- Earnings call transcript Q3 2022

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the PureCycle Technologies Third Quarter 2022 Corporate Update. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to turn the call over to your host, Charlie Place.

You may begin.

Charlie Place

welcome call, Technologies Orlando, coming and corporate quarter Florida. Kevin conference update to you, to third PureCycle XXXX Thank you from

business. on further corporate our related provisions reports SEC Many that filed available for at XX-Q, to other XXXX and and Safe currently and forth the with call joining of through beliefs for will detail has I Harbor information and of be Director press the passed, Dustin update Larry our we on on of As a we forward-looking and your found Executive lose me this as subject Somma, call of and These aware, patience. be this we corporate risks quarterly quarter. if Chief our many highlighting our Relations Form that and Investor PureCycle be back may the our here, about call, be morning, risks quarter known statements control, which of our website the including – well assumptions that in statements third on pass appreciate we on those developments while will be it forward-looking you third unknown Place, morning, this release report today today calling are can time. early are based Investor This will can am of our This be management going file we end Olson, worst uncertainties, found also are and at will on management's purecycle.com. page Charlie Officer; presentation for the power beyond Relations this in be at Chief to and provides statements be Financial yesterday, to may our the made Hurricane the will on had our the in and as set we filed our Officer. through

Additionally, as that the actual results any no company's and materially except by may required we update please undertake differ anticipated statement. to note law, forward-looking from those obligation

today connection Any Our and and in results and estimates also are year-end with changes uncertainties, be include financial subject between risks may quarter-end among and including non-GAAP the PCT’s others material. data adjustments. remarks forth to preliminary variation the set actual herein may preliminary

any to along or follow You if you our phone purecycle.com. welcome deck by are at joining slide time with can access us on it

to the over you. quarter Executive share are turn Officer. Chief We from it Dustin? PureCycle's to Dustin previous Olson, updates with excited will now I

Dustin Olson

you made Procter share history Thanks, morning of their Gamble sustainability and call PureCycle want the and share Charlie. August. Thank of significant that our invested a But meet Good a ambitions. mission. not everyone. today. I’m they In at for around progress reminder the future. new the you start, in last bit existing corporate & we’ve ecosystem XXXX, update to to in would our just our technologies They global joining before we since our I with pleased recognized looked

PureCycle made production. XXXX, moments we're and we scale idea. from late pellets innovative was this our commercial away In started new. something scale our We XXXX now founded feedstock invented the they So, in unit of pellet and evaluation first to

fossil we polypropylene of XXX It's is work Every recycled. deliver why So, The company slips world chasing world or X% remember is wants a are world but XX so year, special. wants desperately who and polypropylene to R&D every why falls of circularity. opportunity their core and approximately produced goals technical why and that paradigm, there. year needs. in is new of plastic PureCycle the and to mission of another our billion are a short, the polypropylene have XXX people solution from billion decade is need new future, brand of we're hard we meet forget our away. less and this world PureCycle PureCycle of every to really PureCycle's easy so approximately commercial and plastic and globally a doing solution The positioned plant in to than fuels. After the seven pounds polypropylene Every pound efforts, XXX the year is and year scaling are this? we Every first of to real pounds Ironton. U.S., will change remember. be and almost We year produced years billion billion

our right will to infrastructure our move Korea. Slide in scaling right domestically the and built start be in and will South right the Augusta solution. Please We've X. scaling We systems scale global the we team, to

on Augusta flagship for not essentially the up Ohio our expected quarter we delay we previously no believe schedule pellet remains mechanical completion now in discussed. impact we’ll Ironton, to and timeline construction is ramp unique operations Our production first on with The of XXXX. nine-month have facility in of as us in slight

continue Phase to increased. critical our of is have of And cost capital. taking given the we've close, work current of generated X to minimize our We overall ne equipment project for our lead designed while through to delivery certain substantial longer options times market on financing conditions, Augusta debt

It XXXX. operations and in non-U.S. Asia just Ulsan, a milestone mechanically up half of a now gateway in the technical deep in technology, represents first into As Korea, more Geocentric facility agreement key core complete one Augusta expansion construction our venture second for joint October, anticipate facility our signed and two be and purification purification in the lines bench. and a agreement in global we representing of a In our begin SK the with we than This much of a trust strategy. South ramp to capacity. is result,

and in more in the for facility was silos feedstock. PreP excited beginning our Feed worked very final phase bail can work for through our to This do, our first Ironton Our is step Ironton. team nonetheless. that you to step motivational to process scaling I commissioning but big a is still flow feedstock team. tell and the team the watch feedstock There's a into process our

pre-SPAC counterparty, previously which provided. feedstock offtake We disclosed, reasoning sought the an and termination As contracted for obligations. supply both disagree was with original

We actively working their to are actions. address now

are We better adapt pricing negotiations mechanisms will for dynamics and contracts the in PureCycle's create that replacement to economics. market reflect final stability and greater

adjusting to sortation. foundational create For Eastern collection We're how purification to is PreP excited Coast facilities this for engineer seaboard continue the we very Augusta, East timeline design network for our are operations and startup. final with a It the PreP timelines new and three will operational for waste match together. coming plastic operational

issues PreP not to local Central numerous some to solutions not the And government the is location. to is that while The volume to overall material economics. overall project related company XXXX believe working we we're or disappointed work resolve we Florida impact continue needed with until minimal. our strategy actions, We the are are to the of the and

We continue feedstock lines our Both nameplate have Augusta X run capacity, execute X LOIs annually successfully to to million representing feedstock sufficient at Ironton in more and acquisition feedstock pounds of strategy. aggregate. XXX and than

Augusta proud additional are update pounds and offtake that contracts, of to discussions with in hold supply lines I'm to our offtake continues and million out. signed X very X both lines now since report support representing Ironton team build pipeline a sources sales to purification to that commercial team last XXX active corporate of to Augusta. sold our feedstock Our our

