Annual Report 2024

In 2022, 2023 and 2024, as part of the LTI plan, the company awarded the Management Board with equity instruments consisting of RSUs and Stock Options with a vesting period of three years, with 1/3 vesting each year. For further details reference is made to the table “Number of RSUs and Stock Options awarded and outstanding to Management Board” below.

Number of RSUs and Stock Options awarded and outstanding to Management Board

Each Supervisory Board member is subject to a Supervisory Board Director agreement. All Stock Options under the 2022 Grant of Stock Options have vested on the date of issue of new shares on 18 April 2023 in completion of Pryme N.V.’s private placement process pursuant to the change of control clause in the Supervisory Board Director agreements on the basis of Infinity Recycling B.V. on that occasion having gained a controlling interest in the company as the managing director of both Circular Rotterdam B.V. (at the time owning 27.5 % of the shares in Pryme N.V.) and Circular Plastics Coöperatief U.A. (at the time owning 13.81 % of the shares in Pryme N.V.) and who together at such time reached a combined 41.31 % of the shares in Pryme N.V. Pursuant to the Supervisory Board Director agreements, each Supervisory Board member is entitled to exercise his Stock Options during any exercise window that the company opens on a regular basis during his tenure on the Supervisory Board and during a period of six months after resignation.

In the EGM held on 9 April 2024, 30,000 Stock Options with a strike of NOK 11 were awarded to each Supervisory Board member, with exception of Emmanuel Colombel, for the entire term of his appointment until the annual general meeting of shareholders to be held in 2026. On the date of grant the Stock Options were scheduled to vest in two equal installments on the dates of the annual general meeting of shareholders to be held in 2025 and 2026. In the same EGM, Emmanuel Colombel was appointed as Supervisory Board Member for three years, until the AGM 2027, and was awarded 45.000 Stock Options, vesting in three equal installments on the dates of the annual general meeting of shareholders to be held in 2025, 2026 and 2027 (the ”2024 Grant of Stock Options").

Number of equity instruments outstanding and awarded to the Supervisory Board

The comparatives 2023 have been adjusted with the amounts related to the carve-out of the discontinued operations. The main difference relates to the adjustment of the impairment of € 2,3 million to discontinued operations in 2023. Reference is made to note 7.3.14 (Assets held for sale).

A Statement of Other Comprehensive Income (OCI) is not disclosed as there are no OCI components.

In October 2022 Pryme entered into a sale and leaseback transaction of installation components. In 2024 Pryme received the remaining receivable of € 133 thousand.

The movement in government grants (€ 959 thousand) relates to the utilization of the EU Horizon (Project ELECTRO) government grant (€ 844 thousand) and the TSE grant regarding the valorization of non-condensable gases (€ 115 thousand) in the income statement. In 2024 the amount of government grants received in advance amounted to € 887 thousand, consisting of the ELECTRO grant for
€ 526 thousand and the TSE grant for € 361 thousand.

Main activities of the entity

The activities of the Pryme group of companies (“Group”) consist of the development and application of innovative technology in the field of processing plastic waste into pyrolysis oil. Going forward the main revenue stream will relate to the production and sale of pyrolysis oil generated from plastic waste.

Disclosure of Group structure Pryme N.V.

Pryme N.V. is the head of the Group and parent company of Pryme Management B.V. and CCT International B.V. Following an internal restructuring on 30 December 2024, Pryme Management B.V. acquired all shares in both CCT Circular CleanTech B.V. and CCT Circular CleanTech Amsterdam B.V. from CCT International B.V. Information on other related party transactions within the Group is provided in note 7.5.3.

Accounting principles

As of the financial year 2024, Pryme N.V. applies the International Financial Reporting Standards (“IFRS Accounting Standards”) as adopted by the European Union (“IFRS Accounting Standards-EU”) for the consolidated financial statements. As per Part 9, Book 2 DCC, Pryme uses the option to apply the accounting policies as used in the consolidated financial statements (article 362(8) DCC) for the company financial statements. By applying this option, reconciliation is maintained between group equity and company equity.

