Live Earnings Conference Call: PureCycle Technologies will host a live Q1 2025 earnings call on May 7, 2025 at 5:00PM ET. Follow this link to get details and listen to PureCycle Technologies' Q1 2025 earnings call when it goes live. Get details. NASDAQ:PCT PureCycle Technologies Q2 2023 Earnings Report $6.56 -0.13 (-1.94%) Closing price 05/6/2025 04:00 PM EasternExtended Trading$6.83 +0.27 (+4.12%) As of 05/6/2025 07:59 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast PureCycle Technologies EPS ResultsActual EPS-$0.19Consensus EPS -$0.15Beat/MissMissed by -$0.04One Year Ago EPSN/APureCycle Technologies Revenue ResultsActual RevenueN/AExpected RevenueN/ABeat/MissN/AYoY Revenue GrowthN/APureCycle Technologies Announcement DetailsQuarterQ2 2023Date8/8/2023TimeN/AConference Call DateWednesday, August 9, 2023Conference Call Time11:00AM ETUpcoming EarningsPureCycle Technologies' Q1 2025 earnings is scheduled for Wednesday, May 7, 2025, with a conference call scheduled at 5:00 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by PureCycle Technologies Q2 2023 Earnings Call TranscriptProvided by QuartrAugust 9, 2023 ShareLink copied to clipboard.There are 11 speakers on the call. Operator00:00:00Welcome to the Pier Cycle Technologies Second Quarter 2023 Corporate Update Call. At this time, all participants are in listen only mode. After the speakers' presentation, there will be a question and answer To ask a question during this session, you will need to press star 11 on your telephone. You would then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. Operator00:00:34I would now like to hand the conference over to Charlie Place, Director of Investor Relations. Please go ahead. Speaker 100:00:42Thank you, Anton. Welcome to Pure Cycle Technologies' 2nd quarter 2023 corporate update conference call. I'm Charlie Place, Director of Investor Relations for Pure Cycle. And joining me on the call today are Dustin Olson, our Chief Executive Officer Larry Soma, our Chief Financial Officer and Dan Combs, our Executive Chairman. This morning, we will be highlighting our corporate developments for the 2nd quarter and subsequent to quarter end. Speaker 100:01:08The presentation we will be going through on this call will also be found under the Investors tab at our website at www.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. These statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control, including those set forth in our Safe Harbor provisions For forward looking statements that can be found at the end of our Q2 2023 corporate update press release and our quarterly report on Form 10 Q filed yesterday evening 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 statement. 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. Speaker 100:02:20Any variation between Pure Cycle'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 joining us by phone, you can access it at any time on purecycle.com. We're excited to share updates from the previous quarter with you. I'll now turn it over to Dustin Olson, Pure Cycle's Chief Executive Officer. Dustin? Speaker 200:02:44Yes. Thanks a lot, Charlie. Thank you everybody for joining the call. Q2 was the most exciting and rewarding quarter in Pure Cycle's history. Ironton is operational. Speaker 200:02:56This is the moment that we've worked toward for the last decade. We shared a lot of moments together from receiving the Procter and Gamble license, Building the feedstock evaluation unit, financing Ironton, going public and now proving the technology at scale. This is a key moment for our future. The first plant is always the most challenging and the most special, but now we have a fundamental understanding for how we grow reliably into new regions, reduce our cost structure, build bigger plants and get more efficient on capital projects. With this progress, we can now start realizing PureCycle's potential. Speaker 200:03:34Remember, PureCycle takes the world's most Popular and least recycled plastic polypropylene and converts it into a premium ultra pure product. Our technology capitalizes on strong feedstock flexibility, a low variable cost and produces a high value product. The world needs technology like this. The world needs a story like this. Consumers all around the world are begging our industry to find solutions like this. Speaker 200:04:01Pure Cycle is the answer. As you know, we accomplished the first two bondholder milestones and for the first time produced pellets at commercial scale. We are well positioned to accomplish the remaining milestones. Ironton is running and raising production rates every day. I wish I could have been there. Speaker 200:04:21I wish you could have been there when we first produced our pellets. It was a remarkable achievement for everyone and a Tangible product of the hard work we've all put in. Everyone on-site will remember that moment for the rest of their lives. During the day, we cut a quick video to capture the moment and I was clearly excited. I was excited for two reasons. Speaker 200:04:421, Because I knew how much it meant for our team, our partners and our shareholders to see the fruits of their labor finally come to reality. But probably more importantly for this group, because it represented that our technology works at scale. For us, when the polymer moved through the system, we knew the fundamental technology would work. Moving to 1st pellets was a major step. We push Polymer through every key process and prove the technology works at scale. Speaker 200:05:14If you take a step back and just look at our fundamentals, our process is mixing polymer with solvent, Extracting contaminants from polymer and then removing solvent from the polymer. These are the core principles of our technology and where the tech risk was most critical. In each of these steps, our process worked extremely well. We have good technical data to support the merits This is a big deal. For the last decade, tech risk was the biggest obstacle. Speaker 200:05:48This is now off the table and sets the stage for our global growth plan. During the start up, we ran into glitches. This was expected. We've talked about it before. There are a lot of details around a facility like this. Speaker 200:06:03And you just have to work through each piece of equipment to both learn how to run them and then fix whatever issues pop up. In some respect, it's about the equipment. Does it work properly? Was it installed properly? Will it handle the process properly? Speaker 200:06:19Can it handle interruptions properly? But it's also about the team. Does the team have the capacity, the determination and the grit to stay focused to keep solving these problems. We do in a big way. Not only has our team grown tremendously over the past 4 months since mechanical completion, we've also shown that we have the talent to successfully solve problems. Speaker 200:06:46After completing the 1st pellets run-in June, we effectively used July to work through a series of commissioning details. As you start to run, you'll find a collection of issues that you just need to address. Some of them you can work on while the equipment is running, but some of them require the and efficiency and pave the way for continued strong operations in the future. We will continue to address the plant operations every day with a systemic, Methodical and purposeful approach. This is the definition of operational excellence. Speaker 200:07:26Every day you grind to improve the facility utilization by improving the robustness of our processes and operations. With respect to commercial activities, we're on track. We've established a good feedstock purchasing pattern with numerous third parties and have adequate feedstock available. We currently have over £10,000,000 of feedstock in inventory with over with about 50% prepped and ready for purification. We have built a substantial amount of optionality into our system. Speaker 200:07:58Our sales group has also been working closely with our core partners on specific applications for first products, and we have been delivering several technical training seminars to our distribution partners. Our product is in high demand and we are ready to get the volume moving. As our production increases, we will continue to expand our sales to new customers in new regions. And while we already have our core Ironton volume committed and ready to go, we can now be opportunistic some of our production and plan to seed the market and prepare sales channels for all future plants, Augusta, Europe and in Asia. As you look across the 4 key areas of operation, preprocessing, which we call prep utilities, purification and Born Digital and consider the commissioning that we've completed, we are very pleased with the progress we've made. Speaker 200:08:53We've accomplished a lot and we moved as we move through commissioning. There are a few specifics that I would like to mention. For prep operations that convert baled plastic into feedstock ready to be purified, all of the technology has been tested and commissioned. It took quite some time to grind through the start up and get things positioned across each piece of equipment, but prep reliability is improving every day and efficiency improvement activities are ongoing. Across the last quarter, we've been running a lot of different types of bales and generally have had good success here. Speaker 200:09:29We're in close communication with the 3rd party suppliers to improve the bale quality where it's needed. We have also identified several small projects that For utilities, While there's been a lot of work to get there, the area is fully commissioned in operations and has achieved benchmark rates across the system. This is the heart of our plant and achieving strong reliability is essential to our operations. Heat control is an important aspect of scale up And in an area where we historically had problems at the FEU, this is working well now and we feel good about the temperature control. For purification, we discussed this quite a bit already, but we're there. Speaker 200:10:18We've tested the core unit operations. They work well. The core tech is sound and tested. We've worked through a number of teething issues and we fixed and fine tuned a lot of equipment. There were a number of minor issues that needed to be worked through, program updates, external sensor replacements, minor adjustments to equipment, But they all have to be right. Speaker 200:10:39Not only have we learned a lot about Ironton, but all of this will be applied to future plants as well. It will help us build faster, build cheaper and start up more predictably. One of the areas where I'm particularly proud is with our Ironton staff. As you might recall, when asked about what are you most worried about with respect to start up, I almost always answered with The learning curve of our team. While the last two months have been a lot of work, time and effort, The commitment by our team has built an incredible strength for our company. Speaker 200:11:16We now know how to operate this plant. We are now more confident in the ability to predict operational performance and we're starting to see around the corner. Lastly, with respect to digital, This has been a big lift. I knew that when we decided to incorporate the Born Digital package, it was going to be more work at the beginning To get right, but I also knew that this would set the stage for everything else in the future. It's been true on both fronts. Speaker 200:11:46I remember early in the project, it was really difficult to get the basic controls to operate. The first time we tried to put Solvent into the system, it took approximately 3 weeks to get lined out. But then we learned and we fixed, we improved and we applied our Born Digital capability. And when we restarted the operations recently, it took less than one day to get the plant optimized on temperature and pressure. This is a good indication of both the power of Born Digital as well as the growth of our team. Speaker 200:12:19With respect to technology, We are excited. We recognize that it isn't easy to see the technology progress without actually being in Ironton and watching the day to day project progress and watching the data. So we pulled the original Investor Day presentation to show the progress across each section. Look, the big picture is clear. For our technology to be successful, we have to be able to mix solvent, extract contaminants and remove solvent. Speaker 200:12:48Each of these steps are really working well. Here are a few of the details across each section and a few problems that we've worked through. The first and last steps are all about extrusion. And our extruders are working really well. The heating, cooling and pumping capabilities are very good, and the capacity appears to track to design. Speaker 200:13:12We're happy with the relationship with Krausz Mafai, the level of support they've provided and the quality of their machines. We've always viewed our mixing and extraction steps as one of