Additionally, recycled we concentrate polypropylene partnership & Company. announced developed Milliken a new with in XXX%

our project up project next during with our operations We feedstock completion of to our team with finance to project the in allocated for starting year-end. able and offtake advance financing more for since continue investments. specifics targeting by update, Augusta hope to $XXX mid-XXXX. with quarter fund in you site million still We We've the and support challenging expectations to selections total conditions very Augusta and call. share cash $XXX Europe, in market be last the is to execution our ended million Despite

Moving Slide X. to

While of we activities are to the on to completing scale pursue continue opportunities focused technology majority our and Ironton globally. our Augusta,

South in to timeline to and couple current have We Phase which back currently six remain in and Ironton mid-XXXX. mentioned, previously activities our committed developments. for three are development approximately months conditions and financing four, As in the a operations fund of full three facility future the construction market lines our start-up ramp X facility, of Augusta, all by and to expected European to representing weeks pushed Korean

XXXX. And Ironton, However, you cost close how completed and that's it's real we anyone It can ensure spend visit, the will it's capital efficiencies. different, to it see feels like Slide the more fun slide major for every process to And a how and more required designed changed. come time project, a a we've looking Every far keeps since facility project could we you when you time for is get day. appreciate startup. ever for us. six is

of As in the teams are project. it's very final completing zeroed our this on pieces that place, put construction being modular clear our are in construction

the of we phase. you fast see, As steps the Ironton project final are construction approaching

of quarter delays and of first XX final We Slide despite of the into all place. have expect the X the mechanical lifted pieces modules of production And construction of couple it XXXX. pellet delivered equipment, in shows completion initial delivery a details in activities. been and the

operations the are and November Our and co final and final complete The Feedstock control are be process are dependent XXXX. and beginning mechanically will commissioning, complete] in the end on by delivery utilities mechanically PreP feedstock. of operations and to to offtake [ph] be [functionally products commissioning expected central mechanically are purification of rail be completion Mechanical timeline. complete in the to near expected QX room, extruder

Ironton that all project, aspects discussed construction the They construction an Every in performance X, Slide to the end schedule, to levels progress independent the XXXX. month, at a headwinds the on water including remain monitoring month X Mississippi. in more was track chain project Ironton. proud other the by that the the an by a external water we the issues, and showed war completion, project are is COVID-XX of the in relentlessly we given impacting and during contracting soon including as very this Our module We full it PureCycle markets, low By and market Germany, ramp to timeline reach deliveries. mechanical to all industry and up team Ukraine, slide. retained publish delay reach partners of we've to our test. due that report some bondholders date post mentioned, experienced working This River, in chain previously. operating is for supply the critical projects. Ukraine, engineer report outperforming the cost independently a The and on recently in however, September prepared just supply entire delay as COVID, I track nine capacity is XXXX, possible. schedule headwinds March of its Mississippi achievement report in levels construction final appears explanatory

However, generating we about be our to clear will when project very want begin pellets. first

have For the of by several pellets quarters, last XXXX. referenced I end the

has weeks phase but the for and statement our plant. same unit difference March pellets the test multiple operations. four shifted is After January, feed in be operational at validate early to final mechanical performance this still will commissioning test. or we will perform X, into capacity performance it's between conditions While to the March Once January testing completion, premise. test before first in two The five-day the XXX% various on sources we the completed,

partners. making pellets and we to pellets selling our time, that offtake will be those During

quarter Our of ramp at therefore, we PureCycle initial nine-month operating commissioning will remain full fourth be plan confident and that by capacity XXXX. outpaces the our

Moving to Slide X.

we quarter, multiline construction X at continued facility our third the engineering During Augusta. first in Phase activities and

tightening financing and half second complete the now markets by times anticipating expanding and completion equipment, delivery based of commissioning we're full However, lead capital on of start-up due XXXX, year-end. in to mechanical

Augusta pleased to agreement development the of for the core Augusta and lines construction the new improve construction LOIs X, and XXX superior operations work XX%. terms align for as both that our facilities a volumes venture important offtake million approximately two one in development efficiencies supply also improve complete capability purification our in represents equipment fundamentals, We timeline, continue the startup in have AEDA definitive of Slide expected first and conversion of entered third in mid-XX. timing share a last since contracts Purification our East our I'm partners global project X.X% Slide the opportunities the delay delivery Augusta On offtake adjusted Phase represents technology you construction million begin feedstock X into year, we and XXX the feedstock commence final with to in have with presentation, construction earlier, Facility increase XXXX at to respect of manage three On temporary schedule. expansion and to with South we quarter timeline the of an all feedstock this fully XXXX. our project XXX with pounds represents per with This demand expected again committed for the update XX, cost, with excess Coast excess the Korea. X of is of an Ulsan, to pursue Geocentric pounds of capacity. step the our in in pellet once Construction to of timelines, second start-up is SK to our on This strength Signed in Despite mentioned quarter pound strategy. Phase around to with to operations quality. JV joint

Asia, more trust to a another. couldn't this We relationship much capacity. represents As be represents more gateway one than in with Geocentric. technical just mentioned this a proud and of SK strong It partnership before, project

to potential we and our Japan. facility selections structure an for continue Progress European the Mitsui for in our purification Additionally, on with work agreement expansion continues plans. site on evaluate

plastic down it's the regarding The corporate over the for have an turn expansion to added our our challenge update. At just for technology options, PureCycle operations and is focused strategy start selection site selection but Ironton have will our next narrowed market address plan, to announcement engineering an have company, financial of to hope is taking point, now We European procurement are to by and site an important and our advantage developing this energized team. the executing its Somma, CFO, I our update beginning. global Larry it call. the for leading global team the on pollution. We

Larry Somma

Thank you, Dustin.

will the since we our It a raise are during capital challenging a number third confidence very have meaningful our nobody? delivering to X received bridge help in to three quarter positive liquidity revenue be Phase development last market, should a market us process. evaluated multi-line encouraged us options we Coast capital being brief which give Augusta has update Despite that fund balance facilities, necessary the to to in discuss to of Ironton ability this and and our a raise At our the to financing East I by funds we not update current our a regards Nevertheless, interactions. Before by to I and to do have sheet, investor we have where operating we diligently profitability. three months feedback are post way on working flexibility ago. future. year-end, but and want of only optionality raise What interest surprise financial in our it revenue the are and with that to our PreP debt been provide stage,

just let's total now over go in XX. So, quarter ended million Slide with $XXX We available to the liquidity.

