Prepared remarks
Good day, and thank you for standing by. Welcome to the PureCycle Technologies Third Quarter 2025 Corporate Update Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Eric DeNatale, Director of Investor Relations. Please go ahead, sir.
Thank you, Kyle. Welcome to PureCycle Technologies Third 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 third quarter of 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 third quarter 2025 corporate update press release filed this afternoon as well as in other reports on file with the SEC that provides further details about the risks related to our business.
Additionally, please note that the company's actual results may differ materially from those anticipated, and except as required by law, we undertake no obligation to update any forward-looking statements. Our remarks today may also include preliminary non-GAAP estimates that 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 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.
Yes. Thanks, Eric. Thank you all for joining today's call. It's been another quarter of meaningful progress for PureCycle across all parts of the business. We're ramping operations, we're starting to ship to key customers in Q4, and we're excited about the growth ahead. I'd like to begin with the recent board changes that we announced. I'm very pleased to welcome our newest board member, Dr. Siri Jirapongphan. Dr. Siri has an impressive resume and I believe he is going to be instrumental in PureCycle's future success. He's the former Chairman of the Board for IRPC, this is our partner in Thailand and is currently serving as an independent director of Bangkok Bank, the largest bank in Thailand by assets. Dr. Siri is an incredibly bright individual. He's got degrees from both Caltech and MIT in chemical engineering, and he has already made an impact when interacting with the Board and the PureCycle team over the last few weeks.
His polymer expertise and deep network in Southeast Asia, along with his passion for PureCycle, is bringing good energy and perspective to our decision-making process. He will serve a key role in our debt financing activities as well as support our technical and project teams. I'm excited to have him join the team. I'd also like to personally thank Jeff Feeler for his service on the Board over the last 4 years. He has been an instrumental part of getting PureCycle to where we are today. And from a personal perspective, he has taught me so much about how to think about our business, our activities, and how to lead this organization effectively. His departure coincides with Dan Gibson of Sylebra Capital joining the Board 3 months ago. Operational performance has shown steady improvement. Ramp-up activities are underway at both Denver and Ironton, further reinforcing our confidence in the business trajectory.
Q3 was one of the highest quarters of production in the company's history. September was the highest month at 3.3 million pounds and was limited by feedstock. At the end of Q3, we successfully added a second shift in Denver during the quarter and plan to add a third in Q4. This will bring Denver's capacity to approximately 100 million pounds annually. The compounding expansion at Ironton continues to be on track, and we expect this to significantly reduce the complexity of our supply chain, improve our product offering, lower our costs, and meaningfully widen the market for available sales. On the commercial front, we continue to make a lot of progress. We are scheduled to ship material in Q4 to P&G's converter for application production that is scheduled to hit the shelves in early '26. Additionally, we are working to finalize and ship for other P&G applications in Q1. We continue to add to the P&G funnel and believe we have alignment to meaningfully grow their volume in 2026.
We have also made standout technical progress on numerous applications and are beginning to narrow the focus to high-value applications. One of the biggest successes has been with white thermoform coffee lids, leading to progress with 3 of the top 5 quick service restaurant companies or QSRs and we expect to be shipping into stores for a top 5 QSR group in the fourth quarter and ramping in 2026. We've made tremendous strides in the commercial front, and the general trajectory is very positive. We've also clarified our customer volume expectations and needs for the next year. While the timing of any ramp is always hard to pinpoint with certainty, we do see initial volume indications between Emerald, Procter & Gamble, QSR coffee lids, and other converters in the range of about 40 million to 50 million pounds annually. To bluntly point out, we see significant volume converting from just 4 to 5 projects, and we have another 75 to 100 projects churning through the hopper.
Given our technical successes and the product line that we've developed, we feel confident about the long-term demand for Ironton. The sales funnel continues to be very strong and the successful conversion of only some of these projects would be large enough to sell out Ironton many times over. The focus has shifted more towards converting these large applications into sales and less towards growing the funnel. Even in a challenging consumer spending and petrochemical environment, we continue to see robust demand and pricing in line with the unit economics we have previously laid out. Our growth plan continues to progress during the third quarter. The personnel in Thailand continues to grow, and I'm excited about the team that is being put in place. The Antwerp permitting process continues on schedule, and it is extremely good news that our proposal to the EU Innovation Fund was accepted.
