Prepared remarks
Hello and thank you for standing by. At this time I would like to welcome you to the PureCycle Technologies First Quarter 2025 Corporate Update Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. I would now like to turn the conference over to Eric DeNatale, PureCycle Director of Investor Relations. Please go ahead.
Thank you, everyone. Welcome to PureCycle Technologies first quarter 2025 corporate update conference call. I am Eric DeNatale, Director of Investor Relations for PureCycle, and joining me on the call today are Dustin Olson, our Chief Executive Officer; and Jaime Vasquez, our Chief Financial Officer. This evening we will be highlighting our corporate developments for the first quarter 2025. The presentation we'll be going through on this call can also be found on the Investor tab at our website at purecycle.com. Many of the statements made today will be forward-looking and are based on management's beliefs and assumptions and information currently available to management at this time. The statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control, including those set forth in our Safe Harbor Provisions and forward-looking statements that can be found at the end of our first quarter 2025 corporate update press release filed this afternoon, as well as in other reports on file with the SEC, to provide further detail about the risks related to our business.
Additionally, please note that the company's actual results may differ materially from those anticipated, and except as required by law, we undertake no obligation to update any forward-looking 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. Any variation between PureCycle's actual results and the preliminary financial data set forth herein may be material. You're welcome to follow along with our slide deck or if joining us by phone, you can access it at any time at purecycle.com. We are excited to share updates from the previous quarter with you. With that, I will now turn it over to Dustin Olson, PureCycle's Chief Executive Officer.
Thank you, Eric. The first quarter marked significant progress across various areas of our business and recorded the first revenues in our company's history. We are thrilled to reach this milestone. Our success with customers in diverse markets gives us confidence that we can convert trials into sales, grow revenues, and achieve full production capacity by year-end. We've made continuous operational enhancements, particularly in onstream time, which has been our greatest production challenge. While we did not reach full pellet production rates in April, producing pellets daily and operating for nearly 90% of the month is a considerable achievement aligned with our objectives. A year ago, our focus was on maintaining plant operations at only 25% to 30% capacity, highlighting the significant progress we've made. Our operations and manufacturing teams have shown exceptional commitment, assuring us that we will continue to improve and move towards capacity goals.
Our commercial efforts are also progressing well. We are currently involved in over 30 trials, 24 of which have advanced to the industrial stage, potentially representing over 300 million pounds in product sales, which is an increase from our last quarterly update. We've observed progress through the sales pipeline, including three trials converting into purchase orders. Many of these discussions involve large order potential, and while initial stages can seem inconsistent, we are optimistic about our current position. The announcement of our technical success with Drake in Q1 has generated additional demand for fiber, which is starting to grow. We are excited about the increasing conversations and opportunities in the fiber sector. The combination of enhanced operational reliability at Ironton and our commercial advancements boosts our confidence in achieving significant EBITDA and cash flow.
We've discussed our compounding strategy in previous calls, emphasizing how it enables us to better meet customer needs while enhancing our operational flexibility. With our entry into the fiber market and successful trials in film, we want to provide an update on our compounding efforts and why we believe it will greatly benefit PureCycle moving forward. As we engage with customers over the past year, we've now established two distinct brands under the PureCycle umbrella. The first is PureFive Ultra, our flagship product that closely resembles virgin material. It performs well in the market and is suitable for color-sensitive applications. PureFive Ultra represents a breakthrough for the plastic recycling industry, and we believe it stands out on its own. However, many customers require more flexibility than what PureFive Ultra offers. Some have specific mechanical requirements, while others are less concerned about color sensitivity or only need 30% to 50% recycled content.
Nearly all customers, however, require strong molecular performance free from coproduct contaminants. PureCycle differentiates itself in this aspect and is introducing the PureFive Choice product line, which includes compounds catering to various applications like film, fiber, and automotive. PureFive Choice allows customers to select the product that best fits their specific needs. Given polypropylene's versatility, it is used in a wide range of products, from carpets and furniture to snack bags, beverage labeling, and even automotive parts. Consequently, the feed we process is often a blend of various consumer product types. This is particularly relevant for more demanding applications like film, fiber, and automotive, which require mechanical properties that traditional recycling methods cannot achieve. Our PureFive Choice line allows us to blend our resin with varying amounts of other input materials and additives to create a product that mimics conventional fossil-based supplies.
