operational readiness plan.
Speaker 5: Our Process Safety Management and Training Development is also on track.
Our process safety management and training development is also on track our phase one Augusta, OSB, Earl and I S. B L line engineering activities are complete and efforts to progress detailed head start engineering for the long lead equipment is in process. We have engaged our key long lead strategic suppliers.
Speaker 5: Our Phase 1 Augusta OSBL and ISBL line engineering activities are complete. And efforts to progress detailed head start engineering for the long lead equipment is in process. We have engaged our key long lead strategic suppliers to ensure that our timeline is secured for mid 2023 startup. We are also finalizing engineering procurement and construction contracts and expect site work to begin in Q1 of next year.
To ensure that our timeline is secured for mid 'twenty 'twenty three startup. We are also finalizing engineering procurement and construction contracts and expect site work to begin in Q1 of next year.
Over the last quarter, our European expansion efforts have focused on site selection, we've identified five suitable locations identified feedstocks and intend to leverage the data used for our F. D. A letter of non objection submission and preparation for engaging the European food safety Authority <unk>.
Speaker 5: Over the last quarter, our European expansion efforts have focused on site selection. We have identified five suitable locations, identified feedstocks, and intend to leverage the data used for our FDA letter of non-objection submission in preparation for engaging the European Food Safety Authority, FSO.
We also made some significant announcements in Q3 as it relates to our expansion into Asia Pacific and we continued to progress our memoranda of understanding with SK geocentric in South Korea, and Mitsui in Japan, two definitive agreements.
Speaker 5: We also made significant announcements in Q3 as it relates to our expansion into Asia Pacific. And we continue to progress our memoranda of understanding with SK Geocentric in South Korea and Mitsui in Japan to definitive agreement.
Our Augusta, Georgia facility announced in July is the future home of five purification lines with space up to eight total lines. Our first five lines are designed to represent our nameplate capacity approximately 650 million pounds annually. When fully constructed we have spent much of the last quarter building.
Speaker 5: Our Augusta Georgia facility announced in July is the future home of five purification lines with space up to eight total lines. Our first five lines are designed to represent a name-plig capacity approximately 650 million pounds annually when fully constructed.
Speaker 5: We have spent much of the last quarter building out the financing package and are working to close our off-take and FeetsDuck arrangements. The details of the project financing will become clear as the debt is finalized, but for now we are assuming multiple debt draws to finance five purification lines.
[noise] out the financing package and are working to close our offtake in feedstock arrangements. The details of the project financing will become clearer as the debt is finalized but for now we are assuming multiple that draws to finance five purification lines.
We are currently in the process of building purification plants that will process. Our goal of 1 billion pounds of polypropylene waste by 2025 as you can see on slide eight we are on the path of achieving that goal. We've provided specifics about capacity by quarter and also revised the production ramp bar to show that.
Speaker 5: We are currently in the process of building purification plants that will process our goal of 1 billion pounds of polypropylene waste by 2025.
Speaker 5: As you can see on slide 8, we are on the path of achieving that goal. We have provided specifics about capacity by quarter and also revised the production ramp bar to show the timeline for name plate capacity.
Timeline for nameplate capacity you will note that we are on track for production that and that timing depends on securing debt financing as additional operations are established we will add them to this chart to map the detailed timeline.
Speaker 5: You will note that we are on track for production and that timing depends on securing debt financing. As additional operations are established, we will add them to this chart to map the detailed timeline.
I would also like to highlight the strength of our modular manufacturing strategy in a global environment, where numerous projects seem to be behind schedule and with significant cost surges, we have been able to work closely with our suppliers to limit global interruptions to schedule and cost overruns.
Speaker 5: I would also like to highlight the strength of our modular manufacturing strategy. In a global environment where numerous projects seem to be behind schedule and with significant cost surges, we have been able to work closely with our suppliers to limit global interruptions to schedule and cost overrun.
Over the last few months, you've heard us talk more and more about this prep concept I'd like to take a few minutes to highlight what a feed processing facility is and why it's important to pure cycle.
Speaker 5: Over the last few months, you've heard us talk more and more about this prep concept. I'd like to take a few minutes to highlight what a feed processing facility is and why it's important to peer cycle.
Our preps will be regional pre processing facilities that sort wash and densify feedstock to prepare for purification.
Speaker 5: Our preps will be regional pre-processing facilities that sort, wash, and densify feedstock to prepare for purification.
Speaker 5: In IARDSIN, our pre-processing facility is co-located with our purification line and is designed to process film, fiber, and mixed ridges with the capacity to deliver over 126 million pounds per year.
And Ironton, our preprocessing facility is co located with our purification line and is designed to process film fiber and mixed rigid with a capacity to deliver over 126 million pounds per year.
Our recently announced central Florida facility, which is expected to provide feedstock to our Augusta purification plant is designed to process mixed Richards, we anticipate being able to process 75 million pounds per year. Initially and then we expect to scale to 150 million pounds of capacity, we plan to initiate.
Speaker 5: Our recently announced central Florida facility, which is expected to provide feet stock to our Augusta purification plant, is designed to process mixed ridges. We anticipate being able to process 75 million pounds per year initially, and then we expect the scale to 150 million pounds of capacity.
Speaker 5: We plan to initiate commercial operations in the third quarter of 2022. We also signed an MOU with Titus, a secondary Murph operator on the West Coast.
Operations in the third quarter of 2022, we also signed an Mou with tied US a secondary murph operator on the west coast to supplement feed supply to both irons <unk> and Augusta, while building a supply source for our third U S location. This will ultimately serve to diversify.
Speaker 5: to supplement feed supply to both ironson and Augusta while building a supply source for a third US location. This will ultimately serve to diversify our overall feed system.
Our overall feed system.
Our preps allow us to do a couple of critical activities first or perhaps allow us to build strong regional relationships that might be cost prohibitive with the centralized strategy.
Speaker 5: Our PREPS allow us to do a couple of critical activities. First, our PREPS allow us to build strong regional relationships that might be cost prohibitive with a centralized strategy. Second, our PREPS allow us to customize facilities based on the feedstock in the region. And third, our PREPS allow us to minimize our carbon footprint by only shipping polypropylene to our purification facilities.
Second our perhaps allow us to customize facilities based on the feedstock and the region and third our perhaps allow us to minimize our carbon footprint by only shipping polypropylene to our purification facilities.
Speaker 5: Next I would like to share how Tansom Edifaw, our Chief Sustainability Officer, is charting a path to 1 billion pounds of polypropylene. Over the last six months, we have grown our team across several pillars to begin building our FeedsDoc network. We are optimizing our search across multiple FeedsDoc lanes in conjunction with our FeedsDoc procurement strategy.
Next I would like to share how tamsin edaphon, our chief sustainability officer is charting a path to 1 billion pounds of polypropylene.
Over the last six months, we have grown our team across several pillars to begin building our feedstock network. We are optimizing our search across multiple feedstock lanes in conjunction with our feedstock procurement strategy. We are building pure cycles relationship in the marketplace. This effort has resulted in identifying over one point.
Speaker 5: We are building Pure Cycles relationship in the marketplace. This effort has resulted in identifying over 1.6 billion pounds of feedstock. During this quarter, our team has signed letters of intent for 160 million pounds of feedstock.
6 billion pounds of feedstock during this quarter. Our team has signed letters of intent for 160 million pounds of feedstock.
We are executing against our strategy to secure feedstock from diverse suppliers across the United States and are proactively seeking to acquire three diverse types of waste streams. The first post consumer curbside pure cycles ability to process. The stream opens a wide variety of contaminated feedstocks as such.
Speaker 5: We are executing against our strategy to secure feedstock from diverse suppliers across the United States and are proactively seeking to acquire three diverse types of waste streams.
Speaker 5: The first is post-consumer curbside. Pure cycle's ability to process the stream opens a wide variety of contaminated feedstocks. As such, we have identified 270 million pounds of feedstock opportunities. 10% are diverted from landfills or incineration. We currently have 30 million pounds contracted and 14 million pounds signed under letters of intent.
We have identified 270 million pounds of feedstock opportunities, 10% are diverted from landfills or incineration. We currently have 30 million pounds contracted and 14 million pounds signed under letters of intent.
The second pillar is post consumer non curbside. This post consumer non curbside stream, we are targeting to implement we're targeting and look to implement circularity programs to date, we have identified 1.1 billion pounds of feedstock opportunities.
Speaker 5: The second pillar is post-consumer non-curbside. This post-consumer non-curbside stream, we are targeting and look to implement circularity programs.
Speaker 5: To date, we have identified 1.1 billion pounds of feed stock opportunities, 50% of which are diverted from ending up in landfills or incineration.
50% of which are diverted from ending up in landfills or incineration with this stream, we have 80 million pounds of feedstock contracted and the 154 million pounds signed under letters of intent.
Speaker 5: With this stream, we have 80 million pounds of feets.contracted and the 154 million pounds signed under letters of intent.
The third feedstock Lane is post industrial here, we are targeting volumes direct from industry and brokered waste opportunities to date, we have identified 225 million pounds of feedstock opportunities and have 100 million pounds of feedstock contracted.
Speaker 5: The third feedstock lane is post-industrial. Here we are targeting volumes direct from industry and broker-dwaist opportunities. To date, we have identified 225 million pounds of feedstock opportunities and have 100 million pounds of feedstock contract.
Speaker 5: We watch the price and availability of FeetDoc options very closely. Since the pure cycle technology can handle a wider variety of feed streams, it gives us the option to optimize into or out of feed streams. As an example, today market prices have recently risen for post-industrial waste, and we are in the process of evaluating the segment for the best opportunities to yield high volume at the best price possible.
We watch the price and availability of feedstock options very closely since a pure cycle technology can handle a wider variety of feed streams. It gives us the option to optimize into or out of feed streams. As an example today market prices have recently risen for post industrial waste and we are in the process of evaluating that.
Segment for the best opportunities to yield high volume at the best price possible.
Partnerships are a key component to our overall strategy to build awareness of pure cycle and what that means for sustainability. It's a strategy that allows us to multiply our efforts to secure feedstock worked with brands on commercial products and help us raise awareness appear cycles work to tackle the plastic waste crisis.
Speaker 5: Partnerships are a key components or overall strategy to build awareness of Purecycle and what that means for sustainability. It's a strategy that allows us to multiply our efforts to secure feedstock, work with brands on commercial products, and help us raise awareness of Purecycle's work to tackle the plastic waste crisis.
We see an opportunity to increase the awareness of pure cycles technology and increase the recycling efforts to a broader group by tapping into feedstock across sports stadiums conference and entertainment venues and even retail we launched our pure zero program. This week with an exciting partnership with the Cleveland Browns as.
Speaker 5: We see an opportunity to increase the awareness of pure cycles technology and increase the recycling efforts to a broader group by tapping into feedstock across sports stadiums, conference and entertainment venues, and even retail. We launched our PureZero program this week with an exciting partnership with the Cleveland Browns as their plastic recycling partner. PureZero is our approach to maximizing recycling and minimizing the environmental impact on these venues.
Their plastic recycling partner pure zero is our approach to maximizing recycling and minimizing the environmental impact on these venues pure cycle sustainability teams have examined the level of plastic waste generated and we see considerable opportunity to not only secure feedstock, but also forged long lasting strategic.