We expect to receive final grant approval of up to EUR 40 million by the end of Q1. We continue to progress our Gen 2 purification design work through Augusta and beyond, and expect this to be completed in the first half of 2026. Overall, this has been another quarter of extreme progress. Branded shipments are moving. We're in the final stage of commercial negotiation with a number of very large potential applications, and we are accelerating. We are doing something that has never been done before. The operations in Ironton and Denver continued to show progress during the quarter. Ironton produced 7.2 million pounds this quarter and 3.3 million pounds in September, both new records. Denver continues to ramp as well, processing 9.4 million pounds of feedstock in Q3 and 4.4 million pounds in October. This was possible due to strong reliability performance and successfully adding a second shift in Denver.
We have plans to add a third shift in the near future, and this will allow Ironton to continue to ramp to higher rates of production in the coming quarters. We have developed a really strong relationship with our feedstock providers and are taking product from numerous locations, some of which are among the largest waste companies in the country. These companies value steady and predictable offtakes, and thus, it makes sense to deliberately and systematically ramp Denver volumes in conjunction with Ironton production and sales, which speaks to our confidence in the commercial ramp in front of us. The amount of feed coming out of Denver was constraining Ironton production in the quarter, and with the additional shifts, this should be relieved going forward. The 100 million pound compounding expansion at Ironton that we announced last quarter is on track for mechanical completion in December.
In addition to that, we've already installed the Co-Product 2 extruder on-site and started the operational commissioning. This compounding capacity we are installing will allow for reduced complexity in the supply chain, improved product offering, lower our costs, and should widen the market for available sales. The Co-Product 2 compounding expansion is already showing positive results. As you can see in the pictures on Slide 4, we can now take raw Co-Product 2 coming out of Ironton and compound it into a sellable pellet that we have already sold into the market for $0.20 to $0.30 per pound. As we have ramped Denver, we have developed market outlets to sell the non-polypropylene co-products. We have found markets for approximately 20% to 30% of the bale that is non-PP, which results in approximately a net 20% reduction in feedstock costs. This is inclusive of the waste disposal costs for 18% of the bale that we are currently not selling.
This is a significant achievement. I believe it is only the early stages of this co-product optimization, and that it will be a big driver in our long-term low-cost story. Operations continue to make progress, and I feel increasingly confident about our ability to ramp production in the coming quarters. To pace the commercial ramps, we expect to run the facility at 60% to 70% rates for the next 3 to 6 months and then ramp to near nameplate in the second half of the year. Now turning to the commercial update. Some of the largest brands and companies in the world are becoming interested in our products. This is a tremendous endorsement for the quality of our product and the future of our company. It's important for our teams to stay focused on developing these high-quality demand applications. While there have been some delays with respect to the overall rollout, it's important to note that none of these were driven by the technical capabilities of our product or the market's underlying demand for it.
The delays relate to the development of regulatory dynamics in various states, which are largely behind us, as well as the natural delays that came from two mergers among the four largest global converters. Both mergers impacted the timing for a few contracts that we had initially expected to close and start moving in Q3. None of this has impacted the long-term progress or our outlook. Frankly, confidence in the end state of where Ironton is headed has only improved. I continue to see potential demand in the funnel well exceeding our ability to supply it by multiple times over and a growing list of qualified products to take us there. If you combine the customers that we're beginning to ship to, with the ones we already have high visibility to ship to in the near term, this represents approximately 40 million to 50 million pounds annually at full ramp. I've spoken a lot over the past few quarters about how our resin continues to get qualified in numerous applications, especially those like film and fiber that traditional mechanical recyclers cannot serve.
I've also talked about the value of the compounding business and how it is a core component of how we can take our purified product and transform it into precisely what the customers require. So with that in mind, I think it's valuable to present to the market our current product portfolio as we go to market. There’s a lot of technical data, but I'd like to note a few things. First, all of our products serving food-grade end markets have FDA LNOs. Second, all of the material that we process has both Green Circle and APR certifications for post-consumer recycled content. Third, our general-purpose material does not require compounding. However, we use compounding to augment the mechanical properties and to deliver a single pellet solution to customers. This product portfolio results from a lot of remarkable work by our technical and R&D teams as well as demand and pricing discovery by our sales team over the last year and is a key part of why I'm so excited about PureCycle's future.