decreased we quarter, XX.X purchases. for for of sale June XX.X for long an our third from the of and the significant investments. available Escrow Cash make and in PreP lead majority XXX.X Augusta During debt and Augusta XX continue facilities, and PreP transferred investments into which to from Ironton, drew assets. pre-engineering We unrestricted account came and securities Augusta, investments Construction equipment million million accounted million Purification million. quarter by

Our pre-operational expenses employee during $X.X quarter. corporate third and were the million

We and as normal X.X cash such fees, during other various the expenses. professional corporate million operations of insurance, also for quarter used

cash Previously, anticipate time, we the million plant, project At we we invested budget. on $XX in as Now, the $XX comment nearing that to initial let million expected mechanical we are the be completion. in These project me project are over million Ironton additional budget this to to about disclosed the $XX spent and an will from finish funded we X.X expenses to this cash expected of final our unrestricted million. additional to million an require $XXX quarter. it are resulted million $XXX $X the million had

to the of for are cash from Additionally, we reserves, X.X certain required required bond agreement, other million transferred level reserves. a we unrestricted to maintain so

for fund from directly XX.X also payments our of payments. We million, progress made project construction

turn to Slide Now, let's XX.

we business enhanced operations. strategy not how approached profitability to As to we the only our wanted stabilize we scale have grow, share operations, our of commercial but to

operating This feedstock our for plus combined forecasts, certainty. provides strategy PreP and of introduction stable contracts, of relative offtake Pre-SPAC is economic the feedstock economic with the greater and stronger With regardless environment to PureCycle cycle. profitability more business

higher expected from plan. to purification vertically the profits Additionally, due enjoy that PureCycle competition when this is and but at time point our a provide protected designed operating out PureCycle feed This in feedstock to is is environments integrated security scenario. operations that developing. feed more It investment, important to our should low to volume sortation business is ecosystem a translate weed-out stable to cost also

our to turn Let's Slide XX. slide, final

offtake continue areas. XXXX. completion track for in momentum operational We in Ironton centric. This contracts quarter feedstock. is feedstock mechanical We Augusta strong offtake now had first with of for X supply pellet and JVA is nameplate geo SK capacity. beginning and production build Augusta key a we of the executed XXX% with to a needed facility lines oversubscribed. for quarter, growth had number PreP X in Ironton to on process

options forward and milestones with completing quarter fund financing we in the Milliken market soon respect PP Company. upcoming are the We We a concentrate process, the updating $XXX to as plan by have fully ended & Ironton total sustainable project achieved and cash to investments. facility with the Augusta to our million the in able. as year-end. look Augusta We developed with financing first We third announced with flagship

questions. to to we on as the are today also you us we and call Thank as believe be open we'll site that will As for now able. call noted, the joining discuss we able soon Dustin the European

Operator

Oppenheimer. first [Operator Instructions] Kaye question Noah Our comes with from

Your line open. is

Noah Kaye

with to offtaker development, supplier that the actually you much us is basically up question. it this that One And detail. now backfill you have feedstock transition three, fair could much taking it Maybe kind need commentary development? assume basically terms side. the more give mention supplement feedstock feedstock Thanks extent Two, here? we may of to that on around Good for make how do morning. is to How that question the think need offtake similar the that could at you start to to to possible feedstock attractive the contracting for plus? you further and

Dustin Olson

much the how the quantum how pounds much lot, from, Noah. per offtake that Yes. Thanks if you was number year when pounds you contract? And feedstock had projects really let's believe the built a very put in started to to five then I and Yes, around talk million million and regarding when is back these first feedstock is terms, streams. XX again. market contracts even mean, XX of back is feedstock before included recall together, put Good wasn't say, around the these together. the to per year. were well develop was it offtake I traded recycle

so, have regards And in bit contracts become stale. the since some then a

will And we so And previously. offtake than on the which to price, it the five the that a mechanism on side, linking bale then feedstock will side, different to is be original referencing feedstock contract. be back discussed number plus we we've a

the X Augusta half, lines and overall to what a to really from more conditions. two so, years market Ironton and good create and X. done job bit perspective, We've to of stability the Ironton last quite a helps the this for building economics the economics updates our momentum really year over a of both current And is for does

and understanding overall opportunities so, pull discussions grow prepare the on in. our They've market helped to the that us and a had on that And ecosystem offtake. feedstock across we've of both

inside pivoting pull we new relationship go new to those current, it and to look close that didn't a very because say base our us, we to supplier offtaker, of but to for let's on could far a So, was contracts. feedstock have

Noah Kaye

further technical And see the some the to That can Anything Q commercial makes LNO. about the in I possible you you if received that positive – Right. what applicability sense there? the specs? and do reason do for FDA news share or thanks. with on for division

about development? So, you could help that. that I understand assume it's us not What

Dustin Olson

a shoes Yes. were. us it's And were they to hard restructuring the having I the more few of with deal quite current understand they've where our about it make for to for chosen conversations jump to whatever mean, different direction. counterparty to reason, go market. a in We the

For doing more in us, options stability the have project to mean, we it's by the bring we fine. and I overall this. have ability

don't why – made to that on they they've we're So, I the speculate want have. really decisions

Noah Kaye

in solely delivery I getting in then nature? those. just to so Ironton for with [indiscernible] some and the Okay. and just of there That's running, helpful. mean, are logistics they are it that up the kind waiting like to some still critical due things of finished sounds just delays equipment And Is path and in extruders be of that actually freight and are that's basically or you're of made? transport terms

Dustin Olson

you are Noah, there?

Noah Kaye

Can Yes, you I'm hear me? here.

