Thomas Boyes: Got it. And then not to put too fine a point on it, but even for the portions that kind of were cross-contaminated it sounds like there are potential customers that are kind of willing to still trial or use that as the basis of then making some decisions longer term on using the final product. Is that correct?
Dustin Olson: Yes, 100%, yes. I mean — so look, I mean, when you think about the options for mechanical supply — let’s say, not mechanical, recycle supply into the market, they’re limited. And so there’s a heavy appetite for recycled material in the market. And so when you compare our material to what they’re used to using, it’s still a pretty good improvement. And so even when we’re not making fully on-prime product, like the color is a little bit high or the opacity is a little bit off. It’s still a very good product. It’s still better than the gray and black material that is largely seen in the mechanical recycling market. And we’re seeing really good interest in our material from the customer base. I mentioned that we’ve made, let’s say, different qualities of product across facility.
I mean we have made prime material, okay? We have made good quality material that met both color and opacity throughout the process. But because we were up and down a bit because we were a little bit of a learning curve on managing it on the back end, we cross contaminated quite a bit of that material. Now having said all of that, we also learned a lot about capability that we have at the facility. And as we grow into it, we’ll be able to expand our capability to move product more efficiently.
Thomas Boyes: Got it. And then for my follow-up, just on the site that you had talked a lot about fiber and kind of the unique attributes that you have that make that a possibility. Is that kind of the same logic for film where the impurities and different melting points kind of make that difficult to produce? Is that the kind of the same dynamic that’s a play there?
Dustin Olson: Yes. So here’s a good way to visualize it. When you’re making fiber, it’s a very thin stream of polypropylene — and if you have contaminants in your feedstock or in your product, then those little contaminants can have a big impact on the string. And when you have an impact on that string, then you end up breaking the string and the producers of fiber have a very difficult time managing it consistently. They’re up and down way too much. They don’t like the product quality, so they can’t do it reliably. And so that’s why they have traditionally moved away from mechanical recycled product. Same is basically true for film as well. As you make film, it’s typically a long, wide sheet very thin of polypropylene. And if you have any inclusion of co-product 1 or co-product 2 in that film, then they can create an interference in the film and break the film or cause problems in the film.
And so what we’re doing and what we’re seeing is that the better we are at removing coproduct 1 and co-product 2 from the process, the better the product quality will be, the better the product quality is, the better we are at being able to make film and fiber. And we are really excited about this, okay? Those are very big markets for the very big global markets. And if our product can prove technically and mechanically competent to run in those services, it gives us a pretty nice differential advantage to the market.
Operator: Our next question comes from Eric Stine at Craig-Hallum Capital Group.
Eric Stine: So I’ll sneak a few in here at the end. I’m just curious any detail you can give on interest in those bonds and your ability to resell those bonds to give you a little bit longer runway? And then also, would love to details on the warrants if you’re able to provide those pricing terms, et cetera.
Jaime Vasquez: Yes. Yes. On the revenue bonds, I have to — based on discussions we’ve had, we know Ironton has to run for a period of time. We do think there is an interest in it. We’ve got ongoing discussions. So my personal view is that if we can get Ironton to run for a couple of months, we’ll have opportunity to sell additional bonds. With respect to the warrants, the warrants the detail I can provide, I mean, they extend to December of 2030. They have a strike price at $11.50, and they were just basically at fair market value of those warrants.
Eric Stine: Got it. And then maybe just last one, and I realize this is difficult. And look, I appreciate I can appreciate this is a new technology. You’re ramping things up, you’re learning a lot. But I mean, any thoughts on when you envisioned that when you take down the plant, it is more of a proactive just part of regular maintenance versus taking it down such as the outage that you just did? I mean, is this — given what you know today, do you envision that this is a 3Q event? Do you think it’s more of a early 2025 event where things are — where you ultimately want them to be from a production perspective? Any thoughts there would be helpful.
Dustin Olson: Yes. Look, I mean we we’re always going to do the evaluation to see if there’s value in taking the plant down to do repairs or if there’s value in continuing to run. In this case, there were numerous items that have been building up since November that we needed to address. We did a really good job during this outage, okay? We executed the outage very well. There were some discovery items, which got in the way. I mean, honestly, weather was a pretty significant impact on the overall time line of this outage. But we implemented a number of improvements that will improve the reliability, okay? So we’re very excited about that. With respect to when will we do it again, we do not have plans to take the plant down again in 2024.
However, I will caveat it by saying if we learn things as we run more consistently and reliably and with more pounds to the plant, that advises us that we need to do something again, then we will, okay? But at this point, we don’t see a need to bring the plant down, quite frankly, because we did such a thorough job of planning this outage and completing the work that we had in front of us. And I think the other thing, Eric, is, look, I mean we will continue to extend the time between outage over the life of the project or the life of the site. We will always be open to new ideas, new improvements, reliability, big, small, medium, whatever, to improve the site, okay? So I don’t think that even in traditional plants that have been running for 50, 60 years, they still implement reliability improvement projects on those plants every time they shut down.
Now the percentage of improvement versus the percentage of maintenance will change, and it will happen for us as well. But we’re never going to stop growing, learning or getting better, and we’ll continuously add things to this facility to help us operate more effectively. You should note that the majority of the projects that we did during this outage were very small dollar items. But even though small dollar item issues, when an operator is in the field, having to deal with something that’s abnormal, it’s not good for reliability of the plant. And so by some of these small improvements, we will help the operator quite a lot in the field be more successful.
Operator: Thank you. I’m showing no further questions at this time. I will turn the call over to Christian.
Christian Bruey: We are going to read one question that we received through investor question at purecycle.com. This comes from Don Matthew.
Don Matthew: Dustin, do you anticipate the need for continuing occasional plant stoppages to keep improving the process.
Dustin Olson: Yes. First of all, Dan, thanks for the question, and thanks for sending it in early. We very much appreciate that. And I think that Eric asked that question just before. So we don’t anticipate needing to take the plant down for any future outages in 2024. But we’re going to see how the plant runs, we’re going to see what the plant is telling us, so we’ll make decisions throughout the year. But thank you for the question.
Dustin Olson: So with that, I believe that’s the end of the questions for this call. I’d like to close the meeting with a few short remarks. Look, I mean the success of this company will depend on our team’s resolve to solve problems and make improvements every single day. 1% every day is a common thing that you hear out there. We execute that all the time. We opened our doors to you just a few weeks ago, and you got to see the culture and the energy behind everything we do with full transparency. We grind, we push through, we saw problems and we improve every day. From the outside looking in, the plant might look the same to you, but for us, we removed so many reliability headaches that prevented us from consistent forward momentum.
During this outage, we took the time to make those improvements that we believe will improve our operation. We couldn’t be more excited to restart our facility and run this plant, and we look forward to talking to you all again next time. Thank you very much for your time today.
Operator: Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect.