Going concern

We draw attention to the fact that on 31 December 2024, the company incurred a loss of € 45.7 million in 2024 (2023: € 15.4 million) and that the company’s total assets exceed its liabilities by € 6.6 million. This primarily reflects the group’s ongoing scale-up phase. Please note that included in the 2024 losses is a non-cash impairment charge of €25.2 million. At the end of 2024, Pryme’s cash balance amounted to around € 6.0 million.

The cash burn rate in Q1, 2025 was around €4.3 million. As per plan, it is expected that the Q2 and Q3 cash burn rates will be similar to that of Q1, before the cash flow is expected to improve in Q4 due to higher levels of pyrolysis oil production as per the plan. Although the production volumes are expected to increase significantly as early as in Q3, the cash flow effect is not expected to reflect this before Q4 mainly due to estimated additional working capital needs. In Q4, the company expects a reduced cash burn rate of €2.3 million as the effects of the production volume increase are expected to affect the cash flow. For 2026, the operational cash flow is projected to reach the breakeven level due to higher expected production volumes and improved pricing assumptions for the pyrolysis oil, but most likely not before the second half of 2026. This means that unless the assumptions of the operational and financial plans are accomplished, there is a high probability of Pryme needing additional liquidity within the next 12 months, most likely at the beginning of 2026.
In summary, the expected overall cash outflows, excluding any funding cash flows and any expenditures for future plants, are expected to amount to around €15 million in 2025.

With the funding inflow from the December 2024 private placement received in January 2025 and the committed and expected funding inflow from the pledged and binding private placement subscriptions in April 2025 of €7 million, the overall certain sources of funds amount to around €17 million (€6 million + €4 million + €7 million). The plan and expectation are that Pryme will be operating around the breakeven level in 2026 due to higher production volumes combined with improved and higher pricing for the pyrolysis oil. Thus, the available liquidity of around €17 million is assumed to meet the overall liquidity needs of the company for the period until 12 months after the issuance of this report if, and only if, the company’s underlying plan assumptions are met. The cash position for the period after the 12 months period is yet uncertain and depends on the effect of the company’s underlying plan and execution thereof.

The above cash flow estimations are based on significant judgements and assessments by the company on the operational cashflows and that these can be negatively or positively impacted by the different assumptions used. Examples of critical unfavorable elements in the underlying assumptions are i) the feasibility of the Pryme technology, ii) further delays in timing and pace of the increase of production, and iii) Pryme’s ability to meet the customers’ product specifications. On the contrary, examples of potentially positive elements compared to the assumption would include i) improved product pricing (as the company is currently negotiating) ii) an acceleration of the ramping up of production volumes and iii) cost reductions which have not yet been developed as they would depend heavily on the causes of shortfall in production volumes. Most likely, in the event of Pryme not achieving the planned and expected ramp up in production volumes for the next 12 months, the company would need to seek additional funding as described above.

Additionally, it should be noted that the above cash flow estimations exclude any Pryme Two expenditures as these have not been included in either the budget nor in the current strategic plan as the validation of the company’s first plant will need to be completed before any expenditures for future plants are budgeted and planned. This represents the current prioritizations of Pryme. Pryme is aware that undertaking activities associated with future plants will require additional funding.

In accordance with the applicable accounting principles, the company confirms that the financial statements have been prepared under the assumption of a going concern. This assumption is based on the profit & loss and cash flows budgeted for 2025 and the strategic forecasts and plan for the year 2026. This basis presumes that funds will be available to finance future operations and that the realization of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business. The likely need for required additional funding in the event that the operational and financial plan for 2025 and 2026 is not fully met leads to material uncertainties that many cast doubt on Pryme’s ability to continue as a going concern.