Dustin Olson

hear backup you like looks Okay. Well, a but look, now. we yes. dropped, can business, because we It had We Hurricane the Wi-Fi phone our here. just got

another business. question. why, in So, go any let you confident it and the it chosen be but into okay without with for different me we're to replace to probably finish want to don't jump and it we'll able direction, and I impact that go they've to Look, we're pass a ahead

Noah Kaye

here some safe. then It sounded extruder Thanks. Yes, really there is like path equipment. getting Okay, hope around was my the and question Ironton follow-up critical I everyone running. great. up is

going So, of equipment be they're delivery, are sort just delays and and shipped of there, or really to freight made there of now pieces around, something? sort the are

Dustin Olson

of And outbreak spike I is overall it piece the in for really impacted there finishing to early equipment supply the that be COVID October, for that if Germany. Noah, what happened one in early October is yes, equipment. chain Germany, Yes, built And was a look mean, statistics you we specific, have that that spike very in being at

has the path. pieces schedule with together. substantially with And plant. to pull worked we're around actually, boxes the plant That's different that still so to the but that but Pretty say the be looks basically things. equipment partner critical The that we'll of that but trying of slide of really the coming we've drawn plant, that delayed our in, rest is what the is and and it commissioned, as is a plant plan. then like And start up piece is the the we the plant get piped path. of in in there one critical Most comes commissioning, that up will

it's see nothing more the that. to than story. there So, That's full

Noah Kaye

Super helpful. pass I'll it others. on to

Dustin Olson

Thanks, Noah. Okay.

Operator

One our next moment for question.

question comes with Global. Hassan next Our from Ahmed Alembic

Hassan Ahmed

Good Why time. the morning, guys. Looking I facilities sort and again, the ramp first ramp sort of I obviously month Nine details completely up it's are bit you appreciate and little a why was the a up mean, of nine wondering, be thereafter. us ramp – gave seems just other But a and that months around, you a forecasting up? things right? commissioning and at of may, happens guys fact facility long sort I how unpredictable. to like me, the

Dustin Olson

thanks Well, lot look, question, a for Hassan. the

several complete to we and blended rates – and and Let commissioning virgin that XX% through we'll type start the run a feedstock feedstocks up be a become we're the mechanically tests process beginning. to we'll feedstock with like with rates to material at then X then through we us done start. and XXX% we And feedstock we'll feedstock say commissioning speak a start XXX% and test move our a actually with number one, at takes have let's plant. to number XX% commissioning X will And the And that then X. We'll actually start the as then we to And to and rates and be rates. the When to starting for X, – flow final March different third feedstock test plants, feedstock me going timeline. two.

original to really some tries to make in going The lots work are it's we've have they month be that sure okay. that supply work the know of honestly that can there there's that Ironton blue going some indicated, so describe is get going the base. dark it are again. to on properly. time is trips days our to on sure so components we as there customers we need And because to of will ramp be you we'll to The to through made road graph, going application ramp to, we're it hiccups, integrate an and held project to to test the that And those to that very Pre-SPAC up their nine assumption bars operation into take some different reality

it's to to know them to to say routine it's plant. supply times not there. That's get trucks going say to time. the to up also some We get ramp take and moving that take to just the operation it's to the It's get feedstock the not and reliable, going

then three chain And the referenced supply work the offtake we about the to nine referenced the chain. month And and referenced feedstock of talk ramp, so supply when We also we've startup those through properly. make we all really technical items. details to sure works it

we're rate effectively question indicated the XXX% the schedule at that your because we holding for saying days. in So, today, insightful plant is we March, what be will is five running that

opportunity ramp. the to have We the outperform nine-month

still mechanical completion Germany, that's two quite frankly, therefore due a in volume when talk material even the to and and revenue the about we Ironton to stuff the to of have from outperform delay So, therefore perspective four-week and we EBITDA. the opportunity

We have otherwise beginning we've the holding we're to what outperform nine-month we until said ramp, because at an nine-month ramp and just but the stick opportunity we'll that. to that's the prove

Hassan Ahmed

and like, that Very environment of through all we're around Understood. lots of And obviously, going terms the inflationary in affecting noise aspects. helpful. feedstock, the just

guys of are contracts sort feedstock and are price as there So, contracting, sourcing you, of or of for settling you sort what nowadays? sort out your projects, future

Dustin Olson

that is three for four to It's ago years people So, what's market actively now price or available available, bale reference. okay? Ironton happened since It's number. the traded project number the X an is

tied that. And the to contracts so we many of reference are that

the result pivot of agreements risk that As effectively and okay. offtake that a down, and plus, so at with we feedstock the our up feedstock we hedge of

do feed, with remember, technology cannot our feed, with what do However, okay. others can

is market number cannot sold X. into at cases, many that the sold X, a to discount in So, the okay. at to be a discount sold bale X It's number feed number

opportunity us gives some differential for buy that so, below LOIs in we to And market Augusta have project. the the a of

Hassan Ahmed

Understood. so much. you Thank

Dustin Olson

Hassan. Thanks,

Operator

question. moment our next One for

next Eric from Stine question Our comes with Craig-Hallum.

line Your is open.

Eric Stine

Hi, Dustin. Hi, Larry.

Dustin Olson

Eric. Hi

Eric Stine

Good morning.

just So, that obviously that having maybe not – ability I to about things the you scenario? financing – in constructive you're of about that but year, hit end would talk just mean confident get just in just out the something play might end can just is in you've Are to now, of able Augusta, right I been if the any on that they leeway you the how there done conversations here? curious maybe by markets how outlook AEDA. given were with bond the what mean in And I challenges year. talk mean,

Dustin Olson

I okay. the a deliveries, most the in see bit anything modular, And field park reality that, seen we've into very equipment a we've all and the Augusta a there get with move. weighting go. very going constructive quite of project while Look, where had yet, they this of think through. that because just project I said us spent Yes. strong excited its the they're are to Augusta been they've the its out position on us they're to most haven't AEDA. the way I discussions money Having project in mean, with that to us have hard already, working the in want to really on of mean, look, come partner we they like is

else, that they allocate is, market pull by end like available the could So, is, and the of to people AEDA get the to market of a them how finance to not impact reality is if the with respect it then today. up the someone financing not long are the that land all options I have but take and financing able timeline the explain the line that impact, probably facility. for recognize to that working to in there's With lining to the the facility. the are year, are we we difficult projects And mean, real we the

the think the capital see. practical So, discussions risk to beginning with some matter is while the complicated that consistent year, that's mitigated of the that we there markets is going be get I the more that at could land

that's answers. it So, how

Larry Somma

add Yes. one thing. Hey, Eric. I'll other

Dustin have a It's or There AEDA. current bankers. committee people. face that of two people on pretty are I group with large are to former face We that met, and the

