PureCycle Technologies, Inc. Q3 FY2023 earnings call

• Ironton operations had challenges in Q3 but made progress in utilities and solvent reliability. - Processed 410,000 pounds of feedstock, validating technology can recycle feedstock and remove contaminants. - Continued to learn and evolve process IP. - Successfully produced on-spec product for PIR and PIR PCR blends. - Installing an automated screen changer over 2 weeks to address bead contamination. - Overcame start-up challenges like seal failures, improving reliability. - Antwerp facility plans to use wind and bio hydrogen for low carbon footprint.

In Q3, Ironton operations faced challenges but made progress. They processed 410,000 pounds of feedstock to the purification system. Progress was seen in utilities and solvent operations, core to reliability. Production rates were limited in Q3, but the ability to run high levels across 3 operational steps (PreP, feed extrusion, product extrusion) was shown. Despite constraints, the technology validated its ability to recycle feedstock and remove contaminants.

• After the 2-week outage, restart production at 50% rates and work towards higher levels with the goal to make 4.45 million pounds in December. - Augusta project financing dependent on Ironton's consistent operations.

• Operational challenges such as bead contamination, mechanical headaches, and seal failures. - Market risks where actual results may differ materially from projections. - Regulatory and carbon market uncertainties affecting environmental impact and financials.

Q: What was the mix of Virgin versus recycled materials in the feedstock run through the plant and what was the yield of finished products?

A: Initially started with Virgin feedstock, quickly transitioned to PIR, most recently injected post-consumer recycle. The majority of the difference between feed and pellets was purged material to remove beads. Post-outage, intend to use 100% PCR with a blend of agglomerate and flake.

Q: Can you discuss what gives comfort that seal issues are permanently solvable?

A: Feel good about Scheibel column seal, implemented similar solutions to other process mixtures. Good at maintaining temperature and pressure, evidenced by 97% uptime. Candle filter has no mechanical seal.

Q: How does the bondholder agreement relate to the 2-week outage?

A: Expected to need an outage, planned and executed in November to set up for achieving milestones.

Q: What effect will learnings from Ironton have on build time and cost of next systems?

A: Construction timeline not greatly impacted, but commissioning and startup phase will be faster in future due to Ironton's experience.

Q: Can you expand on the change from third-party PreP to in-house operation?

A: Initially had help from equipment vendors, now taken over in-house, allowing optimization and improvement.

Q: What is the monthly cash burn and cost of the shutdown?

A: Corporate burn excluding Ironton and corporate allocation is about $10 million per quarter. Shutdown cost is under $2 million, with screen changer costing $0.5 million to $1 million.