Q4 2024 PureCycle Technologies Inc Earnings Call

Operator: Ladies and gentlemen, thank you for standing by.

Ladies and gentlemen, thank you for standing by welcome to the pure cycle technologies fourth quarter 'twenty 'twenty four corporate update call. At this time all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session.

Operator: Welcome to Purecycle Technology's fourth quarter 2024 corporate update. At this time, all participants are in a listen-only mode.

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again.

To ask a question during the session you will need to press star one on your telephone you wouldn't hear an automated message advising you're hanging just right to withdraw your question. Please press star. One wanted again, please be advised that today's conference is being recorded.

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Michelle: I would now like to turn the conference over to your speaker today, Eric DiNatale, Director of Investor Relations. Please go ahead. Thank you, Michelle.

I would now like to turn the conference over to your Speaker today, Eric to now lead director of Investor Relations. Please go ahead.

Eric: Thank you Michelle welcome to pure cycle technologies fourth quarter of 2020 for corporate update conference call.

Eric DiNatale: Welcome to Purecycle Technology's fourth quarter 2024 Corporate Update conference call. I'm Eric DiNatale, Director of Investor Relations for Purecycle. And joining me on the call today are Dustin Olson, our Chief Executive Officer, and Jaime Vasquez, our Chief Financial Officer. This morning we will be highlighting our corporate developments for the fourth quarter of 2024. The presentation we'll be going through on this call can also be found on the investor tab at our website at purecycle.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.

Eric Kelly: I'm, Eric Kelly director of Investor Relations for pure cycle and joining me on the call today are duston Olson, our chief Executive Officer, and Jamie Vazquez, Our Chief Financial Officer.

Eric Kelly: This morning, we will be highlighting our corporate developments for the fourth quarter of 2024.

The presentation will be going through on this call can also be found on the investor tab at our website at pure cycle Dot com.

Eric Kelly: 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.

Eric DiNatale: 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 and forward-looking statements. We found at the end of our fourth quarter of 2024 corporate update press release that was filed this morning, as well as in other reports on file with the SEC that provides 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.

Eric Kelly: 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 provision and forward looking statements that can be found at the end of our fourth quarter of 2020 for corporate update press release that was filed this morning as well as in other reports on file with the SEC provides further detail.

Eric Kelly: The risks related to our business.

Eric Kelly: 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.

Eric DiNatale: Our remarks today may also include preliminary non-GAAP estimates and are subject to risk and uncertainty. including, among other things, changes in connection with quarter-end and year-end adjustments. Any variation between Purecycle's actual results and the preliminary financial data set forth herein may be material. You're welcome to follow along with our slide deck. Or if you're joining us by phone, you can access it at any time at purecycles.com.

Eric Kelly: Our remarks today May also include preliminary non-GAAP estimates and are subject to risks and uncertainties.

Including among other things changes in connection with quarter end and year end adjustments.

Eric Kelly: Any variation between pure cycle as actual results and the preliminary financial data set forth herein may be material.

Eric Kelly: You're welcome to follow along with our slide deck.

Eric Kelly: If you are joining us by phone you can access it at anytime at pure cycle Dot com.

Eric DiNatale: We are excited to share updates from the previous quarter with you.

Eric Kelly: We're excited to share updates from the previous quarter with you.

Dustin Olson: I will now turn it over to Dustin Olson, Purecycle's Chief Executive Officer. Thank you, Eric.

Speaker Change: I'll now turn it over to Dustin often hear cycles, Chief Executive Officer.

Dustin Olson: And by the way, welcome to Pure Cycle. The fourth quarter was an exciting time for Purecycle. With continued momentum across our business. This is a testament to the hard work and dedication of our team. And as I look around the company, I can see we are all increasingly energized as we enter this new chapter.

Dustin Oftenhear: Thank you Eric expand by the way welcome to pure cycle.

Speaker Change: Fourth quarter was an exciting time for pure cycle.

Speaker Change: With continued momentum across our business, which is a testament to the hard work and dedication of our team and as I look around the company I can see we are all increasingly energized as we enter this new chapter.

Dustin Olson: Before we get into the specific quarterly details, I think it's worth taking a step back to frame the progress we have made and to share why we believe so strongly in the future of Purecycle. It's never easy to bring a first of its kind technology to the market. But the last year and a half of ramping Ironton has shown the strength of our team through tremendous grit, determination, and innovative spirit. All of this is foundational and will serve us well into the future.

Speaker Change: Before we get into the specific quarterly details I think it's worth taking a step back to frame. The progress we have made in the share why we believe so strongly in the future of pure cycle.

Speaker Change: It's never easy to bring a first of its kind technology to the market.

Speaker Change: But the last year and a half of ramping ireton have shown the strength of our team through tremendous grit determination and innovative spirit. All of this is foundational and will serve us well into the future.

Dustin Olson: With our first meaningful purchase order from Drake, we are now entering into a new period of commercialization. I'm incredibly pleased with the progress made so far and excited with what is to come. As we have previously discussed, the potential market for recycled polypropylene is enormous, with virgin markets soon to exceed 200 billion pounds globally. Plastic waste disposal and sustainability continues to be an unsolved problem, despite pushes from policymakers. polypropylene is still less than 1% recycled on a global basis. of the polypropylene, which is recycled, it is generally done so through mechanical process. and is of lesser quality than bird.

Speaker Change: With our first meaningful purchase order from Greg We are now entering into a new period of commercialization of origin I'm incredibly pleased with the progress made so far and excited about what is to come as.

Speaker Change: As we have previously discussed the potential market for recycled polypropylene is enormous with Virgin market soon to exceed 200 billion pounds globally.

Speaker Change: <unk> waste disposal and sustainability continues to be an unsolved problem. Despite pushes from policymakers polypropylene, it's still less than 1% recycled on a global basis.

Speaker Change: Propylene, which is recycle it is generally done through mechanical processes.

Speaker Change: And is of lesser quality than Virgin.

Dustin Olson: Dissolution technology is a unique technology segment that fits between mechanical and chemical recycling technologies, and more efficiently checks the boxes of yield, quality, and carbon footprint. Simply stated, we believe this technology stands alone. Inside this space, Purecycle's technology is leading the market as the only dissolution process which can produce at industrial scale and meet customers' often stringent quality needs. We are thrilled to be in commercialization, finding so much success and adoption within commercialization, and believe our success in the next chapter will allow for decades of profitable economy. The feedback from our customers has been incredibly positive, with many saying that our product meets the qualities of virgin material and some even saying that our compounds exceed the qualities of virgin.

Speaker Change: This solution technology is a unique technology segment that fits between mechanical and chemical recycling technologies and as more and more efficiently checks the boxes of yield quality and carbon footprint.

Speaker Change: <unk> stated we believe this technology stands alone and.

Speaker Change: Inside this space peer cycles technology is leading the market as the only dissolution process, which can produce at industrial scale and meet customers often stringent quality leads we are thrilled to be in commercialization finding so much success in adoption within commercialization and believe our success in the next chapter.

Speaker Change: Allow for decades of profitable expansion.

Speaker Change: The feedback from our customers has been incredibly positive with many saying that our product meets the qualities of Virgin material and some even saying that our compounds exceed the qualities of Virgin materials.

Dustin Olson: Our list of potential customers continues to grow. We are engaged in more than 20 trials with more than 10 in later stage industrial trials with significant volume potential. And I'm incredibly impressed by our technical team's ability to meet spec requirements across numerous industries and applications.

Speaker Change: Our list of potential customers continues to grow we are engaged in more than 20 trials with more than 10, and later stage industrial trials with significant volume potential and I'm incredibly impressed by our technical teams ability to meet spec requirements across numerous industries and applications.

Dustin Olson: And let me just say this person. This has been so much fun. There is nothing more gratifying than seeing a decade of work turn into a product that customers are excited. This initial phase of development has been time consuming, but our successful qualifications of new applications is opening large channels of demand for our product that will serve us well for Ironton and beyond.

Speaker Change: And let.

Speaker Change: Let me just say this personally.

Speaker Change: This has been so much fun, there's nothing more gratifying than seeing a decade of work turned into a product that customers are excited about this.

Speaker Change: This initial phase of development has been time consuming but our successful qualifications of new applications is opening large channels of demand for our product that will service well for iron 10 and beyond.

Dustin Olson: Since we became a public company, we've learned a lot about recycled plastic ecosystem and made many strategic decisions to best position ourselves to capitalize and monetize the incredible opportunity in front of us. What has emerged is a vertically integrated strategy that connects our business from the purchase of bales to the sale of compounded material, and then to our customer's product that you see in the store. This approach has several key benefits. First, it is designed to give us control over our own destiny as we enter a nascent and ever-evolving feedstock market. Second, it gives us broader access to customer applications through a compounding strategy.

Speaker Change: Since we became a public company, we have learned a lot about recycled plastic ecosystem and made many strategic decisions to best position ourselves to capitalize and monetize the incredible opportunity in front of us.

Speaker Change: What has emerged as a vertically integrated strategy that connects our business from the purchase of bales to the sale of compounded material and then through our customers' product that you see in the store.

Speaker Change: This approach has several key benefits first it is designed to give us control over our own destiny as we enter a nascent and ever evolving feedstock market second it gives us broader access to customer applications through our compounding strategy.

Dustin Olson: Third, we believe that there are incremental economic returns at each stage of the vertical. This is most clear in our compounding operations, where we see an increasing portions of volumes going, but we also see additional opportunities in feedstock preprocessing operations as well. And fourth, given our technology's feedstock flexibility, we see strong ability to expand the technology globally.

Speaker Change: Third we believe that we are an increment that there are incremental economic returns at each stage of the vertical.

This is most clear in our compounding operations, where we see an increasing portion of the volumes going but we also see additional opportunities in feedstock pre processing operations as well.

Speaker Change: <unk>, given our technologies feedstock flexibility, we see strong ability to expand the technology globally. This will allow us to create one of the worlds first vertically integrated global recycling companies capable of supplying product to the global brands around the world.

Dustin Olson: This will allow us to create one of the world's first vertically integrated global recycling companies capable of supplying product to the global brands around the world.