We believe these blends will significantly impact our fiber, film, and automotive segments. Unlike other technologies in the industry, our ability to eliminate contaminants at the molecular level establishes a platform for PureFive Choice, enabling us to reach markets that others cannot. Our early successes in fiber, film, and automotive support this. Our fiber application consists of a 50-50 blend achieving a melt flow rate of 18 to 40, depending on customer needs, while our film production blends around 30% to 50% PCT and achieves an MFR as low as 2 to 3. Both application successes signify major breakthroughs in the industry, which we anticipate will create substantial demand. PureFive Choice is also available in bright white products. Picture walking through a large retailer and noticing numerous bright white durable goods; that's the potential of our PureFive Choice, enabling brand owners to use recycled polypropylene in their products.
Overall, our compounding strategy provides customers with the products they need for quicker adoption and enhances sales volumes beyond Ironton's annual capacity of 107 million pounds. The unit economics per pound of PCT material also improves compared to non-blended alternatives. We introduced our compounding strategy to the market in Q3 of 2024, and it is encouraging to see our operations actively providing real solutions for customers, including compounded material sales in the first quarter. Since our last update in late February, our backlog of potential trials and customer engagement has grown. We now have 33 active trials, with 24 in the industrial stage and nine pilot trials. The volume potential from these trials has expanded since the previous quarter, a positive sign for our future sales goals in 2025. Specifically, we've increased the number of trials in rigid packaging to 13 in the industrial phase, compared to five in the prior quarter.
This progress illustrates steady strides with multiple customers across our product range. Some notable examples include products showcased last time with Procter & Gamble, thermoform dairy cups from a large converter, and several shampoo and beauty closures for major consumer brands. While details are still being finalized, we are actively engaged in discussions with multiple large automotive OEMs that may procure significant volumes across their global plants and markets. Interest in our products is on the rise, and we continue to expand our addressable market while advancing our trials. We believe the market is actively seeking high-quality products that seamlessly integrate into their operations, and each trial's success offers PureCycle more options regarding where to direct Ironton's production. We see PureCycle's future success linked to demonstrating that our products can work across various application segments, particularly those lacking sustainable solutions.
This brings us to our exciting news about initial trial successes with Bruckner, an industry leader in stretch film manufacturing who dominates 90% of the 30 billion pound BOP market. The prevalence of Bruckner's equipment allows us to initiate industrial trials with many large end-product customers soon. Bruckner operates over 1,000 machines in the market, and their latest single line has capacity nearly double that of Ironton's nameplate capacity. The BOPP film market presents an exciting opportunity for PureCycle. Our successful test with Bruckner demonstrated that our film can be stretched nine times without tearing, maintaining ultra-clear and transparent qualities. The results suggest our film blend can effectively replace virgin materials. The BOPP film sector is particularly promising for us in the coming years for various reasons. It has a higher concentration of single-use plastics rather than durable plastics, making production challenging with traditional recycling grades, resulting in low market penetration.
Brands face intense pressure to find sustainable solutions for this segment. Our film product can be utilized in applications such as candy and snack wrappers, pet food bags, beverage labeling, and adhesive tapes. Initially, we did not anticipate film to drive significant revenue soon, but our success with Bruckner has accelerated our plans, making it expected to contribute significantly to our sales in the latter half of the year. This is an exciting and favorable development. Ironton demonstrated operational progress in the quarter, producing 4.3 million pounds of resin and currently holding approximately 14 million pounds of inventory. More importantly, with some minor adjustments, we managed to run the plant daily in April, achieving an onstream time close to 90%. This is the first instance we've approached the 90% onstream target outlined in our initial engineering plans. The improvement in reliability over the past year has been remarkable.
I've consistently mentioned how the operational challenges at Ironton have diminished in scope and frequency, and our April performance exemplifies that. We’ve also seen quality improvements, supported by advancements at our Flake Sorter in Denver and purification efforts at Ironton. Overall, the first quarter signified excellent progress toward commercially scaling Ironton through 2025. We reported our first revenues, made advances with key customers and trials, achieved success in a critical film market, and made substantial operational strides at Ironton. Coupled with the pricing we are seeing from our branded sales, this enhances confidence in meeting our unit economics and operational and commercial scaling. We are continuing to advance our capacity expansion and growth plans, with many exciting developments to share soon. Let me provide a sneak peek of what's next. We've gained significant insights about our foundational technology through Ironton's commercialization and the R&D efforts at our Durham facility.