Basis of Preparation

The financial statements for the year ended 31 December 2024 and onwards are prepared in accordance with the IFRS Accounting Standards-EU. The consolidated and company financial statements have been prepared on a historical cost basis. The consolidated and company financial statements are presented in euros and all values are rounded to the nearest thousand (€ 000), except when otherwise indicated.

Application of new and revised standards and interpretations

The overview below shows the new and revised standards that have been issued with an effective date of 1 January 2025 and later. These standards will therefore be applied in the Annual report 2025 and later.

Standards and interpretations not yet effective

According to our assessment, these new IFRS standards will have no material impact on Pryme’s financial statements in the period of initial application.

Basis of consolidation

Financial information relating to Group companies and other legal entities controlled by Pryme N.V., has been consolidated in the financial statements of Pryme N.V. The consolidated financial statements have been prepared in accordance with the accounting principles of Pryme N.V.

Financial information relating to the Group companies is fully included in the consolidated financial statements, eliminating the intercompany relationships and transactions.

The subsidiaries included in the consolidation are:

• Pryme Management B.V., Rotterdam (100%)
• CCT Circular CleanTech B.V., Kapelle (100%);
• CCT International B.V., Antwerpen-Berchem (100%)
• CCT Circular CleanTech Amsterdam B.V., Amsterdam (100%)

Subsidiaries are entities controlled by the Group. Pryme controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the Consolidated financial statements from the date on which control commences until the date on which control ceases, using consistent accounting policies.

Summary of significant accounting policies

The Group’s material accounting policies are described in the relevant individual notes to the Consolidated financial statements or otherwise stated below. These policies have been consistently applied to the years presented, unless otherwise stated.

The individual notes are listed in the table of contents.

Current versus non-current classification

The Group presents assets and liabilities in the statement of financial position based on current/non-current classification. 

An asset is current when it is:

• Expected to be realised or intended to be sold or consumed in the normal operating cycle
• Expected to be realised within twelve months after the reporting period

All other assets are classified as non-current.

A liability is current when:

• It is expected to be settled in the normal operating cycle
• It is due to be settled within twelve months after the reporting period

The Group classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

Foreign currencies

The Group’s consolidated financial statements are presented in euros, which is also the parent company’s functional currency. All subsidiaries report in euros.

Transactions in foreign currencies are initially recorded by the Group’s entities at their respective functional currency spot rates at the date the transaction first qualifies for recognition. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date.

Cash flow statement

The cash flow statement has been prepared using the indirect method. The cash items disclosed in the cash flow statement comprise cash at banks and in hand except for deposits with a maturity of longer than three months. Cash flows denominated in foreign currencies have been translated at average estimated exchange rates. Exchange differences affecting cash items are shown separately in the cash flow statement. Interest paid and received as well as income taxes are included in cash from operating activities. Transactions not resulting in inflow or outflow of cash, leases included, are not recognized in the cash flow statement. Payments of lease installments qualify as repayments of borrowings under cash used in financing activities and as interest charged under cash generated from operating activities.

The main financial risks identified by the Management Board to achieve Pryme’s objectives are elaborated below:

Based on the risk assessment, mitigating actions are put in place to manage these risks. Periodically the Management Board and the Supervisory Board update and review these risks and take appropriate action, if needed.

Capital management

Capital includes issued capital, share premium and all other equity reserves attributable to the shareholders and the net debt position. The primary objective of the Group’s capital management is to maximise the shareholder value.

The Group’s objective when managing capital is to safeguard its ability to continue as a going concern (see note 7.2.2) in order to provide returns for shareholders and benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost of capital.

Pryme is a capital-intensive company. Pryme’s funding strategy is directed at establishing and maintaining an optimal financing structure that takes into account the current asset base as well as the current and future investment plans. As a start-up company Pryme may fail to timely obtain the necessary equity, grants, or debt funding, which could prevent the company from continuing as a going concern and preventing the company from executing its strategy to roll-out the “proof of concept plant” Pryme One and start building larger plants. Pryme works actively to maintain and further expand the current funding base.