Dustin Olson: We are also very excited about the substantial progress that has been made in Ironton. As I explained at the Ironton Showcase Day back in March last year, we expect operational progress to follow an S-curve. Slow initial movements improvements followed by a stage of rapid acceleration. With meaningful improvement in max rates as well as on stream time, we believe we are in the latter phase, and we have line of sight to moving toward nameplate capacity. As we have brought Ironton into commercial operations, we made the strategic decision to hold back some of the sales to achieve higher value for the product as we sell into the market.

Speaker Change: We are also very excited about the substantial progress has been made in Ireland as I explained at the origin showcase day back in March last year, we expect operational progress to follow an S curve with slow initial movements improvements followed by stage of rapid acceleration with meaningful improvement in Max rates.

Speaker Change: As well as on screen time, we believe we are in the latter phase and we have line of sight to moving towards nameplate capacity.

Speaker Change: As we brought <unk> into commercial operations, we made the strategic decision to hold back some of those sales to achieve higher value for the product as we sell into the marketplace.

Dustin Olson: We know our resident is PCR compliant and we know PCR compliance generates values for our customers. We also know that many customers require third party validation and thus have made the decision to hold the inventory until we receive the certification to maximize value in the company. We're in the process of acquiring third party certification. Expect it will retroactively apply to the 7.2 million pounds of finished product in inventory and currently expect to receive it toward the end of Q1.

Speaker Change: We know our resin as PCR compliant and we know PCR compliance generate values for our customers. We also know that many customers require third party validation and thus have made the decision to hold the inventory until we received a certification to maximize value in the company. We're in the process of acquiring third party certification expect it will retro.

Speaker Change: Actively apply to the $7 2 million pounds of finished product in inventory and currently and currently expect to receive it towards the end of Q1.

Dustin Olson: I think it's useful to go into more detail surrounding the customer application process and how we proceed from initial interest to a firm purchase. The first step is an iterative phase of pilot trials, where our technology and compounding teams work diligently with the customer to find the formulation that meets the requisite product specifications. This part is the most time-consuming, it requires a very focused discussion to fully understand exactly what the customer requires, and it's the most complex part of our process that can take up to six months. The good news is that after we qualify a product application with one customer, the time frame should be substantially reduced and shortened with future customers.

Speaker Change: I think it's useful to go into more detail surrounding the customer application process and how we proceed from initial interest to a firm purchase order.

Speaker Change: First step is an iterative.

Speaker Change: Iterative phase of pilot trials, where our technology and compounding teams worked diligently with the customer defines the formulation that meets the requisite product specifications. This parts of the most time consuming it requires a very focused discussion to fully understand exactly what the customer requires and is the most complex part.

Speaker Change: Our process that can take up to six months.

Speaker Change: The good news is that after we qualify our product application with one customer the timeframe should be substantially reduced and shortened with future customers. We are already seeing this play out with fiber, where we accelerated the qualification process with numerous other customers subsequent chart Drake successes.

Dustin Olson: We are already seeing this play out with Fiverr, where we accelerated the qualification process with numerous other customers subsequent to our Drake success. We then enter industrial trials, where we run at full-scale production to ensure product viability at the customer's commercial-level volumes. This stage generally takes less time than the initial phase and is usually completed in one to three months, though this also should shorten after initial application success. Upon the completion, the successful completion of this phase, the commercial ramp begins and we can build to fill to full customer volume target.

Speaker Change: Then enter industrial trials, where we run at full scale production to ensure product viability at the customer's commercial level volumes. This stage generally takes less time than the initial phase and is usually completed in one to three months, though this also should shorten after initial application success.

Speaker Change: Upon the completion.

Speaker Change: The successful completion of this phase the commercial ramp begins and we can build fulfill two full customer volume targets.

Dustin Olson: Our relationship with Procter & Gamble continues to be extremely strong.

Our relationship with Procter and Gamble continues to be extremely strong.

Dustin Olson: As filed in an 8K earlier this week, we have recently amended our license agreement, which concludes the North American requirements to secure exclusivity and provides additional exclusivity as we pursue expansion into other regions. This agreement is a testament to our strong working relationship and our shared excitement about the success going forward. We're entering into industrial trials for five different applications with P&G, all of which are well-known consumer brands. This shows we're not only gaining momentum with P&G, we're also gaining momentum with specific brands within P&G. The current goal is for full approval early in Q2, and we will then ramp sales into year end.

Speaker Change: As filed in an 8-K earlier this week, we have recently amended our license agreement, which includes the North American requirements to secure exclusivity and provides additional exclusivity as we pursue expansion into other regions. This agreement is a testament to our strong working relationship and our shared excitement.

Speaker Change: The success going forward, we're entering its industrial trials for five different applications with P&G all of which are well known consumer brands. This shows for not only gaining momentum with P&G. We're also gaining momentum with specific brands with and PNG.

Speaker Change: The current goal is for full approval early in Q2, and we will then ramp sales into year end.

Dustin Olson: Note, this is only the first phase of work with P&G, and there are more than twice the number of applications not listed here that are currently in earlier stages. We believe this puts us on track to get the full PG allocation by year end.

Speaker Change: Note. This is only the first phase of work with P&G and there are more than twice the number of applications not listed here that are currently in earlier stages. We believe this puts us on track to get the full PPG allocation by year end.

Dustin Olson: We are extremely grateful for the collaboration and hard work from our largest partner and excited for what is about to come.

Speaker Change: We are extremely grateful for their collaboration and hard work from our largest partner and excited for what is about to come.

Dustin Olson: We are very happy to succeed in qualifying fiber applications and announcing a commercial order with Drake Extrusion. The fiber market is an extremely challenging application to enter with recycled material. As discussed before, recycled resins typically carry excessive ash and contaminants that makes this a very difficult process. Our purification process was able to remove these contaminants, produce a resin that is greater than 99% pure, and our team worked with Drake to compound a resin that performed like a virgin material, or in their words, better than the virgin resin. We ran industrial scale trials to successfully produce staple fibers and continuous filament yarns.

Speaker Change: We are very happy to succeed and qualifying fiber applications and announcing a commercial order a drink extrusion with.

Speaker Change: The fiber market is an extremely challenging application to enter with recycled material.

Speaker Change: As discussed before recycled resins, typically carry excessive ash and contaminants that makes this a very difficult process.

Speaker Change: Our purification process was able to remove these contaminants producer resin that is greater than 99% pure and our team worked with Drake to compound a resin that performed like a virgin material.

Speaker Change: Or in their words better than the Virgin resin, we ran industrial scale trials to successfully produce staple fibers and continuous filament yards. This ultimately led to their first purchase order, which we announced in late January.

Dustin Olson: This ultimately led to their first purchase order, which we announced in late January. Drake Extrusion is part of a larger global conglomerate, but the Virginia facility alone that qualifies the Purecycle material currently purchases 60 to 70 million pounds of polypropylene per year. We're excited to continue to partner and look to scale our business with Drake into the future, and we continue to work on other product applications in their portfolio.

Speaker Change: Drake extrusion is part of a larger global conglomerate, but the Virginia facility alone that qualified the pure second material currently purchase and 60% to 70 million pounds of polypropylene per year.

Speaker Change: We're excited to continue to partner and look look to scale, our business with Drake into the future and we continue to work on other product applications in their portfolio are.

Dustin Olson: For those of you who haven't seen it, we've provided a link at the bottom of this slide to our recent interview with the CEO of Drake, where we discussed our relationship and the use of our purified resin in their facility. Over the course of the quarter, we compounded approximately 4 million pounds of material for fiber application. The Drake purchase came out of that material.

Speaker Change: For those of you who haven't seen it we provided a link at the bottom of this slide to a recent interview the CEO Drake where.

Speaker Change: We discussed our relationship and the use of our purified resident in their facility.

Speaker Change: Over the course of the quarter, we compounded approximately 4 million pounds of materials for fiber applications. The Drake purchase came out of that material and since the announcement. Other customers are also starting to pull on the inventory.

Dustin Olson: And since the announcement, other customers are also starting to pull on the We also recently announced our first commercial product line, Run It Back. with Churchill Container. Churchill is the leading manufacturer of all of your favorite local and national souvenir cups and containers. This new product line is made of Pure5 resin and was able to meet strict product requirements around odor, color, and processability. We are incredibly excited to get this product onto the market, particularly in front of the upcoming baseball. We estimate that most professional sports teams in the big four sports in North America use about 50,000 to 100,000 pounds of resin in their souvenir containers each season.

Speaker Change: We also recently announced our first commercial product line run it back with.

Speaker Change: With Churchill container Churchill is the leading manufacturer of all of your favorite local and national Souvenir Cups and containers. This new product line is made of pure five resin and was able to meet strict product requirements around odor color and process ability we are incredibly excited to get.

Speaker Change: This product onto the market, particularly in front of the upcoming baseball season, we estimate that most professional sports teams and the big four sports in North America use about 50% to 100000 pounds of resin and Theyre souvenir containers each seed season.

Dustin Olson: When you add to that Churchill's presence in college sports, live events, movie theaters, conventions, and convenience stores, we believe the commercial opportunity here is quite large and they could be a significant customer for Iron Man. Since the announcement, Churchill has already received the first commitment from a professional sports team, and more than 10 other professional sports teams have already submitted inquiries to Churchill. They are a great partner. We are thrilled to see this relationship grow. And while the customers are sensitive to managing the balance between overall cost and value creation, Churchill has seen no pushback from their customers on premium resin.

Speaker Change: When you add to that Churchills presence and college sports live events movie theaters conventions and convenience stores. We believe the commercial opportunity here is quite large and they could be a significant customer for ironton since.

Speaker Change: Since the announcement Churchill has already seen the first commitment from a professional sports team and more than 10 other professional sports teams have already submitted enquiries for Churchill.

Speaker Change: They're a great partner, we are thrilled to see this relationship grow and while the customers are sensitive to managing the balance between overall cost and value creation Churchill has seen no pushback from their customers on premium resin pricing.

Dustin Olson: We currently are underway with 29 trials with potential customers, of which 16 on an industrial scale.

Speaker Change: We currently are underway with 29 trials with potential customers.

Of which 16 on an industrial scale and this is just the tip of the iceberg.