the most critical. It's traditionally difficult to scale mixing And mixing a solvent with a viscous polymer was expected to be challenging, but our plant has achieved this success. This is a key step because the better we mix polymer with solvent, the better the solvent will be removing contaminants. Good contaminant removal means superior product quality. Speaker 200:13:48Filtering and purifying steps are working well now. There's still minor mechanical items to work through, but they will not impact plant operations. The commissioning has been challenging because we had one faulty piece of equipment in a critical step that needed to be repaired, but it was repaired it was built by the drawings, but after startup, We learned that the design needed a small improvement. We used this time to upgrade the equipment and it's working well now. Removing and recovering solvent is a critical piece of our process. Speaker 200:14:23I'm very excited about this section. This allows us to be both cost effective and also a good environmental steward. Our final two steps are dedicated to this effort. Both work very well. In fact, while it takes some time to generate a statistically significant dataset, Our early indications show that our solvent removal is 15% to 40% more effective than the original design. Speaker 200:14:50This means that Pure Cycle is expected to generate pellets with even better odor performance than originally planned. One of the most critical adjustments that we made to the process was with respect to piping in the system. During the first start up, We noticed that the flow rate through the system was hindered and would have been rate limited below max capacity of original design. However, our team brainstormed the situation, developed a novel solution and then implemented it in late July. The results were really good and the rate limit appears to be removed. Speaker 200:15:26This has been a really interesting process for all of us and for the most part, Pretty traditional. Many of us have been part of big projects, startups, new plant operations and scale up efforts. It's basically going the way we expected. Projects like this are always more challenging in the early days as you tease and work out the kinks, and then they start working. We're very methodical with our commissioning process. Speaker 200:15:51And while this did take some time, what we've experienced isn't unusual, and there's no doubt that these At this time, I would like to invite Dan Combs to the call. As you know, Dan is the Chairman of our Board. Dan is a 45 year vet of the industry and has gone through a lot of projects, Startups and has worked in plants for years. He has been very helpful for me through this process. Quite frankly, he's also spent a lot of time in Ironton with all of Through our discussions, I thought that his perspective could be very helpful today. Speaker 200:16:28Dan? Speaker 300:16:30Thank you, Dustin. I'll try to give you some perspective on project completion, commissioning and startup from my 45 years of industry experience. I will discuss how and why such observations are relevant for this project from that industry perspective. Typical commissioning periods for complex technical facilities similar to this one take between 3 6 months. New technology generally takes more time and effort to commission and start up compared to proven technology. Speaker 300:17:04This project reached mechanical completion April 24. We are 3 and a half months past mechanical completion. Given the novel nature of our process, getting to this point inside the early portion of industry commissioning norms is a strong result and a successful outcome. The commissioning and early operations phase of a facility are really about understanding and addressing any key issues that might keep the plant from consistently producing at full capacity. Safety is always the top focus during this stage. Speaker 300:17:43We believe that safety leads and results follow. Commissioning success is driven by safety and finding and fixing issues. Any plant that contains miles of pipe and thousands complex instruments, controls and pieces of equipment will have some issues that require quick solutions. Our plant was no different. The majority of our issues were normal equipment and control issues common to any startup. Speaker 300:18:13There are many reasons that we've made such good progress Since mechanical completion. 1st is our talented team of people at Ironton and within the company. 2nd, our dedicated and committed partners 3rd, our Born Digital philosophy and 4, our capability of Finding Solutions. I've been part of many projects and results, and the results of this team are as good as any I've seen. Project startups follow an S curve. Speaker 300:18:46It's not linear. So it's always slow at the start at leaving the gate, And then it goes faster. However, there is nothing normal about the team in Ironton. It is rare to see a team So singularly focused and aligned on a mission. Pure Cycle hired a mixture of operators, Craftsmen, engineers, scientists, finance and business people to form this company. Speaker 300:19:14Most of our people have had excellent Experience with industry leaders. This gave us a jump on setting up robust processes for safety, environment, training, Quality, reliability and operations in general. All PCT people are committed and focused on the mission to solve plastics waste. They're proud to talk about what they do with their families in the community. This sense of pride and mission are key to our teamwork and drive this team to win. Speaker 300:19:47Not only did we find excellent people, But these people also work remarkably well together. In my many years within the industry, I've worked with a lot of top teams on big projects and managed a lot of plants. This team is as good as any I have worked with in my career. They look for ways to help each other. They look for ways to solve problems rather than make excuses. Speaker 300:20:12They check ego at the door and they listen and cooperate with each other. They make personal sacrifices to support the mission. They're committed to safe operation and making PCT successful. Our team is a key reason why we were making the progress that we're making. I could not be prouder of this team or the opportunity to participate alongside them with them to bring this technology to the market. Speaker 300:20:43Dustin, thank you for letting me share my thoughts about this project. Speaker 200:20:48Thank you, Dan. We're lucky to have you and we appreciate all of your support. While most of the company was focused on getting Ironton operational, we did move the needle forward with respect to our growth strategy. With respect to Augusta, We closed the key documents to secure the land, which now clears way for us to begin site work activities. We expect this work to start in Q4 and continue through Q2 of 25. Speaker 200:21:14As you recall, there are several concerns with respect to securing the Augusta land in the last two quarters that is now resolved. Now that Ironton is operational, we have clear access to land, our project can accelerate. We're incredibly excited about the future plant in Augusta and the recycling capacity that we can bring online. Europe is also on track. We closed the tender process for Antwerp, have commenced both engineering and permitting activities, we expect to close the permitting process in 2024. Speaker 200:21:46Our JVs also continued to move forward. Both Mitsui and SK Geocentric sent teams to Ironton for site tours that supported the development of both projects. We intend to establish inventory locations in Antwerp and in Singapore in order to seed future sales for Europe and Asia. We will use the flexibility in the irons and contracts to make volume available for export. We will add inventory in Antwerp and then 1 to 2 quarters later plan to move to Singapore. Speaker 200:22:14We're currently developing the internal work processes and third party contracts to establish this operation. I will now turn it over to our CFO, Larry Soma, for a financial update. Speaker 400:22:27Thank you, Dustin. I'm really pleased with the financial progress that we made during the quarter. At the end of May, the Augusta Economic Development Authority formally approved our plan of financing for 1 line in Augusta, which officially closed the forbearance that had previously been in place. Subsequent to that, on June 30, We executed an economic development agreement related to our plans to construct the Augusta facility. Pursuant to the EDA, PCT expects to receive certain property tax abatement benefits as well as certain other incentives, including site infrastructure development assistance. Speaker 400:23:17We are excited about our plans for Augusta and with the technology risk removed with pellet production in Ironton, We expect to accelerate our project financing efforts as we believe that removing the tech risk will improve our cost of funding. We have also continued our efforts to raise funds as we have interested parties for the remainder of our prep sortation equipment. We are hopeful to provide details soon, But in the interim, we were able to extend the maturity of our undrawn revolving line of credit with Celebra Capital from June 30, 2024 to March 31, 2025. Our objective has always been to ensure sufficient capital to advance our strategic initiatives, while allowing ourselves the time needed to execute a capital efficient project financing plan for Augusta. We ended the quarter with just over $366,000,000 in cash and available liquidity, which includes $150,000,000 of unused borrowing capacity on our line of credit. Speaker 400:24:34As a reminder, during the quarter, we closed 2 non dilutive financing transactions for a net amount of $47,600,000 Our corporate and pre operational Employee cash used was $9,900,000 during the Q2, which was an increase from the prior quarter, primarily due to the delayed payment of a portion of our 2022 bonuses compared to the previous quarter. We used $12,500,000 of cash during the quarter for normal corporate operations such as insurance, Ironton startup working capital, professional fees and various other expenses. Additionally, we continue to make investments in our Ironton, Augusta and Prep facilities, which were funded primarily from the non dilutive financing transactions. Now let me comment on our budget for completing the Ironton project. As noted in our 10 Q filing last night, Pure Cycle anticipated as of June 30 That the remaining investments in 2023 to complete the Ironton facility could range from $10,000,000 to $22,500,000 This range is dependent upon various contract contingencies and their ultimate resolution. Speaker 400:26:04We believe that we can recapture funds from some of the contractors on the project. But the most important point is that we've already spent or forecasted the need for a total of $22,000,000 which means that any positive resolution to contract contingencies should be favorable to our future cash forecast. Now I'm going to return the call to Dustin for his final comments. Speaker 200:26:33Yes. Thank you, Larry. Look, we continue to execute on both near and long term goals. We completed the first two milestones with the bondholders. The questions regarding Pure Cycle's core technology have been addressed and answered. Speaker 200:26:48We closed The AEDA land transaction on 30 June, which paves the way for our North American growth strategy, we extended the $150,000,000 revolving line of credit through March 31, 2025, and closed 2 non dilutive financing transactions for a net amount of $47,900,000 We continue to set the stage and advance our international projects in Antwerp, Belgium Ulsan, South Korea and Japan. We look forward to updating the market with respect to the upcoming milestones achieved and completing the start up process of our flagship Ironton facility and the Augusta financing process as soon as possible. Thank you everyone for joining the call today. At this time, we'd like to open the call to questions. Operator00:27:33Thank you. We will now conduct a question and answer session. And wait for your name to be announced. Our first question comes from Hassan Ahmed from Alembic Global Advisors. Please go ahead. Speaker 500:28:05Good morning, Dustin and Larry. First a comment followed by Look, I mean, historically, there were a bunch of cynics out there with regards to the BCT story. And the cynical stuff that they would talk about was whether or not the technology works, whether it's scalable or not. So clearly, you guys have proven them wrong, with commercial production starting and the like. So that's obviously the comment that I had to make. Speaker 500:28:35But in terms of my question, as far as your core technology goes, The core technology working at scale. I mean, as I sort of sift through your presentation, it seems that there wasn't Really a whole lot of redesigning that you guys had to do, right? I mean, maybe some slight redesign with regards