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Peer zero, it's just the start of our innovative approach to feedstock in raising awareness for sustainable plastic we are working with top entertainment and content creators to bring messages to kids and families across the United States through a partnership with explorer media today, we are producing a series of episodes on plastic.
Speaker 5: Pure Zero is just the start of our innovative approach to feedstock and raising awareness for sustainable plastics.
Speaker 5: Today, we are producing a series of episodes on plastic waste and pure cycles work. Our aim is not only to energize the next generation of STEM and eco-driven consumers, but also to make pure cycle a household name.
Waste and pure cycles work. Our aim is is not only to energize. The next generation of stem and eco driven consumers, but also to make pure cycle a household name.
The commercial team continues to make progress in building, our pipeline with new customers and establishing the visibility of pure cycle products in the marketplace. This is a unique time for sustainability and pure cycle is positioned to help eco focus brands meet their sustainability goals.
Speaker 5: The commercial team continues to make progress and building our pipeline with new customers and establishing the visibility of pure cycle products in the marketplace. This is a unique time for sustainability and pure cycle is positioned to help eco-focus brands meet their sustainability goals.
Early in our evolution, we saw strong interest in the packaging and consumer goods space, but its sustainability has grown from an insulated segment to a global mandate, we're starting to see interest from a broader market vertical like health and auto.
Speaker 5: Early in our evolution, we saw strong interest in the packaging and consumer good space. But a sustainability has grown from an insulated segment to a global mandate. We're starting to see interest from a broader market vertical like health and auto.
This slide slide 14 highlights the broad applications that have been made from our resin, including the first commercially available pure cycled product from blow molding to injection molding to thermal forming parts, we're targeting a broad range of applications to prove the versatility of our resin were forged.
Speaker 5: This slide, slide 14 highlights the broad applications that have been made from our resin, including the first commercially available pure cycle product.
Speaker 5: From blow molding to injection molding to thermal forming parts, we're targeting a broad range of applications to prove the versatility of our resin. We are fortunate to have strategic partners who see tremendous potential for our resin and value it brings to their customers.
Turning to have strategic partners, who see tremendous potential for our resin and value. It brings to their customers. We know the significant potential that our new or like new plastic can provide the market and we continue our pursuit of executing on the objectives, we need to bring ultra pure recycled plastic.
Speaker 5: We know the significant potential that our new, our like new plastic can provide the market. And we continue our pursuit of executing on the objectives we need to bring ultra-pure recycled plastic to brands and consumers alike.
To brands and consumers alike with that I will introduce Michael D, Our Chief Financial Officer.
Speaker 5: With that, I will introduce Michael D. Artif Financial Office.
Thank you Dustin on slide 15, we will begin with our liquidity position of $494 $1 million. This is cash on the balance sheet of this in blue on the right you will see $273 million of restricted cash and.
Speaker 6: Thank you, Dustin. On slide 15, we will begin with our liquidity position of $494.1 million. This is cash on the balance sheet. Of this, in blue on the right, you will see $273 million of restricted cash and in green on the left, $221.1 million of unrestricted cash.
In Green on the left $221 1 million of unrestricted cash.
Speaker 6: Now, the restricted cache is set aside for the IARNTON plant, and that totals 156 million. In addition to three reserves, totaling 114.8 million, and 2.2 million of others.
Now the restricted cash is set aside for the ironton plant and that totals a $156 million.
In addition to three reserves totaling $114 8 million and.
And $2 2 million of other <unk>.
Speaker 6: These reserves are required under our bond agreement.
These reserves are required under our bond agreement.
Speaker 6: our unrestricted cash of two hundred and twenty one point one million is sufficient to continue operational activities and it's expected to be supplemented with additional project financing as we build out in a gust of george
Our unrestricted cash of $221 1 million is sufficient to continue operational activities and is expected to be supplemented with additional project financing as we build out in Augusta, Georgia.
I would note that the additional $30 million to $40 million that we anticipate spending in ironton will be spread out over the coming year and will be funded from unrestricted cash.
Speaker 6: I would note that the additional 30 to 40 million that we anticipate spending in IARN 10 will be spread out over the coming year and will be funded from unrestricted cash.
In slide 16.
We review the third quarter liquidity and changes from the prior quarter.
Speaker 6: We review the third quarter liquidity and changes from the prior quarter.
Speaker 6: of the approximately 45 million of capital spent in the third quarter, 27.9 million or 62% was spent on ironton construction, which remains unscheduled for expected completion in Q4 2022.
Of the approximately $45 million of capital spent in the third quarter.
$27 9 million or 62% was spent on ironton construction, which remains on schedule for expected completion in Q4 2022.
Seven 7 million or 17% of the total spend for the quarter was spent on increasing our feed prep and future capacity.
Speaker 6: 7.7 million or 17% of the total spend for the quarter was spent on increasing our feed prep and future capacity.
Speaker 6: In this 7.7 million are two and a half million to acquire the winter garden pre-possed processing location
Polluted in this $7 7 million or two and a half million to acquire the winter garden Prepacked processing location.
Speaker 6: 2.9 million for the pre-processing facility in Iront.
$2 9 million for the pre processing facility in Ironton.
Speaker 6: and a 2.3 million investment in preparation for the Augusta bill.
And a $2 3 million investment in preparation for the Augusta build.
Finally.
Speaker 6: Finally, 9.3 million or 20% was spent on operating expense.
$9 3 million or 20% was spent on operating expenses.
Speaker 6: This includes four million for payroll it's been
This includes $4 million per payroll expenses.
Speaker 6: 1.4 million for third party service providers.
One 4 million for third party service providers.
$900000 relating to our digital strategy.
Speaker 6: $900,000 relating to our digital strategy.
And $2 9 million of other expenses, including rent and insurance.
Speaker 6: and 2.9 million of other expenses, including rent and insurance.
In summary, we are continuing to meet our commitments.
Speaker 6: In summary, we are continuing to meet our commitment.
Speaker 6: We're staffed with very highly experienced town.
We're staffed with very highly experienced talent and.
And with our engineering nearing completion for Augusta, we will be initiating the project financing process. This quarter to raise the capital to begin the procurement of the long lead time items for Augusta.
Speaker 6: And with our engineering completion for Augusta, we will be initiating the project financing process this quarter to raise the capital to begin the procurement of the long lead time items for Augusta.
Now, let me turn it over to Mike Atworth again, our CEO.
Speaker 6: Now let me turn it over to my Godworth again, our CEO .
Thank you Michael pure cycle is changing the game when it comes to plastic waste and not just in an incremental way, but in a truly transformational way.
Speaker 4: Thank you, Michael. Pure cycle is changing the game when it comes to plastic waste and not just in an incremental way, but in a truly transformational way.
We offer more than just ultra pure recycled resin, we offer an opportunity for businesses to create truly sustainable products and fully close the loop on plastic.
Speaker 4: We offer more than just ultra-pure recycled resin. We offer an opportunity for businesses to create truly sustainable products and fully close a loop on plastic.
So now I'm going to focus on a few key takeaways.
Speaker 4: So now I'm going to focus on a few key takeaways. First, our flagship facility in Ironson is well underway and is expected to be operational in Q4 2022 with a projected capacity to produce 107 million pounds of ultra-pure recycled resin. And I can't stress this enough. Our team has been and continues to be laser focused on commissioning of Plant 1 in Ironson.
First our flagship facility in Ironton is well underway and is expected to be operational in Q4 2022 with the projected capacity to produce 107 million pounds of ultra pure recycled resin.
And I can't stress this enough our team.
<unk> has been and continues to be laser focused on commissioning of plant one in Ireland.
We heavily.
Speaker 4: We heavily invested in purification capacity optimization for our ironton plant. And we're continue to do everything possible to minimize risk and ever increase the possibility that everything will start up there as planned and on fire.
We invested in purification capacity optimization for our Ironton plant.
We're continue to do everything possible to minimize risk and in.
And ever increase the possibility that everything will startup there as planned and on time.
We're deploying our feedstock strategy that aims to diversify our supply LOI is this quarter equate to 168 million pounds of feedstock.
Speaker 4: We're deploying a feedstock strategy that aims to diversify or supply. L-O-I's this quarter equates to 168 million pounds of feeds.
We're actively decentralizing, our feedstock intake process. So we can more easily and cost effectively collect plastic waste from across all U S regions.
Speaker 4: We're actively decentralizing our feed stock intake process so we can more easily and cost effectively collect plastic waste from across all US regions. As Dustin mentioned, we opened our first satellite pre-processing facility in central Florida, and we expect to have the capacity to produce up to 150 million pounds of plastic waste there.
As Dustin mentioned, we opened our first satellite preprocessing facility in Central Florida, and we expect to have the capacity to.
Produce up to 150 million pounds of plastic waste there.
And we expect to break ground and begin construction on the Augusta plant in the first quarter 2022, with the first of five purification lines expected to be completed in the second half of 2023.
Speaker 4: And we expect to break ground and begin construction on the Augusta plant in the first quarter of 2022 with the first five Durefication lines expected to be completed in the second half of 2023
Speaker 4: We have a strong customer pipeline with 277 million pounds of off-taken active discussion.
We have a strong customer pipeline with 277 million pounds of offtake in active discussion.
As promised we submitted our letter of no objection to the FDA in September.
Speaker 4: As promised, we submitted our letter of no objection to the FDA in September .
And we.
Speaker 4: And we also saw the first pure cycle product get the digital shells with the EC30's shampoo dispenser.
We also saw the first juror cycled product hit the digital shelves with EC <unk> shampoo dispenser.
Which I know have one sticking on my shower wall.
Speaker 4: which I now have one sticking on my shower wall. We've developed and deployed our PUR-0 program, the Target Plastic Waste at Stadiums, Entertainment Venues, and even at retail stores. The first team sports to adopt this program is Cleveland Browns and I anticipate the Browns will be the first of many.
And we've we've we've developed and deployed our <unk> zero program to target plastic waste that stadiums entertainment venues.
And even at retail stores.
First team sports to adopt this program as the Cleveland Browns and I anticipate the Browns will be the first of many.
And pure cycle, we know that a more sustainable planet starts with people and their relationship with the environment more than ever consumers are putting sustainability of the top of their list when it comes to where they shop and what they bought.
Speaker 4: At Pure Cycle, we know that a more sustainable planet starts with people in their relationship with the environment. More than ever, consumers are putting sustainability at the top of their list when it comes to where they shop and what they buy.
The consumer data tells the story and we know it's not just us who see the enormous potential and pure cycle.
Speaker 4: The consumer data tells the story, and we know it's not just us who see the enormous potential in pure cycle.
Speaker 4: We know there's major consumer demand for companies to truly tackle the plastic waste crisis, not just check a box to say their green.
We know Theres major consumer demand for companies to truly tackle the plastic waste prices not just check a box to say Theyre green.
While we are creating a pure cycle is more than plastic that can be infinitely sustainable, we're giving our customers and potential customers an opportunity to be deliberate when it comes to creating sustainable products that put our environment at the forefront.
Speaker 4: What we're creating at Pure Cycle is more than plastic that can be infinitely sustainable. We're giving our customers and potential customers an opportunity to be deliberate when it comes to creating sustainable products that put our environment at the forefront.
Thank you for your time. This morning, we'll now open the call up to questions.
Speaker 4: Thank you for your time this morning. We'll now open the call up to question.