Dustin Olson: And this is just the tip of the ice. The total volume potential volume from these trials is one is on the total volume potential from these trials is based on one the applications we are testing and to the customers stated market intentions and it is approximately 250 to 500 million pounds per year at steady state. We also have customer interest in 42 trials that should begin soon and these applications could unlock north of 1 billion pounds of demand. The progress that has been made on this front gives us tremendous amount of confidence that we can sell out Ironton in the near future.

Speaker Change: The total volume potential volumes from these trials is one is on the total volume potential from these trials is based on one the applications. We are testing and to the customers stated market intentions and it has approximately 250 to 500 million pounds per year at steady.

Speaker Change: State. We also have customer interest in 42 trials that should begin soon and these applications could unlock north of 1 billion pounds of demand there.

Speaker Change: Our progress has been made on this front gives us tremendous amount of confidence that we can sell out ironton in the near future success. In these trials should accelerate the need for our global expansion as our ability to supply our customers stated needs will be constrained.

Dustin Olson: Success in these trials should accelerate the need for global expansion as our ability to supply our customers stated needs will be constrained.

Dustin Olson: Bridget, let's let's go through a few of these sectors. Rigid Packaging is the largest market for polypropylene in North America at roughly 3.8 billion pounds per year. By unlocking access to this large premium part of the market, we can go a long way to successfully ramping our commercial operation at attractive units. We are currently engaged in seven pilot application trials and five industrial This includes large CPGs and one of the largest converters in the country and successful conversion here can unlock over 200 million pounds of customer demand. The flexible packaging market, or FILM, represents a significant opportunity for us.

Richard: Richard Let's go through a few of these segments rigid packaging is the largest market for polypropylene in North America at roughly three 8 billion pounds per year.

Richard: By unlocking access to this large premium part of the market. We can go a long way to successfully ramping our commercial operations at attractive unit margins. We are currently engaged in seven pilot application trials and five industrial trials. This includes large cpg's and one of the largest convert.

Richard: <unk> in the country and successful conversion here can unlock over 200 million pounds of customer demand.

Richard: Flexible packaging market or film represents a significant opportunity for us many CPG customers. Many CPG companies have a strong appetite for recycled content, but face limited access to high quality recycled solutions last quarter, we discussed the path for develop.

Dustin Olson: Many CPG customers, many CPG companies, have a strong appetite for recycled content, but face limited access to high-quality recycled solutions. Last quarter, we discussed the path for development here, and we have remained on track with those We've developed a 30% PCT content compound that we feel good about for various flexible applications and are currently engaged in two pilot trials. with additional trials set to begin soon. This is a massive, largely under-supplied market with very high demand. And pending the results of these early trials, we are well-positioned to capitalize.

Richard: And here and we have remained on track with those estimates we've developed a 30% PCT contact compound content compound that we feel good about from various flexible applications and are currently engaged in two pilot trials.

Richard: With additional trials set to begin soon this is a massive largely under supplied market with very high demand and pending the results of these early trials, we are well positioned to capitalize on.

Dustin Olson: The non-woven and other fiber markets represent approximately 1.9 billion pounds in North America and roughly 6.8 billion pounds globally. And of that, only 0.3% is made up of recycled content in 2024. We are incredibly excited about a recent success at Drake, and this announcement has accelerated commercial interest across other interested parties, both in parallel to Drake and downstream of Drake. This has shortened the approval process for others, and we are engaged in seven industrial trials, which should be completed in the coming months. This has also created the opportunity to direct sell to end market brands that you can find in your local big box stores.

The non woven and other fiber markets represent approximately $1 9 billion pounds in North America, and roughly $6 8 billion pounds globally and of that only 0.3% is made up of recycled content in 2024.

Richard: We are incredibly excited about our recent success at Drake and this announcement has accelerated commercial interest across other interested parties, both in parallel to Drake and downstream a drag.

Richard: This is shortened the approval process for others and we are engaged in seven industrial trials, which should be completed in the coming months.

Richard: This has also created the opportunity to direct sales and market brands that you can find in your local big box stores.

Dustin Olson: The automotive market is another important market for Purecycle to target future sales. The industry's trend in lightweighting to improve fuel economy has created the need for increasing plastic content in cars. Currently, there is approximately 100 pounds of polypropylene per car, and we believe it will continue to grow. Additionally, as proposed regulation in Europe and Japan aims to have 25% recycle content per vehicle in 2030. While the final form of the legislation is still to be determined, we see increased urgency to find reliable, high-quality recycle solutions from automotive manufacturers, particularly those in Europe and Japan, and those with global platforms. Europe is expected to produce over 16 million vehicles in 2025, growing to over 18 million in 2030.

Richard: Motive market is another important market for pure cycle to target future sales the industry's trend in light weighting to improved fuel economy has created the need for increasing plastic content in cars.

Richard: Currently there is approximately 100 pounds of polypropylene per car and we believe it will continue to grow. Additionally, as proposed regulation in Europe, and Japan, and Japan aimed at 25% recycled content per vehicle in 2030.

Richard: While the final form of the legislation is still to be determined we see increased urgency to find reliable high quality recycled solutions from automotive from automotive manufacturers, particularly those in Europe, and Japan, and those with global platforms Europe is expected to produce over 16.

Richard: Vehicles in 2025 growing to over $18 million in 2030.

Dustin Olson: It's with that context that we are incredibly excited by our successful production of a compound with Washington pin to create a bumper fascia for one of the largest global automotive manufacturers. This is a major step forward for our use of recycled content in the automotive industry. As you know, automotive quality standards are among the highest in the world. Using post-consumer recycle, or PCR, as a feedstock for parts is incredibly challenging for traditionally recycling programs. Typically, automotive manufacturers face challenges with paint adhesion, scrap rate, and consistency, or are limited by highly restricted feedstocks when using other recycling techniques.

Richard: With that context that we are incredibly excited by our successful production of a compound with Washington pin to create a bumper fascia for one of the largest global automotive manufacturers. This is a major step forward for our use of recycled content in the automotive industry.

Richard: As you know automotive quality standards are among the highest in the world using post consumer recycle or PCR as a feedstock for parts is incredibly challenging traditionally recycling programs.

Richard: Typically automotive manufacturers face challenges with paint adhesion scrap rate and consistency or are limited by highly restricted feedstocks when using other recycling techniques. However.

Dustin Olson: However, With the compound and PCT's product, we see very good success across all these quality components. This application was comprised primarily of purified resin, which was compounded with other non-polypropylene components to make the final bumper. We expect further safety testing to be completed in the coming months with approval scheduled later in 2025. While there is no change in interest from the customer, there is still an open discussion on whether it will be introduced into this model in mid 2025 or in the next model, which is slated to start production in late.

Richard: With the compound and Pct's product, we see very good success across all of these quality components.

Richard: This application was comprised primarily of pure <unk> resin, which was compounded with other non polypropylene components to make the final bumper.

Richard: We expect further safety testing to be completed in the coming months with approval scheduled later in 2025.

Richard: While there is no change in interest from the customer there is still an open discussion on whether it will be introduced into this model in mid 2025 or in the next model, which is slated to start production in late 2025.

Dustin Olson: It's important to note the scale of this opportunity. Global demand for just one bumper fascia on one vehicle model is roughly 30 million pounds per year with 15 million for North America alone. With this case, both the addressable volume and the margin opportunity driven by regulation has the potential to be a very strong component for the Purecycle strategy in the coming For more information visit www.purecycle.com The bottom line for all of our commercial activity is this, while initial qualification can be time intensive, it is a necessary undertaking for us to unlock and enhance the value of our resin.

Richard: It is important to note the scale of this opportunity global demand for just one bumper fascia on one vehicle model is roughly 30 million pounds per year with $15 million for North America alone.

Richard: This case, both the addressable volume and the margin opportunity driven by regulation has the potential to be a very strong component for the pure cycle strategy in the coming years.

Richard: The bottom line for all of our commercial activity is this while initial qualification can be time intensive it is a necessary undertaking for us to unlock and enhance the value of our resin to date. We've had good success and frankly, we've succeeded at every application we've tested even if it's.

Dustin Olson: To date, we've had good success, and frankly, we've succeeded at every application we've tested, even if it's taken a few iterations to get there. Based on customer interest and success we've achieved across numerous applications, we see even higher demand for our product today. Given the supply and demand imbalance in the market, the high percentage of applications that are FDA continues to provide the confidence in our unit margins and growth. On the operational front, we're really excited about the progress we've made since our last update. We continue to pace Ironton production to match the commercial ramp.

Richard: Taken a few iterations to get there based on customer interest and success, we've achieved across numerous applications, we see even higher demand for our product today, given the supply and demand imbalance in the market. The high percentage of applications that are FDA continues to provide the confidence in our unit margins.

And growth to come.

Richard: On the operational front, we're really excited about the progress we've made since our last update we continue to pace ironton production to match the commercial ramp we produced $3 6 million pounds in Q4, and there is tremendous improvement under the surface. There are three areas that highlight our increased confidence in the past.

Dustin Olson: We produced 3.6 million pounds in Q4, and there is tremendous improvement under the surface.

Dustin Olson: There are three areas that highlight our increased confidence in the path to nameplate capacity and meeting our customers' needs. First, we have continued to improve our maximum achieved feed rate. This is really exciting. As nameplate capacity is now in sight, each time we reach new heights, we learn more about our facility's potential. Second, our reliability is improving significantly. This is appropriately measured by on-stream time, which is almost 70% in December, a new monthly high. We expect to continue to see quarter-over-quarter reliability improvements, and we'll update the market on our performance as each quarter concludes. Finally, our quality metrics continue to improve as well.

Richard: Nameplate capacity and meeting our customers' needs first we have continued to improve our maximum achieve feed rate. This is really exciting as nameplate capacity is now inside each time, we reached new heights, we learn more about our facility's potential.

Richard: Our reliability is improving significantly this is appropriately measured by on stream time, which is almost 70% in December a new monthly high we expect it to continue to see quarter over quarter reliability improvements and we'll update the market on our performance as each quarter concludes.

Richard: Finally, our quality metrics continue to improve as well this is practically seen and our ability to qualified customer applications. But is also seen in the pellets with improvements in opacity in order. This is a direct result of the investment that we made in Denver in our flex, earning operations coming online and improved operating performance at <unk>.