to The mixing and extraction side of things, maybe some on the purification step and the separation step. So the question is, were these sort of minor redesigns, A and B, the lessons learned and Time saving and potentially budget saving for future projects because of these potential sort of findings. Speaker 200:29:25Yes. Hey, thanks a lot, Hassan. Yes, I think the way you're thinking about it is right. Anytime you're scaling a new technology, there's always that Chance that you start raising rates and you run into something that's going to require a lot of time or a lot of CapEx to repair. And as we started up the facility, we just didn't see that, okay? Speaker 200:29:47We did have some minor issues. I'll speak to that in a second. But like you say, I mean, the core technology is really about mixing, removing contaminants and then removing solvent. And as we performed those 3 core, let's say, chemical engineering type technologies, They worked, and they worked really well. So we're very excited about that. Speaker 200:30:12With respect to the minor items that we had, It's a myriad of things, Sasan. So I can give you lots of examples of things that happen. I would say the majority of them are very common to any start up, whether it's a new technology or not. Okay? I mean, anytime you start up, you're going to have Control valves that don't work quite right or regulators that are not set properly for the system, We had one situation where we needed to shut down the entire utilities plant to basically boot up a new program. Speaker 200:30:49That's similar to restarting your computer, but for a plant like this, it takes a bit of time. Where we did have some issues that were that we had to work our way through. We're in some of the piping around pieces of equipment. We had a little bit higher pressure drop in that system than what we expected, and we redesigned the piping And implemented it in the course of July. That was actually a really nice, let's say, technical achievement by the team to adapt and to adjust. Speaker 200:31:24The other item was quite frankly a small design problem with 1 of our Johnson screens in one of our core operations. And that allowed some of the process to leak through where it wasn't supposed to, and that required us to cycle down But all these things are behind us. And so what we did is through the course of the commissioning process, Instead of pushing to get some minor rates, we've made the decision to really prep this plant for full rates. And so we shut down, fixed a lot of things that were kind of on the list that we've been dealing with and came back up and have been running really well. With respect to lessons learned, absolutely. Speaker 200:32:15Okay. So on the competency side, anytime you scale a technology like this, You don't really know exactly what you're going to see. You've got good fundamental understanding of the tech, but until you see it at scale, You don't know how to handle it. So on one hand, the competency development that we've had across our system has been exceptional. Our team out here really Dan spoke to that quite a lot, but our team really out here Has been the right team, done a good job, but also learned a lot. Speaker 200:32:50And as it comes to applying the learnings to future plants, It's certainly going to help us in the startup phase because we're going to know what to expect before we start. So the startup will go much, much faster on future plants. But we're also learning a lot about our plant where a tweak here and a tweak there is going to give us basically 2 opportunities. One is we see several areas on our plant where we can cut significant CapEx and also we see several areas in our Plant where we can increase capacity with very minimal impacts to the plant. So I'm optimistic about our CapEx per pound. Speaker 200:33:31It's a tough environment with respect to inflation and costs in general, but I think we're going to have an opportunity to reduce costs and probably also increase Capacity on future facilities. Thanks a lot for the question, Hassan. Speaker 500:33:44Very, very helpful. And a quick follow-up. Can you talk a bit about How you feel the commercial scale sort of facility has performed relative to the FEU? Speaker 200:33:57It's performing better than the FEU, okay. I mean, we have and we knew that on the front end. We've added a lot of design components to the commercial plant that we didn't have in the FEU. And quite frankly, the Equipment that we have installed in the facility is a much higher quality than the FU. One area in particular, just to give you one example, which is There's several, but one example would be around the devolatization of our final product pellet. Speaker 200:34:28I mean, this is a really big deal. It helps to remove contaminants in the overall product, but it also reduces the odor of our final And we've talked about this quite a bit. When people would smell the FEU pellets, They would think, wow, this is good. And when we tested it, it looked good. But what we're seeing is that the performance of our final Pellet here is even better than the FEU. Speaker 200:34:59And quite frankly, I'm extremely excited about that. I've got a lot of experience dealing with different industries. And odor is very often a core component, and I think that's going to be a big opportunity for us to value sale in the future. Speaker 500:35:14Very helpful. Thank you so much. Speaker 200:35:15Thanks, Sasan. Operator00:35:17Thank you. One moment for our next question. Our next question comes from Noah Kaye from Oppenheimer and Co. Please go ahead. Speaker 600:35:33Thanks for taking the questions and for the update. Clearly, the team has been Living on this 20 fourseven and it's really helpful for us to see where you're at currently. And so my first question is kind of a 2 parter that actually feeds from the last question, which is, first, around product quality and second, around product run rates, Right. So you mentioned the odor, but just so Speaker 200:35:59we all Speaker 600:35:59understand, are the Pellets that are coming out of the facility now of the quality that would get commercial acceptance from your customers And if those attributes are actually better than contemplated in the agreements, what does that mean for Customer demand. Speaker 200:36:22Yes. We feel really good about the product quality, Noah. Anytime you start up a facility like this, you're going to have some periods at the beginning where you have construction debris and different Items that you have to clean out through the pipe, rust that's developed in the inside of the pipe. And when we look at the products, we had some of that at the beginning. But the core component that we've been watching is the odor performance, and that's been performing very well. Speaker 200:36:51With respect to the marketability of the product, yes, we feel very good about that. With respect to the ability to, let's say, up Sell that from an odor perspective? We'll have to see how that goes, Noah. I anticipate, a lot of interest In our product and markets that we haven't traditionally chased from an odor perspective, but we'll have to see how that plays out over time. Speaker 600:37:16Not to show your hand too much, but can you talk a little bit more about that? What does having lower order mean in terms of expanding your markets? Speaker 200:37:25Well, I mean, one easy example is automotive. Another would be in Let's just speak to automotive. I mean, no one wants to have, there's a lot of areas in the world That do not like the new car smell. A lot of times, the new car smell is really the fossil based plastic that is Creating that smell inside the vehicle. And if we can perform better than fossil based polypropylene on the odor front, which early indications Indicate that we can, then that's going to give us a jump into the cockpit of the vehicles type applications. Speaker 200:38:07That would be Dashes, pillars, consoles, things like that. I think that's a really big opportunity that could open up for us. Speaker 600:38:17Really interesting. So into product run rate, you mentioned you recently initiated to the restart. And so I'm guessing that where you sit today is a fairly low run rate relative to rated capacity. But can you walk us through where you sit and how you see this ramping. You reiterated commitment to a full month of 50% production by end of September. Speaker 600:38:41Obviously, you have conviction there, but just help us walk through what you're seeing now and what you expect. Speaker 200:38:47Yes. It's important to note that in July, We were much more focused on fixing these items that were hanging us up a little bit so that we could reach full run rate. And what I'll tell you now is that we're touching the 40%, 45% level of capacity, And we haven't seen real top end constraints yet. So as we get into August, I anticipate us pushing above the 50% level And working to knock out those next milestones. Speaker 600:39:21That's great, dear. Last question just around there was a comment in the release around the expected margins Kind of being in line with the budget that was provided previously, there can be a lot of moving Parts of the cost structure and the revenue stack, but just what should give us or what gives you confidence in being able to kind of hit Target margins as you build this thing to scale over the next several months? Speaker 200:39:56Well, let's talk about cost and then we'll talk about revenue. On the cost side, I think we're seeing indications, although they're early, that our variable cost structure is Going to look good, if not a little bit favorable to the original budget, okay? I think that we're finding efficiencies as we optimize the plant to pull down the utility cost. And so I think that's going to be good. Another core component to cost is feedstock. Speaker 200:40:21And we're finding feedstock market's been down quite a bit this year relative to the last couple of years. And so we'll take full advantage of that. And quite frankly, given our flexibility on FEED, I think that we'll have a notch Better than others buying in the mechanical recycling market. So I feel good about that. The other item that We really haven't talked Yes, Speaker 700:40:45no, Speaker 200:40:46that's okay. The other item that we really haven't spoken quite as much about is on the revenue side. And Well, there are a lot of puts and takes on the overall deck, especially with respect to Ironton, we have a couple of things. 1, we've got an increasing amount of Feedstock Plus contracts that we're applying to Ironton, which is going to help quite a lot. But more important to that is to how we believe that we can value sell. Speaker 200:41:18We've run several different feedstocks in the plant so far, a couple of different grades of PIR. We even ran a little bit PCR, we focused more on PIR because of its consistency and it just allowed us to watch the data a bit Closer, but the key thing is that the feeds that we ran in the plant so far, they all basically act the same, which gives us a lot of confidence on the PCR front. And so most of the contracts that we have in place are Mandating like a minimum of 50% PCR, but we know that the market is very excited about more PCR. And so the higher the PCR that we can put to the market, I think the better we'll be able to value sell our product. And so I feel good about the revenue side. Speaker 200:42:09The polypropylene market in general is down a bit, Noah. And so that's something that we have to watch. But, I think that our product is in a league of its own, and I think it's going to carry a lot of weight in the market. Thanks. Speaker 500:42:27Thank you. Operator00:42:29Thank you. One moment for our next question. Our next question comes from Adit Shereshta from Stifel. Please go ahead. Speaker 700:42:44Hi, good morning and thanks for taking my questions. Just could we get an update on the general timeline of meeting the key milestones? I know you Talk about the 50% utilization, you'll meet that by September. But it looks like other things may have shifted a bit. When do you not expect the performance test completion To occur. Speaker 200:43:04Yes. Look, we feel really good about the milestones. I think we'll be ramping above 50% within The next period of short period of time, I think we'll have a shot at achieving the milestone in August. And if not, we'll close that milestone in September. With respect to the final performance Look, this is really the game that we have been going for. Speaker 200:43:31All of the work that we did in July was really about achieving this Because it gives us a lot more flexibility in the overall system. And so we haven't really set a target date for that. I think that in the September, October time frame, it's very reasonable for us to touch that test. Remember, it's a 5 day test at 100% rates. And as we ramp up to get to that position, We'll know if we see any incremental constraints and look to work around them. Speaker 200:44:04But right now