As a reminder to ask a question you will need to press star one on your Touchstone phone again that is star then the number one still withdraw your question press the pound key.
Please standby, while we compile the Q&A roster.
And your first question will come from Noah Kaye with Oppenheimer. Your line is open.
Speaker 1: your first question will come from NO-OK with Openheimer.
Hi, Good morning, I have a number of operational financing questions, but we need to start with the.
Speaker 7: Good morning. I have a number of operational financing questions, but we need to start with the disclosure in the 10Q last night around the SEC investigation. What can you share with us in terms of color on the investigation? What can you share with us around scope and possible around the timing that you might be expecting for a resolution of this? In any confidence you can give investors at this point,
Disclosure in the 10-Q last night around the SEC investigation.
What can you share with us in terms of color on the investigation.
What can you share with us around scope.
And possible around the timing that you might be expecting for a resolution of this and any confidence you can give investors at this point regarding matter.
Speaker 6: Thank you Noah, it's Michael D. Let me give you the best answer that I can. As we disclosed in our 10Q, at the end of September , the SEC issued an investigative subpoena to the CEO of Pure Cycle requesting testimony in connection with an investigation.
Thank you Noah it's Michael D.
Let me give you the best answer that I can as we disclosed in our 10-Q at the end of September the SEC issued an investigative subpoena to the CEO of pure cycle requesting testimony in connection with an investigation.
This investigation is a nonpublic fact, finding inquiry.
Speaker 6: This investigation is a non-public fact-finding inquiry.
Speaker 6: We are disclosing this because we feel it is important to be transparent and to inform our shareholders of the existence of this matter.
We are disclosing this because we feel it is important to be transparent and to inform our shareholders of the existence of this matter.
Speaker 6: It is important to note that the fact finding nature of this investigation does not infer any conclusions that any violations have occurred.
It is important to note that.
But the fact finding nature of this investigation does not infer any conclusions that any violations have occurred.
The nature of a subpoena and the investigation itself is not judgmental and does not indicate a negative opinion of either the recipient or the facts of the matter.
Speaker 6: The nature of a subpoena and the investigation itself is not judgment.
Speaker 6: and does not indicate a negative opinion of either the recipient or the facts of the matter.
We will fully cooperate with the SEC.
Speaker 6: we will fully cooperate with the SEC.
I'm sure you can appreciate that we're not able to take further questions on this at this time.
Speaker 6: I'm sure you can appreciate that we are not able to take further questions on this at this time. Thanks, Noah. Your next question?
Thanks Noah.
Your next question.
Okay, we'll move on again.
Your next question will come from Gerry Sweeney with Roth Capital. Your line is open.
Speaker 1: Your next question will come from Jerry Sweeney with Roth Capital, Your Line of Z-
Speaker 8: Thanks for taking my call. It sounds like you know I've got cut off there, but
Thanks for taking my call. It sounds like you got cut off there but.
Anyhow.
Speaker 8: Anyhow, could you, I had a question around the process.
I had a question around the the process improvements at the Harrington facility.
Speaker 8: I understand that the process has allowed a higher amount of contaminated material to go through, but the question I had...
I understand that the processes allow for higher amount of contaminated material that go through but.
The question I had revolved around.
If there's higher contamination in that feedstock does not equate to a lower amount.
Purify polypropylene coming out the backend.
Just curious as to how this works and and then also maybe what your expectations are.
Return for this investment.
Yes.
Speaker 5: Yeah, so thanks, though. This is Dustin with respect to the investment that we're making in Ironson or the incremental investment we're making in Ironson. First of all, it doesn't have any impact on the backend capacity for polypropylene production.
Yeah. So thanks. This is dustin with respect to the investment that we're making in irons and or the incremental investment we're making in ironton.
First of all it doesn't have any impact on the backend capacity for polypropylene production.
Speaker 5: In fact, what it really does, it opens up the spectrum of feed that we can bring into the facility and gives us an opportunity to diversify the feed slate and be more selective with the cost profiles of the feeds that we bring in.
In fact, what it what it really does is it opens up the.
The the spectrum of feed that we can bring into the facility and gives us an opportunity to let's say diversify the feed slate and be more.
Be more selective with the cost profiles of the feeds that we bring in.
Speaker 5: It's partially that. The second piece of this is really a way to improve the operation and the process safety management of the facility. And that effectively has no capacity implication on the plant, but it improves the overall reliability of the final operation. Okay. Switching gears.
It's partially the second piece of this is really a way to improve the operation.
Process safety management of the facility.
And that effectively has no capacity implication on the plant, but it improves the overall reliability of the final operation.
Okay.
Switching gears to skate.
Geocentric Mitsui.
M O us.
I think in the press release, you stated that they are moving forward do you have any update on in terms of timing how far along these.
Agreements are from maybe Finalization any comment on that front.
Yeah. So thanks, Thanks for that question I'll say that the discussions with SK are going very well as came at two are going very well and we're progressing.
Multiple lanes to answer all the questions that they have about our company and about the technology to to get them comfortable with what we want to do together going forward at this point, we don't have a let's say a detailed timeline to share.
Speaker 5: to get them comfortable with what we want to do together going forward. At this point, we don't have a, let's say a detailed timeline to share yet, but I can't assure you that the discussions are going very well.
Yet but.
I can assure you that the discussions are going very well and we're making good progress on all fronts there.
Speaker 5: And we're making good progress on all fronts there.
Finally, I would just add that it's the reaction that we're getting as a result of their tactic respective technical teams coming here has been overwhelmingly positive so.
Speaker 4: I was just glad that it's the reaction that we're getting as a result of their respective technical teams coming here has been overwhelmingly positive. So there's good momentum behind those relationships and I think that's really all we can say with regard to timing. Got it. Final question in the also the presentation I think.
There is there's good momentum behind those relationships and.
I think thats really all we can say with regard to timing.
Got it.
Final question also in the presentation I think there was a comment that.
For the Augusta facility on time, but.
Think that hinges on.
Finalizing.
Financing project financing.
How is that coming is there any concerns that.
This may be delayed or not come in as you expected maybe debt to equity type of ratios.
Speaker 6: Yeah, thanks. It's Michael. We are just initiating the process, given that we only recently announced Augusta, we had been working on the engineering well in advance of making that announcement. And so as the engineering work begins to finish, we then have the ability to go out and engage in discussions on unconducting that project finance.
Yeah. Thanks, it's Michael.
We are just initiating the process given that we only recently announced Augusta, we had been working on the engineering.
Well in advance of making that announcement.
And so as the engineering work begins to finish we then have the ability to go out and engage in discussions on on conducting that project finance, we have capital to begin the processes, we already have announced.
Speaker 6: So we have capital to begin the process as we already have announced.
Speaker 6: But we do want to get the project financing and done. So we will be initiating discussions with both intermediaries and banks.
But we do want to get the project financing and done so we will be initiating discussions with both intermediaries and banks this quarter in order to get that get that started we take great comfort in the fact that even before there was a merger.
Speaker 6: this quarter in order to get that, get that started.
Speaker 6: We take great comfort in the fact that even before there was a merger
Speaker 6: a pipe, convertible, and all the financing that we did last year. We raised 250 million of debt in the public tax exempt market.
Our pipe convertible and all the financings that we did last year, we raised $250 million of debt in the public tax exempt market is.
Speaker 6: As I mentioned in the last quarter, those bonds have traded extremely well, trading up approximately.
I mentioned in the last quarter those bonds have traded extremely well trading up approximately <unk>.
Speaker 6: fifteen to twenty points from where they were issued and uh... and so we feel we have a very solid credit curve out there that investors will be able to look at thank you
15 to 20 points from where they were issued and and so we feel we have a very solid credit curve out there that investors will be able to look at thank you.
Got it that's it for me I appreciate it thank you.
Speaker 1: And we have a follow up question from NOAAK with Openheimer. Your line.
And we have a follow up question from Noah Kaye with Oppenheimer. Your line is open.
Thank you.
Speaker 9: Thank you. So regarding the FDA, I know while I was wondering if you could share your current expectation on timing, obviously you know you're five-holt with the FDA, but what maybe a reasonable expectation in terms of hearing, bashing, getting that letter of note text.
So.
Regarding the FDA NOL I was wondering if you could share your current expectation on timing.
Obviously you filed.
With the FDA, but.
What may be a reasonable expectation in terms of carrying back and getting that letter of no objection.
David Brenner, who you want to answer that.
Speaker 4: David Brenner, you want to answer that? Absolutely. This is David Brenner, Chief Commercial Officer. As we mentioned, we submitted it in September . We anticipate that we would have a response by the end of the year. But again, the actual time that will take the FDA to provide a response to our submission could vary. So we're hoping for the end of the year, but that could vary. That's great.
This is David Brown, our chief commercial officer.
And as we mentioned we submitted in September we anticipate that we would have a response by the end of the year, but again.
The actual time that it would take the FDA to provide a response to our submission could.
Could vary so we're hoping for the end of the year.
But that could.
That could vary.
Okay great.
Turning to <unk>.
The contracting for the offtake.
Speaker 7: contracting for the off-take. You know, just looking at the slide 13, showing that you have a display of allocated versus contracting versus relay discussions up to 625 million pounds.
Just looking at the slide 13, showing that you have the split of allocated versus contracting versus early discussions.
625.
In pounds.
Speaker 7: I guess to be helpful to understand the activity behind that, you know, you probably got prospective customers coming in, looking at the iron and iron plan. But if we give us some more indications on where some of the contracting discussions are going, what's being indicated in terms of pricing structure, you know, are more folks entering the plants now, just give us a flavor of how demand this.
I guess it'd be helpful to understand.
The activity behind that.
You've probably got Costa prospective customers coming in looking at the origin plan, but if you could give us some more indications on where some of the contracting discussions going with being indicated in terms of.
<unk> structure.
Our.
More and more folks entering the plants now just give us a flavor of.
How demand is trending.
Yes, it's a fantastic question.
Speaker 3: Yeah, that's a fantastic question though. From our standpoint, one of the things that
From from our standpoint, one of the things that.
Speaker 3: We've really been able to do over the last couple of months is host more and more of these prospective customers at the FU, which has been problematic over the last two years due to COVID.
We've really been able to do over the last couple of months as host more and more of these prospective customers at the <unk>, which has been a.
Problematic over the last two years due to COVID-19 as it relates specifically to your question around both the early discussions and contracting we follow a very straightforward process when we engage with the customer.
Speaker 3: I'd relate specifically to your question around both the early discussions and contracting. We follow a very straightforward process when we engage with a customer where we essentially talk about the key terms that are comprised of our long-term off-take agreements. We spend a number of weeks discussing what those key terms are, one of the central pillars of all of our agreements.
Where we essentially talk about the key terms that are comprised of our long term off take agreements we.
We spend a number of weeks discussing what those key terms are one of the central pillars of all of our agreements.
Speaker 3: Is this feedstock plus model, which is essentially a fixed price, plus the cost of feedstock divided by yield loss?
Is this feedstock plus model, which is essentially a fixed price plus the cost of feedstock divided by yield loss. This really allows us to mitigate the volatility that has existed over the last six months for the price of recycled polypropylene or abele of polypropylene.
Speaker 3: This really allows us to mitigate the volatility that has existed over the last six months for the price of recycled polypropylene or a bail of polypropylene.