The Group manages its capital structure and aims to expand the gearing ratio, which is ‘net debt’ divided by total equity plus net debt. The Group’s policy is to move to a gearing ratio between 20% and 40%. Within net debt the Group includes interest bearing (leasing) loans and borrowings, trade and other payables, less cash and cash equivalents. Given the nature of the long-term asset base, the company needs a large proportion of long-term funding, either equity, financing, or hybrid funding. As a result of the impairment losses of € 25.2 million in total in 2024, the gearing ratio increased significantly above the preferred range. The impairment losses relate to Pryme One (€ 24.0 million, refer to note 7.4.7 (Impairment losses)), and the Amsterdam site (€ 1.2 million, refer to note 7.3.14 (Assets held for sale)). Therefore, additional (equity) funding is required.

To achieve this overall objective, the Group’s capital management, among other things, aims to ensure that it meets (financial) conditions attached to government grants, lease agreements and other interest-bearing loans and borrowings that define capital structure requirements. These agreements do not contain obligations to meet certain financial ratios. There have been no breaches of the (financial) conditions in the current period.

No changes were made in the objectives, policies, or processes for managing capital during the years ending on 31 December 2024 and 31 December 2023.

The preparation of the Pryme consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the related disclosures, and the disclosure of contingent assets and liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities in future periods. Despite management’s best efforts to accurately estimate such amounts, future results could materially differ from those estimates.

The following management insights, estimates and assumptions, given the nature of Pryme’s activities, might have significant impact on the financial statements. The key elements of uncertainty in the estimates and judgements are as follows:

Estimates and assumptions related to impairment test of Pryme One, intangible assets, and assets held for sale

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation should be based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs of disposing of the asset. This information is not available.

The value in use calculation is based on a Discounted Cash Flow (DCF) model. The cash flows are derived from the budget 2025 and a forecast for the next 7 years. Pryme is not committed to significant future investments that will enhance the performance of the assets of the Cash Generating Unit (CGU) being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows, production efficiency and cost level growth rate used for extrapolation purposes. The key assumptions used to determine the recoverable amount for the CGU Pryme One are further explained in note 7.4.7.

Similar to the impairment testing for Pryme One, the value in use of the intangible assets (development costs) have been tested. Based on the anticipated revenues of Pryme One and the agreed upon Intellectual Property fees, the value in use exceeds the carrying value of the intellectual property. For further details we refer to note 7.3.1.

The impairment test on the assets held for sale is based on a valuation report of an external real estate broker.

Estimating the incremental borrowing rate

The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group ‘would have to pay’, which requires estimation when no observable rates are available. Main source of information are the interest rates charged on new contracts. Comparing these interest rates and international benchmark interest percentages for large, mature chemical companies, we notice that for Pryme as small start-up entity, the cost of (asset-backed) debt on average lies approximately 5% above the interest rate of Dutch government bonds with a duration of 10 years.

Anticipated duration of the leasing contract for the Pryme One site

The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. The Group has several lease contracts that include extension and termination options. The Group applies judgement in evaluating whether it is reasonably certain whether to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination.

After the commencement date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate. For the Pryme One site, the Group assumes to make use of the extension option for 5 years starting as of 1 March 2027 till 29 February 2032, unless the lessor gives notice of termination. Pryme further assumes to continue the lease of the main components (a reactor, two extruders and a walking floor) of the installation. For further details regarding leasing, we refer to note 7.3.3.

In addition, the renewal options for leases of motor vehicles are not included as part of the lease term because the Group typically leases motor vehicles for not more than five years and, hence, is not exercising any renewal options. Furthermore, the periods covered by termination options are included as part of the lease term only when they are reasonably certain not to be exercised.

Useful life of Plant and Equipment Pryme One

The useful life of Pryme One is closely connected to the anticipated period the Pryme One installation will be used for testing and generating process data as input for the design, construction, and production process of future larger chemical recycling plants. Pryme Management assumes that the Pryme One plant will be used for 8 years until 29 February 2032, in line with the assumed duration of the lease contract of the Pryme One site.