These insights should enable us to scale the technology for higher capacity per line, reducing CapEx and OpEx for these facilities and improving overall economics. The economic potential we are beginning to see at Ironton is robust, but we expect even greater outcomes for future lines. We also continue to identify opportunities to enhance Ironton's economics. For years, we've invested in the overall growth of the company by purchasing prep equipment and long-lead equipment for two upcoming 130 million-pound lines. This investment has proven beneficial, allowing us to navigate Ironton challenges more efficiently and enhance the feedstock for Denver's early introduction. This should also facilitate a quicker market entry with a less inflated cost structure due to our early decisions. Given the global interest in our product across the customer spectrum, we plan to aggressively expand the capacity of future lines beyond what we've accomplished so far.
We are still in the early engineering stages for these solutions, but based on our current technology knowledge, we are confident in our ability to scale to much higher levels. This should yield capital and operational efficiencies across facilities, ultimately improving overall profitability and returns for our stakeholders. This will lay the groundwork for PureCycle's future. We are actively exploring various financing avenues for our plan, and once finalized, we will update the market with as many details as possible. The lessons we've learned from Ironton are foundational, and as we realize more operational and commercial successes, our confidence in the growth plan ahead strengthens.
Thank you, Dustin. As you see on Slide 10, we ended the quarter with $37.5 million of cash on hand, including $22.5 million of unrestricted cash. During the quarter, we raised just under $55 million through a series of transactions, including $33 million through the sale of about 4 million shares of common stock in a private placement, the sale of about $19 million face value of revenue bonds, as well as proceeds from the exercise of certain warrants. Shortly after the quarter closed, we sold an additional $11.8 million face value of revenue bonds, and we still have about $85 million of revenue bonds remaining that we will continue to sell. Our operations and corporate spend was about $37 million for the quarter, which was in line with the first quarter a year ago, and about $9 million higher than the fourth quarter of 2024. The higher spend compared to last quarter largely reflected spending at Augusta and the first full quarter of our Denver operations. I would now like to turn the call back to Jericho, who will open the call for your questions.
Questions and answers
Thank you. We will now begin the question-and-answer session. Our first question comes from Andres Sheppard from Cantor Fitzgerald. Please go ahead.
Hi, everyone. Hey, Dustin. Hey, Eric. Good afternoon. Congratulations on the quarter. And more importantly, congratulations on the first recorded revenue. Very, very exciting indeed. Just a quick question. You touched on this briefly on the call. I see you guys have about 14 million pounds of inventory. So just curious, kind of what the strategy is. Would you want to sell more of this product into the market this year? Or perhaps are you holding back, I guess for a specific reason? Thank you.
Yes. Hey, thanks, Andres. Appreciate the question. Appreciate the compliments as well. Yes, as we entered 2025, we knew that there would be a ramp and some time required for customer trials. Okay? And so we knew at the beginning of the year, we'd probably need to push some of the material through distribution. But quite frankly, as we got into the customer trials and the performance of the customer trials was proceeding a bit faster than what we expected, and some of the early realized pricing that we were seeing out of the sales coming from those trials from fiber, we basically decided to hold back on some of the inventory for some of the branded sales later in the year. And so this is really just a decision to build the inventory now into the channels that we discussed so we can sell them for higher values in the second half of the year.
I see. Got it. That makes actually perfect sense. Thanks for clarifying that. And maybe just as a quick follow-up, I want to touch on maybe the growth plans. So obviously you provided a lot of detail, particularly Slide 5, very helpful. Just curious if you can maybe provide us with a little more color as to what is the thinking around here in terms of the growth as we get closer and closer to the second facility? Thank you.
Yes. Hey, that's a great question. Look, I mean, we are really excited about the plan that we're building for growth. We've talked about this quite a bit over the last couple of years in terms of locations that we were excited to be initiating discussions on, whether it be Georgia or Belgium or some of our JV partnerships like the one with Mitsui. And we've also talked about the interest in taking the learnings from Ironton and rolling those into future designs. So that's kind of a two-part question. The first part is there's a lot of things we learned at Ironton from a reliability perspective, okay, like buy this piece of equipment not that, or arrange this piece of equipment this way, not that. We've gone through a lot of those learnings, and that's why you see the uptime at like 90% today. What's even more exciting than that is that our fundamental understanding of the technology is also growing exponentially.