with what we see across the system, I see no reason that's going to stop us Getting it done in September, October. Speaker 700:44:12All right. Thank you. And just a follow-up. Do you see any other process technology issues From start up, maybe that needs to be resolved or any other things that may pop up that we're not necessarily seeing right now? Speaker 200:44:28Well, I mean, that's kind of a crystal ball question. I mean, the short answer is, I have no doubt that we will have other challenges in front of us as we move forward, Okay. That's the nature of this business. It's the nature of introducing a novel technology, and that's what we've seen all the way through. What I'm confident in is our team and our ability to solve problems. Speaker 200:44:51So do we see other items that are out there now? Yes, some nuisance things around the edges. But again, the core technology that really represents The power of the technology is working really well. And we're going to leverage that, pivot on that and continue to grow. So I'm really optimistic that the majority of the heavy hitting headaches are behind us, and we're going to be moving forward with pace now. Speaker 700:45:23Thank you for taking my questions and good luck. Speaker 200:45:25Yes. Thank you so much, Adit. See you next time. Operator00:45:29Thank you. One moment for our next question. Our next question comes from Eric Stine from Craig Hallum. Please go ahead. Speaker 800:45:43Hi, everyone. I was just hoping to follow-up on an earlier question about lessons learned as you bring Ironton online and At scale, any change to your thought on optimal plant size? I believe it's £130,000,000 is your expectation. And then also just curious as you move forward and look at international markets, is there anything in those markets that would dictate a different Speaker 200:46:12Look, I think that we've had a lot of theoretical discussions about what the optimal plant size would be. I think that when you Helicopter up a little bit and think about the market holistically. I think there's look, I think there are Cases to be made for smaller plants, and I think there are cases to be made for bigger plants. Obviously, when you get into the bigger plants, you have the opportunity Spread the cost out across higher capacity and that helps your overall CapEx per pound. And you can often offer quite a bit of feedstock flexibility by targeting 1 feed to a specific line and optimize that way. Speaker 200:46:53With respect to smaller plants, I mean, there's a lot of smaller markets out there that would love to have A facility like this that could reduce their dependency on imports from other regions, okay? And so we're paying attention to both. I think from a technology perspective, what we're seeing is that since the core technology is so robust And effective, I think the ability to scale the inside components of our plant are pretty straightforward. We're going to have to look at the details, and I'm not prepared to make a comment on what we think future plant sizes Could be today, but I think that we should be very optimistic about that. I think that Once you've got a good handle on your core internal technology, then it's really just about Operating a bit on the edges to increase capacity. Speaker 200:47:54So some natural constraints that we're going to have Initially, our extruder capacity, okay, we'll probably hit constraints there before anywhere else. But you can always add an extruder or you can always build a bigger extruder for future lines. We're not seeing mixing constraints. We're not seeing extraction constraints at this point. We're not seeing solubility management constraints. Speaker 200:48:21Those are good. And once you have clean, control of that core portion of the technology, it allows you to think about Scaling differently. So do I think that we could have a much bigger plant out there someday? Absolutely. And what impact will that be on our overall CapEx per pound? Speaker 200:48:40It will certainly drop it. And I think that when it comes to the overall position for us in the market in the long run, I think that's where Pure Cycle becomes very powerful, because once we know the technology works and we can operate it reliably like we're learning in Ironton, Then it's going to be all about how can you get the CapEx per pound in control so that you can grow economically more sustainably. And I think that we are in a great position today to do that. Speaker 800:49:12Got it. That's helpful. And maybe last one for me. Just on the feedstock side, obviously, you've done a lot of work in the U. S. Speaker 800:49:20But just curious, I know It's still somewhat early, but curious the work that you've done or work that your partners have done in some of these international markets As those projects approach? Speaker 200:49:33Yes. No, actually, this is one of the fringe benefits of thinking and going global early. As soon as you start opening that up, it just It gives people the reason to pick the phone up and to give you a call. Okay. So in every region that we've mentioned about growing globally, we have Feedstock potential future feedstock partners that are picking the phone up and giving us a call. Speaker 200:50:00And one great example that I'd like to use, When we were considering moving into Europe, one of the things that we heard a lot of was it's going to be very difficult to find feedstock. You'll have a very difficult time finding feedstock because it's there's not enough of it. It's all been consumed and there's not any leftover for PureCycle. But within a couple of weeks of announcing our location in Antwerp, We had early indications of oversubscription for a single line and quite frankly, on our way to having enough subscription for 2 lines. And so I think that fundamentally, we are a technology that is agnostic when it comes to the type of feedstock. Speaker 200:50:48We handle a lot of different varieties. That's differential to almost all other players in the market. As a result of that, feedstock suppliers and aggregators, they see us as an opportunity to where they can go find A home for stuff that they've been looking at for many years. And so we find that our technology actually draws Feedstock out of the market as opposed to shortens the market. Speaker 800:51:19Yes. That's great to hear. Thank you. Operator00:51:23Thank you. One moment for our next question. Our next question comes from Gerry Sweeney from ROTH Capital. Please go ahead. Speaker 900:51:37Good morning, Larry and Dustin. Thanks for taking my call. Speaker 200:51:40Yes. Thanks a lot, Jerry. It's good to see you again. Speaker 900:51:44The question, Obviously, a lot of questions on the operational front. But my one question is, have you sent pellets for certification yet? Speaker 200:51:55We have not sent pellets for certification off the commercial plant yet, but we are in active Discussions with all of our key partners for their applications. Speaker 900:52:11Got it. Okay. And then switching gears, Larry hasn't had a chance to talk too much, so I got a question or 2 for him. Obviously, the project financing sounded as though that was kicking back in gear. Just curious if maybe you could let us know where it stands. Speaker 900:52:27And then In conjunction with that, it sounded as though in your prepared remarks, Augusta was one line. I'm not sure if I heard that right. I'm just curious if there were any changes. And obviously that fits into project financing as well. Speaker 200:52:40Yes. Thanks, Jerry. I'll answer the last part and then I'll pass the baton to Larry. Augusta is It has the capacity for 8 lines. We've purchased long lead items for 2 lines. Speaker 200:52:55And then we are evaluating whether to attack one line first and then pull the second line in or to go after both at the same time. We've got that was a kind of a central discussion with the AEDA in terms of the overall timing and the package that we've built with them. But they were very comfortable with us starting with 1 versus starting with 2, which is where that narrative is coming from. And I'll pass it to Larry for the rest of the answer. Speaker 400:53:24Yes, okay. Thanks. Jared, it's a good question. If we learn one thing from our experience last year Being in the market, besides for the fact that it was a very difficult market, we really had A strategy with one set of investors. And what we've done is we've pivoted Our thought process for restarting by thinking about different avenues So that we don't have all of our eggs in one basket. Speaker 400:54:03We have 3 different scenarios that we are thinking about and evaluating with respect to how we would close financing. What that does is it diversifies us so that we have choice hopefully And that choice should allow us to pick the scenario that's best for us long term, But also would get us to the finish line sooner. So the good news is with Ironton running, tech risk removed, We have different irons in the fire, if you will. So we're really excited about that. But If there's one thing we know, we don't want to get ourselves ahead of things because it's a tough market. Speaker 400:54:58We're going to make sure that we're positioned well. We're probably going to be working To build momentum with some anchors, if you will. So, yes, we're really excited to get going now that the tech risk has been removed. The other comment I'll make with respect to what Dustin said, as Dustin alluded, we did get the approval from the AEDA for one line financing for one line. We have been progressing long lead for two lines. Speaker 400:55:33So as Dustin said, we've got a lot of flexibility. The most important thing is that We got the agreement with the AEDA. And when we go to market on a couple of different scenarios, we have flexibility whether it's one line first, Both together, etcetera. Speaker 900:55:51Got you. That was my main question really was if the AEDA gave you the thumbs up, You're in good shape with no matter if you do one line or 2 lines, correct? Speaker 400:56:02That's right. Obviously, Two lines at the same time is more revenue and profitability for us. So that will also factor in our thinking. Speaker 900:56:14Got it. Okay. I appreciate it. Thanks for taking my call. Speaker 400:56:18Yes. Thanks, Jerry. Operator00:56:20Thank you. One moment for our next question. Our next question comes from Thomas Boyes from TD Cowen. Please go ahead. Speaker 1000:56:33Thanks for taking the questions. Great to see all of the kind of progress this quarter. First, A quick one on just the 100 percent operating capacity deadline at the end of January, not the performance test. Is it similar to the 50% operating capacity? Is that something where you need to operate the facility 100% for a whole month or Just wanted to kind of understand the framework there. Speaker 200:57:03Yes. It's similar to the current milestone, which is just a pounds per month requirement by that date, yes. Speaker 1000:57:13Got it. And then just a longer term one, I was wondering if you could talk maybe about the ability to leverage, say, the DOE for additional lines at Augusta beyond 12 because that process obviously takes a good chunk of time. Speaker 200:57:30Yes. I mean, so we're chasing a lot of different financing options for us. And in the case of, let's say, a long term partner like the DOE and financing, we're certainly looking at that as a Potential vehicle beyond 2 lines. It's one of these potential financing options that could It'll be turned on for each line in series in Augusta. That's the idea. Speaker 200:57:59So you wouldn't necessarily have to go through the same process every time Operator00:58:11All right. I am showing no further questions at this time. I will turn the conference back over to Dustin for closing remarks. Speaker 200:58:19Look, I just want to close, 1st of all, by thanking everybody for participating today and asking the great questions and more importantly, by following us And supporting us along the way. It seems to me like every quarter we accomplished something newer, bigger and even more exciting. This quarter was no different. And I mean given the success that we found with our technology combined with the growth, The quality and the resolve of our people today represents a true inflection point for our company. And while we're extremely proud of where we are today, I believe future updates will even be more rewarding. Speaker 200:58:59Thank you for joining the Pure Cycle team and helping us to create a Pure Planet. Operator00:59:05This concludes today's conference call. Thank you for participating. You may nowRead morePowered by Conference Call Audio Live Call not available Earnings Conference CallPureCycle Technologies Q2 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) PureCycle Technologies Earnings HeadlinesPureCycle Technologies Q1 2025 Earnings PreviewMay 6 at 7:08 PM | msn.comPureCycle Technologies: PureCycle Invites Ironton and Denver Communities to Tour Recycling FacilitiesMay 1, 2025 | finanznachrichten.deTrump wipes out trillions overnight…Is there anybody more powerful than Donald Trump right now? In a single tariff announcement, he wiped out nearly $5 trillion in wealth from the S&P 500 and $6.4 trillion from the Dow Jones… Not to mention the countless trillions of dollars lost in every market around the world… leaving the major political powers scrambling in fear of Trump’s next move.May 7, 2025 | Porter & Company (Ad)3 Growth Stocks Down as Much as 34% to Buy Right NowApril 29, 2025 | fool.comCraig-Hallum Reaffirms Their Hold Rating on PureCycle Technologies (PCT)April 24, 2025 | markets.businessinsider.comPureCycle Technologies: Collapse Of Liquidity Places Serious DoubtApril 21, 2025 | seekingalpha.comSee More PureCycle Technologies Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like PureCycle Technologies? Sign up for Earnings360's daily newsletter to receive timely earnings updates on PureCycle Technologies and other key companies, straight to your email. Email Address About PureCycle TechnologiesPureCycle Technologies (NASDAQ:PCT) engages in the production of recycled polypropylene (PP). The company holds a license for restoring waste PP into ultra-pure recycled polypropylene resin that has multiple applications, including packaging and labeling for consumer products, piping, ropes, cabling, and plastic parts for various industries. Its recycling process separates color, odor, and other contaminants from plastic waste feedstock to transform it into virgin-like resin. 