So it. they get

alluded, Dustin anything million side their the in much walk investment is we site I north not on done concern which made, because may yet. XXX on from we've design, the think that of there's is them as as all modular of we've

capital. know the have come fact where look, so, to We referenced don't And going it's that raise out. we we optionality to

good face the very we're that to important most with them a comfortable make and the position that we're that's in. face through But is and to them meet to that talk sure continue both thing. we'll work So, discussions each to

Eric Stine

Got it. helpful. It's

Dustin Olson

the haven't that significant this us. important Yes, probably spent effectively is back note to a also land. we capital it's mean, for I to lease

lease partnership for like back millions procure and we've time dollars to down the is the of it's of it after road. from buy a land the years us. them where will not it them to we for So, several a then back period spent This from land hold

big not CapEx a risk out land. there there's on So, Augusta the

Eric Stine

you. Got

just Okay. maybe Well Ironton. Perfect. then turning to

of this confirm, is and mean offtake kind be can it's do fenced? like think like being ring can your to fenced want any So, trigger want I you is the it's to ring anything mean, this, sounds a a that bonds? it? it to to confirm, you benefit, there this of but actually mean, of in to ability able case bondholders that? high I I does Or kind anything make one-off, call the replace it just would replace confidence really, and

Dustin Olson

items answer. we're answer there's realistic to trigger technical the that could them. it mean, a is happen the benefit but discussions the with it's the there's answer I then and so, I technical to in and several a not mean with is for Well, reality bondholders, their and trustee

really that The a discussions at other contract this is item replacing this technical is or had moment, and piece fixing we've transactional the okay. this with bondholders

contracts, that and waiting feedstock in and actually the bondholders speed that with is technical getting And the the for one the the we're with is this through replacement. administrative a We but details have Most process that and now one counterparty to have for likely of for new replace system. have and work two some by of to been whole the the will now, bondholders system. resolved and up for with leaving. offtake just would they're firm engaged legal trustees

happy And can so, have we we solve it. we're to stability it's in a We them caught the replacements pretty business. this before of where a now for ring and speed think lot wait a for to with the get we perspective, contract. bit we're little bubble that bit a a kind add to time, to have of to fence play from going But of

Larry Somma

to wanted of I also add a things. Eric, couple

to because had see it. a when can the this feedback the place bondholders mentioned, Dustin wanted we from call we aggregate the in address was, As out we and get hey, bondholders with when The site. took

invited haven't in us a time. guys You out long

is working default as a to going that the for bondholders, November is of to a high expressed and of bondholders level we've interest. that it, no the of it's want be there on if here, Dustin there come, we're look, any end So, have cure site event contracts individual the period, we including tour said, of invited

also comfortable one and with – built okay. really confident that Augusta be we're an this or we've and feed as Dustin certain in remember, one replace. we oversubscribed we next behind Ironton And building on it's got the we're project contracts and for that as offtake event, So, we're the that project, are because but weeks, highly said, that the it's both, us as feel will very few

the feedstock a got both agreements sum zero float We've some in facilities. and isn't for game. overall So, this offtake

quite one frankly, Yes. I concern And more didn't counterparty, add so, to risk one I is that for not have the us. point a losing And of before.

If these is way you said, the operator the we best site. a to There's I because issue see in. cure put guys This the the that in situation yourself asset would that bondholders take really they're the to to want want highly highly, position the replace scenario case collateralized the even is of worst no into the the us to shoes and have. got we've they

Eric Stine

potentially that cure the is near term. quite And Right.

Dustin Olson

very No, it's near-term.

matter final working just in for it a negotiations of are transactionally contracts. through. It's two We the

Eric Stine

you. Okay. That Thank is great color.

Operator

question. One next moment our for

Our next question comes from with Gerry ROTH. Sweeney

open. is line Your

Gerry Sweeney

and Larry, Dustin call. taking for morning. thanks my Good

Dustin Olson

Gerry. Thanks,

the the financing but and going it maybe this Ironton get and for you is on obviously are if you're or to year, significantly and options a de-risks a has mean, sounds original Just tranche amount on side, I project for smaller project and still just it coming by running trying question up of facility to end some down. anything obviously, for the doing changed the front? as then you target though you're go there maybe a that curious the

Larry Somma

a This talked been process quarter it great Yes. has it's I a ago. We about mean, question. ongoing.

this that hey, raise to So, fact optionality. finish to It's it. referenced I In we don't have that that, over. event the originally we we what have isn't need we the need start them. we options. why we under scenarios than scenarios Could thought, have less probably I pivot of Dustin we that's absolutely. And have seven each no also and to many five

to of a know up capital. the a to have we we'll deeper side capital, we're and the of bring cheaper point, them, pellet yes, of right? a that – all great for to AEDA there's get this that see on So some will hinges landscape other those only but production, the that Ironton options we we and with fact set discussion canvassing are. not landscaping once And you of Because set have what everything the access

to decisions the too. So, we make best want

So, and be total constructive with thing able to to of best financial our maintain the the AEDA discussions and capital do are we for cost to can going we're optionality. flexibility

Gerry Sweeney

pay little with and that to extend out the just It option? bit land it. se just an Is option money on you land an take Could with the option? per a also the AEDA

Dustin Olson

the part I a that the doing, the detailed we're to the and managing illustrate a over think with give with confidence month and we've them that got how reality them all AEDA. Yes, them is, to meetings of the The described. to got of it scenarios half help what those discussions are options couple we've we've we're next

on definitely discussions And of so, types I look, these are table. think think, the I

Gerry Sweeney

options, middle ground There's that it. be at able there's Got near saying you some the is a get you're potentially. future confidence some what in you'll point to