Dustin Olson: This is practically seen in our ability to qualify customer applications, but is also seen in the pellets with improvements in opacity and odor. This is a direct result of the investment that we made in Denver and our flake sorting operations coming online and improved operating performance at Ironton. Running PCR feed is much harder than running post-industrial recycle or PIR. And yet the PP we are producing is over 99% pure compared to mechanically recycled product with which is typically in the 90 to 95% Given we are now running almost exclusively very challenging PCR feedstocks, this operational progress is even more exciting to our team and really increases our confidence for Ironton and beyond.

Richard: Ironwood.

Richard: Running PCR feeds it's much harder than running postindustrial recycled RP IR and yet the pp. We are producing is over 99% pure compared to mechanically recycled product, which is typically in the 90% 95% range. Given we are now running almost exclusively.

Richard: Very challenging PCR feedstocks. This operational progress is even more exciting to our team and really increases our confidence for ireton and beyond.

Dustin Olson: We also ramped our compounding activities in Q4 to £4 million, which is helping our customer qualification efforts. As I've mentioned before, the domestic market for compounding capacity is in excess, and we secured £5 million per month of local compounding capacity at very attractive unit economics. This is an exciting development and is making the theoretical economic benefit of compounding very real. We are also finding additional sales channels for our co-products from the purification process, as well as the excess PET and PE and other saleable materials from our purchased bales. Approximately 5% of our feed to purification goes to Co-Product 1 and Co-Product 2, and we see emerging sales channels at the $0.22 to $0.55 per pound range.

Richard: We also ramped our compounding activities in Q4 dollars 4 million pounds, which is helping our customer qualification efforts as I've mentioned before the domestic market for compounding capacity is in excess and we secured 5 million pounds per month of local compounding capacity at very attractive unit economics.

Richard: This is an exciting development and is making the theoretical economic benefit of compounding.

Richard: <unk> real.

Richard: We are also finding additional sales channels for our co products from the purification process as well as the excess PDT and P/e and other saleable materials from our from our purchase sales approximately 5% of our feed to purification goes the co product, one and co product too and we.

Richard: See emerging sales channels at the 22 to <unk> 55 per pound range. This.

Dustin Olson: This process is still being optimized, but it is a clear and exciting opportunity to further lower our net feedstock costs going forward. We have continued to spend capital on long-lead equipment for Augusta, given the progress we see in Ironton. The data that has come out of Ironton has been valuable in developing our plans for future growth.

Richard: This process is still being optimized but it is a clear and exciting opportunity to further lower our net feedstock costs going forward.

Richard: We have continued to spend capital on long lead equipment for Augusta, given the progress we see in iron.

Richard: The data that has come out of Ironton has been valuable in developing our plans for future growth. There is a lot of work going on behind the scenes. We are seeing a real opportunities to improve our project and technology execution and I can't wait to update the market on our expansion plan soon.

Dustin Olson: There is a lot of work going on behind the scenes. We are seeing real opportunities to improve our project and technology execution, and I can't wait to update the market on our expansion plan soon. This, coupled with our successes in operations and commercial efforts, are the principal reasons why we continue to invest.

Richard: This coupled with our successes in operations and commercial efforts are the principal reasons why we continue to invest.

Dustin Olson: Let me end by saying that I'm incredibly proud of how far the company has come and even more excited about the opportunity in front of us. What we have seen in the last three months has only further validated the scale of the opportunity in front of us, as well as the potential financial returns for our stakeholders.

Richard: Let me end by saying that I'm incredibly proud of how far the company has come and even more excited about the opportunity in front of us while we have seen in the last three months has only further validated the scale of the opportunity in front of us as well as the potential financial returns for our stakeholders. A company is only as good as its people we.

Dustin Olson: A company is only as good as its people. We continue to grow our talent, particularly in commercial sales and projects, and the people across the entire company are as energetic and optimistic as ever. This new chapter is an exciting one. and a bridge to becoming a unique growth concept, one that can create substantial good for the society and the world at large while generating strong returns for our state.

Richard: To grow our talent, particularly in commercial sales and projects and the people across the entire company are as energetic and optimistic as ever this new chapter is an exciting one and.

Richard: And a bridge to becoming a unique growth concepts one that can create substantial good for society and the world at large while generating strong returns for our stakeholders with that I will turn it over to Jamie for the financial presentation. Jamie. Thank you Duston on slide 10, you can see our year end liquidity position, which included <unk>.

Jaime Vasquez: With that, I will turn it over to Jaime for the financial presentation. Jaime?

Jaime Vasquez: Thank you, Dustin. On slide 10, you can see our year-end liquidity position, which included just under $16 million of unrestricted cash. As we highlighted, we raised $33 million in February by entering into subscription agreements with certain investors. This included a significant investment by Plead Investment Advisors, a Hong Kong-based fundamental investor that has done due diligence on Purecycle for a period of time. We believe that attracting a firm like Plead helps further validate the progress that Purecycle is making towards commercialization. The capital raise was also supported by Salibra Capital and Samlin Capital, who further increased their investments in Purecycle.

Jamie: Under $16 million unrestricted.

Jamie: Good cash as we highlighted we raised $33 million in February by entering into subscription agreements with certain investors. This included a significant investment by <unk> investment advisors, a Hong Kong based fundamental equity investor that has done due diligence on pure cycle for a period of time.

Jamie: We believe that attracting a firm like play at helps further validate the progress at pure cycle is making towards commercialization.

Jamie: <unk> raised was also supported by <unk> capital and San Juan the capital to further increase their investments in pure cycle.

Jaime Vasquez: In addition to the capital raise, we still hold about $118 million of revenue bonds that we anticipate to sell in 2025, which will further enhance our liquidity position. Our cash expenses for the fourth quarter totaled $68 million. This amount included about a $36 million payment, mostly for equipment related to our growth project. Adjusted for the $36 million payment, as well as the revenue bond interest payment, our cash expense for the quarter was around $27 million, which was in line with the recent previous quarter.

Jamie: In addition to the capital raise we still hold about $118 million of revenue bonds that we anticipate to sell in 2025, which will further enhance our liquidity position.

Jamie: Our cash expenses for the fourth quarter totaled $68 million. This amount included about $36 million payment, mostly for equipment related to our growth projects adjusted for the $36 million payment as well as the revenue bond interest payment our cash expense for the quarter was around $27 million, which.

Jamie: It was in line with recent previous quarters.

Michelle: Now I would like to turn the call back to Michelle to open the call for questions. Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. And to withdraw your question, please press star 11 again.

Michelle: Now I would like to turn the call back to Michelle to open the call for questions.

Speaker Change: Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced.

Michelle: Withdraw your question. Please press star one again.

Andres Sheppard: And the first question will come from Andres Sheppard with Cantor Fitzgerald. Your line is now open. Hey, everyone. Good morning and congratulations on the quarter and all the great progress. Dustin, you touched on this a little bit on your prepared remarks, you know, there's a lot of exciting information in the deck surrounding the commercial ramp. I'm wondering if you can maybe elaborate, you know, what gives you confidence about this flowing through? Thank you. Yeah, hey, thanks a lot, Andres.

Speaker Change: And the first question will come from Andres Schaeffer with Cantor Fitzgerald. Your line is now.

Andres Schaeffer: Hey, everyone. Good morning, and congratulations on the quarter and all the great progress.

Speaker Change: Dustin you touched on this a little bit on your prepared remarks.

Speaker Change: There's a lot of exciting information in the deck surrounding the commercial ramp I'm wondering if you could maybe elaborate what gives you confidence about this flowing through thank you.

Speaker Change: Yes, hey, Thanks, a lot Andreas look where we are just so excited about the application successes, we're seeing in the customer trials.

Dustin Olson: Oh, look, we are, we're just so excited about the application successes we're seeing in the customer trials. I mean, I mean, I can tell you when I went to Drake the other day and shot the video that we released a couple weeks ago, it was, it was so exciting to see our product dropped into their plant and watch the staple fiber production. It was, it was, it was exciting. And when you see that kind of success across extremely different, difficult customer applications, it gives us extreme confidence in our ability to do this. And that's just one example.

Speaker Change: <unk>.

Speaker Change: I can tell you what I went to drag the other day and shot the video that we released a couple of weeks ago. It was.

Speaker Change: It was so exciting to see our product dropped into their plant.

Speaker Change: What's the staple fiber production. It was it was it was exciting when you see that kind of success across extremely different difficult customer applications.

Speaker Change: Extreme confidence in our ability to do this and that's just one example, I mean, we see this across the board in all of the segments that I mentioned then.

Andres Sheppard: I mean, we see this across the board and all of the segments that I mentioned, and, and that's what gives us our confidence. Wonderful, that's super helpful. And again, very exciting, indeed.

Speaker Change: And Thats, what gives us our confidence.

Speaker Change: Wonderful that's super helpful and again very exciting indeed.

Jaime Vasquez: Maybe as a quick follow up, Jamie, I'm wondering if you can maybe comment a bit further on your current cash decisions and plans around financing going forward. Absolutely. I don't want to comment beyond the fourth quarter, but you know, as you saw, we ended the quarter with $15 million of unrestricted cash, and we raised another $33 million in February. We still have the revenue bonds to sell. And I'm very confident that as Ironton continues to perform the way it's been performing, and we continue to have the commercialization success, we'll be able to sell those revenue bonds near term.

Speaker Change: Maybe just a quick follow up Jamie I'm wondering if you could maybe comment a bit further on your current cash decisions and plans around financing going forward. Thank you.

Speaker Change: Absolutely.

Speaker Change: I don't want to comment beyond the fourth quarter.

Speaker Change: As you saw we ended the quarter with $15 million of unrestricted cash and we raised another $33 million in February and we still have the revenue bonds to to sell.

Speaker Change: And.

Speaker Change: I am very confident that as iron team continues to perform the way. It has been performing and we have continue to have the commercialization success, we'll be able to sell those revenue bonds.

Speaker Change: Near term.

Andres Sheppard: Got it, wonderful. Thanks again and congrats on the quarter. I'll pass it on. Yeah, thanks a lot Andres.

Speaker Change: Got it wonderful thanks, again, and congrats on the quarter I'll pass it on thanks a lot.