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There are 11 speakers on the call. Operator00:00:00Welcome to the Pier Cycle Technologies Second Quarter 2023 Corporate Update Call. At this time, all participants are in listen only mode. After the speakers' presentation, there will be a question and answer To ask a question during this session, you will need to press star 11 on your telephone. You would then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. Operator00:00:34I would now like to hand the conference over to Charlie Place, Director of Investor Relations. Please go ahead. Speaker 100:00:42Thank you, Anton. Welcome to Pure Cycle Technologies' 2nd quarter 2023 corporate update conference call. I'm Charlie Place, Director of Investor Relations for Pure Cycle. And joining me on the call today are Dustin Olson, our Chief Executive Officer Larry Soma, our Chief Financial Officer and Dan Combs, our Executive Chairman. This morning, we will be highlighting our corporate developments for the 2nd quarter and subsequent to quarter end. Speaker 100:01:08The presentation we will be going through on this call will also be found under the Investors tab at our website at www.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. These statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control, including those set forth in our Safe Harbor provisions For forward looking statements that can be found at the end of our Q2 2023 corporate update press release and our quarterly report on Form 10 Q filed yesterday evening 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 statement. 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. Speaker 100:02:20Any variation between Pure Cycle'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 joining us by phone, you can access it at any time on purecycle.com. We're excited to share updates from the previous quarter with you. I'll now turn it over to Dustin Olson, Pure Cycle's Chief Executive Officer. Dustin? Speaker 200:02:44Yes. Thanks a lot, Charlie. Thank you everybody for joining the call. Q2 was the most exciting and rewarding quarter in Pure Cycle's history. Ironton is operational. Speaker 200:02:56This is the moment that we've worked toward for the last decade. We shared a lot of moments together from receiving the Procter and Gamble license, Building the feedstock evaluation unit, financing Ironton, going public and now proving the technology at scale. This is a key moment for our future. The first plant is always the most challenging and the most special, but now we have a fundamental understanding for how we grow reliably into new regions, reduce our cost structure, build bigger plants and get more efficient on capital projects. With this progress, we can now start realizing PureCycle's potential. Speaker 200:03:34Remember, PureCycle takes the world's most Popular and least recycled plastic polypropylene and converts it into a premium ultra pure product. Our technology capitalizes on strong feedstock flexibility, a low variable cost and produces a high value product. The world needs technology like this. The world needs a story like this. Consumers all around the world are begging our industry to find solutions like this. Speaker 200:04:01Pure Cycle is the answer. As you know, we accomplished the first two bondholder milestones and for the first time produced pellets at commercial scale. We are well positioned to accomplish the remaining milestones. Ironton is running and raising production rates every day. I wish I could have been there. Speaker 200:04:21I wish you could have been there when we first produced our pellets. It was a remarkable achievement for everyone and a Tangible product of the hard work we've all put in. Everyone on-site will remember that moment for the rest of their lives. During the day, we cut a quick video to capture the moment and I was clearly excited. I was excited for two reasons. Speaker 200:04:421, Because I knew how much it meant for our team, our partners and our shareholders to see the fruits of their labor finally come to reality. But probably more importantly for this group, because it represented that our technology works at scale. For us, when the polymer moved through the system, we knew the fundamental technology would work. Moving to 1st pellets was a major step. We push Polymer through every key process and prove the technology works at scale. Speaker 200:05:14If you take a step back and just look at our fundamentals, our process is mixing polymer with solvent, Extracting contaminants from polymer and then removing solvent from the polymer. These are the core principles of our technology and where the tech risk was most critical. In each of these steps, our process worked extremely well. We have good technical data to support the merits This is a big deal. For the last decade, tech risk was the biggest obstacle. Speaker 200:05:48This is now off the table and sets the stage for our global growth plan. During the start up, we ran into glitches. This was expected. We've talked about it before. There are a lot of details around a facility like this. Speaker 200:06:03And you just have to work through each piece of equipment to both learn how to run them and then fix whatever issues pop up. In some respect, it's about the equipment. Does it work properly? Was it installed properly? Will it handle the process properly? Speaker 200:06:19Can it handle interruptions properly? But it's also about the team. Does the team have the capacity, the determination and the grit to stay focused to keep solving these problems. We do in a big way. Not only has our team grown tremendously over the past 4 months since mechanical completion, we've also shown that we have the talent to successfully solve problems. Speaker 200:06:46After completing the 1st pellets run-in June, we effectively used July to work through a series of commissioning details. As you start to run, you'll find a collection of issues that you just need to address. Some of them you can work on while the equipment is running, but some of them require the and efficiency and pave the way for continued strong operations in the future. We will continue to address the plant operations every day with a systemic, Methodical and purposeful approach. This is the definition of operational excellence. Speaker 200:07:26Every day you grind to improve the facility utilization by improving the robustness of our processes and operations. With respect to commercial activities, we're on track. We've established a good feedstock purchasing pattern with numerous third parties and have adequate feedstock available. We currently have over £10,000,000 of feedstock in inventory with over with about 50% prepped and ready for purification. We have built a substantial amount of optionality into our system. Speaker 200:07:58Our sales group has also been working closely with our core partners on specific applications for first products, and we have been delivering several technical training seminars to our distribution partners. Our product is in high demand and we are ready to get the volume moving. As our production increases, we will continue to expand our sales to new customers in new regions. And while we already have our core Ironton volume committed and ready to go, we can now be opportunistic some of our production and plan to seed the market and prepare sales channels for all future plants, Augusta, Europe and in Asia. As you look across the 4 key areas of operation, preprocessing, which we call prep utilities, purification and Born Digital and consider the commissioning that we've completed, we are very pleased with the progress we've made. Speaker 200:08:53We've accomplished a lot and we moved as we move through commissioning. There are a few specifics that I would like to mention. For prep operations that convert baled plastic into feedstock ready to be purified, all of the technology has been tested and commissioned. It took quite some time to grind through the start up and get things positioned across each piece of equipment, but prep reliability is improving every day and efficiency improvement activities are ongoing. Across the last quarter, we've been running a lot of different types of bales and generally have had good success here. Speaker 200:09:29We're in close communication with the 3rd party suppliers to improve the bale quality where it's needed. We have also identified several small projects that For utilities, While there's been a lot of work to get there, the area is fully commissioned in operations and has achieved benchmark rates across the system. This is the heart of our plant and achieving strong reliability is essential to our operations. Heat control is an important aspect of scale up And in an area where we historically had problems at the FEU, this is working well now and we feel good about the temperature control. For purification, we discussed this quite a bit already, but we're there. Speaker 200:10:18We've tested the core unit operations. They work well. The core tech is sound and tested. We've worked through a number of teething issues and we fixed and fine tuned a lot of equipment. There were a number of minor issues that needed to be worked through, program updates, external sensor replacements, minor adjustments to equipment, But they all have to be right. Speaker 200:10:39Not only have we learned a lot about Ironton, but all of this will be applied to future plants as well. It will help us build faster, build cheaper and start up more predictably. One of the areas where I'm particularly proud is with our Ironton staff. As you might recall, when asked about what are you most worried about with respect to start up, I almost always answered with The learning curve of our team. While the last two months have been a lot of work, time and effort, The commitment by our team has built an incredible strength for our company. Speaker 200:11:16We now know how to operate this plant. We are now more confident in the ability to predict operational performance and we're starting to see around the corner. Lastly, with respect to digital, This has been a big lift. I knew that when we decided to incorporate the Born Digital package, it was going to be more work at the beginning To get right, but I also knew that this would set the stage for everything else in the future. It's been true on both fronts. Speaker 200:11:46I remember early in the project, it was really difficult to get the basic controls to operate. The first time we tried to put Solvent into the system, it took approximately 3 weeks to get lined out. But then we learned and we fixed, we improved and we applied our Born Digital capability. And when we restarted the operations recently, it took less than one day to get the plant optimized on temperature and pressure. This is a good indication of both the power of Born Digital as well as the growth of our team. Speaker 200:12:19With respect to technology, We are excited. We recognize that it isn't easy to see the technology progress without actually being in Ironton and watching the day to day project progress and watching the data. So we pulled the original Investor Day presentation to show the progress across each section. Look, the big picture is clear. For our technology to be successful, we have to be able to mix solvent, extract contaminants and remove solvent. Speaker 200:12:48Each of these steps are really working well. Here are a few of the details across each section and a few problems that we've worked through. The first