I mean, the more we run, the steadier we run, the more uptime we have, the better clarity that we have into how our processes work, and quite frankly, it's more efficient than what we expected when we started this journey. That's led to our ability to forecast how we can design improvements into these plans. So the idea is that the deeper technology enables us to know that we can build much bigger plants. So we referenced in the slide something like 200 to 500. We haven't narrowed that down yet, although we've got some ideas. But the point is, it's much, much bigger. When you have bigger plants, you lower your OpEx, that's both fixed and variable, which leads to higher EBITDA, and then you also lower your CapEx per pound because as you scale facilities like this, the CapEx does not scale linearly, and so you're able to drop the CapEx pretty substantially. Ultimately, the higher EBITDA and lower CapEx leads to higher returns, and that's really the plan that we're building for the future.
We've got a great footprint built for the future. We know where we want to build the plant, and we know there is tremendous demand in those regions for our product, and this now gives us the opportunity to build plants more cost-effectively, which will ultimately lead to faster growth, better projects, and faster financing in the future. That's a good question, Andres. Thank you.
Awesome. Thank you, Dustin, for the answer. Very thorough and detailed. Appreciate it. Congrats again. I'll pass it on.
Our next question comes from Hassan Ahmed from Alembic Global.
Afternoon, Dustin. Apologies for the background noise. I'm actually traveling. Look, it seems like you guys have made solid progress relative to even the last quarter. So a two-part question, I guess as I compare what you guys sort of shared with us last quarter to this.I mean, am I thinking about things correctly that as I sort of take a look at the backlog? First of all, it seems the backlog has increased. Thereafter, as I sort of sit there and look at the conversion of that backlog, call it from pilot to industrial to potentially eventually commercialization, it seems that has been gaining more momentum. Momentum in terms of more mobility of projects from that sort of pilot stage to the industrial stage. It seems imminent that a couple of these sort of industrial tests will convert into lumpy commercial opportunities for you. Is that the right way of thinking about the momentum from Q4 2024 to Q1 2025?
Yes, I mean, look, it's only been a few weeks since we had the last quarterly update. I think it's like nine weeks or something. But even in that short amount of time, we've been able to show continued progress with the trials. And so, yes, I think that's right, Hassan. I mean, 2025 has always been dubbed as a transformative year for us. We're really building for the second half of the year being kind of a revenue ramp period for us. We've shown really good progress across the customer trials and a lot of continued interest to test and trial in different applications. What I think is equally important to the things that you mentioned is just the optionality that we're starting to build. I mean, when you can qualify your product in film, fiber, automotive, dairy cups, et cetera, et cetera, that ultimately puts a lot of flexibility and optionality into PureCycle's hands as to where we want to allocate the production that we have for Ironton.
Look, at the end of the day, the demand for this product far outstrips the supply. Ironton has a nameplate of 107 million pounds; we'll be able to expand that a bit through compounding. But this customer funnel is more than just Ironton. This customer funnel is also planting the foundation for every growth project that we have in the future. So when we start talking about growing in Europe and growing in Asia and growing in Augusta, the conversations are just fundamentally different and with fundamentally different people as well. Like we’ll be able to show them product that has been tested, qualified, and proven to work before we ask them to sign the contracts. That’s just a great position to be in as we start talking about the future.
Very helpful, Dustin. And as the follow-up, again, I know you guys were pretty clear in explaining the BOPP film opportunity, but just digging a bit deeper into that, I mean, you guys talked about the market being around a 30 billion market, but just a Bruckner opportunity unto itself. I mean, if I am sort of thinking correctly about it, it seems that Bruckner has one of the larger market shares in that arena. So just that one sort of customer of yours or a potential customer of yours could actually be a huge sort of commercial opportunity for you. Is that the right way of thinking about it?
There's a nuance to the discussion on Bruckner that I need to clarify here. Bruckner is the premier equipment supplier to the market. They have an enormous market share percentage in the market for equipment supplies to brands that then make the film. What customers will traditionally do is they will see a new product brought to the market and then they will look to Bruckner to say, does it work? If Bruckner says, hey, it works on our machines, then the customer knows that it will work on their machines. The discussion with Bruckner and the trial at Bruckner is really important because it's a window into what every other customer is going to be able to do. And that's very, very, very strong. This is going to open the door and conversations with a lot of brand owners down the road. Film, like I mentioned, is just a very difficult topic for brand owners from a sustainability perspective. It's a lot of single-use plastic, so it gets a lot of attention there.