Hassan Ahmed: The next question will come from Hassan Ahmed with Limbic, your line is now open. Morning, Dustin. You know, fantastic seeing all the commercial successes you guys are making. You know, love the fact that you pointed out, you know, a line of sight to 250 plus million pounds of resin sales, right? And the fact that you are, you know, almost approaching nameplate utilization, right? So, so, you know, from a commercial perspective, things seem to be, you know, well on track from an operational perspective as well.

Hassan Ahmed: The next question will come from Hassan Ahmed with.

Speaker Change: Your line is now.

Speaker Change: Yes.

Speaker Change: Good morning Dustin.

Speaker Change: Fantastic seeing all the commercial successes you guys are making.

Speaker Change: Loved the fact that you pointed out.

Speaker Change: Your line of sight to 250 plus million pounds of resin sales rate and the fact that.

Speaker Change: All of them.

Speaker Change: Most approaching nameplate utilization right.

Speaker Change: So from a commercial perspective things seem to be.

Speaker Change: Well on track from an operational perspective as well.

Dustin Olson: Now, as you know, you guys are sort of hitting all of these milestones, can we revisit unit economics? I mean, what are you guys seeing in terms of sales price? What are you guys seeing in terms of feedstock costs? What are you guys in terms of potential EBITDA margins? And, you know, to use your words, you know, as you are sort of embarking on this next chapter, you know, it would be interesting to revisit, you know, where we stand in terms of unit economics.

Speaker Change: Now as you know.

Speaker Change: You guys are sort of hitting all of these milestones.

Speaker Change: Can we revisit the unit economics I mean, what are you guys seeing in terms of sales price. What are you guys seeing in terms of feedstock cost. What are you guys seeing in terms of potential EBITDA margins than usual.

Speaker Change: As you are sort of embarking on this next chapter.

Speaker Change: It would be interesting to revisit where we stand in terms of unit economics.

Dustin Olson: Yeah, look, thanks Hassan for the question. We still feel really strong about the unit economics. I mean, as we've mentioned before, there's a few key components here. One is obviously sales price. We continue to stand by the sales price that we discussed in prior public disclosures being an aggregate of like $1.36 per pound of PCTPP. So that still feels really good to us. Our variable cost components, both fixed and variable at the Ironton site, they're quite good. If we continue to find efficiencies on the utility side, those are very strong. Those are, I think we've noted this before, but those are substantially lower than what we originally estimated in the initial Ironton stuff.

Speaker Change: Yes look thanks Hassan for the question, we still feel really strong about the unit economics I mean, as we've mentioned before there is a few key components here. One is obviously sales price we continue to stand by the sales price that we discussed in prior public disclosure as being an aggregate up like $1 36 per pound of <unk>. So.

Speaker Change: It still feels really good to us our variable cost components, both fixed and variable at the irons and site. They are quite good we continue to find efficiencies on the on the utility side. Those are very strong those are I think we've noted this before but those are substantially lower than what we originally estimated.

Speaker Change: And the initial and the initial irons and stuff and then there is feedstock and on the feedstock side. What you see is a market where the number five bel is moving around quite a bit. So that's something we're paying attention to but with the integration of the Denver facility, our flaked sorting operations, our ability to compound some of them.

Dustin Olson: And then there's feedstock. And on the feedstock side, what you see is a market where the number five bale is moving around quite a bit. So that's something we're paying attention to. But with the integration of the Denver facility, our flake sorting operations, our ability to compound some of the co-products that come off of PrEP, as well as the feedstock flexibility that our technology offers, it's still very good. I mean, we view our technology as unique and the ability to run different feeds that give us cost advantage on the feedstock side, as well as gaining improved opportunities to continue to further optimize the overall site.

Speaker Change: Co products that come off of prep as well as the feedstock flexibility that our that our technology offers it's still very good I mean, we view our technology as unique and the ability to run different feeds that give us cost advantage on the feedstock side as well as gaining improve.

Speaker Change: Opportunities too.

Speaker Change: To continue to further optimize the overall site.

Dustin Olson: We feel really good about all of that. And like we've mentioned before, you know, the break-even economics for Ironton, they still look quite good at the 40 to 50% operating range, and the break-even economics for PCT, we still say are quite good at the 80 to 90% range. So Hassan, we feel really good about the unit economics, and quite frankly, the commercial successes are going to drive a lot of the top end here. And the more commercial success that we can show across a wide variety of applications, the more opportunity we're going to have to sell, to hire value creation customers that can afford to spend a bit more on the product.

Speaker Change: Feel really good about all of that and like we've mentioned before.

Speaker Change: The breakeven economics for iron they still look quite good at the 40% to 50% operating range and the breakeven economics for PCT, we still say are quite good at the 80% to 90% range. So so hassan we feel really good about the unit economics and quite frankly.

Speaker Change: The commercial successes are going to drive a lot of the top end here and the more commercial success that we can show across a wide variety of applications. The more opportunity, we're going to have to sell to higher value creation customers that can afford to spend a bit more on the product and thats going to give us a lot of flexibility.

Dustin Olson: And that's going to give us a lot of flexibility going forward, as well as fuel the growth plan for the company.

Speaker Change: Ability going forward as well as fuel the growth plan for the company.

Dustin Olson: Very helpful, and you know, just as a follow up, you know, sort of, you know, towards the end of your answer, you talked about these growth projects, obviously, with this commercial success, you know, with the operational success, you know, I'm sure there's a lot more interest now in the product in PCT and the like. So can you can you just talk a bit more about, you know, future future growth projects, maybe, you know, potentially, you know, some sort of rough timeline associated with those as well. Yeah, I mean, look, I mean, we've always said that unlocking the potential for growth was dependent on our ability to commercialize the product and run Ironton at good rates with good reliability.

Very helpful.

Speaker Change: Just as a follow up.

Speaker Change: Towards the end of <unk>.

Speaker Change: Your answer you talked about these growth projects, obviously with this commercial success.

Speaker Change: The operational success.

I'm sure there's a lot more interest now in the product and DCT and the like so can you can you just talk a bit more about.

Speaker Change: Future future growth projects maybe.

Speaker Change: Potentially some sort of rough timeline associated with doors as well.

Speaker Change: Yes, I mean look I mean, we've always said that unlocking the potential for growth was dependent on our ability to commercialize the product and run iron.

Speaker Change: At good rates with good reliability.

Dustin Olson: And we believe that we're at that turning point. Now, we believe that we're able to show the market our capability, both in terms of producing the product quality required for the customers as well as running the plant in a controlled fashion, that's going to give us access to the growth. The growth side of things like we're in a great position Okay, we have a really good relationship with our friends in Augusta and a site that's ready to go. We have a really good relationship with both the site at the Port of Antwerp, as well as the government in Belgium.

Speaker Change: We believe we're at that turning point now we believe that we're able to show the market or capability. Both in terms of producing the product quality required for the customers as well as running the plant in a controlled fashion, that's going to give us access to the growth.

Speaker Change: The growth side of things like we're in a great position.

Speaker Change: Okay, we have a really good relationship with our friends in Augusta and a site that's ready to go we have a.

Speaker Change: A really good relationship with.

Speaker Change: Both the site at the port of Antwerp, as well as the governments in Belgium there.

Dustin Olson: They're very excited for that to progress and we have a very compelling package for our European growth plan that will be quite good. And then we also have additional growth opportunities beyond Europe and the U.S. into Asia, which we're currently working on. So as you know, we've purchased a lot of the long lead equipment for two 130 million pound lines. Those are ready to go and ready to execute. And we believe the timeline to execute that will be abridged because we've already bought most of the long lead equipment for those projects. And so we're on the cusp of moving that forward.

Speaker Change: Very excited for that to progress and we have a very compelling package for.

Speaker Change: Our European growth plan that will be quite good.

Speaker Change: And then we also have additional growth opportunities beyond Europe, and the U S into Asia, which we're currently working.

Speaker Change: So.

Speaker Change: As you know we've purchased a lot of the long lead equipment for two 130 million pound lines those are.

Speaker Change: Those are ready to go and ready to execute and we believe the timelines to execute that will be a bridge because we've already bought most of the long lead equipment.

For those for those projects and so once we.

Speaker Change: So we're on the cusp of moving that forward. The other the other thing I would like to mention is just.

Dustin Olson: The other thing I'd like to mention is just about the learnings we've taken from Irons and Hassan. I mean. It's one thing to run the plant more reliably and to show that we can hit top end rates, but the data that we're collecting off of the plant gives us critical insight to the fundamentals of the plant operations that is far beyond what we've ever had in the past. And we're going to be able to leverage that information. to not only improve the design of the 130s, but also lead to enhanced designs in the future beyond the 130s that will have substantial improvements in operations, technical deployment, as well as capex per pound.

Speaker Change: It's just about the learnings we've taken from from Ironton Hassan I mean.

Speaker Change: It's one thing to run the plant more reliably and to show that we can hit top end rates, but the data that we're collecting off of the plant.

Speaker Change: Gives us critical insight to the fundamentals of the plant operation that is.

Far beyond what we've ever had in the past and we're going to be able to leverage that information to <unk>.

Speaker Change: Not only improve the design of the <unk>, but also lead to enhanced designs in the future beyond the 130 that will have substantial improvements in operations technical of deployment as well as capex per pound and so we're not going to talk too much more about the growth plan.

Dustin Olson: And so we're not gonna talk too much more about the growth plan, it's coming, but I can't wait to share that with the market.

Speaker Change: It's coming but I can't wait to share that with the market.

Dustin Olson: Extremely helpful, Dustin. Thank you so much.

Speaker Change: Extremely helpful. Justin Thank you so much.

Eric Stine: And the next question will come from Eric Stine with Craig Hallam. Your line is open. Good morning, everyone. Hey, Eric, how you doing? Hey, doing well, thanks.

And the next question will come from Eric Stine with Craig Hallum. Your line is open.

Eric Stine: Good morning, everyone.

Speaker Change: Hey, Eric how are you doing hey, it's.

Eric Stine: So maybe we could just dig in a little bit on the production side. So appreciate the, you know, the details in terms of max feed rate achieved. But just trying to put that in context, the 12,500 pounds per hour, you know, just curious, how long was that? I mean, was that a sustained run? And I guess what I'm getting at is so you did 3.6 million pounds in Q4, which I guess is roughly low teens in terms of your overall nameplate. You know, what are you shooting for in terms of that production number for Q1?