and last steps are all about extrusion. And our extruders are working really well. The heating, cooling and pumping capabilities are very good, and the capacity appears to track to design. Speaker 200:13:12We're happy with the relationship with Krausz Mafai, the level of support they've provided and the quality of their machines. We've always viewed our mixing and extraction steps as one of the most critical. It's traditionally difficult to scale mixing And mixing a solvent with a viscous polymer was expected to be challenging, but our plant has achieved this success. This is a key step because the better we mix polymer with solvent, the better the solvent will be removing contaminants. Good contaminant removal means superior product quality. Speaker 200:13:48Filtering and purifying steps are working well now. There's still minor mechanical items to work through, but they will not impact plant operations. The commissioning has been challenging because we had one faulty piece of equipment in a critical step that needed to be repaired, but it was repaired it was built by the drawings, but after startup, We learned that the design needed a small improvement. We used this time to upgrade the equipment and it's working well now. Removing and recovering solvent is a critical piece of our process. Speaker 200:14:23I'm very excited about this section. This allows us to be both cost effective and also a good environmental steward. Our final two steps are dedicated to this effort. Both work very well. In fact, while it takes some time to generate a statistically significant dataset, Our early indications show that our solvent removal is 15% to 40% more effective than the original design. Speaker 200:14:50This means that Pure Cycle is expected to generate pellets with even better odor performance than originally planned. One of the most critical adjustments that we made to the process was with respect to piping in the system. During the first start up, We noticed that the flow rate through the system was hindered and would have been rate limited below max capacity of original design. However, our team brainstormed the situation, developed a novel solution and then implemented it in late July. The results were really good and the rate limit appears to be removed. Speaker 200:15:26This has been a really interesting process for all of us and for the most part, Pretty traditional. Many of us have been part of big projects, startups, new plant operations and scale up efforts. It's basically going the way we expected. Projects like this are always more challenging in the early days as you tease and work out the kinks, and then they start working. We're very methodical with our commissioning process. Speaker 200:15:51And while this did take some time, what we've experienced isn't unusual, and there's no doubt that these At this time, I would like to invite Dan Combs to the call. As you know, Dan is the Chairman of our Board. Dan is a 45 year vet of the industry and has gone through a lot of projects, Startups and has worked in plants for years. He has been very helpful for me through this process. Quite frankly, he's also spent a lot of time in Ironton with all of Through our discussions, I thought that his perspective could be very helpful today. Speaker 200:16:28Dan? Speaker 300:16:30Thank you, Dustin. I'll try to give you some perspective on project completion, commissioning and startup from my 45 years of industry experience. I will discuss how and why such observations are relevant for this project from that industry perspective. Typical commissioning periods for complex technical facilities similar to this one take between 3 6 months. New technology generally takes more time and effort to commission and start up compared to proven technology. Speaker 300:17:04This project reached mechanical completion April 24. We are 3 and a half months past mechanical completion. Given the novel nature of our process, getting to this point inside the early portion of industry commissioning norms is a strong result and a successful outcome. The commissioning and early operations phase of a facility are really about understanding and addressing any key issues that might keep the plant from consistently producing at full capacity. Safety is always the top focus during this stage. Speaker 300:17:43We believe that safety leads and results follow. Commissioning success is driven by safety and finding and fixing issues. Any plant that contains miles of pipe and thousands complex instruments, controls and pieces of equipment will have some issues that require quick solutions. Our plant was no different. The majority of our issues were normal equipment and control issues common to any startup. Speaker 300:18:13There are many reasons that we've made such good progress Since mechanical completion. 1st is our talented team of people at Ironton and within the company. 2nd, our dedicated and committed partners 3rd, our Born Digital philosophy and 4, our capability of Finding Solutions. I've been part of many projects and results, and the results of this team are as good as any I've seen. Project startups follow an S curve. Speaker 300:18:46It's not linear. So it's always slow at the start at leaving the gate, And then it goes faster. However, there is nothing normal about the team in Ironton. It is rare to see a team So singularly focused and aligned on a mission. Pure Cycle hired a mixture of operators, Craftsmen, engineers, scientists, finance and business people to form this company. Speaker 300:19:14Most of our people have had excellent Experience with industry leaders. This gave us a jump on setting up robust processes for safety, environment, training, Quality, reliability and operations in general. All PCT people are committed and focused on the mission to solve plastics waste. They're proud to talk about what they do with their families in the community. This sense of pride and mission are key to our teamwork and drive this team to win. Speaker 300:19:47Not only did we find excellent people, But these people also work remarkably well together. In my many years within the industry, I've worked with a lot of top teams on big projects and managed a lot of plants. This team is as good as any I have worked with in my career. They look for ways to help each other. They look for ways to solve problems rather than make excuses. Speaker 300:20:12They check ego at the door and they listen and cooperate with each other. They make personal sacrifices to support the mission. They're committed to safe operation and making PCT successful. Our team is a key reason why we were making the progress that we're making. I could not be prouder of this team or the opportunity to participate alongside them with them to bring this technology to the market. Speaker 300:20:43Dustin, thank you for letting me share my thoughts about this project. Speaker 200:20:48Thank you, Dan. We're lucky to have you and we appreciate all of your support. While most of the company was focused on getting Ironton operational, we did move the needle forward with respect to our growth strategy. With respect to Augusta, We closed the key documents to secure the land, which now clears way for us to begin site work activities. We expect this work to start in Q4 and continue through Q2 of 25. Speaker 200:21:14As you recall, there are several concerns with respect to securing the Augusta land in the last two quarters that is now resolved. Now that Ironton is operational, we have clear access to land, our project can accelerate. We're incredibly excited about the future plant in Augusta and the recycling capacity that we can bring online. Europe is also on track. We closed the tender process for Antwerp, have commenced both engineering and permitting activities, we expect to close the permitting process in 2024. Speaker 200:21:46Our JVs also continued to move forward. Both Mitsui and SK Geocentric sent teams to Ironton for site tours that supported the development of both projects. We intend to establish inventory locations in Antwerp and in Singapore in order to seed future sales for Europe and Asia. We will use the flexibility in the irons and contracts to make volume available for export. We will add inventory in Antwerp and then 1 to 2 quarters later plan to move to Singapore. Speaker 200:22:14We're currently developing the internal work processes and third party contracts to establish this operation. I will now turn it over to our CFO, Larry Soma, for a financial update. Speaker 400:22:27Thank you, Dustin. I'm really pleased with the financial progress that we made during the quarter. At the end of May, the Augusta Economic Development Authority formally approved our plan of financing for 1 line in Augusta, which officially closed the forbearance that had previously been in place. Subsequent to that, on June 30, We executed an economic development agreement related to our plans to construct the Augusta facility. Pursuant to the EDA, PCT expects to receive certain property tax abatement benefits as well as certain other incentives, including site infrastructure development assistance. Speaker 400:23:17We are excited about our plans for Augusta and with the technology risk removed with pellet production in Ironton, We expect to accelerate our project financing efforts as we believe that removing the tech risk will improve our cost of funding. We have also continued our efforts to raise funds as we have interested parties for the remainder of our prep sortation equipment. We are hopeful to provide details soon, But in the interim, we were able to extend the maturity of our undrawn revolving line of credit with Celebra Capital from June 30, 2024 to March 31, 2025. Our objective has always been to ensure sufficient capital to advance our strategic initiatives, while allowing ourselves the time needed to execute a capital efficient project financing plan for Augusta. We ended the quarter with just over $366,000,000 in cash and available liquidity, which includes $150,000,000 of unused borrowing capacity on our line of credit. Speaker 400:24:34As a reminder, during the quarter, we closed 2 non dilutive financing transactions for a net amount of $47,600,000 Our corporate and pre operational Employee cash used was $9,900,000 during the Q2, which was an increase from the prior quarter, primarily due to the delayed payment of a portion of our 2022 bonuses compared to the previous quarter. We used $12,500,000 of cash during the quarter for normal corporate operations such as insurance, Ironton startup working capital, professional fees and various other expenses. Additionally, we continue to make investments in our Ironton, Augusta and Prep facilities, which were funded primarily from the non dilutive financing transactions. Now let me comment on our budget for completing the Ironton project. As noted in our 10 Q filing last night, Pure Cycle anticipated as of June 30 That the remaining investments in 2023 to complete the Ironton facility could range from $10,000,000 to $22,500,000 This range is dependent upon various contract contingencies and their ultimate resolution. Speaker 400:26:04We believe that we can recapture funds from some of the contractors on the project. But the most important point is that we've already spent or forecasted the need for a total of $22,000,000 which means that any positive resolution to contract contingencies should be favorable to our future cash forecast. Now I'm going to return the call to Dustin for his final comments. Speaker 200:26:33Yes. Thank you, Larry. Look, we continue to execute on both near and long term goals. We completed the first two milestones with the bondholders. The questions regarding Pure Cycle's core technology have been addressed and answered. Speaker 200:26:48We closed The AEDA land transaction on 30 June, which paves the way for our North American growth strategy, we extended the $150,000,000 revolving line of credit through March 31, 2025, and closed 2 non dilutive financing transactions for a net amount of $47,900,000 We continue to set the stage and advance our international projects in Antwerp, Belgium Ulsan, South Korea and Japan. We look forward to updating the market with respect to the upcoming milestones achieved and completing the start up process of our flagship Ironton facility and the Augusta financing process as soon as possible. Thank you everyone for joining the call today. At this time, we'd like to open the call to questions. Operator00:27:33Thank you. We will now conduct a question and answer session. And wait for your name to be announced. Our first question comes from Hassan Ahmed from Alembic Global Advisors. Please go ahead. Speaker 500:28:05Good morning, Dustin and Larry. First a comment followed by Look, I mean, historically, there were a bunch of cynics out there with regards to the BCT story. And the cynical stuff that they would talk about was whether or not the technology works, whether it's scalable or not. So clearly, you guys have proven them wrong, with commercial