Dustin Olson

us, in Yes. that's another basically the south and that's out is And there. finance of the also one of [land] of oversubscribed. not one clear facility, a but kind us, wide it, be tracks swath When you the one There's let's of coming there's over track AEDA to [ph] many area of like Augusta. fly to pending north

high we able them that be also land available that something excited no extremely what need we their A, and have with do to pretty enough there's out So, doubt There's to work the confidence that, this in have to been us we'll and keep moving do, extend to AEDA forward. to is park.

to through a And that is other just with to get work them to the so, timing this have side. we item

Gerry Sweeney

restricted know, it. Got of Larry, cash the went but expansion, cash, a gotten through XXX say bit little bit know million, little I you for of questions a one is [$XX is got how expansion, much much cost. more unrestricted. This position, increased it, maybe for I've million that I but think to earmarked some XXX Ironton we'll that – how not – [ph] on you either, million]

that I and of much the the of cash couple XX comes not, if the you much Some excess And over is run in for say months? later have and months different to how business, think in next project, earmarked other the etcetera? next how do events

Larry Somma

out to out of a absolutely of need you're the Yes, talk XXX. do in the I those Ironton, mean, which question. about overruns come it's When great unrestricted cash, we And comes right.

against the that first that's that. course, of So, we earmarked thing

job can. long we our have done case to commitments a scenario, run-in as We to look ensure as really at we really, that good forward the worst can

hinged this single they on in committee We What's our to it's to feedback to pretty thing say difficult, know it got were secret. right person And because don't maintain talk raise everybody no. run that, optimal that one inordinate of every They common is have part on XXX that investment their we're in did technology love position Dustin that capital. they do but a this. to thing flexible is, the their put only underwriting, just It's not us and what are those this we people the that the for the to we one flexibility as overwhelming longest and unique, because we and it wanted for that my wanted for takes upwards a having trying be commercial the have don't for I the things, committee, sure, market, as of us right okay. structure. can the at able business position we able was a we do, as ability is committees have with us is and we pre-revenues as Augusta. are in to to things the give have to And don't was to capital to no approved meaning investors investment we but investors, maximum process. most not of to and in committee about hands capital. us close to runway fact risk financing initiatives on. it difficult, strategic referenced is important to did been to being of that's one of raise, the Because that have to one them evaluation amount our now Nobody respect brought the of tough person. to thing we capital So, the I many unfortunately not the investment it look overwhelming we're going we're in be number trying different they environment, business of the out close. committing goes because of even And to to raise commitments all And to remarks, we those When committee scale during because

We that trying long we're as for doing for run. as it can at environment, the look the this wrong. at structure maximum so organization capital look anything don't the we flexibility So, right this we to maintain and create

Gerry Sweeney

it. back jump line. Thanks. appreciate it. I'll Got I in

Operator

One question. next our for moment

with comes Our Brian next Butler question Stifel. from

Your line is open.

Brian Butler

Great. me? guys hear Can you

Dustin Olson

and loud Thanks. you we got Yes, clear.

Brian Butler

with right where can if guess guess some kind of is going lines what I And [ph]. you to that point follow two month the I XXXX] come first Thanks. about now kind [end completion, the think Great. in. first not Maybe getting one you the you first cost, or it's you going also, cost? that, Ironton of in give really Augusta line approach be is an the that would is to to gives talk and a six delay color maybe and confidence of is what that the this at longer it's on

Dustin Olson

a Yes, question. it's good

look we capability can we the is complex cluster to the us So, gives the scale put a it that's Augusta at when project, really Augusta thing into about so multiple to where exciting lines.

individual I put think of flexibility that incredible business we've we the referenced and of feedstock this of in terms us gives sorting project, amount an acres on that but lines XXX can different things. and eight first doing before,

it because two. scale. than expensive two. be line for one number plant and comes for that's for So, than expensive it's infrastructure utility line is is sewers, it project plant more going that's with for have is, line line more Roads, one What to will a one exciting that

not expect on Augusta see build even not we more feed project market so, that okay? in curve project purification. but just there two, that and is feed, decrease to our sorting is people doing the maybe of and the It's to growth. to infrastructure is PreP side, And okay. to reality this enough support cost The lots substantially In addition that, an with the line also of more are of

that eastern PreP grow into feed sortation really so, facility to Augusta about and facility we that over a is collection talk building seaboard we and time. the can And

the build infrastructure one. line build per the the So, plus on PreP the for project facility pound cost initial raises

runway polypropylene get that when coming feed to produced of of of operations, the line on new a think we side, terms a In new dollars I per when get set just we when pound building have we first CapEx us. into into post the

will range raise bit with those think per a that the one and infrastructure higher, $X.XX for online still I other CapEx $X the build pound to in then okay. PreP up the we're lines. And

with position lot in really not ultimately that cost how to I'm Augusta say, discuss, point. of infrastructure of let's for yet this and so, at we pound side CapEx the one finance reduce to A And on how a the options depends we but have can the infrastructure at line that, on we actively looking going some also pursuing opportunities forward. and the we're that reduce for

Brian Butler

right back – you pushing the is the the further? anything that to tied I that financing, delay, could push the what's back that's it there kind I'm then great. but that the again, confidence is mean, of of just mean months, kind delay? guessing and that's timeline gives on Okay, And or that mostly, else I behind six that's

Dustin Olson

of Well, equipment, remember, – first we I lead majority are time long the long say would some seeing the lead of piece well, the lead equipment, of some but all issues say, let's okay. with

about of That's it's this So, purchased, we equipment facility, upfront the longest It's project. referenced the purchased. lead for it's in in that the the original capital Augusta talked pipeline.

what in place. tranche financing from schedule equipment mitigated. and for of we're just items that fully so, to the quite tranche orders get lead next waiting we're the risk is pretty And frankly The is the until working we now place on that of

Larry Somma

central pole] for planned tent I the [ph] a mean, in this Dustin building or I his think remarks for part it [long in of mentioned is, but the to utilities.

central the construction for to do with utility are a We firm working us.

from central to XX, plant timeline faster we XX central utilities XX the and can't build kind in is our utilities than So, months. going anywhere the