Eric Stine: Doing well thanks.

Speaker Change: So maybe we could just dig in a little bit on the production side. So appreciate the.

Speaker Change: The details in terms of Max feed rate achieved.

Speaker Change: But just trying to put that in context.

Speaker Change: 12500 pounds per.

Speaker Change: Per hour just curious.

Speaker Change: How long was that I mean was that a sustained run and I guess, what I'm getting at is so you did $3 6 million pounds in Q4, which I guess is roughly low teens in terms of your overall nameplate. What what are you shooting for in terms of that production number for Q.

Dustin Olson: Yeah, the 12.5 thousand pounds per hour was a stable production. We basically planned the test, operated that test, moved the plant up to that position and held it so we could get the required data from the plant to know how well it was operating at that position. And we were really happy about those results.

Speaker Change: One.

Speaker Change: Yes, the $12 5000 pounds per hour was a stable production.

Speaker Change: We basically plan to test operated at test move the plant up to that position and held it. So we could get the required data from the plant to know how well it was operating at that position and we were really happy about those results when it comes to.

Dustin Olson: When it comes to where we're going with overall plant rates, it's going to be driven by commercial. It doesn't make a lot of sense for us to generate product out of the plant and stack it before we have the commercial sales and the commercial applications well understood for a couple reasons. One, it's a working capital stack that we have to watch out for. But two, when you get into the development of specific customer applications, it's very specific to the application itself. And so, as we're compounding this material to meet the customer needs, we're very specific in what we want to do.

Speaker Change: Where we're going with overall plant rates, it's going to be driven by commercial okay. It doesn't make a lot of sense for us to generate product out of the plant and stack. It before we have the commercial sales in the commercial applications well understood for a couple of reasons one is it's a.

Speaker Change: Our working capital stack that we have to watch out for but too.

Speaker Change: When you get into the development of specific customer applications.

Speaker Change: It's very specific to the application itself and so as we're compounding this material to meet the customer needs we are.

Dustin Olson: And so, we want to make sure that we produce exactly what the customer is looking for at the end of the day. So, that's really what's driving our overall production. But from a basic production capability perspective, we feel very much in control of the plant. We understand the plant much better. If we tell the plant to go left, it goes left. If we tell the plant to go right, it goes right. And we know how to do that effectively. So, we're very well poised at this point to move forward as the commercial sales. Got it.

Speaker Change: We're very specific in what we wanted to do and so we want to make sure that we produce exactly what the customers looking for.

Speaker Change: At the end of the day, so thats really whats driving our overall production but from a.

Speaker Change: From a basic production and capability perspective.

Speaker Change: We feel very much in control of the plant.

Speaker Change: And we understand the plant much better if we fill the plant to go left that goes left if we tell the plans to go right that goes right and we.

Speaker Change: We know how to do that effectively so we're very well poised at this point to move forward as the commercial sales develop.

Dustin Olson: And maybe I guess just adding on there. I mean, so is it fair to you? It sounds like you feel like production levels really not the limiting factor or or much less of a limiting factor than it has been in the past. It really is getting through the qualifications, the trials, and then ramping.

Speaker Change: Got it.

Speaker Change: I guess just adding on there.

Speaker Change: Is it fair to you it sounds like you feel like production levels really not the limiting factor or much less of a limiting factor than it has been in the past it really is getting through the qualifications of the trials.

Speaker Change: And then ramping.

Dustin Olson: Ramping with a customer, how fast? But you're right, I mean, we are ready to go. And as we as we get the customer sales locked down, we know exactly what we need to make, then we'll start ramping both feedstock procurement, as well as operations along with the commercial.

Speaker Change: Ramping with the customer how fast that is yes, I think thats pretty accurate Eric I mean look we're a manufacturing facility and we will forever be working to improve the reliability of the sites and the uptime of the site and there is plenty of work that we need to do there to continue to make progress.

Speaker Change: But the items continue to get smaller and smaller and smaller and so we're getting much more articulate with the improvements that we're making and thats leading to big big gains on the on the manufacturing side, but you are right. I mean, we are ready to go and as we as we get the customer sales locked down.

Speaker Change: And we know exactly what we need to make then we will start ramping both feedstock procurement as well as operations along with the commercial.

Eric Stine: Okay, thank you. Thanks, Eric.

Speaker Change: Okay. Thank you.

Speaker Change: Sure.

Adit Shrestha: And the next question will come from Adit Shrestha with CFL. Your line is open. Good morning, thanks for taking our questions. Just quickly on the monthly cash burn, what is that currently running at? We looked at four cubes around 10 million and just want to make sure it's running at the same pace now. You did raise $33 million in February. I guess it gets you through at least first quarter, but how should we think about the re-marketing of the SOPA bonds when that actually happens? You know, based on sort of your burn rate and your expected production wrap up.

Speaker Change: The next question will come from Adam Chester.

Speaker Change: Stifel. Your line is open.

Adam Chester: Good morning, Thank you for taking my questions.

Speaker Change: Just quickly.

Speaker Change: On the monthly cash burn what is that currently running at I think.

Speaker Change: We looked at <unk> it was around $10 million and just want to make sure. It's trending at the same pace now.

Speaker Change: You did raise 33 million in February I guess, it gets you through at least first quarter, but how should we think about.

Speaker Change: The remarketing of the sofa bonds when that actually occurs.

Speaker Change: Based on sort of your burn rate and your expected production ramp up.

Jaime Vasquez: Yeah, so you're right, the cash burn has been historically has been in that eight and a half million dollar range. And now that we've brought on Denver is probably moved up into that nine, nine and a half million dollar range, but we'll get the efficiencies and the benefits of product going from Denver into the Ironton facility. And so as we move forward, you know, we've got sufficient liquidity with the revenue bonds behind us, and that'll be one avenue that we'll look to to raise additional liquidity for the balance of the year.

Speaker Change: Yes, so yes.

Speaker Change: Alright, the cash burn has been.

Speaker Change: Certainly has been in that $8 $5 million range now that we brought on Denver.

Speaker Change: <unk> moved up into that $99 $5 million range, but we will get the efficiencies and the benefits of <unk>.

Speaker Change: Product going from Denver into the Ironton facility.

Speaker Change: Sure.

Speaker Change: And so as we move forward.

Speaker Change: We've got sufficient liquidity.

Speaker Change: Revenue bonds behind us and that will be one avenue that we will look to raise additional liquidity for the balance of the year.

Jaime Vasquez: All right, and... Just maybe a quick update on Augusta. I know Dustin kind of talked about it, but just sort of now the expectation is that Augusta construction resumes. in 2025? And sort of, have you started looking at sort of the financing options? And if you have, are you seeing sort of more attractive rates in the market? Yeah, I mean Augusta project is on track. We are doing work at the site, some civil work in Augusta that will lead to preparing the site for the big project. We continue to have a good relationship with the AEDA.

Speaker Change: Alright.

Speaker Change: Just maybe a quick update on Augusta doesn't kind of talked about it but just the sort of the expectations Augusta construction resumes.

Speaker Change: Okay.

Speaker Change: In 2025 and sort of have you started looking at the financing options and if you have are you seeing sort of more attractive rates in the market.

Speaker Change: Yes.

Speaker Change: The project is.

Speaker Change: It's on track we are doing work at the site some civil work in Augusta that will.

Speaker Change: That will lead to preparing the site for the Big project.

Speaker Change: We continue.

Speaker Change: Continue to have a good relationship with the EMEA, we continue to standby.

Jaime Vasquez: We continue to stand by the timeline that we've discussed in the past, and we think that the Ironson success that we're seeing is going to lead to, like you said, improved rates for financing longer term, but also the access to the cash to continue to progress that project.

Speaker Change: The timeline that we've discussed in the past and we think that the irons and success that we're seeing is going to lead to like you said improved rates for financing longer term, but also the access to the cash.

Speaker Change: Turning to progress that project.

Speaker Change: Okay.

Operator: As a reminder, to ask a question, please press star one one on your telephone.

Speaker Change: As a reminder to ask a question. Please press star one on your telephone. The next question comes from Thomas Boyes with TD Cowen Your line is open.

Thomas Boyes: The next question comes from Thomas Boyes with TD Cohen. Your line is open. Excellent. Appreciate you guys taking the questions. Maybe the first one, obviously good to see the progress with P&G. For the sales volume chart that you showed in the deck that references the compounded resin, do you have a sense of what maybe the average blend is there? Is this where we're talking about 25% recycled, 25% virgin, or is compounding referring to just finished resins where you're adding in final components that hit the customer's application stack? Yeah, that's a great question, Thomas. The way to think about it is a couple things.

Speaker Change: Excellent I appreciate I appreciate you guys, taking the questions maybe the first one obviously good to see the progress with <unk>.

Speaker Change: P&G.

Speaker Change: The chart at the sales volume chart that you showed in the deck that references the compounded resin do you have a sense of what maybe the average blend is there is this when we're talking about 25% recycled 25%, Virginia was compounding referring to just finish horizons, we are adding in final components that hit the customer's application stuff yet.

Speaker Change: Yes, that's a great question Thomas the way to think about it as a couple of things one.

Dustin Olson: One, the whole purpose of compounding is to create the product that the customer needs. In some cases, compounding does not add any additional material to it, it just augments the property. So we can change what we call the melt flow rate of the resin from one number to another number because it will fit better into the system. A great example of this is with our Churchill containers. With Churchill, we ran our standard material off of the facility with a lower MFI, and they could only get to 50 to 60% rates because of their specific equipment.

Speaker Change: The whole purpose of compounding is to create the product that the customer needs. So.

Speaker Change: In some cases.

Compounding does not add any additional material.

Speaker Change: Augments the property so we can change.

Speaker Change: What we called the flow rate of the resin from one number to another number because it will fit better into the system.

Speaker Change: Example of this is with our Churchill containers with Churchill, we ran our standard material off of the facility with a lower MSI and they could only get to 50% to 60% rates of because of their specific equipment, but after we augmented the compound a little bit didn't add anything to it but.