There really hasn't been a technical solution to bring recycled content in because if you have a heavy contaminant load in the product, then when you stretch it, it will stretch irregularly. It'll tear, it will have fish eyes, it'll be discolored, it'll just look hazy. It won't work. There've been a lot of problems trying to introduce recycled products into BOPP, and that's why Bruckner says this could be a complete game changer for the industry and an opportunity to close the loop. So we're really excited about what we're doing with Bruckner. We're not there yet. We've got more work to do. We've got trials going with a couple of people outside of Bruckner that will give us additional insights and hopefully progress toward commercializing it, but the early success is just, I can just, it’s just so exciting, Hassan. I mean, it's just really, this is just one of those things. When you look back, you're going to remember it, because the industry really needs a film solution.
I mentioned the comment about walking through stores and thinking about all the white products. We’ll do the same thing with film. I mean, it's everywhere. I probably should admit it, but I ate a couple of candy bars today, and every time I open one of them up, I'm thinking, hey, that's BOPP film. I just think that this is going to be a solution that the industry is super excited about when they see it come to commercialization.
Very helpful, Dustin. And the fact that you're talking about fish eyes and really enjoying those candy bars is a testament to you, being spending too much time around polypropylene recycling. So kudos to you.
It's true that I eat, breathe, and sleep polypropylene.
Thank you so much again, Dustin.
Thank you. Thank you.
Our next question comes from Thomas Boyes from TD Cowen.
Appreciate you taking the questions. Maybe the first one around the commercialization is kind of gaining traction. Do you have a better sense of what the pricing structure looks like for the business? I know when we were at the Ironton, you talked about maybe the lower bound of what pricing could look like. And not too long ago, the company used to talk about perhaps pursuing a feedstock plus pricing model relative to fixed pricing. So just wondering if you could give any insight into how that's evolving over time?
Yes, I think that the discussion is largely the same, and we're still sticking to the numbers that we said last year around the expected ASP. We still see that as part of the game for us per pound of PCT products. I think that the idea of the feedstock plus pricing is actually gaining more traction now, to be honest with you. There's a lot of customers that as they deal more and more with the recycle market and they see some of the moves both on the feedstock and the virgin market perspective, they recognize that feedstock plus pricing is really required for this industry, and they're starting to embrace it. I think that's still pretty strong. You'll still find some customers that are really trying to anchor into a fixed price or something that touches virgin, like a virgin-plus type mechanism. But I think that especially given the supply-demand imbalance, I think that the conversation pretty quickly goes to feedstock-plus, because quite frankly, it just makes the most sense. That is the market. This is a specialty product. It's very different than virgin polypropylene. It's tied to a different feedstock source. I think people understand that and are okay with it.
Excellent. I appreciate the color there. And then I would also like to just get your thoughts on liquidity moving forward. Obviously, the burn rate still remains relatively high. So I'm just curious on how maybe you think that trends through the year and how that could potentially extend the cash runway. To that end, given where your cash position is now and the revenue bonds that you still have remaining, do you see the need to raise additional capital, maybe project debt financing for future facilities?
Yes. Let me take the first crack at it, and I'll pass it to Jamie to finish it off. I mean, one of the side benefits of steadier operation is also steadier cost management. So when you look at some of the bumpier quarters that we've had over the last year and a half, I mean, we've done a lot of work at Ironton in terms of putting a screen changer in or doing some work on the adsorbent beads or seal improvements. Those things cost money, and we've spent quite a bit of money over the last 12 to 18 months improving that. As we run steadier, you start to see your maintenance cost profile become more in-line. You also start to see your variable cost become steadier because you're not moving the plants around as much, and that's going to be really good for us. It's been good so far this year; it'll continue to improve as we raise rates and run increasingly better throughout the year. When it comes to the overall cash position, remind everybody that we have the revenue bonds on the balance sheet.
We also have the $200 million line of credit and the longer and better that Ironton facility continues to operate and also, quite frankly, the progress we're making on customer trials, that makes the Ironton bonds more and more valuable. We see increasing demand for those and better pricing for those over time. From a cash burn perspective, we're putting some cash into inventory right now. We'll be able to pull that back out as we get the customer trials done and we start pulling the inventory down. I see it improving over the second half of the year. Jamie?
I think you touched on it, Dustin. Thomas, we have a very good, steady rate of costs. They don't vary too much now from month to month. I think with the sale of the inventory plus future sales in the second half of the year, combined with the sale of the revenue bonds, the cash burn is going to be minimized.