Useful life of intangible assets

The useful life of the asset is estimated at 5 years (straight-line), taking into consideration the anticipated technological obsolescence (rapid changes in technology), which might reflect a reduction of the future economic benefits.

Valuation deferred tax asset

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits, together with future tax planning strategies.

Taking into account the lack of track record for Pryme to generate profits, the uncertainties surrounding the Pryme business model and activities and the significant period anticipated to recover these losses, Pryme only recognized deferred tax assets up to the level of the deferred tax liability related to right-of-use assets recognized in the financial statements of 2024.

For further details reference is made to note 7.3.13.

Residual value and provision for decommissioning Pryme One

Pryme has recognized a provision for decommissioning obligations associated with the Pryme One site and installation. Our assumptions and estimates are made in relation to discount rates, the expected cost to dismantle and remove the plant from the site and the expected timing of those costs. The estimates and the underlying assumptions are reviewed on a regular basis. Adjustments are made in the period in which the estimates were reviewed, if the adjustment affects that period, or in the relevant period and the future periods if the adjustment affects both current and future periods.

Accounting policies

Intangible assets are stated at cost less accumulated amortization and impairment losses. Impairment testing is executed if an impairment trigger is identified. This is relevant if the carrying amount of the asset (or of the cash-generating unit to which the asset belongs) is higher than its recoverable amount. With regards to the determination as to whether an intangible asset is subject to impairment. 

Research costs are recognized in the consolidated profit and loss account. Expenditure on development projects is capitalized as part of the production cost if it is likely from both a commercial and technical perspective that the project will be successful (i.e.: if it is likely that economic benefits will be realized) and the cost can be determined reliably. The amortization of capitalized development costs commences at the time when commercial production starts and takes place over the expected future useful life of the asset. The useful life of the asset is estimated at 5 years (straight-line).

Movements in intangible assets

The development costs encompass all the efforts spent on:

• Intellectual property and know-how regarding the conversion of plastic waste into a form of (pyrolysis) oil, including (claims to) patents, trademarks, etc.
• All developed design, engineering (software), tools and equipment for the above process.
• All documentation of process modules, manufacturing methods and software programs.

Amortisation started on 1 January 2024, after commencing commercial production at plant Pryme One. The remaining amortization period is therefore 4 years. Impairment testing confirmed that the carrying value is below the recoverable amount.

No borrowing costs directly attributable to the development costs have been capitalized as part of the intangible asset.

Impairment development costs

The recoverable amount of the development costs in respect of the CGU CCT International B.V. is determined based on a value in use calculation using the cash flow projections for Pryme One covering a seven-year period. This period is in line with the expected economic life of Pryme One. As a result of this analysis, management did not identify an impairment for this CGU. Impairment testing confirmed that the carrying value is below the recoverable amount. Reference is made to note 7.4.7.

Accounting policies

Property, plant, and equipment mainly comprises plant and equipment of Pryme One (Rotterdam) and our labscale plant at Ghent University.

Plant and equipment are broken down into their components and carried at cost, net of accumulated straight-line depreciation and less any impairment losses. Borrowing costs that are directly attributable to the construction of the plant form part of the cost of Plant and equipment. This also applies to the (financially) leased equipment reported under this section. Other borrowing costs are recognised as an expense. Costs encompass the initial cost plus other direct acquisition costs (duties and transport) and installation costs that can be allocated directly, such as design and engineering costs as well as hours of own employees and contractors. Investment grants are deducted from the costs.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item are expected and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. Costs of repairs and maintenance that do not increase the future economic benefits are recognized as expenses.To the extent that dismantling obligations exist at the end of the useful life, these estimated costs and any amendments thereto are included in the cost of the assets.

Impairments expected at year-end of the reporting period are considered (see note 7.4.7).