production starting and the like. So that's obviously the comment that I had to make. Speaker 500:28:35But in terms of my question, as far as your core technology goes, The core technology working at scale. I mean, as I sort of sift through your presentation, it seems that there wasn't Really a whole lot of redesigning that you guys had to do, right? I mean, maybe some slight redesign with regards to The mixing and extraction side of things, maybe some on the purification step and the separation step. So the question is, were these sort of minor redesigns, A and B, the lessons learned and Time saving and potentially budget saving for future projects because of these potential sort of findings. Speaker 200:29:25Yes. Hey, thanks a lot, Hassan. Yes, I think the way you're thinking about it is right. Anytime you're scaling a new technology, there's always that Chance that you start raising rates and you run into something that's going to require a lot of time or a lot of CapEx to repair. And as we started up the facility, we just didn't see that, okay? Speaker 200:29:47We did have some minor issues. I'll speak to that in a second. But like you say, I mean, the core technology is really about mixing, removing contaminants and then removing solvent. And as we performed those 3 core, let's say, chemical engineering type technologies, They worked, and they worked really well. So we're very excited about that. Speaker 200:30:12With respect to the minor items that we had, It's a myriad of things, Sasan. So I can give you lots of examples of things that happen. I would say the majority of them are very common to any start up, whether it's a new technology or not. Okay? I mean, anytime you start up, you're going to have Control valves that don't work quite right or regulators that are not set properly for the system, We had one situation where we needed to shut down the entire utilities plant to basically boot up a new program. Speaker 200:30:49That's similar to restarting your computer, but for a plant like this, it takes a bit of time. Where we did have some issues that were that we had to work our way through. We're in some of the piping around pieces of equipment. We had a little bit higher pressure drop in that system than what we expected, and we redesigned the piping And implemented it in the course of July. That was actually a really nice, let's say, technical achievement by the team to adapt and to adjust. Speaker 200:31:24The other item was quite frankly a small design problem with 1 of our Johnson screens in one of our core operations. And that allowed some of the process to leak through where it wasn't supposed to, and that required us to cycle down But all these things are behind us. And so what we did is through the course of the commissioning process, Instead of pushing to get some minor rates, we've made the decision to really prep this plant for full rates. And so we shut down, fixed a lot of things that were kind of on the list that we've been dealing with and came back up and have been running really well. With respect to lessons learned, absolutely. Speaker 200:32:15Okay. So on the competency side, anytime you scale a technology like this, You don't really know exactly what you're going to see. You've got good fundamental understanding of the tech, but until you see it at scale, You don't know how to handle it. So on one hand, the competency development that we've had across our system has been exceptional. Our team out here really Dan spoke to that quite a lot, but our team really out here Has been the right team, done a good job, but also learned a lot. Speaker 200:32:50And as it comes to applying the learnings to future plants, It's certainly going to help us in the startup phase because we're going to know what to expect before we start. So the startup will go much, much faster on future plants. But we're also learning a lot about our plant where a tweak here and a tweak there is going to give us basically 2 opportunities. One is we see several areas on our plant where we can cut significant CapEx and also we see several areas in our Plant where we can increase capacity with very minimal impacts to the plant. So I'm optimistic about our CapEx per pound. Speaker 200:33:31It's a tough environment with respect to inflation and costs in general, but I think we're going to have an opportunity to reduce costs and probably also increase Capacity on future facilities. Thanks a lot for the question, Hassan. Speaker 500:33:44Very, very helpful. And a quick follow-up. Can you talk a bit about How you feel the commercial scale sort of facility has performed relative to the FEU? Speaker 200:33:57It's performing better than the FEU, okay. I mean, we have and we knew that on the front end. We've added a lot of design components to the commercial plant that we didn't have in the FEU. And quite frankly, the Equipment that we have installed in the facility is a much higher quality than the FU. One area in particular, just to give you one example, which is There's several, but one example would be around the devolatization of our final product pellet. Speaker 200:34:28I mean, this is a really big deal. It helps to remove contaminants in the overall product, but it also reduces the odor of our final And we've talked about this quite a bit. When people would smell the FEU pellets, They would think, wow, this is good. And when we tested it, it looked good. But what we're seeing is that the performance of our final Pellet here is even better than the FEU. Speaker 200:34:59And quite frankly, I'm extremely excited about that. I've got a lot of experience dealing with different industries. And odor is very often a core component, and I think that's going to be a big opportunity for us to value sale in the future. Speaker 500:35:14Very helpful. Thank you so much. Speaker 200:35:15Thanks, Sasan. Operator00:35:17Thank you. One moment for our next question. Our next question comes from Noah Kaye from Oppenheimer and Co. Please go ahead. Speaker 600:35:33Thanks for taking the questions and for the update. Clearly, the team has been Living on this 20 fourseven and it's really helpful for us to see where you're at currently. And so my first question is kind of a 2 parter that actually feeds from the last question, which is, first, around product quality and second, around product run rates, Right. So you mentioned the odor, but just so Speaker 200:35:59we all Speaker 600:35:59understand, are the Pellets that are coming out of the facility now of the quality that would get commercial acceptance from your customers And if those attributes are actually better than contemplated in the agreements, what does that mean for Customer demand. Speaker 200:36:22Yes. We feel really good about the product quality, Noah. Anytime you start up a facility like this, you're going to have some periods at the beginning where you have construction debris and different Items that you have to clean out through the pipe, rust that's developed in the inside of the pipe. And when we look at the products, we had some of that at the beginning. But the core component that we've been watching is the odor performance, and that's been performing very well. Speaker 200:36:51With respect to the marketability of the product, yes, we feel very good about that. With respect to the ability to, let's say, up Sell that from an odor perspective? We'll have to see how that goes, Noah. I anticipate, a lot of interest In our product and markets that we haven't traditionally chased from an odor perspective, but we'll have to see how that plays out over time. Speaker 600:37:16Not to show your hand too much, but can you talk a little bit more about that? What does having lower order mean in terms of expanding your markets? Speaker 200:37:25Well, I mean, one easy example is automotive. Another would be in Let's just speak to automotive. I mean, no one wants to have, there's a lot of areas in the world That do not like the new car smell. A lot of times, the new car smell is really the fossil based plastic that is Creating that smell inside the vehicle. And if we can perform better than fossil based polypropylene on the odor front, which early indications Indicate that we can, then that's going to give us a jump into the cockpit of the vehicles type applications. Speaker 200:38:07That would be Dashes, pillars, consoles, things like that. I think that's a really big opportunity that could open up for us. Speaker 600:38:17Really interesting. So into product run rate, you mentioned you recently initiated to the restart. And so I'm guessing that where you sit today is a fairly low run rate relative to rated capacity. But can you walk us through where you sit and how you see this ramping. You reiterated commitment to a full month of 50% production by end of September. Speaker 600:38:41Obviously, you have conviction there, but just help us walk through what you're seeing now and what you expect. Speaker 200:38:47Yes. It's important to note that in July, We were much more focused on fixing these items that were hanging us up a little bit so that we could reach full run rate. And what I'll tell you now is that we're touching the 40%, 45% level of capacity, And we haven't seen real top end constraints yet. So as we get into August, I anticipate us pushing above the 50% level And working to knock out those next milestones. Speaker 600:39:21That's great, dear. Last question just around there was a comment in the release around the expected margins Kind of being in line with the budget that was provided previously, there can be a lot of moving Parts of the cost structure and the revenue stack, but just what should give us or what gives you confidence in being able to kind of hit Target margins as you build this thing to scale over the next several months? Speaker 200:39:56Well, let's talk about cost and then we'll talk about revenue. On the cost side, I think we're seeing indications, although they're early, that our variable cost structure is Going to look good, if not a little bit favorable to the original budget, okay? I think that we're finding efficiencies as we optimize the plant to pull down the utility cost. And so I think that's going to be good. Another core component to cost is feedstock. Speaker 200:40:21And we're finding feedstock market's been down quite a bit this year relative to the last couple of years. And so we'll take full advantage of that. And quite frankly, given our flexibility on FEED, I think that we'll have a notch Better than others buying in the mechanical recycling market. So I feel good about that. The other item that We really haven't talked Yes, Speaker 700:40:45no, Speaker 200:40:46that's okay. The other item that we really haven't spoken quite as much about is on the revenue side. And Well, there are a lot of puts and takes on the overall deck, especially with respect to Ironton, we have a couple of things. 1, we've got an increasing amount of Feedstock Plus contracts that we're applying to Ironton, which is going to help quite a lot. But more important to that is to how we believe that we can value sell. Speaker 200:41:18We've run several different feedstocks in the plant so far, a couple of different grades of PIR. We even ran a little bit PCR, we focused more on PIR because of its consistency and it just allowed us to watch the data a bit Closer, but the key thing is that the feeds that we ran in the plant so far, they all basically act the same, which gives us a lot of confidence on the PCR front. And so most of the contracts that we have in place are Mandating like a minimum of 50% PCR, but we know that the market is very excited about more PCR. And so the higher the PCR that we can put to the market, I think the better we'll be able to value sell our product. And so I feel good about the revenue side. Speaker 200:42:09The polypropylene market in general is down a bit, Noah. And so that's something that we have to watch. But, I think that our product is in a league of its own, and I think it's going to carry a lot of weight in the market. Thanks. Speaker 500:42:27Thank you. Operator00:42:29Thank you. One moment for our next question. Our next question comes from Adit Shereshta from Stifel. Please go ahead. Speaker 700:42:44Hi, good morning and thanks for taking my questions. Just could we get an update on the general timeline of meeting the key milestones? I know you Talk about the 50% utilization, you'll meet that by September. But it looks like other things may have shifted a bit. When do you not expect the performance test completion To occur. Speaker 200:43:04Yes. Look, we feel really good about the milestones. I think we'll be ramping above 50% within The next period of short period of time, I think we'll have a shot at achieving the milestone in August. And if not, we'll close that milestone in September. With respect to the final performance Look, this is really the game that we have been going for. Speaker 200:43:31All of the work that we did in July was really about achieving this Because it gives