No other recycled PP producer can offer to the market what we can. Last quarter, we told the market that we had 17 applications that had successfully passed industrial trials and that we are in later stages before commercialization. I want to provide a detailed update on this. The key takeaways are that we are progressing and converting the funnel. We completed negotiations with an unnamed consumer goods company during the quarter and expect to ship product for a thermoform application in Q4. Two large applications for yogurt cups had to undergo lengthy odor and taste tests, but that's now complete. We successfully created industrial adhesive tape for a top 5 manufacturer during the quarter. This is very similar to packaging tape consumers use every day when preparing for a move or when shipping a gift to the postal service during the holiday season. They informed us that they want to conduct additional testing on a Brückner machine, which was planned for November.
This will be our first commercialization of BOPP, and we believe this can become a double-digit annual volume opportunity for PureCycle. The only real disappointment in the funnel has been the lengthy brand adoption cycle we're experiencing with fiber. We're fully technically qualified with numerous fiber producers, but this is a very fragmented market with thousands of small textile producers making individual decisions. It is taking longer to build out these new projects with end customers during these challenging market conditions. The only application of the 17 that PureCycle decided to drop out of the funnel was a small consumer goods application. This is one of the smallest applications in our pipeline, and we chose not to pursue it due to the required internal resources needed to develop the project. What's really exciting to me is the number of new opportunities that have entered the later stages of the funnel.
Many of them are with Fortune 100 brand owners, specifically across thermoform and BOPP. As I've mentioned in the last few quarters, part of the reason that we have qualified so many applications is to demonstrate the market depth across different segments and end markets. Not surprisingly, FDA flexible film or BOPP is toward the top of the list. Thermoforming for QSRs, particularly for coffee lids and cups, as well as other food container opportunities, are also emerging as excellent areas for us to focus on. The demand from just 3 of these large QSRs for coffee lids alone could be enough to sell out Ironton. We have a purchase order in hand to begin shipping for the first of these top 5 global QSRs in the fourth quarter and are closely working with two top QSRs who have both indicated that they want to move forward but are waiting for a couple of internal approvals before doing so. BOPP film continues to progress on schedule, with trialing success with Brückner unlocking additional trials with brand owners from multiple top 5 snack brands.
These represent huge volume opportunities and currently cannot be served by mechanically recycled products due to the technical challenges of producing BOPP. We've also had virgin resin producers reach out to us for BOPP supply. The success we've seen with the first adhesive tape trial has led to interest in scheduled trials for other brands. To be clear, both white thermoform and BOPP film technical developments are complex, and this is a very undersupplied market. We've proven that we can produce these grades; we've tested it, and it is working. While it took additional time to complete the development trials, the interest in this segment is strong and progressing more quickly than other applications. The single-use nature of many of these applications is driving interest and quicker adoption by QSRs and snack brands. Furthermore, due to the lack of true recycled demand for these applications, we believe many of these companies are currently buying ISCC Plus credits for roughly $0.70 to $0.80 per pound over virgin prices to meet their regulatory requirements.
We continue to make progress with Procter & Gamble during the quarter. They are one of the most technically demanding companies due to their intense focus on quality and brand image. I'm very excited that we expect to be shipping product in the fourth quarter with these caps making it to shelves in early 2026. Our relationship with Procter & Gamble is transitioning to an operational relationship. We meet weekly, we are well-aligned, and we are both excited about this first application and the pipeline that follows. The partnership with Churchill also continues to ramp with incremental end customers, and I'm very excited that we will be producing cups for the release of a very popular upcoming franchise film. Additionally, there's a major sporting event taking place in the United States in 2026, and they have confirmed that they will be using our run-at-back cups throughout that event. These are both nice volume additions, but even more importantly, I believe there will be great opportunities to showcase PureCycle to a broader audience.