Depreciation is calculated using the straight-line method to allocate the cost of the assets to their residual values over their estimated useful economic lives as follows:

• Land:                                                 No depreciation
• Plant and equipment                       8 years
• R&D facility equipment                   4 years
• Office furniture and equipment     3-5 years

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and reported as an adjustment of the depreciation or amortization of the assets involved. In 2024 no such gains or losses are included in the consolidated statement of profit and loss.

Movements in property, plant, and equipment – owned assets

The Amsterdam site (plant, and equipment not used in production process) mainly relates to plant and equipment and is held for sale. The purchase price of the site amounted € 3.5 million, plus the acquisition of an overdue ground lease liability of € 544 thousand. Reference is made to note 7.3.14 (Assets held for sale).

Impairments relate to components which will not deliver future economic benefits. These impairment losses are recognized in the Statement of Profit and Loss. Reference is made to note 7.4.7 regarding impairment testing.

The additions in Plant and equipment and R&D equipment of € 1.6 million and € 110 thousand relate to the Pryme One plant in Rotterdam and the R&D facility at Ghent University (Belgium), respectively. Depreciation started after commencing commercial production at Pryme One as of 1 January 2024. The Lab installation (R&D equipment) in Ghent is in use and being depreciated as of 1 January 2023.

Accounting policies

Identification as lease contract

A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for a consideration. Pryme applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognises lease liabilities representing obligations to make lease payments and right-of-use assets representing the right to use the underlying assets. In line with the nature of its activities, Pryme has long-term land leases and leases of other non-current assets such as Plant and equipment and company cars. Most of the contracts contain extension options.

Some contracts contain both lease and non-lease components. Pryme allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices.

Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements in general do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets cannot be used as security for borrowing purposes by Pryme.

Right-of-use assets

Pryme recognises right-of-use assets at the commencement date of the lease. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows:

• Plant and machinery                                                   8 to 10 years
• Lab scale R&D equipment (UGhent University)      4 years
• Motor vehicles and other equipment                       3 to 5 years
• Office space                                                                1,5 to 4 years

Right-of-use assets are depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. If Pryme is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset’s useful life.

In case the ownership of the leased asset transfers to Pryme at the end of the lease term, the cost reflects the exercise of a purchase option. The right-of-use assets are also subject to impairment. We refer to the accounting policies in note 7.4.7 (Impairment losses). Right-of-use assets that are part of the assets held for sale are reported separately. We refer to note 7.3.14 (Assets held for sale).

Leasing liabilities

At the commencement date of the lease, Pryme recognises leasing liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments less any lease incentives receivable.

Lease payments are allocated between a principal and interest expense. The interest expense is charged to profit or loss over the lease period to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The principal amount of the lease payment is deducted from the lease liability.

Some lease arrangements do contain an obligation to dismantle and remove the underlying asset, restore the site on which it is located or restore the underlying asset to a specified condition. To the extent that dismantling obligations exist at the end of the useful life, these estimated costs and any amendments thereto are included in the cost of the assets or decommissioning costs are expected to be offset against the proceeds of the materials disposed of.

Leasing liabilities that are directly associated with assets held for sale are reported separately. We refer to note 7.3.14.

Short-term leases and leases of low-value assets

Pryme applies the short-term lease recognition exemption to its short-term leases of equipment, cars, and office space i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option. It also applies the lease of low-value assets recognition exemption to leases of office equipment and software that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.

Incremental borrowing rate

The lease payments are in almost all instances discounted using the incremental borrowing rate of Pryme. This is because the interest rate implicit in the lease can in most instances not be readily determined. The incremental borrowing rate is the rate that Pryme would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset, in a similar economic environment with similar terms, security and conditions.

As a basis for the calculation of the interest rate, a risk-free rate is used, being the interest rate on Dutch government securities, plus 5 percentage points. The incremental borrowing rate for new leases in 2024 is set at 8.0%.