us a lot more flexibility in the overall system. And so we haven't really set a target date for that. I think that in the September, October time frame, it's very reasonable for us to touch that test. Remember, it's a 5 day test at 100% rates. And as we ramp up to get to that position, We'll know if we see any incremental constraints and look to work around them. Speaker 200:44:04But right now with what we see across the system, I see no reason that's going to stop us Getting it done in September, October. Speaker 700:44:12All right. Thank you. And just a follow-up. Do you see any other process technology issues From start up, maybe that needs to be resolved or any other things that may pop up that we're not necessarily seeing right now? Speaker 200:44:28Well, I mean, that's kind of a crystal ball question. I mean, the short answer is, I have no doubt that we will have other challenges in front of us as we move forward, Okay. That's the nature of this business. It's the nature of introducing a novel technology, and that's what we've seen all the way through. What I'm confident in is our team and our ability to solve problems. Speaker 200:44:51So do we see other items that are out there now? Yes, some nuisance things around the edges. But again, the core technology that really represents The power of the technology is working really well. And we're going to leverage that, pivot on that and continue to grow. So I'm really optimistic that the majority of the heavy hitting headaches are behind us, and we're going to be moving forward with pace now. Speaker 700:45:23Thank you for taking my questions and good luck. Speaker 200:45:25Yes. Thank you so much, Adit. See you next time. Operator00:45:29Thank you. One moment for our next question. Our next question comes from Eric Stine from Craig Hallum. Please go ahead. Speaker 800:45:43Hi, everyone. I was just hoping to follow-up on an earlier question about lessons learned as you bring Ironton online and At scale, any change to your thought on optimal plant size? I believe it's £130,000,000 is your expectation. And then also just curious as you move forward and look at international markets, is there anything in those markets that would dictate a different Speaker 200:46:12Look, I think that we've had a lot of theoretical discussions about what the optimal plant size would be. I think that when you Helicopter up a little bit and think about the market holistically. I think there's look, I think there are Cases to be made for smaller plants, and I think there are cases to be made for bigger plants. Obviously, when you get into the bigger plants, you have the opportunity Spread the cost out across higher capacity and that helps your overall CapEx per pound. And you can often offer quite a bit of feedstock flexibility by targeting 1 feed to a specific line and optimize that way. Speaker 200:46:53With respect to smaller plants, I mean, there's a lot of smaller markets out there that would love to have A facility like this that could reduce their dependency on imports from other regions, okay? And so we're paying attention to both. I think from a technology perspective, what we're seeing is that since the core technology is so robust And effective, I think the ability to scale the inside components of our plant are pretty straightforward. We're going to have to look at the details, and I'm not prepared to make a comment on what we think future plant sizes Could be today, but I think that we should be very optimistic about that. I think that Once you've got a good handle on your core internal technology, then it's really just about Operating a bit on the edges to increase capacity. Speaker 200:47:54So some natural constraints that we're going to have Initially, our extruder capacity, okay, we'll probably hit constraints there before anywhere else. But you can always add an extruder or you can always build a bigger extruder for future lines. We're not seeing mixing constraints. We're not seeing extraction constraints at this point. We're not seeing solubility management constraints. Speaker 200:48:21Those are good. And once you have clean, control of that core portion of the technology, it allows you to think about Scaling differently. So do I think that we could have a much bigger plant out there someday? Absolutely. And what impact will that be on our overall CapEx per pound? Speaker 200:48:40It will certainly drop it. And I think that when it comes to the overall position for us in the market in the long run, I think that's where Pure Cycle becomes very powerful, because once we know the technology works and we can operate it reliably like we're learning in Ironton, Then it's going to be all about how can you get the CapEx per pound in control so that you can grow economically more sustainably. And I think that we are in a great position today to do that. Speaker 800:49:12Got it. That's helpful. And maybe last one for me. Just on the feedstock side, obviously, you've done a lot of work in the U. S. Speaker 800:49:20But just curious, I know It's still somewhat early, but curious the work that you've done or work that your partners have done in some of these international markets As those projects approach? Speaker 200:49:33Yes. No, actually, this is one of the fringe benefits of thinking and going global early. As soon as you start opening that up, it just It gives people the reason to pick the phone up and to give you a call. Okay. So in every region that we've mentioned about growing globally, we have Feedstock potential future feedstock partners that are picking the phone up and giving us a call. Speaker 200:50:00And one great example that I'd like to use, When we were considering moving into Europe, one of the things that we heard a lot of was it's going to be very difficult to find feedstock. You'll have a very difficult time finding feedstock because it's there's not enough of it. It's all been consumed and there's not any leftover for PureCycle. But within a couple of weeks of announcing our location in Antwerp, We had early indications of oversubscription for a single line and quite frankly, on our way to having enough subscription for 2 lines. And so I think that fundamentally, we are a technology that is agnostic when it comes to the type of feedstock. Speaker 200:50:48We handle a lot of different varieties. That's differential to almost all other players in the market. As a result of that, feedstock suppliers and aggregators, they see us as an opportunity to where they can go find A home for stuff that they've been looking at for many years. And so we find that our technology actually draws Feedstock out of the market as opposed to shortens the market. Speaker 800:51:19Yes. That's great to hear. Thank you. Operator00:51:23Thank you. One moment for our next question. Our next question comes from Gerry Sweeney from ROTH Capital. Please go ahead. Speaker 900:51:37Good morning, Larry and Dustin. Thanks for taking my call. Speaker 200:51:40Yes. Thanks a lot, Jerry. It's good to see you again. Speaker 900:51:44The question, Obviously, a lot of questions on the operational front. But my one question is, have you sent pellets for certification yet? Speaker 200:51:55We have not sent pellets for certification off the commercial plant yet, but we are in active Discussions with all of our key partners for their applications. Speaker 900:52:11Got it. Okay. And then switching gears, Larry hasn't had a chance to talk too much, so I got a question or 2 for him. Obviously, the project financing sounded as though that was kicking back in gear. Just curious if maybe you could let us know where it stands. Speaker 900:52:27And then In conjunction with that, it sounded as though in your prepared remarks, Augusta was one line. I'm not sure if I heard that right. I'm just curious if there were any changes. And obviously that fits into project financing as well. Speaker 200:52:40Yes. Thanks, Jerry. I'll answer the last part and then I'll pass the baton to Larry. Augusta is It has the capacity for 8 lines. We've purchased long lead items for 2 lines. Speaker 200:52:55And then we are evaluating whether to attack one line first and then pull the second line in or to go after both at the same time. We've got that was a kind of a central discussion with the AEDA in terms of the overall timing and the package that we've built with them. But they were very comfortable with us starting with 1 versus starting with 2, which is where that narrative is coming from. And I'll pass it to Larry for the rest of the answer. Speaker 400:53:24Yes, okay. Thanks. Jared, it's a good question. If we learn one thing from our experience last year Being in the market, besides for the fact that it was a very difficult market, we really had A strategy with one set of investors. And what we've done is we've pivoted Our thought process for restarting by thinking about different avenues So that we don't have all of our eggs in one basket. Speaker 400:54:03We have 3 different scenarios that we are thinking about and evaluating with respect to how we would close financing. What that does is it diversifies us so that we have choice hopefully And that choice should allow us to pick the scenario that's best for us long term, But also would get us to the finish line sooner. So the good news is with Ironton running, tech risk removed, We have different irons in the fire, if you will. So we're really excited about that. But If there's one thing we know, we don't want to get ourselves ahead of things because it's a tough market. Speaker 400:54:58We're going to make sure that we're positioned well. We're probably going to be working To build momentum with some anchors, if you will. So, yes, we're really excited to get going now that the tech risk has been removed. The other comment I'll make with respect to what Dustin said, as Dustin alluded, we did get the approval from the AEDA for one line financing for one line. We have been progressing long lead for two lines. Speaker 400:55:33So as Dustin said, we've got a lot of flexibility. The most important thing is that We got the agreement with the AEDA. And when we go to market on a couple of different scenarios, we have flexibility whether it's one line first, Both together, etcetera. Speaker 900:55:51Got you. That was my main question really was if the AEDA gave you the thumbs up, You're in good shape with no matter if you do one line or 2 lines, correct? Speaker 400:56:02That's right. Obviously, Two lines at the same time is more revenue and profitability for us. So that will also factor in our thinking. Speaker 900:56:14Got it. Okay. I appreciate it. Thanks for taking my call. Speaker 400:56:18Yes. Thanks, Jerry. Operator00:56:20Thank you. One moment for our next question. Our next question comes from Thomas Boyes from TD Cowen. Please go ahead. Speaker 1000:56:33Thanks for taking the questions. Great to see all of the kind of progress this quarter. First, A quick one on just the 100 percent operating capacity deadline at the end of January, not the performance test. Is it similar to the 50% operating capacity? Is that something where you need to operate the facility 100% for a whole month or Just wanted to kind of understand the framework there. Speaker 200:57:03Yes. It's similar to the current milestone, which is just a pounds per month requirement by that date, yes. Speaker 1000:57:13Got it. And then just a longer term one, I was wondering if you could talk maybe about the ability to leverage, say, the DOE for additional lines at Augusta beyond 12 because that process obviously takes a good chunk of time. Speaker 200:57:30Yes. I mean, so we're chasing a lot of different financing options for us. And in the case of, let's say, a long term partner like the DOE and financing, we're certainly looking at that as a Potential vehicle beyond 2 lines. It's one of these potential financing options that could It'll be turned on for each line in series in Augusta. That's the idea. Speaker 200:57:59So you wouldn't necessarily have to go through the same process every time Operator00:58:11All right. I am showing no further questions at this time. I will turn the conference back over to Dustin for closing remarks. Speaker 200:58:19Look, I just want to close, 1st of all, by thanking everybody for participating today and asking the great questions and more importantly, by following us And supporting us along the way. It seems to me like every quarter we accomplished something newer, bigger and even more exciting. This quarter was no different. And I mean given the success that we found with our technology combined with the growth, The quality and the resolve of our people today represents a true inflection point for our company. And while we're extremely proud of where we are today, I believe future updates will even be more rewarding. Speaker 200:58:59Thank you for joining the Pure Cycle team and helping us to create a Pure Planet. Operator00:59:05This concludes today's conference call. Thank you for participating. You may nowRead morePowered by