It's also worth noting that one of the big four sports leagues has invited us to a Private Stadium Operations Conference, where we will have the chance to present our cups to all the franchise procurement teams simultaneously. There's also a lot of positive news emerging from the regulatory front. Seven states covering about 20% of the U.S. population have passed extended producer responsibility regulations for packaging over the past 4 years. On top of that, states like New Jersey have passed and are implementing laws that mandate recycled content. Further builds are also being introduced in numerous states across the political spectrum, including places like Tennessee and North Carolina. These bills were passed over the last 3 to 4 years and are just now being implemented. I believe this will force many large brands that operate in interstate commerce to adopt our materials and we expect this will only accelerate as more states implement these policies in '26, '27, and beyond.
We're ramping up our efforts to educate the market on the positive role that PureCycle can play in compliance with the new rules. Many new independent publications like the PRE White Paper for Dissolution and the NOVA Institute’s Definitive Chart for recycled technologies are helping to place the right designations on plastic to plastic solutions at the regulations demand. PureCycle is very well positioned to be the premier solution for many brand applications. The regulations in Europe regarding PPWR as well as mandated recycled content for automotive continue to be planned for implementation towards the end of the decade, and our recent successful application for the EIF grants speaks to the momentum PureCycle is building in Europe. We will continue to educate all agencies and regulatory bodies on how PureCycle can support legislative efforts around the globe. The growth plan we outlined to the market last quarter continues to progress.
Since announcing the Thailand project earlier this year, key feedstock letters of intent have been signed and the volume of material available appears to be more than sufficient to run the facility at full capacity. In Europe, permitting for the Antwerp facility is progressing as planned, with construction expected to commence thereafter. Our proposal to the EU Innovation Fund has been accepted, and we anticipate a maximum grant of EUR 40 million by the end of Q1. Between the capital efficiency of the Thailand project, the EIF grant for Antwerp, and the capital already spent on long-lead equipment, the remaining capital requirements are limited relative to the scope of these projects. We're in a good position to progress these two projects over the next 3 years according to our original plan. Additionally, we're on schedule to complete the final engineering for our Gen 2 purification line design work in early 2026.
While not finalized yet, we still believe the capacity will likely fall between 300 million and 500 million annually. On the financing front, we have initiated debt financing efforts in Thailand in collaboration with local banks and are making good progress to secure the financing, believing that we remain on track for financial close in line with prior communications. With that, I'll turn it over to Jaime for the financial presentation.
Thank you, Dustin. As shown on Slide 16, we ended the quarter with just over $234 million of unrestricted cash. In addition to the cash on hand, we still hold about $87 million of revenue bonds that we plan to sell in the future to further support our growth initiatives. Also, as we mentioned in our June growth update, we have nearly $25 million in warrants outstanding that expire in March of 2026, which must be exercised at a price of $11.50 per warrant before that time. In addition to the potential proceeds from the warrants, our team is pursuing other nondilutive financing arrangements, including the successful EUR 40 million grant application for our Belgium project that Dustin just mentioned. Our operations and corporate spending was around $37 million, which was slightly lower than the $39 million spent in the previous quarter. We anticipate our operational spending will remain at similar levels, adjusted for increased spending associated with the ramp-up of commercial sales. Additionally, we expect growth capital spending to increase beginning in early 2026. We are working on detailed project plans and will provide more insight once the spend curves associated with those plans are finalized. I would now like to turn the call back to Kyle, who will open the call for your questions.
Questions and answers
And for your first question, it comes from the line of Andres Sheppard from Cantor Fitzgerald.
Can you hear me okay?
Yes, Andres. We hear you loud and clear.
Wonderful. Congrats on the quarter and all the progress. I think there's a lot to unpack, but I wanted to maybe start with all the progress with these QSRs. I was wondering if you can give us some details regarding where the interest is coming from and any feedback you've received. Why have they been so interested lately?
Yes. Thank you for the question, Andres. What I find really exciting is to see the interest coming from these very recognizable brands worldwide. These are not only brands people will recognize, but also brands that we can grow with globally. Sustainability is incredibly important to these companies and the brand value is core to their success. Ultimately, that's where the true opportunity lies. I think it's vital to take a step back a little and look at recycling from a broader perspective. People often think about their recycling bin at home — what they throw in and where it goes. Everyone wants to see that material go back into products, but they don’t comprehend the scale of it. That's what's interesting with PureCycle and, quite frankly, our Denver facility. Our Denver facility is processing a significant amount of waste, and when you observe it closely, you see the types of materials moving through it.