Brian Butler

kind Okay. the original little versus, I you stands debt? the financing where just on financing, in debt on, kind give of a Good. of on update of your And guess, cost can maybe then market expectations

Larry Somma

to We Well, we expensive it's but than be originally we can't. we set more know out. going can,

today, If When it's sub-X. started of it’s close basis XX-year because the I XX-year it's treasury, good, between, the trading to inflation print, anywhere this points down you about at XX look X-ish. is process, the we was at guess, which treasury

optionality the So, and can I've mentioned discussion, flexibility. is our a the point the XXX from you increase one but I we tell of that got started basis that you cost things in when

it's ourselves cost be The of know period prohibitive to a more, market a to. thing investors that us talking because cost we itself position for that where because we're of to optionality, the put we for is making going going time. of don't the most in and while and long the So, sure is important

Now, as can flow to because and because we're excess be EBITDA more continue that lucky you the model, of our highly operating line understand have debt we're margin to business also and cash able absorb you beyond at profitable that.

So us as do. that a [Multiple our gives in in this lot of – thinking flexibility market others can't well. Speakers]

to us decisions today make So, could our not. business others model allows that

Brian Butler

last if I All right. One one could.

issue is [ph], to guess, go recourse they there against PureCycle and supply any them contract, the for those terminate as [SG&A] guys the this back On you to with agreements? for I

Dustin Olson

discussions the keenly wrong I'm the that we us. to appreciate did anything believe We later. I in but the it, as Look, process, don't rather let this for and that going but noted, Yes. aware in the we've But dodge with sphere. we We're keep question. just of question disagree We'd have legal the legal others we're to solve for look, approach. that stay going

Brian Butler

you Okay, for great. questions. taking much very Thank the

Larry Somma

replace trustee alluded our the say, is Yes, and of it was complain did the helpful puts to we is very quickest our Brian, they and that physician to to wrong, contracts important to that's their bond instead and market, something going as just the Look, counsel. us. something best at which thing thing most did going do with I to them we're do fighting Dustin wrong. is and all new And to,

Brian Butler

you. Thank Great.

Operator

question. next before moment One

Our with Cowen. next Boyes Thomas question from comes

Your line is open.

Thomas Boyes

to that critical have reports both things? you are Around on mean executors? this a waiting item] in Are was series are or I latest Appreciate these I from two as my sure of been the it's reviewing them? just make one-offs. of most a of questions parallel it. kind of there of Yes, that [ph] I of well. critical [knockout wanted process pot] two asked. guys know [ph], is that there some kind just couple they [passing

Dustin Olson

in pot I not a was project, the this path critical was now. but project the there a knockout that's concern Yes. that earlier on mean,

there's critical you're one and right? comes You one path up, can You mean, appreciate, I critical other multiple working lanes, always path. fix

coming And is Germany. to this of and working voltage All the to the for so, is extruder. And of place the some point basically At that down look, equipment major the we're get path at plant day, piping have extruder end is finish we wiring the going. out the it. coming to critical actively except this low it in

the we're have soon as delivered. really last So, delivered, I as do think work to that we critical waiting that's after there on. delivery it's is it's that that But

And built there's on some all is the carry impacts, that so, schedule. but of existing into

Thomas Boyes

so the facilities now modified your on would around are better board, when will And be moving slightly about timeframe of the maybe I maybe pre-cut some parts, just next imagine lower just all year? could the [indiscernible] you specifically before for have Perfect. they views there? that Augusta match, going given that – maybe then come CapEx Because because talk you does expectations the to the of would might give

Dustin Olson

SK okay. definitive. incredible have technology, with scale Well, We've got look, I venture our mean, to a we joint that's interest agreement

process that CapEx now and already CapEx well. year same build so, we'll good about require discussions as and land brewing Europe. I formality a in ultimately plan. spending And will will got really we've a out those we're and for on thing strategy financing that a starting in discussions plan CapEx Europe mean – early next

we is company on difficult financing, the and assured to we're Korea project real. that two what curve financing we'll ready I is are the forecast need let's but for initial place, projects building the okay? that CapEx for in through the rest of so, deck like to we're South set mean will the rest we but when with about pipeline until Augusta of alongside And set growth that? the those would we the to what done, out stage say, look look, which with do, now gets the real, that this and This have out answer, get the go Augusta want right to build real now like and Europe, talking and CapEx are it's

Larry Somma

our most The making force capital let single will. us precede that in for Yes, a we're a not commitments plan add. CapEx to you to thing that I'd us the important if is build desire position inflows, also

we day. uses and think about is Sources the thing every

Dustin right. on we'll then XXXX. you to past here, So, capital the more be will Once get like look able exactly give we the was definitive capital a in what answer

Thomas Boyes

there. makes perfect Got it. sense That

for on obviously, opportunity both also customer one in see line feedstock an just, had progress the some previous could to discussions. Augusta of highlighted feedstock to had, is you wondering to two, that you just have one if decks you active additional you've and provide was and and I the there? Another you've the update visibility offtakes that

Dustin Olson

mean, offtake. story changed or I feedstock hasn't the on

a side, a feedstock lower have much than energy to purifier we product footprint the other On alternatives.

cost perspective, advantaged. we're variable So, from a

other We can't much have it, more we people And the that for than touch fundamental a and other okay. what process cleaning therefore, feed do. purify feedstock processes can buy streams

go shampoo very bottle, to to brands okay. in I have When have product. offtake, quality, product the are you for interested side a in flip make the got the mean, On you consistency

everybody let's they build use cases, to they the sustainable so, do same the and bottle shampoo quality every single a wants move odors colors very try around. some to world converter time. to say, difficult the And manage And that, in products, variability to in that's when go but way the for

to and because it our know frankly analysis. analysis okay. deal of lifecycle the for product remove We cost frankly, really that, provides easier we product customers our at – it quite going Augusta, to remove quite be provides at lower even top so, a it's is lifecycle better that's good with. that we our On we odor, is it the because a the color, And do point,

product win know footprint the about care mark. carbon first it's brands to because They want sustainable. so, to that they're That's a this that good they're got interested They the that is And is using side. too. that converters. easier check quite in as know want that they where And them then with story be And the for the on well. we offtake their want frankly, it to brand for

easy with. solution sustainable and show easier odor. provide them to to we color LCA just it's It's a the It's about to easy them the deal They good. remove for easy it. customers, because that it's We don't with to for that's will have and show to worry deal is to

project, day, is going so, mean, platform ultimately give I it base end It's delayed the feedstock because the base – drive the And oversubscribed and out, they But the that and growth and heads site financing. oversubscribed the face look, get have got we're what of need little we've the also and brands be Augusta that the customers. should we for bit this figure turning obviously, a and the offtake the what that on the going. economics project an we'll to to at of come, we'll an will