Dustin Olson: But after we augmented the compound a little bit, didn't add anything to it, but augmented the mechanical properties, we were able to get 100% performance out of the Churchill equipment, and everybody was very excited about that. When it comes to the percentage of other materials added into the product, I think there's kind of a segment discussion here. When you think about fiber, we're currently running that at like a 50-50 blend of 50% PCT material and 50% other. When you think about film, we expect that to be on the order of 30% our material and 70% other.

Speaker Change: Augmented the mechanical properties, we were able to get the 100% performance out of the Churchill equipment and everybody was very excited about that.

Speaker Change: When it comes to the percentage of other materials added into the product.

Speaker Change: There's kind of a segment discussion here when you think about fiber. We're currently running that at like a 50 50 blend of 50% PTC material and 50% other.

Speaker Change: When you think about film, we expect that to be on the order of 30% our material and 70% other.

Dustin Olson: And then when you come to automotive, it's really a mixed bag depending on the specific application that goes into the car. You know, by the way, an automobile consumes a lot of different types of applications. They consume fiber into the rugs and the carpeting in the car. They consume ridges, and they also consume compounds. And so as an example with the bumper, in that particular case, that was approximately 60% to 70% PCT material, and then the balance was other non-polypropylene type materials to make the performance of the bumper work.

Speaker Change: And then when it comes to automotive, it's really a mixed bag depending on the specific application that goes into the car.

Speaker Change: By the way an automobile consumes a lot of different types of applications, they consume fiber into the rugs and the carpeting in the car they can.

Speaker Change: Consume ridges and they also consume comp.

Speaker Change: Compounds and so as an example, with the bumper in that particular case that was approximately 60% to 70% PCT material and then the balance was other non polypropylene type materials to make the performance of the bumper work.

Dustin Olson: So I think that's a bit of a longer answer, but it really depends on the application. One thing is certain, we definitely see a lot of value in the compounding operation, more so than what we originally anticipated. The ability for us to deliver to the customer exactly what they need with a no-compromise drop-in solution is highly valued by the company. And it really gets us in the door, has been the gating item to really unleash some of the commercial progress. got it.

Speaker Change: So I think that the.

Speaker Change: A bit of a longer answer, but it really depends on the application. One thing is certain we definitely see a lot of value and the compounding operation.

More so than what we originally anticipated the ability for us to deliver to the customer exactly what they need with a no compromise drop in solution is highly valued by the customer and it really gets us in the door has been the gating item to really unleash some of the commercial progress that we've seen.

Thomas Boyes: And that's extremely helpful.

Speaker Change: Got it that's extremely helpful and maybe just on the automotive front, just with the kind of disclosures about the.

Thomas Boyes: And maybe just on the automotive front, just with the kind of disclosures about the The pilots that you have going, excuse me, is that with one OEM that you have had the existing relationship or is that now expanded to other OEMs? And the reason I'm asking is just obviously, you know, the qualification time for with new OEMs to be designed into specific model years is a lot longer. So I'm just kind of wondering through that, you know, that 45 million pound number that's on slide eight, if that's something that's near term or a portion of that is something that would come in a lot longer time frame.

Speaker Change: The pilots that you have going excuse me is that with one OEM that you have had the existing relationship or is that now expanded to other Oems and the reason I'm asking is just obviously the qualification time with new Oems to be designed into specific model gives us a lot longer so I'm just kind of wondering through that.

Speaker Change: 45 million pound number that's on slide eight.

Speaker Change: That's near term or a portion of that is something that would come in at a level and over a much longer timeframe.

Dustin Olson: Yeah, so a couple questions there. So the first thing is with every single application we see, application success that we see across all the segments, it leads to a lot more interest by others that are trying to jump in and participate as well. So after we, you know, after we discussed the automotive in the last quarterly, as well as, you know, we have some technical presentations coming up in the near future that are public, that interest level has driven a lot of additional requests for trials from other manufacturing facilities, other automotive tiers. And so that continues to go there.

Speaker Change: So a couple of questions. There. So the first thing is with every single application. We see applications success that we see across all the segments. It leads to a lot more interest by others that are trying to jump in and participate as well so after we.

Speaker Change: After we discussed the automotive in the last quarterly as well as we have some technical presentations coming up in the near future that are public.

Speaker Change: That interest level has driven a lot of additional requests for trials from other manufacturing facilities other automotive tiers and so that continues to go there.

Dustin Olson: I would say a lot of success, carry on success from the initial. Single Pilot Success. With respect to timing... This is also a bit the same across the board. It really depends customer by customer, application by application. So some customers can adopt much more quickly and drop it in. Other customers need, they have longer qualification processes. In the case of our resin with the bumper, quite frankly, our resin dropped in and performed extremely well. I mean, I was actually at that trial as well. The first day we tried it and I mean, the bumpers just look fantastic.

Speaker Change: I'd say a lot of success Carryout success from the initial sing.

Speaker Change: Single pilot success.

Speaker Change: With respect to the timing.

Speaker Change: This is also a bit the same across the board it really depends customer by customer application by application. So some customers can adopt much more quickly and drop it in other customers they have longer qualification processes in the case of our resin with the bumper quite frankly, our resin dropped in <unk>.

Speaker Change: Performed extremely well.

Speaker Change: I was actually at that trial as well.

Speaker Change: The first day, we tried it and I mean, the bumper just looks fantastic.

Speaker Change: And they operated very well surprise people with how low the scrap rate was.

Dustin Olson: Andres Sheppard, Dustin Olson, Eric Stine, Thomas Boyes, Christian Bruey, Andres Sheppard, Andres Sheppard, Dustin Olson, Eric Stine, Thomas Boyes, Christian Bruey, Andres Sheppard, It's good enough to work in lots of very challenging automotive applications, but then you move into the commercial aspects of supply chain and pricing and drop in time. And do you put it in on this model and replace the incumbent, or do you drop it in the new model and just be a new supplier? And that, quite frankly, is the discussion we're having right now, and I'm not sure where that will land at this time.

Speaker Change: We are very excited coming out of that day now once you get past that point that proves that your that your material is good enough to work on all bumpers.

Speaker Change: It's good enough to work in lots of very challenging automotive applications, but then you move into the commercial aspects of supply chain and pricing and drop in time and do you put it in on this model and replace the incumbent or do you drop it into the new model and just be a new supplier and that quite frankly is the disc.

Speaker Change: <unk>, we're having right now and and I'm not sure where that will land at this time, however, I am not worried about it.

Dustin Olson: However, I'm not worried about it. Because we've got lots of interest in our product across the board, and the interest in the customer has not slowed down at all. In fact, quite frankly, it's accelerated. After the success that we had with the bumper, we're getting additional inquiries about, you know, potential products on the interior of the car, potential products, and some of the fiber backing behind the dashboard and with different substrates, as well as the fiber in the carpets and different places inside the car. So I think the story with automotive is growing, and it'll be a great growth discussion for us in the long term, especially as we grow globally.

Speaker Change: Because we've got lots of interest in our product across the board and the interest and the customer has not slowed down at all in fact quite frankly, it's accelerated after the success that we had with the bumper or getting additional inquiries about.

Speaker Change: Potential products in the interior of the car potential products and some of the.

Speaker Change: With fiber backing behind the dashboard and with different substrates as well as the fiber and the carpets and different places inside the car so.

Speaker Change: I think the story with automotive is growing and it will be a great growth discussion for us in the long term, especially as we grow globally.

Dustin Olson: Remember, these automotive customers, they are highly quality sensitive, and maybe even more so supply chain sensitive. They don't like to do things in singular locations. They like to do things globally.

Speaker Change: These automotive customers they are high.

Speaker Change: Highly quality sensitive and maybe even more so supply chain sensitive they don't like to do things and singular locations. They like to do things globally and as we begin to grow globally, we're going to be able to offer a global products to global platforms and thats going to be highly we believe it will be highly.

Dustin Olson: And as we begin to grow globally, we're going to be able to offer a global product to global platforms. And that's going to be highly, we believe it'll be highly valued by the community.

Speaker Change: Valued by the customers.

Dustin Olson: Absolutely, appreciate it.

Speaker Change: Absolutely I appreciate it if I can just sneak one more in just around because you had mentioned the bonds.

Dustin Olson: If I could just sneak one more in just around, because you'd mentioned the bonds for the source of liquidity, you know, for the discussions you're having, have you seen any inclination that the discount could contract? I mean, before, I think we're getting 80 cents on the dollar there. And, you know, my expectation maybe was with a bit more performance information out of Ironton, that you would slowly start to see that narrow. I'm just wondering if you're starting to see that actually play out. Yeah, I think they're exactly right. You know, our viewpoint is that we have de-risked the bonds with the performance of Ironton.

Speaker Change: So the source of liquidity for that.

Speaker Change: The discussions Youre, having have you seen any inclination that discount could contract I mean before I think we're getting 80.

Speaker Change: On the dollar there.

Speaker Change: And my expectation videos with a bit more performance information out of Ireland.

Speaker Change: That you would slowly start to see that narrow and I'm just wondering if youre starting to see that actually play out.

Speaker Change: I think you're exactly right. Our viewpoint is that we have derisked the bonds with the performance of iron tuned in with this.

Dustin Olson: with the success that we're having on the commercial side. So yeah, as we last sold the bonds, they were at 80 cents on the dollar and we would expect something to be much more. Great.

Speaker Change: SaaS that we're having on the commercial side. So yes, we last saw the bonds. They were at <unk> 80 on the dollar and we would expect something to be much north of that.

Dustin Olson: Now I'll hop back into you.

Speaker Change: Great and then I'll hop back in queue. Thank you so much.

Jerry Sweeney: Thank you so much. The next question will come from Jerry Sweeney with Ross Capital. Your line is open. Good morning. Thank you. Good morning. One point.

Speaker Change: The next question will come from Gerry Sweeney with Roth Capital. Your line is open.

Gerry Sweeney: Good morning.

Jamie: Jamie Thanks for taking my call.

Good morning.

Jamie: One point.

Jamie: Just a little confused upon.

Jamie: And I apologize, but.

Dustin Olson: These are my words, not yours. Sounds like you can run Ironton maybe at a higher... But then we talk about comp. That's where my... Why not run? No, it's a fair it's a fair point, Jerry. I mean, there's a couple things here. One is, you know, there's still a working capital component on the feedstock side. So bringing that in and pushing the cash out is something we're keenly aware of and managing closely. And so for us, being a good steward of working capital is an equal component to that story. But also, you know, as we run our plant and learn about the plant and test different limits of the plant, we see the opportunity to optimize it to what the customer needs, even at the Ironton level.