Speaker 3: And then from there, once we sign a term sheet or have agreement on that term sheet, we provide a small sample for additional testing. And once that sample and that test is complete, we either simultaneously are progressing the commercial agreement or we then sign that commercial agreement.
And then from there once we sign a term sheet or have agreement on that term sheet. We provide a small sample for additional testing and once that that sample and that test is complete we either simultaneously or progressing the commercial agreement or we then sign that commercial agreement.
Speaker 3: And so I would describe the state of discussions today as a very strong pipeline with a number of those customers that are acknowledged on the key terms and are working towards the final details on the commercial agreement.
So I would describe the state of discussions today as a very strong pipeline with a number of those customers that are acknowledged on the key terms and are working towards the final details on the commercial agreements.
Speaker 7: Okay, and then on the bees stock side, it sounds like the
Okay.
And then on the feedstock side it sounds like the.
The largest quantity in terms of LOI is for post consumer non curbside now are those generally.
Speaker 7: The largest quantity in terms of LOIs is for post-consumer non-curb side. Now, are those generally number five, but a mixed fails? Because it certainly seems like a big part of what you've been doing of the last couple of course has been to develop more pre-processing capability, which I think includes sortation. So I guess there's just be a couple to understand the composition of the feedstock you've identified.
Number five but a mixed fails.
Because it certainly seems like a big part of what you've been doing over the last couple of quarters its been too diverse.
More preprocessing capability, which I think includes sortation. So I guess it would just be helpful to understand the composition of of the feedstock you've identified.
Thompson why don't you comment on that business teams identified chief sustainability officer.
Speaker 10: Tamsun, why don't you comment on that? This is Tamsun Ediflach's Sustainability Officer. And while our preprocessing has been somewhat focused on curbside collected because that does have great potential of growth, our L.O.I.s and our ability to find new feet has been mostly on post-consumer non-curbside.
Our pre processing has been somewhat focused on curbside collected because that does have great potential growth are.
<unk> and our ability to find new fee has been mostly on post consumer non curbside. So when you think about where price ethylene.
Speaker 11: So when you think about what pipeline is used in such a variety of places, it's used in grocery stores for the bakeries, the four of the department, the meat department, and even in the signage. And so when you think about going to an organization and say we can help you get to zero waste if you were to collect all this material, and that adds up to quite a bit of material that wasn't recycled through traditional systems before.
Using such a variety of places.
Used in grocery stores for the bakery as far as the pardon me the meat department and even in the science and so when you think about going to that organization and say we can help you get to is there a way if we were to collect all of this material.
Add that to quite a bit.
It wasn't recycled to traditional forms before.
So the Cleveland Browns and doing stadium.
Speaker 11: So, they Cleveland Browns and doing stadium service wear, doing things like super stacks across the industry, consuming different materials like coffee beans, at a Starbucks manufacturing roasting plant, goes through a lot of pipe-or-blink super stacks. And so those aren't highly contaminated. They're actually...
Service, we're doing things like super stocks across the industry consuming different materials like coffee beans at Starbucks manufacturing has been dosed in a lot of pipe Islington protection. So those arent highly contaminated actually quite often.
Speaker 11: Quite often higher percentages of pipe oakling, they're just people haven't really looked into recycling that material and that's why when we go out and identify, we're claiming we found over a billion pounds out there that might not necessarily have been identified.
Higher percentages of pipe ethylene piece.
People haven't really looked into recycling that material and that's why when we go out and identify where claiming we found over 1 billion pounds.
Might not necessarily have been quantified.
In the past.
Speaker 11: I hope that helps answer your question. It's things that have met it's intended use, but not collected in curbside. If that makes sense. Yeah, that's very helpful. Thank you.
I hope that helps answer your question.
Things that have met its intended use but not collected in curbside.
Yes, that's very helpful. Thank you.
Your next question will come from Eric <unk> with Craig Hallum. Your line is open.
Speaker 1: Your next question will come from Eric's team with Craig Hello. Your line is open.
Good morning, everyone.
Good morning, good morning.
Speaker 4: Morning. Good morning. I was wondering if you could just give a little more clarity in the release. You talk about the 200.
I was wondering if you could just give a little more clarity in the release you talk about the 200 and <unk>.
Speaker 4: seventy seven million pounds uh... where you're an active discussions is it fair to say that those uh... would all be uh... related to augusta and then you know i know in the presentation you did give kind of the pipeline by um... you know by end use but just curious if you could maybe talk about the pipeline by geography
77 million pounds, where you're in active discussions is it fair to say that.
Those would all be related to Augusta.
And then I know in the presentation, you did give kind of the pipeline by.
By end use but just curious if you could maybe talk about the pipeline by geography.
Pipeline.
Is.
Okay.
Speaker 3: However, when we look at how we're executing in Europe as well as in Asia, the right of first offers that our partners have, we're not taken into account in that 277 number.
However, when we look at how we're executing in Europe as well as in Asia.
The right of first offer is that our partners have were not taken into account in that $2 77 number.
Speaker 4: Okay, and I don't know if it was just my phone that cut out, but I did not hear the beginning of your answer there. I'm just related to the Q7. So, yeah, that 277 is really focused on the demand for a guy.
Okay, and I don't know if it was just my phone cut out, but I did not hear the beginning of the of your answer there.
Related to the 277 so.
Yes that $2 77 is really focused on the demand for four Augusta.
Speaker 4: uh... got it okay and then you know maybe just on your up i know that uh... a while back Europe was kind of top of mind then it took a back seat a little bit to augusta now it seems like it's kind of accelerated again you mentioned the identification of five sites uh... maybe just some color on how your uh... you know current customers are involved in in you know at least helping with that decision and then just maybe any thoughts on a timeline when you may come to some
Got it Okay, and then maybe just on Europe I know that.
A while back Europe was kind of top of mind, then it took a backseat a little bit to Augusta now it seems like it's kind of accelerated again you mentioned the identification of five sites, maybe just some color on how your current customers are involved in at least helping with that decision and then just.
Maybe any thoughts on a timeline when you may come to some decision.
Absolutely so in Europe.
Speaker 3: Absolutely. So in Europe , you know, part of the delay was really focused on better understanding what feedstock was available as we saw a dramatic spike in feedstock pricing as the price of It will, too.
Part of the delay was really focused on.
On better understanding what feedstock was available as we saw a dramatic spike in feedstock pricing as the price of Virgin increased.
Speaker 3: We've also learned a tremendous more amount of information as we've progressed the IARINTEN design, which has allowed us to get more specific with our requirements for a European site. And most importantly, was having the FDA letter of no objection submitted so that we can begin to prepare for engaging with us.
We've also learned a tremendous more amount of information as we've progressed the ironton design, which has allowed us to get more specific with our requirements for our European site and most importantly was having the FDA letter of no objection submitted so that we can begin to prepare for engaging with Amazon.
Speaker 3: What we've realized from talking with a number of our customers is that initial execution in Europe would be sufficient with an FDA letter of no object in hand, which was new information for us, and really kind of created a clearer path to investing in a facility in Europe .
What we've realized from talking with a number of our customers is that initial execution in Europe would be sufficient with an FDA letter of new object in hand, which was new information for us.
And really kind of created a clearer path to investing in a facility in Europe. We continued to progress site selection that network has not slowed down.
Speaker 3: We continue to progress site selection. That work has not slowed down. And from my perspective, we're quite excited at the discussions we're having on the feedstock side. Our team's been over to Europe a couple of times in the last 90 days. And are progressing both the commercial and feedstock discussions to be ready to progress site selection and begin the debt financing process.
And from from my perspective, we're quite excited at the discussions we're having on the feedstock side. Our team has been over to Europe, a couple of times.
In the last 90 days.
And are progressing both the commercial and feedstock discussions to be ready too.
Progress site selection and begin the debt financing process.
Speaker 5: This is my thought worth and just let me add this. You know, on the European side, there's a huge amount of demand, but you know, the overall equation with regard to feedstock and regulations and other elements is a bit more complicated.
This is Mike got worth and just let me add this.
On the European side, there is a huge amount of demand.
But the overall equation with regard to feedstock and regulations and other elements is a bit more complicated so even our partners and.
Speaker 5: So even our partners in Europe , who are very excited about our building capacity there, opined that because availability of feed stock is so comparatively open in North America that we should really make sure that we weren't slowing down our focus.
In Europe, who are very excited about our building capacity there opined that because availability of feedstock is so comparatively open in North America that we should really make sure that we werent slowing down our focus.
Speaker 5: on building out our footprint in North America and doing a bit of a land grab on feedstock. So we're doing that, but at the same time, we're seeing increased excitement from our European partners, the strategies coming together.
On building out our footprint in North America, and doing a bit of a.
A land grab on feedstock so we're doing that but at the same time, we're seeing increased excitement from our European partners. The strategy is coming together both in terms of feedstock in our pricing model.
Speaker 5: both in terms of feedstock and a pricing model. And so I think we are operating with renewed enthusiasm for moving the ball forward in Europe simultaneously to all the progress we're making here in North America.
So I think we are operating with renewed enthusiasm for moving the ball forward in Europe simultaneously to all the progress where we're making here in North America.
Got you no. That's helpful. Maybe last one for me and I certainly can appreciate the inability to say much more about the subpoena, but given that that was on September 30th I mean is it fair to say that if there were something in there.
Speaker 4: gotcha know that's helpful uh... maybe last month for me and i certainly can appreciate you know the the inability to say much more about the subpoena but given that that was on September thirty if i mean is it fair to say that if there were something in there uh... you know that elevated to a certain level that you would have had to disclose that uh... you know knowing that in this case you're disclosing it at your choice rather than being forced
That elevated to a certain level that you would have had to disclose that.
Knowing that in this case, you're disclosing it at your choice rather than being forced to.
Yes. Thank you for that I really hope you can appreciate that this is not something that we can comment on further at this time, we've really tried to make the disclosure.
Speaker 6: Yeah, thank you for that. I really hope you can appreciate that this is not something that we can comment on further at this time. We've really tried to make the disclosure that we feel is necessary even though not required. And we will keep people informed as we go along, but this is really as far as we can go right now. Yep. Okay. You know what we know. Yep. Thank you.
That we feel is necessary.
Even though not required and we will keep people informed.
As we go along but this is this is really as far as we can go right now.
You know what we know.
Thank you.
Your next question will come from Hamzah <unk> with Jefferies. Your line is open.
Speaker 1: next question we'll come from Hamza Masari with Jeffrey here.
Hi, This is Mario <unk> filling in for Hamzah excuse me appreciate the time.
Speaker 12: Hi, this is Mara Cordellaci, filling in for home visits. Excuse me, appreciate the time. I just want to touch on one thing in the quarter and then maybe ask two questions that are just bigger picture. I guess just the first one is around the incremental cost. I guess what's your confidence level in terms of budgeting on the cost side going forward? Do you need to revise your expectations on OPAC and CAPX? Going forward for not only Ironson, but the additional facilities?
I just wanted to touch on one thing in the quarter and then maybe asked two questions that are just bigger picture.
I guess just the first one is around the incremental cost.
I guess, what's your confidence level in terms of budgeting on the cost side going forward.
Do you need to revise your expectations on Opex and Capex going forward for not only iron, but the additional facilities.
So we continue as we as we work through the detailed engineering for Augusta, We continue to evaluate the overall capex story for that site.
