Pryme N : Q3 2022 - Report

PRYME N.V.

Q3 2022 REPORT

NOVEMBER 30, 2022

Pryme One - Advanced Recycling Reactor

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PRYME N.V. - Q3 2022 Report

CEO Letter

Dear Investors,

Pryme's roots go back over a decade when our founder Johannes van der Endt developed an industrial process that converts plastic waste into valuable products at industrial scale. After all these years of pioneering the company is about to start operating its first plant, "Pryme One" in Rotterdam.

In the meantime, plastic waste has been elevated to one of the critical issues of our time. Social and political pressures to reduce waste and improve recycling rates, global brands committing to switching their demand to recycled plastics and increasing focus from the petrochemical industry have reinforced Pryme's ambition to be a game changer in the plastic supply chain by enabling plastic circularity through advanced recycling at industrial scale.

Since joining Pryme six months ago, my efforts have been dedicated to the timely delivery and successful start-up of Pryme One. This plant is the logical end point of our pioneering phase and will validate our pyrolysis process on an industrial scale, which will unlock economies not seen to date in plastic recycling, and eventually position Pryme as a leading company in this field.

Construction of Pryme One has now reached its critical final phase, leading to the start of commissioning in early 2023, and commercial production in Q3 2023. The plant has a plastic waste intake capacity of 40'000 tons per year, resulting in the production of 30'000 tons of pyrolysis oil.

Along with the ongoing construction of our first plant, much focus has been placed on building an ambitious and cohesive team consisting of professionals with many years of applicable experience in the industrial & petrochemical sector. Having a team with the correct skillset, relevant experience and can-do attitude is of utmost importance for success and future growth.

Several other recent developments and achievements are notable:

We have now completed the installation of our lab scale process in our R&D center in Ghent, Belgium. This facility will focus on continued process improvements, which we identified as a key driver of sustained company growth.

We also made significant progress in negotiating the terms of a multi-year strategic supply agreement of plastic feedstock with a major waste sorting company. These feedstock flows will function as a backbone for Pryme One and will ensure process continuity while testing various other qualities of feedstock.

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PRYME N.V. - Q3 2022 Report

The coming months will present multiple challenges, and the team and I are committed to meet these with resourcefulness and dedication.

We first and foremost need to finish the construction of Pryme One and complete staffing ramp-up to ensure start of operations. More broadly, knowledge and skills will be critical to our long-term success, we will remain focused on developing, growing and protecting them.

At the same time, we are laying the groundwork for our next plant in the Rotterdam area which will be a logical continuation from Pryme One. We have developed several options and aim for the design of a 120'000-ton plant that incorporates our learning from Pryme One, leading to an investment decision by early 2024.

All in all, we have made good operational and organizational progress through Q3 of 2022. With the startup of Pryme One, 2023 will be an inflection point with our focus gradually shifting from pioneering to rollout. I look forward to supporting the Pryme teamwork and delivering on the vast potential ahead of us.

Christopher Herve

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PRYME N.V. - Q3 2022 Report

PRYME N.V.

Q3 2022 REPORT

The third quarter of 2022 witnessed accelerating growth for Pryme NV, as below highlights illustrate:

• The build project progressed steadily through its critical phase as installation and assembly of key process blocks of the plant continued. Having finished lifting all the key equipment, including the feed handling system, two extruders, the ash cooler, the quench column and the reactor, we were able to make progress on mechanical completion, piping & electrical.
• A senior project engineer joined the company, and an external expert advisor was appointed on the management of non-condensable gas, both to ensure that the Pryme team is adequately staffed for the final completion of the construction. During Q3 shift operations also continued their build- up with the joining/hiring of additional talent.
• In August 2022, Pryme finalized the renegotiation of the terms of its pyrolysis oil supply agreement with Shell. The renegotiated agreement is in effect a new supply agreement ensuring attractive economics for both parties.
• Pryme made significant progress in negotiating the terms of a strategic 5- year plastic waste supply agreement to secure substantial coverage of the requirements for the first year and a guaranteed base load supply for subsequent years. We expect to sign before the end of Q4 2023.
• In October, as a subsequent event, Pryme finalized a sales and leaseback agreement for some of the equipment installed in Pryme One. This agreement secured EUR 8.2 million of liquidity.

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PRYME N.V. - Q3 2022 Report

BUSINESS OVERVIEW

ACHIEVEMENTS IN Q3 2022

Pryme One - Construction Update

We made significant progress in a challenging business environment in the construction of Pryme One, our first production unit located in the Port of Rotterdam. Pryme One will have a plastic waste chemical recycling throughput of 40'000 tons per year equivalent to 30'000 tons of pyrolysis oil. As the pictures illustrate, most of the key equipment is now installed.

We continued to experience external supply chain issues. Nevertheless, with the construction approaching completion and most long lead time equipment items having already been committed, delivered or ordered, the effects were smaller than in previous quarters. Staffing shortages of contractors for completion of the construction remains an ongoing challenge that the company manages in close cooperation with its EPC partner to mitigate negative impacts.

In September we made good progress on the engineering for the installation of a gas turbine. As a subsequent event, the company entered into a rental agreement with a Dutch supplier for an adequate second-hand gas turbine with delivery in the first half of 2023.

The overall spending relating to the construction of Pryme One is well under control and the company does not foresee any material overruns compared to what has been communicated to date. The company plans to start partial commissioning in January 2023 while piping works will be finalised in February 2023 for hot commissioning to start in March/April 2023 as previously communicated.

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PRYME N.V. - Q3 2022 Report