Larry Somma

doing that relay something the in one to thing alluded to be etcetera, And we stay speed I'd add, partnerships we're building on talk will with because partnerships but that European about values, we're again, tuned to exciting. site. that's building Thomas. enough to Europe really going able prove have respect at that for Yes, unique. ensure It's that economic extremely to He we're really today, goal Europe. going really, not the on stuff all the scenes feedstock Dustin other at didn't behind the

Dustin Olson

tag that let Yes, onto me too.

by think I point it's Larry. a great

everybody it's presentation is we reason the we this same. the just the now story, to started where are with So, about remind

same Okay. the story. It's

a our opportunity value from product. massive of in a have We the market

the have We market respect differential to in with what a aspect the feedstock and needs do with world we it. can

And been the real the so, traction there. of past, reasons globe, of And getting in still about have frankly, the with partners across that PureCycle we're like excited lot people a okay. quite all they're

that. feedstock start We've you you Europe done a about So, talking don't until developing plan. start

and that recognize don't understand talking or to and and with feedstock get You a have sound SK traction SK start the until value, plan. they agree and technology offtake is also

Okay.

with So, players us up and and are real taking this concept of lining future real note PureCycle in the growth. the is to market partner in they're market for

do items, that those that right is And we're of special partners us more us got get Augusta with behind get do so, develop know it's going that. really behind and growth we've than lining going to partner PCT two We to running. that. temporal is to to that all financed, to a something plan look, up know Ironton But we talking, just to up are we've got We're globally.

Thomas Boyes

Got it.

sounds [indiscernible]. discussions than like, that quarter has million discussion early So, an looking that last the to than accelerate. for pounds that [indiscernible]? Is I It we're of the think just of like XXX continued a of gets there's bigger pounds that. XXX in bigger feedstock of offtakes. It's everything just We're

Dustin Olson

go back into was billion of in from the world. taking from a say, that let's the pounds of And that half some coming China about year XXXX, And was U.S. let's fundamentals. Back to XX was of so Well, feedstock China half polypropylene.

Okay.

to billion reversed it and started polypropylene of flowing they it, stopped In X billion X.X to landfills. So, was going XXXX, China. to

we We peer can there's this value okay, of it, can make not opportunity, we seem Asia, purify around to value, lots people do When yet the that in but technology. and In they pull just quality, when that out say, a we it, States. So, great for just they the look incineration around there at it got proposition. Asia. massive bring it. that we're got called to incineration infrastructure purify a world. that United with got amount the to there's lot goes it, to there's to it out, sense right model The Europe, we we cycle. recycled. into mine want collect of to better copy is at got in that feed consistency, we solving they even can volume is that to LCA, most is In same of technologies come when you world the plastic the story terms a issue of with our the and paste get look as look of so the we That play tapped system a out the to it go It's

your would it yes. the bigger? Is And yes, agree so, I answer is with think point. I getting

demonstrate to As technology, more future. capability people our and are in for learn about the the the and what can is what as we scale do floodgates PureCycle we more to going do, to able open

just an so, and appetite to product. volume I think of enormous for yes, enormous And think there There's somebody feed I that's there's get go ready for and an out our brighter all purify, see what we is Augusta unique it. in Ironton today. we're to completion, position in we which that a get people, the market the for to of financing, do closer that becomes And

Thomas Boyes

last Maybe just it. one. Got

and do the of lines scenario couple offtake have a kind committed impact just there? plus of, one a percentage a you had analysis of two the of for For what the quarters good you kind sense that obviously, and of feedstock pricing, covers, ago

Dustin Olson

Yes.

Augusta In important terms are also offtake, on but And not lines we two, to to oversubscribed note, it's Augusta, committed. it's and of XX%. are one it approximately when we over comes

Okay.

We at to and max’s min have contract top the at our min’s the level. and set the is in max level with one the option

Okay.

we like and XXX, max that a So, something XXX on, around min to okay. have a that, of need XXX, million we deliver to of XXX XXX million approximately

that's to are And us our so, to that going do it. the is ready for the offtake it what pivot flexibility give want and customers to

that want. brands in are developing successful that And the ultimately most applications Okay.

a is for plus note the Ironton of flexibility contract got the feedstock we're XX%. the I also feedstock on approximately important said, It's that And a there replacement. majority piece. plus in that we've to flipping like lot of it at so, And to like

in that So, pricing the well bales, market reduces the on substantial as it's Ironton number based feedstock as overall risk project a now amount contract five to for plus for the situation, pricing Ironton even because of offtake.

Thomas Boyes

questions the I Great. had. And insight. was appreciate I That the all

Dustin Olson

a Thanks lot.

Operator

at call turn closing questions time. this any showing to further for not back Dustin remarks. any I’ll the I'm

Dustin Olson

on okay. but everybody Yes. for Look, there say with to in our importantly more for PureCycle along to thanks being path, I call, just want this joining

We discussion six and complete this are of for starting cusp been on years. the the that's the Ironton technology being last up and

And there. so, we're almost

to joining longer, able and little that really couple PCT we'll and you to the up show the hang forward world us in a plant So, of. months. we'll Thanks for look talking of capable and get next with be what running to is

Operator

gentlemen, does and this Ladies presentation. conclude today's

disconnect have day. wonderful may You a now and

PureCycle (PCT) 11 Nov 222022 Q3 Earnings call transcript