There’s a tremendous amount of QSR material on the belts in Denver. When we share this information with the QSRs, it resonates with them. Seeing their products in the bales at Denver and being transformed back into items like coffee lids truly moves them. Yes, as far as large companies are concerned, these QSRs are moving faster, and they're enthusiastic about collaborating — they need a lot of material. Once we designed the white thermoform and the film brands, and we got them tested to work, that’s when the excitement really began to grow. Thank you for the question, Andres.
And for your next question, it comes from the line of Jeffrey Campbell from Seaport Research Partners.
First, I wanted to congratulate you on the strong progress this quarter. I'd like to ask a couple of questions if I could. The first one is, I want to clarify what you said earlier regarding the Co-Product 2. Is the plan to sell the material you separate from the feedstock to the market even though any of it is utilized in your compounding operations?
That's a very insightful question, Jeff. Thank you for that. The answer is both. While we see opportunities to take the Co-Product 2 that we separate out in our purification facility and compound that into a pellet form, which makes it easier for customers to use, that’s primarily what we’re doing at Ironton right now with our newly installed compounding operations, which we are commercializing currently. But your question hits on something important, and it speaks to our direction with co-products. The concept of compounding pertains to recipe management, and it involves blending various materials together to enhance product quality. Given our compounding capacity both through a third party and the compounding operations we've installed in Ironton, alongside the products we make at both Ironton and Denver, we have numerous opportunities for synergy. I believe your question is insightful, and we will start incorporating some material from Denver into the Co-Product sales as we manage our recipe, which will be proprietary to the company. Ultimately, I anticipate this will lead to increased revenue from Co-Product sales and lower net feedstock costs to Ironton.
Right. That's along the lines of what I was thinking. I also wanted to ask you, you mentioned that some of your potential customers have to buy credits. Could you elaborate on that a bit and provide a sense of the value that PureCycle will offer these companies by potentially eliminating the need for those credits?
Yes, that’s a good point. I'm not sure how aware people are about the current environment out there. There are ISCC credits generated by several facilities across the industry. Our customers, we believe, will purchase these credits as part of their regulatory requirements. The value of these credits, as best as we understand, sits at approximately $0.75 to $0.80 per pound in the market, which effectively translates to virgin pricing plus $0.75 to $0.80. This acts as a great proxy for the value proposition we offer. We should, at a minimum, be at those levels in the long run. But honestly, we believe we'll be priced higher. Here's why: ISCC credits represent a plastic-to-fuel solution that is mass-balanced to plastic, and that solution is inferior for brands. Customers purchasing a candy bar or snack bags want to know that the material they recycled has returned in the products they are now buying — that is a real plastic-to-plastic solution we provide. We deliver a true plastic-to-plastic solution with reduced regulatory risk and litigation risk. It is becoming clear across the regulatory ecosystem that multiple new rules are coming, which limit the incorporation of recycled material. That limitation directly impacts ISCC material, creating an opportunity for us to step in.
Right. The last question I wanted to ask is, are you actively selling much PureFive right now, or are you mostly building inventory for the compounding that you plan to engage in when your equipment is installed in the next quarter?
It's a bit of both. We have sold some PureFive and some compounded products, but we've also built more inventory that we've sold. I think that as these trials convert and the funnel starts to pull, and the ramp extends, we'll reduce that inventory and show revenue from that in the future.
And for your next question, it comes from the line of Hassan Ahmed from Alembic Global Advisors.
I wanted to focus both of my questions on the growth project side of things. Let's start with the EIF grant that you were awarded. Would love to hear about the process around that, what it entails, and what this means for your European growth projects.