I think we mentioned this in the call also, but our goal is to, let's say, first get to break even at Ironton, Q3-ish timeframe, and then as we start to exit the year, get into early 2026 and start to really chew into some of the corporate costs as well. I think what you'll see over the second half of the year is a pretty significant reduction in overall cash burn from operations.
Excellent. I appreciate the kind of updated thought there on breakeven at Ironton and the corporate breakeven. I'll hop back in queue.
Our next question comes from Eric Stine from Craig-Hallum Capital Group.
Hi, everyone.
Hey, Eric. How you doing?
Doing well. You?
Doing great. Doing great.
Good, good. So I guess first thing, obviously, great to see that you have increased the number of active trials. I guess as you said, you reported nine weeks ago. I know at that time you had, I believe, 10 in later stage, and you had some level of confidence that those trials would be largely complete or some of them would be in Q2. So just wondering kind of where things stand in terms of how far along are these trials? As you look at these trials, what are kind of the steps? As you look at the 33 that are active, would you expect that you would be through these trials by the end of 2025, or is it something that could come quite a bit sooner?
Yes, so first of all, I appreciate the question. Yes, we've made really good progress. It's only been a few weeks since the last call, but we continue to see ramp there. With respect to Q2, yes, I think some of these are going to start commercializing inside of Q2 and starting to ramp-up. We're already starting to see that a bit with the fiber trial. So I think that will continue. Then I definitely believe that the second half of 2025 looks really positive from a commercial perspective. I think it's hard to say how many of the 33 or which ones will because, quite frankly, every customer is different and every customer has a different qualification period and qualification procedure. What we're doing is we're putting a lot of lures in the water and qualifying as many different application segments as possible. So it provides us great optionality and flexibility for our sales team. Yes, I think in the course of 2025, for sure, we're going to start to see ramp. We’re going to see some of these commercial trials move from pilot to industrial and into ramp, and I feel really good about getting the production up and the sales up in the second half of the year.
Got it. That is good to hear. And then maybe last one for me just on compounding. And I apologize, I'm jumping around on calls and may have missed this earlier. But as you think about that, do you find or do you expect that you'll get a premium for that product on all of the compounded volume? Is it something where you would get a pricing that's consistent with the specific blend of your recycled polypropylene, or is it just too early to tell what that looks like?
No, I think the way to look at compounding is this is a service that we're providing to the customer. Quite frankly, a lot of the customers that we deal with have, let's say, pre-compounding steps coming into their facility. They'll buy virgin, they'll compound it up, get it ready for their facility, and so we're basically allowing them to integrate more with us as opposed to going to third-party compounders. Generally speaking, that's a very positive activity from our customers' perspectives. They definitely see it as a service added. In respect to pricing, I think it gives us a lot of flexibility. Ultimately, you have an overall bill of materials that you're operating to, you're driving different mechanical performances across different applications, and in some cases you're the only game in town for supply. I think the supply-demand balance is going to drive most of the pricing discussions, and I think that the compounding operation is just going to give us more flexibility with the customer. We'll see where it lands in the end. I definitely see compounding as accretive to the original base plan for PureCycle. I see it as a real enabler to get the qualifications done more quickly. If we hadn't had compounding, we wouldn't be able to do film and fiber, and so I think that this is just a real practical near-term example of how this is going to play in our favor.
Okay, thanks a lot.
Thank you.
Our next question comes from Gerry Sweeney from ROTH Capital.
Good afternoon, Dustin and Jamie, thanks for taking my call.
Hey Gerry, good to talk to you again.
It's nice to talk to you as well. Eric addressed part of my question regarding the compounding aspect, so I'm not sure how much you want to discuss this. In the presentation, there is a target for commissioning Gen 1 by 2027. Additionally, we've mentioned investments being made in Augusta. When combining these two factors, how much progress has actually been achieved in Augusta, and will that contribute to achieving the 2027 goal, assuming project financing or other funding opportunities are available?
Yes, I mean, look, we feel really good about the Gen 1 design. It's an improvement over Ironton. The improvements from Ironton are baked into that design. We bought the majority of the long lead equipment for that activity to proceed. I think that's one of the real value points from having the two 130s already on site and ready to go because we'll be able to accelerate that pretty quickly once we decide to do so. So I think that's still in play. We're excited about it.