Speaker 13: So we continue, as we work through the detailed engineering for Augusta, we continue to evaluate the overall CAPEX story for that site. At this point,
At this point.
Yes.
Speaker 13: You know, there are some cost increases that we have seen in base material pricing as well as a little bit of expansion of the scope as we discussed for the iron temp facility. But even with that built in, the scale efficiencies that we're going to get out of the Augusta cluster complex.
There are some cost increases that we have seen.
And base material pricing as well as a little bit of expansion of the scope as we discussed for the irons and facility.
But.
Even with that built and the scale efficiencies that we're going to get out of the Augusta cluster complex still substantially bring down the overall capex for that for that build quite substantially and then with respect to opex.
Speaker 13: still substantially bring down the overall catbacks for that build quite substantially. And then with respect to opX.
We track that.
Speaker 13: But, you know, from a labor perspective and wage rates and things like that, I mean, we track that, we watch it, but it's not a significant portion of the overall P&L for each facility. And we don't see that as a needle mover for our operation at this point.
But.
From a labor perspective, and wage rates wage rates and things like that I mean, we track that we watch it but it's not a significant portion of the overall P&L for each each facility and we don't see that as a needle mover for our for our operation at this point.
Sure.
Got it and then just my one of my follow ups again Big picture.
Speaker 12: Got it and then just one of my follow ups, again big picture. I guess particular with the...
This particular with up with.
The technology.
What could you say to help get us more comfortable with the technology and that it works and I guess this is just a question more for investors that are still newer to the story and getting used to it and kind of understanding your confidence level within it.
Speaker 12: What could you say to help get us more comfortable with the technology and that it works? And I guess this is just a question more for investors that are still nowhere to the story and getting used to it and kind of understanding your confidence level within it. I guess obviously your customers and the GVs that you're working with have done their diligence, but is there anything incremental that gives you confidence in the tech and maybe gets us even more comfortable with the tech?
I guess, obviously your customers in the JV that you are working with have done their diligence, but is there any what can you point to specifically and is there anything incremental that gives you confidence in the tech and maybe gets us even more comfortable with the tech.
Speaker 5: Thanks. This is this is my got worth. You know, I've been involved in and around early stage technologies, you know, my whole career, or at least my whole adult career.
Yeah. Thanks. This is this is Mike Wirth.
I've been involved in and around.
Early stage technologies.
My whole career or at least my whole adult career in.
Speaker 5: You know, Pure Cycle is far and away the most do diligence technology I've ever been around. And so, you know, we're supremely confident in the robustness of the technologies. And I think, you know, look to, you know, look to our investors and strategic partners and joint venture partners.
Pure cycle is far and away the most due diligence technology I've I've ever been around.
And so.
We're supremely confident in the robustness of the technologies and I think look too.
Look to our investors and strategic partners in joint venture partners.
Speaker 5: They comprise some very sophisticated companies with very deep and broad technical capabilities. You know, and they've done extensive due diligence on the technology. That extensive due diligence started at PNG before the technology was even licensed off.
They comprise some very sophisticated companies with very deep.
And broad technical capabilities.
And they've done extensive due diligence on the technology that extensive due diligence started at P&G before the technology was even license to us.
And as continued nonstop.
Speaker 5: and has continued non-stop, you know, over the seven years or so since we licensed the technology.
Over the seven years or so since we license the technology.
Speaker 5: So, you know, these partners and companies comprise.
So these companies these partners and companies comprise.
Speaker 5: you know, technical teams that have...
Uh huh.
Technical teams that have.
Speaker 5: you know, supremely good expertise and processes that involve temperature and pressure, polymers and chemicals. And so, you know, in every instance, I think it's fair to say, in every instance where we've had somebody come and do deep technical due diligence, sending teams of people to our facility in Ironson, you know, they've come back to us very quickly wanting to do something with us.
Supreme Lee good expertise and processes that involve temperature and pressure.
Polymers and chemicals and so.
Every instance, I think it's fair to say in every instance, where we've had.
Somebody come and do deep technical due diligence sending teams of people to our facility in ironton.
They've come back to us very quickly wanting to do something with us.
Speaker 5: And we've heard comments like, there are things we do today that are harder than this.
And we've heard comments like there are things, we do today that are harder than this.
Speaker 5: And what you have here really is scaling challenge, not really a core technical challenge.
What you have here really is scaling challenge not not really a core technical challenge.
Speaker 5: So, you know, I really lose no sleep over worrying about the technology. We have a very big scaling and execution challenge. There's no question about that.
No.
Really.
I really lose no sleep over worrying about the technology, we have a very big scaling and execution challenge. There's no question about that.
Speaker 5: but as far as the robustness and the realness of the technology, some of you on this call or a part of our investor day that we had in Ironton, you saw it yourself.
But as far as the robustness and the real Miss of the technology.
Some of you on this call.
Or a part of our our Investor day that we had in ironton.
You saw it yourself.
Speaker 5: We love to host people, to come and see it, because, you know, seeing is believing. And it's the real deal. It's going to transform plastic recycling. And, you know, when you ask about my confidence, I have a supreme level of confidence in that. It's not amongst our bigger challenges.
Love to host people to come and see it.
Seeing is believing.
And it's the real deal.
It's going to transform plastic recycling.
When you ask about my confidence I have is the premium level of confidence in that.
It's not amongst our bigger challenges.
Got it and then just my last one.
<unk>.
Speaker 12: again, big picture. Maybe you could just take us back to where you were in this story say a year ago and what you were saying and who you were in the company and the initiatives you laid out. And then maybe that compared that to where you are today in the story and on those initiatives. And then maybe some of the big achievements that you had over the past 12 months.
Again Big picture, maybe you can just take us back to where you were in this story say a year ago, what you were saying and who you are as a company and the initiatives you laid out and then maybe compare that to where you are today in the story and on those initiatives and then maybe some of the big achievements that <unk> had over the past 12 months.
Speaker 5: you know we we have tried very hard and per cycle from the very beginning to be careful about what we say we're going to do and the laser focused on delivering on what we've said we're going to do and i think we've we've been
We have tried very hard in pure cycle from the very beginning to be careful about what we say, we're going to do and be laser focused on delivering on what we've said, we're going to do and I think we've been.
Speaker 5: You know, true to that mission. And I continue to preach it to our team.
True to that mission and I continue to preach it to our team.
Speaker 5: And so, you know, the things that we've said we were going to achieve.
And so the things that we've said we were going to achieve.
Speaker 5: you know, keep IARNTON on schedule, identify additional locations to start to build more capacity to meet the demand.
Keep ironton on schedule.
Identify additional locations to start to build more capacity to meet the demand.
Speaker 5: increase awareness of ger cycle in terms of the potential.
Increased awareness of pure cycle in terms of the potential.
Speaker 5: to have a beneficial and transformative effect on the industry.
To have a beneficial and transformative effect on the industry.
Speaker 5: You know, we talked about the Cleveland Browns. I can tell you that there are many other organizations that we're talking to, some of which picked up the phone and called us on their own.
We talked about the Cleveland Browns I can tell you that there are many other organizations that we're talking to some of which picked up the phone and called us on their own.
Speaker 5: That will be high profile announcements when they come to fruition. So I think in addition to continuing to broaden the spectrum of customers.
That will be high profile announcements when they when they come to fruition. So I think in addition to continuing to broaden the spectrum of customers.
Speaker 5: Broaden the spectrum on the side of Feetsbuck and you know we're ever broadening the spectrum on just general awareness across different verdicts.
And the spectrum on the side of feedstock.
And we are ever broadening the spectrum on just general awareness across different verticals.
Speaker 5: of how we can have creative beneficial transformation. And as I said in my earlier comments, enable companies to do something that will be recognized as real and impactful and not, you know, anything near corporate greenwash.
Of how we can have create a beneficial transformation and as I said in my earlier comments enable companies to do something that will be recognized as real and impactful and not anything near corporate greenwashing.
Speaker 5: So, I think our progress on all of those fronts has been significant. And we'll continue to focus on what we've said we're going to do going into next year. And we welcome the scrutiny of our doing what we say. And I'll let Michael make a couple of additional comments here because I can see that he's He's one Englishman.
So.
I think our.
Our our progress on all of those fronts has been significant and we.
We will continue.
To focus on what we said, we're going to do going into next year.
<unk>.
We welcome the scrutiny of AV are doing what we say and ill, let Michael make than it did a couple of additional comments here because I can see that he is wanting to yeah.
Thank you Mike look I think it's I think it's very important to look back.
Speaker 6: Yeah, thank you Mike. Look, I think it's, I think it's very important to look back a year, year and a half from when I first signed an NDA with the company back in January 5th of 2020. And first heard about the company in December of 2019. The transformation that this company has made over the last year, year and a half, and even over the last six to nine months, has been amazing. Really nothing short of amazing. The people and I'm going to start.
A year year and a half from when I first signed an NDA with the company back in January 5th of 2020, and first heard about the company in December of 2019. The transformation that this company has made over the last year year, and a half and even over the last six to nine months.
He's been amazing really nothing short of amazing that people and I'm going to start with the people. The experience that we have at this company that sits around a table every tuesday for an hour and a half where we talk about every aspect of our business.
Speaker 6: the experience that we have at this company that sits around a table every Tuesday for an hour and a half where we talk about every aspect of our business
Speaker 6: We have in-person meetings, we do virtual meetings, but the experience around the table, working out strategies, working out challenges, working out the idea that Augusta is the place to go. Working out why we want to do a 130 million pound plant rather than 165. Working out why we want to do the feedstock plus pricing agreement going forward.
We have in person meetings, we do virtual meetings, but the experience around the table working out strategies working out challenges working out the idea that Augusta is the place to go working out why we want to do 130 million pound plant rather than a 165 working out why.
We want to do the feedstock plus pricing agreement going forward, we have decades and decades of experience sitting around this table and all of that experience is extremely entrepreneurial now.
Speaker 6: We have decades and decades of experience sitting around this table. And all of that experience is extremely entrepreneurial. Now, Larry Soma is going to come in to replace me as CFO .
Gary Soma is going to come in to replace me as CFO.
Speaker 6: The fact that we can recruit somebody of Larry's caliber.
Fact that we can recruit somebody of Larry's caliber.
From a $30 billion producer of polypropylene is something everyone. On this call should sit up and take notice of the fact that we can recruit someone at that level of their career. In addition to recruiting people with the experience of Camden or or or Dustin Olson or I could go down a named 20 other people.
Speaker 6: from a thirty billion dollar producer of polypropylene is something everyone on this call should fit up and take notice of
Speaker 6: the fact that we can recruit someone at that level of their career in addition to recruiting people with the experience of camson or or or dust in the whole sun uh... or i could go down and name twenty other people
Speaker 6: is incredible. And why do they do that? These are the people that work in the industry.
Is is incredible and why do they do that these are the people that work in the industry. They know that what we're doing can be done and it can happen and then it could get done is it easy no do we work on it together, yes, we have we modify our strategy based on market conditions, we are a learning.
Speaker 6: They know that what we're doing can be done and it can happen and it can get done. Is it easy? No. Do we work on it together? Yes. We have, we modify our strategy based on market conditions. We are a learning organization. We have incredibly strong relationships with all of our partners.
Organization, we have incredibly strong relationships with all of our partners for Mike artwork to have gotten a license from Procter and Gamble for this revolutionary technology.