Yes. This is a classic case of third time’s the charm. First of all, I want to commend the team in Europe. We've got an incredible small but dedicated team in Europe who has been building toward this project for 3 years. We've submitted twice previously and were not selected, but we've continued enhancing the quality and economics of the project, and now we're excited to announce we've been awarded the EIF this year. This represents a significant confidence in our ability to scale technology, and it highlights the growing interest in sustainability from Europe. Economically, the EIF facilitates reducing the overall CapEx for the project, making the project more valuable for our shareholders. We constantly explore the overall CapEx of projects and work rigorously on it. This will be another feather in the cap for the overall return on investment when we leverage it for project development. Thank you, Hassan.
Very helpful. Just sticking with the growth topics, regarding Thailand, you flagged securing the feedstock letters. What does that entail? Can you discuss the costs and availability, particularly in alignment with your capacity expectations out there?
The punchline is, this is just the beginning. One key reason we pursued Thailand is its potential for significant growth. It’s not a secret that Asia has a massive population and substantial needs for waste management, trash management, and recycling, resulting in many efforts for smaller-scale projects to enhance waste handling in that region. We are starting to see positive outcomes, and frankly, waste handlers are eager for partnerships with PureCycle that can better the net value of the products produced. Ultimately, if we can't sell to a higher-margin business, we won't be able to justify higher feedstock procurement. We're thrilled about it. We've spoken with numerous parties across Asia, and there is a robust willingness to collaborate. In many cases, stakeholders indicate that the issue is not the availability of polypropylene but rather their ability to sell to customers like us. This bodes well for the prospects of our Gen 2 design and our growth trajectory.
And for your next question, it comes from the line of Jeff Grampp from Northland Capital Markets.
I was curious, Dustin, and you touched on this in your prepared remarks as well as the deck. A couple of applications are waiting on brand approval. It sounded like you’ve jumped through all the hoops and just are waiting for a couple of signatures effectively. Do you have any sense of what the expected timing is? Are we literally just waiting on a couple of signatures to move forward? What might that ramp look like for those that you indicated were close?
We feel optimistic about it. If you examine the highlighted green lines from our slides, including Procter & Gamble, I believe at full ramp, we can achieve 40 to 50 million pounds. The momentum we’ve gained from significant brands and reputable names is incredibly encouraging. These brands are category leaders and a successful conversion will materially impact our output. We’re positive about discussions and anticipate successfully closing a few contracts soon, enabling us to reach a sold-out condition. These brands are deliberate in their processes and ramp up in stages. This does take time, but their needs are genuine, and their enthusiasm is real, which boosts our outlook for what's on the horizon. We are not just aiming to convert these opportunities quickly, we are focused on establishing long-term relationships that ensure sales for years to come. Thank you for the question.
Great. For my follow-up regarding Co-Product monetization, do you believe this is feasible across various continents? Is this something you have confidence in, or are there uncertainties at this stage?
Breaking it down into prep Co-Products and purification Co-Products, the concept of purification Co-Products is indeed directly applicable. Our Co-Product 1 is a very useful waxy-type product, and we're investigating different avenues to market that. I believe the demand for those applications will grow year by year as we find new opportunities. The same applies to Co-Product 2. Both of these Co-Products will be produced at every plant we construct in the future. Regarding prep Co-Products, that will depend somewhat on the region and how advanced they are. In general, I believe that the answer is affirmative. We will likely manage prep Co-Products similarly across various stages in our process—whether compounding, or as feedstocks for purification. We've identified plenty of ideas and opportunities and will handle them on a case-by-case basis. The larger takeaway is that the ecosystem we're developing around both feed and compounding creates transformative, expansive opportunities for our company to create value in the entire chain.
And for your next question, it comes from the line of Eric Stine from Craig-Hallum Capital Group.
This is Luke on for Eric. First off, could you provide a bit more detail on the financial impact you expect from your shipments in Q4? Can you outline how quickly you anticipate reaching full production levels for these contracts?
That's a thoughtful question, Luke. The main focus should be on our shipping and growth transactions occurring with customers in the fourth quarter and the first quarter. It remains tricky to predict the exact week or month these shipments will ultimately materialize, but they are indeed happening. The timing of the ramp is challenging to pinpoint. However, that doesn't mean we are stepping away from prior commentary regarding the target of $8 million per month by the end of Q1 and into Q2. Essentially, the sales funnel remains robust, with significant global brands now fully engaged and interested, resulting in increasing revenue. Most importantly, we are focused on selling out Ironton with brands that will consistently remain our customers for the next decade.