Got it. That's helpful. I have a lot of questions about the trials, but I'm curious if there are any obstacles that are hindering progress in the trials. What I'm really trying to ask is whether this is just a matter of time and testing that your partners have to navigate. Once we receive a couple of large orders or approvals, will that naturally expedite the process for those involved?
Well, I think that every customer is different, and every customer has different requirements for what it takes to commercialize the product. I think you need to look at it in a couple of different ways. The first way is, does the product work in the general application? So can you make fiber? Check. Can you make film? Partial check. Not 100% theory, but it looks really good. Can you make a dairy cup? Check. Okay. And then it gets to the specific customer timelines, and they're all different. They all have different requirements and timelines to go. I think the industry is seeing that we can successfully make a lot of things, and now it's just working through the individual customer application periods to bring those things to commercialization. So we can't control the timeline, but what we can is continue to perform well in all the trials, which is going to give us the option to move when it moves. I think that based on the timeline and the progress that we're seeing right now in all these trials, I think that this looks really good for the second half of 2025.
Got it. I know it's a question probably different iterations, so I appreciate it. I'll jump back in queue.
Yes, thanks Gerry.
Our next question comes from Amer Tiwana from Imperial Capital. Please go ahead.
Good afternoon, guys. First of all, congratulations on achieving your first revenue. My question is around your nameplate capacity. You mentioned in the presentation that you're on the path to getting to that. What are the impediments to getting to full nameplate capacity?
Yes, hey, thanks for the question, Amer. It's nice to meet you, by the way, and appreciate you jumping into the queue to participate on this call. Look, in the last quarter, we announced that we were able to touch 12,500 pounds per hour, which is 90% of nameplate capacity. What we said before is every time you bump that limit up, you test the plant to see how it operates there, to see if you hit any constraints, and when we got to 12,500 pounds, we ran pretty well. We ran pretty steadily, and so it gave us confidence at that level. We haven't tested it above that yet, but honestly, 90% to 100% is pretty close. We feel really good about that operation. The headaches over the last year and a half have been twofold. The first is random reliability events, and we were able to work through a lot of those issues to improve the reliability. You see that now in uptime. The other is just a fundamental understanding of how the plant operates so that we can get steadier and steadier on the operation.
I think that we're in a really good place to run the plant as we need to run the plant when the demand comes in. One point I want to make, Amer, I mentioned the 12,500 pounds, and you were speaking to nameplate capacity. The 12,500 pounds is actually with respect to feed, not final pellet production. That's a nuance; it's a fairly small difference, but I want to ensure you got your numbers right.
Understood. That's good. One clarification. This also says that 87% onstream time in April. Is that the average for April, or is that the number that you achieved in April?
That's the number that we achieved in April. The way to think about uptime, because there are a couple other questions about this before, is that's effectively like a percentage of time that the feed was on by minute. So 87% of the minutes in the month we were running feed into the plant. The rest of the plant, the circulation and other ancillary operations, they run all the time. Their reliability is up 98%, 99% nearly every month. What we're tracking right now is the percent of time that feed is on, and that's what the 87% represents.
Understood. Last question. You've talked about your expansion and building future plans. Any plans on putting some CapEx for the rest of the year for growth purposes, or given the liquidity position, do you just want to make sure you're focused on Ironton at this point?
No, we're very judicious with where we spend capital. We're targeting our activities there. The majority of the effort has been spent on getting the engineering right and implementing some of the things that I talked about before. We've done some work at Augusta to get the civil work ready to go for that facility, and like we said before, we put some CapEx into Denver sorting facility last year, which was really part of the Augusta project. We continue to spend capital on growth because we know that that's the food for the future, and we want to be ready when it's here.
Thank you so much.
Thanks, Amer.
There are no further questions at this time. I'll now turn the call back over to Dustin Olson, PureCycle's CEO.
All right, thank you again, everyone, for the change in time this time for our quarterly review, and also for your continued support. This is another good quarter for PCT. We're very pleased with the momentum that is building behind this company. Our performance on first revenue and steady Ironton performance and advancements on film give us a lot of confidence, and I hope it gives you confidence as well that the path we are on is the right one. I mentioned before that 2025 would be a transformative year for PCT. Our performance in Q1 keeps us right on track. We look forward to talking to you next time. Thanks for the great questions and the continued support. Talk next time. Thank you.
This concludes the meeting. You may now disconnect.