Speaker Change: These are my words, not yours. It sounds like you can run iron and maybe at a higher production level, you're a little reticent to do that because I don't want to build excess inventory because some of your customers maybe certain specificity to their own product.

Speaker Change: But then we talk about compounding and taking products and compounding it to meet customer requirements.

Speaker Change: That's where it might disconnect is why not broaden ironton higher levels build some inventory and then when those orders come in.

Speaker Change: Compounded.

Speaker Change: Some of those the specificity of orders or or the requirement and I know, it's probably a little bit more complicated than I just said.

Speaker Change: I think it's important just for clarity sake.

Gerry Sweeney: No. It's a fair point, Jerry I mean, there's a couple of things here one is.

Gerry Sweeney: There is still a working capital component on the feedstock side, yes, so so bringing that in and pushing the cash out is something we're keenly aware of and managing closely and so for us being a good steward of working capital as an equal components of that.

Gerry Sweeney: Story.

Gerry Sweeney: Also.

Gerry Sweeney: As we as we run our plan and learned about the plant and test different limits of the plant.

Gerry Sweeney: We see.

Gerry Sweeney: We see the opportunity to optimize it to what the customer needs, even if the irons in level and so running ahead of the customer cut.

Dustin Olson: And so running ahead of the customer requirements is premature for us. So we see it as a better value position for us to pace the rate at the plant with the customer request. Now, to be fair, you know, we have the opportunity, sorry, We plan to pace the commercial with the Ironton. Ironton Operation.

Gerry Sweeney: Customer requirements is premature for us so we see it as a better value position for us to pace the rate at the plants with the customer with the customer requests now to be fair.

Gerry Sweeney: We have.

Gerry Sweeney: We have the opportunity.

Gerry Sweeney: Alright.

Gerry Sweeney: We plan to to pace the commercial with the Ironton.

Gerry Sweeney: Irons and operation.

Gerry Sweeney: Got it okay.

Gerry Sweeney: Sorry, just looking at my notes taking notes here.

Dustin Olson: Procter & Gamble. Do you think, you know, you have a nice chart there? Actually, I... Procter & Gamble would potentially, would they... I don't think we're going to take a position on which customer is going to be the biggest stake in the final tally at the end of this year. What I can tell you is that we're very thankful to have Procter & Gamble on our team. And I think that what you saw from the AK that we filed this week is it's a pretty strong vote of confidence by Procter & Gamble to us. So we've got a lot of good trials already started with Procter & Gamble, the five that are mentioned before, and then we have quite a big backlog coming behind, and we think that that's going to put us in a great position to hopefully fill out their full capacity by the end of the year.

Don't Gamble do you think you.

Gerry Sweeney: Have a nice chart, there any ramp up and actually I think the.

The table with all your programs that are sort of in different stages is actually great Super helpful. But do you think procter and gamble would potentially would they be.

Gerry Sweeney: Your largest customer this year it seems like they're further along obviously you have a great partnership with them just curious from that perspective.

Gerry Sweeney: I don't think we're going to take.

Gerry Sweeney: <unk> taken a position on which customer is going to be the biggest stake in the final tally at the end of this year what I can tell you is that we're very.

Gerry Sweeney: Thankfully that Procter and gamble on our on our team and I think that what you saw from the 8-K that we filed this week is a pretty strong vote of confidence by Procter and Gamble for us.

Gerry Sweeney: So.

Gerry Sweeney: So we've got a lot of good trials already started with Procter and Gamble. The five that I mentioned before and then we have quite a big backlog coming behind and we think that that's going to.

Gerry Sweeney: Put us in a great position to hopefully fill out their full capacity by the end of the year.

Jerry Sweeney: That's fair. I appreciate it. Thanks for the clarity on the first question. I appreciate it very much.

Gerry Sweeney: Got it that's fair.

Gerry Sweeney: I appreciate it thanks for the clarity on the first question I appreciate it very much.

Gerry Sweeney: Thanks.

Operator: I show no further questions in the queue at this time.

Eric: I show no further questions in the queue at this time I would now like to turn the call back over to Eric for closing remarks.

Eric DiNatale: I would now like to turn the call back over to Eric for closing remarks. All right. Thank you, Michelle.

Eric: Alright. Thank you Michele we also received a few questions through E mail.

Dustin Olson: We also received a few questions through email. First, could you please provide more detail around the 8K with Procter & Gamble? Yeah, like I mentioned, just a second ago with Jerry, I mean, this is a real vote of confidence. I mean, this effectively provides exclusivity to Purecycle with the license for North America. And it also extends the exclusivity period across all of the regions in the world. And so we feel we feel really good about that. This is also Procter & Gamble basically saying that we believe in Purecycle's ability to run the facility at expected rates and provide a product of the quality that's going to be good enough for their operation.

Eric: Okay.

Speaker Change: Can you please provide more detail around the 8-K with Procter and Gamble, yes.

Speaker Change: Yes, like I mentioned, just a second ago, Jerry I mean, this is a real vote of confidence I mean this effectively.

Speaker Change: <unk> provides exclusivity to pure cycle with the license for North America.

Speaker Change: And it also extends the exclusivity period across all of the regions in the world and so we feel we feel really good about that.

Speaker Change: This is also procter and gamble basically, saying that we believe in pure cycles ability to run the facility.

Speaker Change: The expected rates and provide a product of the quality thats going to be good enough for their operation that's quite good.

Dustin Olson: That's quite good. I think this is all driven by the success that we're seeing in the trials. I think that Procter & Gamble is excited to be growing with us and getting into the commercialization phase.

Speaker Change: I think this is all driven by the success that we're seeing in the trials.

Speaker Change: Think that Procter and Gamble is.

Speaker Change: Excited to be growing with us and getting into the commercialization phase.

Dustin Olson: And look, I think it's important to just take a step back and to recognize the work that Procter & Gamble did at the beginning of the story. I mean, recognizing the unique position required on quality for a technology like this solution over a decade ago is brilliant. And then trusting in Purecycle to extend that dream into action, into reality through the production at Ironton has been a very good partnership and we continue to work very well together going forward.

Speaker Change: Look I think it's important to just take a step back and to recognize the work that Procter and gamble that at the beginning of the story I mean, recognizing the unique position required on quality for a technology like this solution over a decade ago is brilliant and then trusting.

Speaker Change: And pure cycle to extend that dream into action into reality through.

Speaker Change: Through the production that ironton.

Speaker Change: <unk> has been a very good partnership and we continue to work very well together going forward.

Dustin Olson: Next, we also have a question that came in asking how pricing is varying relative to virtual. Yeah, we're not going to get into the specific pricing relative to Virgin. But what I will tell you is that we still feel very comfortable about the stated prices that we put out about a year and a half ago at the $1.36 level. And that's with Virgin moving all over the map. Okay, Virgin, Virgin has moved from, you know, north of 80 cents a pound down to south of 60 cents a pound. But our but our pricing still stands pretty, pretty firm and secure.

Speaker Change: Next we also had a question that came in asking how pricing, it's bearing relative to Virgin pricing yes.

Speaker Change: Yes, we're not going to get into the specific pricing relative to Virgin, but what I will tell you is that we still feel very comfortable about the stated prices that we put out about a year and a half ago with a $1 36 level and Thats, what Virgin moving all over the map Okay Virgin.

Speaker Change: Virgin has moved from north of 80 cents, a pound down to south of 60 cents, a pound, but our but our pricing still.

Speaker Change: <unk> pretty pretty firm and secure.

Dustin Olson: Ultimately, the price, the final price of our product is going to be driven by supply and demand fundamentals, of which we believe there's an enormous undersupply of high quality material in the market and a growing demand for our product. And it's also important to note that. This is not a commodity polypropylene market that we're operating in. We are a specialty product. We operate in a different market and it's quite disconnected from Virgin. And I think we're starting to see that disconnect happen a bit across the board. So I feel really good about our pricing, really regardless of where the Virgin is.

Speaker Change: Ultimately.

Speaker Change: The price the final price of our product is going to be driven by supply and demand fundamentals of which we believe there is an enormous under supply of high quality material in the market and a growing demand for our product.

Speaker Change: And it's also important to note that.

Speaker Change: This is not a commodity polypropylene market that we're operating in we are a specialty product we operate in a different market and it's quite disconnected from Virgin in and I think we're starting to see that disconnect happen a bit.

Speaker Change: Cross the board so.

Speaker Change: I feel really good about our pricing really regardless of where the Virgin pricing goes.

Eric DiNatale: All right, thank you for everyone who submitted questions today.

Speaker Change: Alright, Thank you for everyone who submitted questions today.

Dustin Olson: Dustin, if you have any final comments. Yeah, look, before we conclude, I just want to take a moment to sincerely thank all of our stakeholders, partners, and employees for their continued trust and support. Your commitment has been instrumental in getting us to where we are today. We're incredibly proud of our progress, both operationally and commercially. Simply put, we've never been in a better position than we are right now. This strength enables us to continue executing with a discipline and focus, always making strategic decisions that serve the best interests of our stakeholders. Today we're operating from a place of strength, which gives us even greater flexibility and confidence in our direction.

Speaker Change: If you have any final comments.

Speaker Change: Before we conclude I just want to take a moment to sincerely. Thank all of our stakeholders partners and employees for their continued trust and support your commitment has been instrumental in getting us to where we are today, we're incredibly proud of our progress both operationally and commercially simply put we have never been in a better position than we are right now the strength enables us to continue executing.

Speaker Change: With the discipline and focus always making strategic decisions that serve the best interest of our stakeholders today, we're operating from a place of strength, which gives us even greater flexibility and confidence in our direction or excited about the opportunities ahead and look forward to connecting with many of you at upcoming conferences. Thank you again for your support we look forward to continuing this journey.

Dustin Olson: We're excited about the opportunities ahead and look forward to connecting with many of you in upcoming conferences. Thank you again for your support. We look forward to continuing this journey together.

Speaker Change: Together.

Operator: And ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect and have a wonderful day. Thanks for watching!

Speaker Change: Ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect and have a wonderful day.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.