That's helpful. As a follow-up, could you share your thoughts on inventory and cash usage moving forward? We expected to see an increase in PureCycle's inventory this past quarter, particularly with contracts nearing completion. Should we anticipate seeing that balance rise significantly during Q4 and Q1?
From an inventory standpoint, we are ramping up operations at Ironton and Denver in line with our observed sales ramp. While there may be a slight increase in inventory coinciding with the onboarding of customer sales, it’s again tricky to pinpoint the exact timing of which month or quarter this will occur. That's how I view that.
We have a follow-up question from the line of Andres Sheppard from Cantor Fitzgerald.
Apologies, I got disconnected earlier. Dustin, I wanted to follow up by asking if you could give us a bit more detail regarding the 40 million to 50 million pounds run rate mentioned in the call. Also, if you could connect the dots regarding the REACH certification in Europe and the joint presentation with Volkswagen on the bumper, what should we be interpreting from that? Anything you can say would be helpful.
Yes, that’s great. Regarding the 40 to 50 million, we’ve addressed that somewhat. If you look at the highlighted green lines related to our projects, and add Procter & Gamble, I believe we can achieve the 40 to 50 million pounds at full ramp. This is incredibly positive, as we are making significant progress with major brands. These are prestigious companies with which we can develop long-term relationships, not only in Ironton and Augusta but also in Thailand and Antwerp. This sets a solid foundation for future plants and sales and is a significant advantage for us. Concerning REACH and Volkswagen, we are essentially a burgeoning company engaged in numerous excellent initiatives. We're continuously working towards achieving many certifications. We’ve received certifications from GreenCircle and APR, and multiple FDA LNOs; I’m unsure of the exact number but it’s around 4 or 5 at this point.
We have recently gained our REACH certification—a crucial step in enabling our products to enter Europe. Without REACH, we wouldn't be able to ship substantial volumes there. Now that we have it, I’m already observing interest in trials and movement forward. The team in Europe is diligently pursuing growth opportunities while simultaneously managing the EIF submission. They are actively reaching out to various customers, and as we refine our product portfolio sheets with white thermoform, flexible packaging, and injection molding grades, we will begin sending samples to Europe in scale for trial. I believe REACH will facilitate this process. As for the presentation we shared in the 8-K regarding Volkswagen, I cannot express enough gratitude for their partnership. Their technical team worked closely with us to develop an exemplary bumper. We even have this bumper on display in our Orlando office; it is remarkable.
Integrating post-consumer curbside recycled products into highly sensitive applications like automotive presents tremendous challenges. Automotive supply chains are exceptionally complex, requiring precision in quality to ensure performance under varied environmental conditions. The presentation we filed in the 8-K showcased not just the bumper we built, but it demonstrated that it passed all critical automotive quality tests. That says a lot about the quality of our product. Although I don’t foresee automotive ramping quickly in the next year or two for Ironton, other opportunities are expected to materialize sooner and potentially bring greater value. However, I firmly believe that automotive will form a solid cornerstone of our growth plan, guaranteeing volume stability for both Thailand and Augusta in the years to come. I consider this case as a leading benchmark for other automotive companies to recognize the capabilities of our product. Great insights, Andres.
This concludes our Q&A session. I would now like to hand the conference back over to Dustin Olson, PureCycle's Chief Executive Officer, for closing remarks.
Thank you all for joining the call. It’s been another positive quarter for PureCycle. We have developed a unique asset footprint throughout our process, from feedstock processing to product compounding. This expansion is unlocking opportunities to reduce costs and diversify our customer base. We continue delivering technical improvements to the pipeline and are witnessing significant adoption from major brands in the market. Anticipated shipments will begin flowing in Q4 of 2025. Most importantly, we play a crucial role in improving our planet. We are converting post-consumer curbside waste into high-quality products for consumers. This represents the holy grail of recycling, and PureCycle is beginning to achieve that vision. We’re poised to execute on a very strong 2026. Thank you for your interest in PureCycle and your continued support. See you next time, everyone.
This concludes today's conference call. You may now disconnect.