Speaker 6: For my Godworth to have gotten a license from Proctor and Gamble for this revolutionary technology.
Back in 2015 is a testament to the quality of his relationships and his ability to build companies and the fact that P&G has great confidence in us. The fact that we've raised $750 million approximately over the last year year and a quarter is also a testament, yes, we will have challenge.
Speaker 6: back in 2015 is a testament to the quality of his relationships and his ability to build companies. And the fact that PNG has great confidence in us, the fact that we've raised $750 million approximately over the last year and a quarter is also a testament.
Speaker 6: Yes, we will have challenges, but I want to make it just clear to everyone that when you are inside the belly of the beast and you're sitting there at the table with your colleagues every Tuesday for an hour and a half and having conversations at midnight or two o'clock in the morning as your colleagues are overseas asking questions and looking for information. The that ability and what we're building here gives me enormous confidence.
But I want to make it just clear to everyone that when you are inside the belly of the Beast and Youre sitting there at the table with your colleagues every Tuesday for an hour and a half and having conversations at midnight or two o'clock in the morning, as your colleagues or overseas asking questions and looking for information.
That ability and what we're building here gives me enormous confidence.
Speaker 6: and I am very, very proud of where we are. Yes, we're gonna have challenges to overcome. Yes, there are things we have to deal with as a pre-revenue company. But make no mistake, when we come out and we do these quarterly updates, our number one goal is to demonstrate to you that we have laid out a plan.
And I I am very very proud of where we are yes, we're going to have challenges to overcome yes. There are things we have to deal with as a pre revenue company, but make no mistake when we come out and we do these quarterly updates our number one goal is to demonstrate to you that we have laid out a plan we have laid out our strat.
Speaker 6: We have laid out a strategy and we have milestones and goals that we are striving to reach.
<unk> and we have milestones and goals that we are striving to reach and we want to give you updates on a regular basis show a unique level of transparency like the lightest report that comes out every month and we want you to understand what we're doing and have the confidence that we're meeting our goals. The only way we can build our cause.
Speaker 6: and we want to give you updates on a regular basis show a unique level of transparency like the Lido support that comes out every month.
Speaker 6: and we want you to understand what we're doing and have the confidence that we're meeting our goals. The only way we can build our confidence in your confidence is by achieving those goals. And we focus on that as Mike said with a laser-like attention. Thank you.
<unk> and your confidence is by achieving those goals and we focus on that as Mike said with a laser like attention. Thank you.
Thank you very much.
Your next question will come from Hassan Ahmed with Alembic Global Your line is open.
Speaker 1: The next question will come from Hazan Ahmed with a name big global.
Good morning, guys.
Speaker 14: Morning guys, you know, couple of questions. One on the EP and C side of things, right? I mean, we obviously...
A couple of questions.
One on the P&C side of things right I mean, we obviously.
In today's sort of market keep hitting about all these sort of supply chain constraints and logistical constraints and the like.
Speaker 14: In today's market, keep hearing about all these supply chain constraints, logistical constraints and the like.
I just wanted to get a better sense of how you guys have structured your contracts.
Speaker 14: I just want to get a better sense of how you guys have structured your contracts.
So basically sort of.
Speaker 14: to basically sort of get some sort of assurances around the timeliness with the EPMC guys or what they're delivering in terms of building out your facilities and also being on budget in the like, particularly as we are living through these sort of unprecedented sort of situations with COVID and labor shortages and supply chain and logistical constraints in the like.
Get some sort of assurances around the timeliness with the P&C guys or what they're delivering in terms of building out their facilities and also.
Being on budget and the like particularly as we're living through these sort of.
Unprecedented gets sort of situations with COVID-19 and labor shortages and supply chain logistical constraints and the like.
Okay. So we're very aggressively.
Speaker 13: Okay, so we're very aggressively closing the EPC contract strategy for Augusta. And I would say that that activity has gone really well. We're really bridging off of our knowledge and experience from Ironson to help structure the contracts for the future. I think it's a little bit...
Closing the EPC contract strategy for Augusta.
And I would say that that's that activity has gone gone really well, where we're really bridging off of our knowledge and experience from ironton to help structure the contracts for the future I think it's a little bit.
A little bit different though we've learned so much with our experience with ironton that we're able to.
Speaker 13: It's a little bit different though. We've learned so much with our experience with Ironton that we're able to manage the key supplier relationships in a way that gives us a bit of advantage when it comes to cost and timeline for delivery of key long lead items. So.
Manage the key supplier relationships in a way that.
It gives us a bit of an advantage when it comes to cost and timeline for delivery of key long lead items. So.
Speaker 13: From an EPC perspective on guarantees for timeline and for cost, I mean, it really comes down to the long lead key pieces of equipment that we have to get on order in order to build the facility.
From an EPC perspective on guarantees for timeline and for cost I mean, it really comes down to the long lead.
Key pieces of equipment that we have to get an order in order to build the facilities.
Speaker 5: And let me just say, you know, there is these days in the current environment.
And let me just say there is these days in the current environment.
Speaker 5: buying involved selling. So selling our company and selling our opportunity compared to other opportunities that that these suppliers have in terms of who they can sell to. And Dustin and his team have done an exceptional job of traveling around the world, selling these companies on, hey, Piers cycle is the future of plastic recycling. And even though we may be a smaller customer today than some of your other options.
Buying involve selling.
Selling our company in selling our opportunity compared to other opportunities that that these suppliers have in terms of who they can sell to and Dustin and his team have done an exceptional job of traveling around the world.
Selling these companies on a pure cycle is the future of plastic recycling and even though we may be a smaller customer today than some of your other options.
Speaker 5: You know, we're going to be a very big customer in the future.
So we're going to we're going to be a very big customer in the future and he's been very successful on selling them on that and that really has largely diminished kind of the risk to us of not getting key componentry that we need.
Speaker 5: and he's been very successful on selling them on that and that really has largely diminished kind of the risk to us of not getting key component that we need. So I've been surprised that he's needed to do that, but I've also been surprised pleasantly so in the success that he and his team have been able to have.
So I've been surprised that he needed to do that.
But I've also been.
Surprised pleasantly so and the success that he and his team have been able to have.
Understood understood very helpful and as a follow up.
Speaker 14: understood, understood, very helpful. And as a follow-up, you know, on the, again, a completely uncoordinated of the sensitivity is around the SEC, SAPINA, and the like. But.
On the again that completely I'm cognizant of the sensitivities around.
The SEC subpoena and the like.
And frankly, I'm very confused about it right because look if I read the verbiage properly.
Speaker 14: I'm frankly very confused about it, right? Because look, if I read the Verbiage properly, they are questioning you about the technology and the financial projections, right? I mean, my frustration basically is, I'm a chemical engineer by training. I'm in the master's in industrial engineering. And sure, I mean, in chemical engineering school, you know, we would sit there and...
Our questioning you about the technology and the financial projections.
My frustration basically is I'm, a chemical engineer by training.
Masters Industrial engineering, and sure I mean, and chemical Engineering School.
I would sit there and.
If you look at it technology, we set up a pilot plant and we scale it up right I mean, thats the ethos of chemical engineering right.
Speaker 14: Look at a technology, we'd set up a pilot plant and we'd scale it up. I mean, that's the ethos of chemical engineering. So let's assume that these lovely lawyers from the SEC walk in and probably with no chemical engineers.
So let's assume that these lovely lawyers from the SEC walk in and.
Probably with no chemical engineering expertise.
Speaker 14: What is it that they will discover about the technology between now and Q4 2022? Right? Because at the end of the day, I mean, you guys should have your facility up and running by Q4 2022. And if it's up and running, the technology works. You've scaled it up, right? If the technology works and you've scaled it up,
Is it that they will discover about the technology between now and Q4 2022 right because at the end of the day I mean, you guys should have your facility up and running by Q4 of 2022 and if it is up and running the technology works you've scaled it up right. If the technology works and Youll scaled it up.
Speaker 14: your financial projections are correct as well because all you're doing is taking market prices or polypropylene you have contract in place for raw materials right so then the financial projections work as well.
Your financial projections are correct as well because all you're doing is taking market prices.
Preopening.
You have contracts in place for raw materials right. So at the end of financial projections work as well so.
I mean, just broad stroke, just try to help me understand what these guys are looking for.
Speaker 14: I mean just draw a stroke, just try to help me understand what these guys are looking for.
Speaker 6: Yeah, so I need to see my frustration with this.
Yeah, So I.
Let me begin my frustration with this.
Speaker 9: I do, I do, I do see your, I do see your frustration. We share it. And yes, and we share it. Look, we're not gonna discuss what the SEC is. I mean, there's a part of me that just wants to go back to my engineering school and return my degree.
I do I do I do see.
Illustration, we share it yes, and we sure look we're not going to discuss what the SEC.
As a part of me that just want to go back to my Engineering School and returned my degree.
Speaker 6: ha ha ha ha ha look we we we we can't we we can't discuss in the scc any any uh... in any more detail than we have but let me just say a couple things first of all uh... on this we have always been aware of the road killed it's out there from time to time on scaling
Well look we can't we can't discuss the FCC any any in any more detail than we have but let me just say a couple of things first of all.
On this we have always been aware of the road kill that's out there from time to time on scaling risk.
Speaker 9: That's why we spent $30 million building a fee of value. I'm talking about a valid risk, right? I mean, scaling up in engineering is a valid risk.
That's why we spent $30 million building a feedstock.
That's great I mean scaling up in engineering as a valid risk.
Yes, yes, it is and that's why the feedstock evaluation unit, which has now been running for two and a half years is so important because and that's one thing. The second thing is having people like duston Olsen and the breadth of his team on the manufacturing side coming from people who have been building polypropylene.
Speaker 9: yet yes it is and and that's why the feedstock evaluation unit which is now been running for two and a half years is so important
Speaker 9: because and that's one thing the second thing is having people like dust and ulson and the breadth of his team on the manufacturing side coming from people who have been building polypropylene plants for their entire career
<unk> for their entire career. So we have done and continue to do everything we can to mitigate and derisk that process.
Speaker 9: So we have done and continue to do everything we can to mitigate and de-risk that process.
Speaker 9: and and we try and bring to you and this additional investment that Dustin talked about is a very important element. You know, we sit and we have decisions that we have to make that I have to make a CFO about that of whether they are going to put out our investment, creating this whole investment, and that of whether they are going to put out our investment, creating this whole investment,
And we try and bring to you and this additional investment that Dustin talked about is a very important element, we sit and we have decisions that we have to make that I have to make a CFO about investments and when we have an opportunity to make an investment which increases the probability that everything will come on stream.
Speaker 9: And when we have an opportunity to make an investment, which increases the probability that everything will come on stream as expected, we will make that. And that investment that we're making in Irton is good. It's important and it's the right decision to do. And we want to be about execution.
As expected, we will make that and that investment that we're making in ironton is good it's important and it's the right decision to do.
And we want to be about execution, and that's why I always stress the quality of the people that we have here.
Speaker 9: And that's why I always stress the quality of the people that we have here.
Speaker 9: on execution i'm gonna ask dustin to just just talk for a minute about gulf
On execution I'm going to ask Duston to just just talk for a minute about golf spam and why our investment in golf span is so important.
Speaker 9: and why our investment in golf span is so important.
Speaker 13: Yeah, I mean, I would just say that everything that we do when it comes to the execution plan for this company is centered around finding efficiency.
I would just say that everything that we do when it comes to the execution plan for this company is centered around finding efficiency, okay and doing the things most efficiently. If we focus on that and then everything else will fall into place and so Michael's point about the Gulf spanned construction capacity is really two fold one.
Speaker 13: Okay, and doing the things most efficiently, if we focus on that, then everything else will fall into place. And so, Michael's point about the Gullspan construction capacity is really twofold.
Speaker 13: One, we will be able to scale more quickly with the gold span facility because we have the capacity to build three plants concurrently. So when we get the design finalized and we start building the plants, we won't have a construction capacity risk. That's good. But that's-
We will be able to scale more quickly with the Gulf spend facility because we have the capacity to build three plants concurrently so when we get the design finalized and we start building the plants, we won't have a construction capacity risk that's good but that's and that's important.
Speaker 13: That's important, but you can buy capacity in the market, what you can't buy is the institutional, let's say, experience build of the people doing that work.
But you can buy capacity in the market, which you can't buy is the institutional let's say experience build of the people doing that work and so by by concentrating our work at the Gulf spent facility one we protect our IP, but two we train people on how to build facilities.
Speaker 13: And so by concentrating our work at the Gulf Span Facility, one, we protect our IP, but two, we train people on how to build the facility. The people at Gulf Span will be building our first facility for Ironson, and then they will be building this subsequent facilities after that. And so look, that's one minor piece of the overall story of how we're going to scale efficiently. But I think it's a great example of how we're going to do it with the folks that are going to be able to
But people like Gulf spent will be building, our first facility for Ironton and then they will be building. The subsequent facilities after that and so that's one minor piece of the overall story of how we're going to scale efficiently, but I think it's a great example of how we're going to do it.
With the focus on efficiency you can say the same thing about our born digital strategy. I mean, born digital strategy is 100% focused on how do we scale most efficiently how do we ensure that the learnings from one plant get applied to the second plant how do we ensure that the training of an operator and ireton gets translated.
Speaker 13: you can say the same thing about our born digital strategy me born digital strategy is one hundred percent focus on how to be scale most efficiently
Speaker 13: you know how do we ensure that the learnings from one plant get applied to the second plant how do we ensure that the training of an operator in irton gets translated to the training of an operator in a gustas so when we learn what works we keep when we learn what doesn't works we move on and we continue to build that institutional knowledge day in and day out
To the training of an operator in Augusta, So when we learn what works we keep when we learn what doesn't work. So we move on and we continue to build that institutional knowledge day in and day out.
Speaker 13: you know the these two strategies in particular are are really key foundational items key keep pillars to us doing this efficiently and if we keep efficiency at the center of every decision that we make you know our view is that we can't lose
These two strategies in particular are really key foundational items key pillars to us doing this efficiently and if we keep efficiency at the center of every decision that we make.
Our view is that we can't lose.
Very helpful guys. Thank you so much.
Your next question will come from Steve Byrne with Bank of America. Your line is open.
Speaker 1: Your next question will come from Steve Barn with Bank of America.
Yes.
Yes, I wanted to drill in a little bit about the technologies that you've been looking at.
Speaker 15: Yes, I wanted to drill in a little bit about the technology that you've been looking at for a...
Sure.
Pre processing and I know youre looking at a variety of technologies.
Speaker 15: pre-processing and I know you're looking at a variety of technologies.
Are you seeing any.
Speaker 15: Are you seeing any technologies that are kind of rising to the top that you think will likely be, you know, the technology you employ in these trees processing plants that are best able to sort the P.P. from the P.E. and so forth? Or would you characterize this as still fairly...
Any technologies that are kind of rising to the top of that you think will likely be.
Uh huh.
The technology, you employ and news these trees processing plants that are best able to store. The P. P from the P/e and so forth or would you characterize this as still.
Early early in.
Speaker 15: the review of these technologies and new entrants in the industry to develop these technologies. And do you anticipate your having ownership of these technologies or is this all going to be like?
The review of these technologies and new entrants.
In the industry to develop these technologies.
Do you anticipate.
Hugh how bidding.
Ownership of these technologies or is this all going to be licensed.
And it's a good question I'll, let Dustin and maybe Thompson may want to add something as well, but I would say on our team.
Speaker 5: It's a good question. I'll let Dustin and maybe Tamsen may want to add something as well, but I would say on our team, we've seen everything probably that exists and we have the kind of the resident knowledge of everything that's existed probably going back 30 years to the present and how it's evolved and kind of what's out there in terms of kind of on the horizon.
We've seen everything probably that exist and we have.
The resident knowledge of everything Thats existed probably going back 30 years to the present and how it's evolved.
And kind of what's out there in terms of kind of on the horizon.
Speaker 5: So I'll let Dustin start by with his perspective on your question.
I'll, let I'll, let duston start by with his perspective on your question, Yes, I think I think it's really important to start with let's say why there isn't or why some of the polypropylene doesn't get mined out of the waste today.
Speaker 13: Yeah, I think it's really important to start with, let's say why there isn't, or why some of the polypropylene doesn't get mined out of the waste today. The reason that that hasn't happened at scale today is because there hasn't been a technology on the market that could transform a wide variety of plastic feedstock into an ultra-peer recycled polypropylene product.
The reason that that hasn't happened at scale today is because there hasnt been a technology on the market that could transform a wide variety of plastic feedstock into an ultra pure recycled polypropylene product pure cycle brings that and so as a result of our technology now being available there is a.
Speaker 13: Pierce Michael brings that. And so as a result of our technology, now being available, there is a greater and greater opportunity to go find the polypropylene and bring it out of the waste and into our technology. And let me just help further distill this down to its base.
Greater and greater opportunity to go find the polypropylene and bring it out of the waste and into our technology.
Let me just help further distill this down to its basic elements. So the problem is one of technology, but that problem with the technology creates a problem on the market side, because you can't make high value products.
Speaker 5: So the problem is one of technology, but that problem with the technology creates a problem on the market side because you can't make high value products that demand a premium price out of low quality, recycled polypropyl.
That demand a premium price out of low quality recycled polypropylene.
Speaker 5: And what we're doing is we're enabling our customers to make products of the highest quality, hence they're willing to pay more for the recycled polypropylene, which means we can pay more for the feedstock, and it creates a whole new viable business ecosystem.
And what we're doing is we're enabling our customers to make products of the highest quality. Hence they are willing to pay more for the recycled polypropylene, which means we can pay more for the feedstock and it creates a whole new viable business ecosystem that didn't exist in the past and if you ask somebody.
Speaker 5: that didn't exist in the past. And if you ask somebody like one of our partners on the processing side of the company called Rumpke and if you ask them, well, why aren't you pulling the polypropylene out of your Cincinnati operation? And they'll say, well, because we haven't had consistent demand from a customer like what you're telling us you're willing to do. That's never existed in the past.
Like one of our partners on the processing side of the company called called <unk>, and if you ask them well why aren't you pulling the polypropylene out of your out of your Cincinnati operation and they'll say well because we haven't had consistent demand from our customer like what you are.
Telling us they are willing to do that has never existed in the past.
Speaker 5: And so, you know, we are creating a transformation in the supply chain.
So.
We are creating a transformation in the supply chain.
Speaker 5: And at its core, it's being driven by our rather revolutionary technology.
And.
At its core it's being driven by our rather revolutionary technology, yes.
Speaker 13: Yeah, and I would say that as we now bring that technology to market and we look to how we collect and aggregate this type of, this type of mall.
I would say that as we now bring that technology to market and we look to how we collect and aggregate this type of.
This type of molecule.
Speaker 13: Much of what we're doing is really just deploying traditional technologies in the feed pre-processing area. This is not, in many cases, it's not brand new tech that we need to prove out in order to make this work. This is established tech with very low risk of operation. We just need to get it out there to go find the polypropylene.
Much of what we're doing is really just deploying traditional technologies and the feed preprocessing area. Okay. This is not in many cases, it's not brand new tech that we need to prove out in order to make this work. This is established tech with very low very low risk of operation, we just need to get it out there.
To go find the polypropylene the second the second point is something we mentioned in the script, which was.
Speaker 13: the second the second point is something we mentioned in the script which was you know depending on the
Depending on the feedstock.
Speaker 13: available for recycling or the feedstock available for us to purchase. It may require a unique type of processing in order for it to be prepared for the purification facility. A good example of that are net
Available for recycling of the feedstock available for us to purchase it may require a unique type of processing in order for it to be to be prepared for the purification facility. A good example of that our nets and ropes fishing nets and ropes used to tie off cruise ships and things.
Speaker 13: and ropes, fishing nets, and ropes used to tie off cruise ships and things like that. Like, that is a very unique product.
That that is a very unique product and so in order to.
Speaker 13: And so in order to pre-process that to get it ready for purification, it takes a unique processing step to do it. So in each region where we set up these satellite prep facilities, we will evaluate what is around us and what we will need to put in place in order to process the feed that's available.
Pre process that to get it ready for purification. It takes a unique processing steps to do it so in each region, where we set up these satellite prep facilities, we will evaluate what is around us and what we will need to put in place in order to process to feed that's available.
The last thing I'll mention is just respect to let's say emerging technologies on the advanced sortation.
Speaker 13: The last thing I'll mention is just respect to, let's say, emerging technologies on the advanced sortation space. There are some that we are evaluating, robotics and AI and things like that are definitely hitting the market and they have real nice potential and promise.
Base. There are some that we are evaluating robotics and AI and things like that are definitely hitting the market and they have real nice potential and promise, we actually have some advanced recycling technology.
Speaker 13: We actually have some advanced recycling technology that we have discussed and shown everybody and actually built at our aranxing facility to test out and we're seeing good success with that. So I think the important thing is that we will continue to survey.
That we have discussed and shown everybody and actually built at our R&D facility to test out and we're seeing good success with that so I think the important thing is that we will continue to survey the market for what technologies are available for us to deploy to process, the polypropylene and preparation for.
Speaker 13: The market for what technologies are available for us to deploy, to process the polypropylene and preparation for the purification.
The purification and.
Speaker 13: And we will advance certain in-house technologies, like the one that we built at P4, and we will leverage the experience and the offerings from those in the market to help us as well.
And we will advance certain in house technologies like the one that we built at <unk> and we will leverage the experience and the offerings from those on the market to help us as well.
I hope that.
Is your question.
Speaker 11: I was just going to agree that the last point that's in made I felt like it moved us the most that we have put in equipment already that kind of puts us ahead in sorting. I would say post consumer cryptside material in comparison to what's out there today. And you know, I feel confident about being able to add on to that as we build.
I was just going to agree that the last point Dustin made I felt like the.
The most that we have put in equipment already that.
Kind of puts US ahead, and sorting I would say post consumer curbside material in comparison to what's out there today and.
I feel confident about being able to add on to that as we built.
Speaker 11: as these new equipment become available in a more robust way. I think AI is still a little bit behind the scene, but it's getting there. Next question.
These new equipment.
Come available in a more robust way I think AI is still a little bit behind the scene, but it's getting there.
Next question.
Your next question will come from Thomas Boyes with Cowen <unk> Co. Your line is open.
Great. Thanks for taking my questions.
Speaker 16: Great, thanks for taking my questions. Obviously most have been asked already, but there's a couple things that you wanted to drill down.
Obviously, most have been asked already but theres a couple of things I just wanted to drill down.
Speaker 16: particular. I just noticed that the European stability is I think now was the 107 million pounds of capacity and I believe it was one per year before. So I was wondering if you just address the capacity shift there, you know, about a function of what you think you can secure as far as feed-spots concern. There's a demand to just picking the iron-chim design over a cluster facility or their specific site.
Particular.
I just noticed that the European facilities, I think now with the 107 million pounds of capacity and I believe it was 130 before US I was wondering if you could just address the capacity shifts there is that a function of what you think you can secure as far as feedstocks concern or is it demand is it just picking the orange and design cluster facility is there a specific site.
Great.
So to be honest with you.
Speaker 13: To be honest with you, the decision between 107 and 130 is still, let's say, yet to be made. We have the capability to deploy both technologies, and ultimately it's going to come down to a decision between available seed stock that we can process as well as speed.
The decision between 107% to 130.
Is still let's say yet to be made.
We have the capability to deploy both technologies and ultimately it's going to come down to a decision between.
Available available feedstock that we can process as well as speed if.
Speaker 13: If we get enough Feets.contracted to support 130 million pound plant, then we'll do it, but if we can get started with 107 million pound plant, then we may make that decision. I will remind you.
If we get enough feedstock contracted to support 130 million pound plant then we'll do it but if we can get started with 107 million pound plant. Then we may make that decision I will remind you that when we made the decision to go from 107 to 130, we actually use.
Speaker 13: that when we made the decision to go from 107 to 130, we actually use quite a lot of the same design from the 107 and just alter it a little bit to push it to 130. So it's feasible to say that we could make some small modifications.
Quite a lot of the same design from the 107, and just alternate a little bit to push it to 130. So it's feasible to say that we could make some small modifications later in the process in order to make the decision between 107 and $1 30.
Speaker 13: Later in the process in order to make the decision P107 and 130
Got it that makes sense.
Speaker 16: got it on my hands. Let me just sticking on the European market really quickly, but given the letter of no objection that you have with the FDA, if you do attract that when you submit to the European Food Safety Authority, or if you kind of wait for that official sign-off, and then submit everything on to you and you already have all kind of the technical data that you submitted to the FDA.
Just sticking on the European market really really quickly but.
Given the letter of no objection that you have with the FDA do dual track that when you submit to the European food safety authority or do you kind of weak or that official sign off and then submit everything.
We already have all the technical data that you submitted to the FDA.
Yes, I think from our standpoint, we're preparing to engage with axa, but we believe we'll have the best path forward with FDA letter of no object in hand, so right now we're working through a lot of preparation activities to to begin the engagement, but have not begun the formal engagement.
Speaker 3: Yeah, I think from our standpoint, you know, we're preparing to engage with F stuff, but we believe we'll have the best path forward with FDA, letter of no object in hand. So right now, we're working through a lot of preparation activities to begin the engagement, but have not begun the formal engagement.
Speaker 13: And I think that much of the information required to submit for the FDA is similar to the information that will be required for FSA. And so the work done once does not need to be redone. And that's why we think that there's benefits leveraging the FDA for FSA.
And I think that much of the information required to submit for the FDA is similar to the information that will be required for <unk> and so the work done once does not need to be redone and that's why we think that theres benefits leveraging the FDA for <unk>.
Great point.
Great I appreciate the color there.
Speaker 16: I appreciate the color there. Then the other thing is just to be a bit more granular on the two thirds of the cap increase of non-associated kind of with that inflationary cost on construction, I would imagine that the majority of that's related to the feedstock contaminant processing and not safety, but maybe I'm wrong, it's not like adding more handrails to the facility. Are they linked in some way? Then I'm not appreciating.
The other thing is just to be a bit.
Were granular on the.
Two thirds of the increase upon associates and what that inflationary cost construction I would imagine that you already have that's related to the feedstock contaminant processing and not safety, but maybe I'm wrong. It sounds like adding more handrails thats to the facility I think linked some way that I'm not appreciating.
Speaker 13: no yeah no no there were really two distinct paths and i would uh... maybe point out one key differentiation when we talk about process safety that's that that has a lot to do with the reliability of the plant the uh...
No.
No there really two distinct paths and I would maybe point out one.
Key differentiation when we talk about process safety, that's that has a lot to do with the reliability of the plant.
Speaker 13: The insurance that the operation of the plant will be safe and reliable on an ongoing basis. It has less to do with the occupational safety risk, like handrails and things like that. The cost profile for that activity really hasn't changed too much.
The insurance that the operational plant will be safe and reliable on a ongoing basis. It has less to do with the occupational safety risks like handrails and things like that but the cost profile for that activity really hasnt changed too much.
Speaker 13: With respect to the two thirds versus one third. I mean for sure the two thirds is
With respect to the two thirds versus one third I mean for sure. The two thirds is.
Speaker 13: Let's say, mostly the expansion of feed processing activities and then popped off with the process safety. And then the one third has to do with material escalation across the overall plant. I mean, look, we've had some suppliers that have come to us and said, hey, look, we can't deliver the equipment at the price we originally.
Let's say, mostly the expansion of feed processing activities.
Then topped off with the process safety and then the one third has to do with material escalation across the across the overall plan.
We've had we've had some suppliers that have come to us and said Hey look we can't deliver the equipment at the price. We originally quoted you and we won't.
Speaker 13: quoted you and we won't because the material price is higher than the final product price. And so, you know, we have to make a decision there whether to try to find someone else that can do it or recognize that this is a market and adjust our pricing for that equipment to keep the timeline.
The material prices higher than the final product price and so we have to make a decision there whether to try to find someone else that can do it or recognize that this is a market and adjust our pricing for that equipment to keep that to keep the timeline.
Makes sense.
Speaker 16: And this is the movie, the final one, you sent you to highlight it kind of 1, 2, 2, 2, 2, as a key financing window. And with the five lines in Augusta, you supported by about three debt draws. Is there a specific amount of capital that you kind of need to secure in that time frame against those long lead time items? Or is this really still TBD based on from the engineering work that still has to happen in that looking?
Maybe the final one you since you had highlighted kind of <unk> 2022 as a key financing window.
With the five lines in Augusta supported.
Supported by the three that draws.
Is there a specific amount of capital that you kind of need to secure in that timeframe against those long lead time items or is this really still.
TBD based on some of the engineering work that still has to happen in that location.
Yes.
Speaker 13: Yet, so I would say that, you know, with respect to when the capital needs to be deployed, we really didn't speak in too much detail around the key supplier relationship here, but the reality is that when you look at the curve for spending across the plant,
So I would say that.
With respect to when the capital needs to be deployed we really didn't speak.
In too much detail around the key supplier relationship here, but the reality is that when you look at the curve for spending across the plant.
Speaker 13: And then you dissect that down to a curve for spending across each piece of equipment. You recognize that...
And then you you dissect that down to a curve for spending across each piece of equipment.
You recognize that.
Speaker 13: you know, not not not a lot of capital needs to be deployed immediately most of the work that gets done at this stage in the game is detailed engineering and so we can progress the timeline before we have the final financing because it's a relatively low amounts of capital required to do so.
Not a lot of capital needs to be deployed immediately most of the work that gets done at this stage in the game is detailed engineering and so we can progress the timeline before we have the final financing because its a relatively low amount of capital required to do so.
<unk>.
Speaker 13: So that's how I would answer it. I mean, for sure we need to secure financing in the Q1 window, but by not having the financing today, does not mean that we are slowing down on the Augusta build at all.
So.
That's how I would answer it I mean for sure we need to secure financing.
In the Q1 window, but but by not having the financing today does not mean that we are slowing down on the Augusta build at all.
Speaker 16: Right now I appreciate the call. That was it for me.
I appreciate the color that was it for me.
Again, if you would like to ask a question you May press star one on your telephone keypad.
Speaker 1: Again, if you would like to ask a question, you may press the star one on your telephone.
And your next question will come from Barry Haimes with Sage asset management.
Speaker 1: Question will come from Barry Hamed with Sage S.
Speaker 13: Thanks so much. I have a question back on the scaling up.
Thanks, so much.
Question <unk>.
Back on the scaling up.
Speaker 13: question if you will. So as you're going through the build process at IARN10.
A question if you will.
So as you're going through the build process and ironton.
Speaker 13: How many different key processes are there? Will you be able to validate some of those as you go or is it a more situation where you get to the end, you turn the key and see if it works? So just would love any kind of feel for.
Or how many sort of different key processes are there and will you be able to validate some of those.
As you go or is it.
More of a situation where you get in you turn the key and see if it works. So just would love any kind of feel for.
Speaker 13: You know how you guys think about validating the different processes and how much before that final end date, some of that you might be able to do.
How you guys think about validating the different processes.
How much before that final end date.
Some of that.
You might be able to do some of that thanks.
I think the the first separation on the processing is between the prep, what we call the prep and what we call the purification.
Speaker 17: I think the first separation on the processing is between the prep, what we call the prep and what we call the purification.
The.
Speaker 17: The prep activities we mentioned in Ironson will or should begin operation in Q2 of next year. And that will be the first proof point on the equipment that we purchased for preparing the feed for the purification. So we'll know pretty early in the course of 2022, how well the pre-processing area is working. And that's really good because that takes that level of, let's say,
The prep activities, we mentioned and ironton will or should begin operation in Q2 of next year.
And that will be the first proof point on the equipment that we purchased for preparing the feed for the purification. So we'll know pretty early.
In the course of 2022.
Well the preprocessing areas working.
And that's really good because that takes that level of let's say skill build learn and.
Speaker 17: skill build, learn and, let's say, operational risk off the table by the time the purification plant is ready to go.
Operational risk off the table by the time the purification plant is ready to go when the purification plant finishes construction and we do all of the necessary, let's say mechanical commissioning tests like <unk>.
Speaker 17: When the purification plant finishes construction, and we do all the necessary, let's say mechanical commissioning tests like...
Speaker 17: You know, making sure vows operate the right direction, make sure things are wired up properly, make sure we pass pressure tests and things like that. Then there will be a series of process commissioning steps that start.
Making sure valves operate the right direction make thing make sure things are wired up properly make sure we pass pressure test and things like that then there will be a series of process commissioning steps that start.
Speaker 17: And part of that will be processing virgin polypropylene to ensure the flow works properly through the plant. And then we will over the course of the process commissioning step add different levels of, let's say,
Part of that will be processing Virgin polypropylene to ensure the flow works properly through the plant and then we will over the course of the process commissioning step add different levels of let's say.
Speaker 17: fully recycle, let's say normal feed stock to the process to test the rest of the operation. So that's the best way to answer that question. Great, thanks. Appreciate the color.
Really recycle, let's say normal feedstock to the process too.
Test the rest of the operation so.
There is I'd say, that's the best way to answer that question.
Great. Thanks, I appreciate the color.
Excuse me speakers I am seeing no further questions at this time you may continue.
Speaker 5: If we have no further questions, we'll adjourn this call. Thanks to everybody for joining us today. And we continue to appreciate your interest.
If we have no further questions. We'll adjourn this call. Thank thanks to everybody for joining us today and we continue to appreciate your interest.
This concludes today's conference call. Thank you for participating you may now disconnect.
Okay.
Yes.
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