Movements in property, plant, and equipment – leased assets

Leasehold equipment includes the extruders, reactor, walking floor and some other equipment installed and in use at Plant On, office space as well as some vehicles.

Movements of the carrying amounts of Right-of-use assets:

The remeasurement of € 1.9 million in 2023 mainly related to the extended scope of the lease contract of the Pryme One location, from February 2027 to February 2032. 

Movements of lease liabilities:

Lease expenses recognised in the consolidated statement of profit and loss:

Pryme had non-cash additions to right-of-use assets and lease liabilities of €323 thousand in 2024 (€ 2.8 million in 2023). There are no future cash outflows relating to leases that have not yet commenced.

Lease commitments:

As of 31 December 2024 and 31 December 2023, there are no material leases to which Pryme has committed, but which have not yet commenced.

Maturity analysis - Contractual undiscounted lease cash flows as of 31 December 2024:

The average weighted duration of the lease commitments is 77 months (6.4 years). The Pryme One installation accounts for € 4.0 million of the total contractual undiscounted lease cash flows.

Lease extension and termination options:

Pryme has several lease contracts that include extension and termination options. These options are negotiated by management to provide flexibility in managing the leased-asset portfolio and align with Pryme’s business needs. Management exercises significant judgement in determining whether these extension and termination options are reasonably certain to be exercised.

The lease agreement with Plant One Rotterdam (Pryme One site) offers the option to extend the lease term after the current term ending 28 February 2027. Currently Pryme has the intention to extend this lease with another five-year term up to and including 29 February 2032, unless the lessor give notice of termination. After this date the lease can be continued for consecutive periods of one year, subject to termination by both lessee and lessor with a notice period of twelve months.

Therefore, there are no material undiscounted potential future lease payments relating to periods following the exercise date of extension options that is not already included in the lease term.

Accounting policies

Inventories are valued at the lower of cost and net realisable value. The costs of purchase of inventories comprise the purchase price, import duties and other taxes (other than those subsequently recoverable by the entity from the tax authorities), and transport, handling, and other costs directly attributable to the acquisition of finished goods, materials, and services. Trade discounts, rebates and other similar items are deducted in determining the costs of purchase.

The costs of conversion of inventories include costs directly related to the units of production, such as direct labour and energy. They also include a systematic allocation of fixed and variable production overheads that are incurred in converting materials into finished goods. Fixed production overheads are those indirect costs of production that remain relatively constant regardless of the volume of production, such as depreciation and maintenance of factory buildings, equipment and right-of-use assets used in the production process, and the cost of factory management and administration. Variable production overheads are those indirect costs of production that vary directly, or nearly directly, with the volume of production, such as indirect materials and indirect labour.

The allocation of fixed production overheads to the costs of conversion is based on the normal capacity of the production facilities. Normal capacity is the production expected to be achieved on average over a number of periods or seasons under normal circumstances, taking into account the loss of capacity resulting from planned maintenance.

Other costs are included in the cost of inventories only to the extent that they are incurred in bringing the inventories to their present location and condition.

The value of produced pyrolysis oil is recognized by applying the standard cost per ton.

Inventories

Inventory of Pryme consist of plastic waste purchased in bulk quantities (bales, pellets), additives and produced pyrolysis oil and are valued at the lower of cost and net realisable value.

Accounting policies

Receivables and accrued income are initially valued at the fair value of the consideration to be received unconditionally, including transaction costs, if material. Receivables are subsequently valued at the amortized cost price. If there is no premium or discount and there are no transaction costs, the amortized cost price equals the nominal value of the accounts receivable. 

Impairment provisions for trade receivables are recognised based on the simplified approach within IFRS 9 to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. Provisions for bad debts are deducted from the carrying amount of the receivables from third-party customers. 

Other receivables and prepaid expenses are valued at amortized cost.

Trade receivables, other receivables, and prepaid expenses

Taxes and social security charges:

Other receivables:

Both the receivables related to the sale and leaseback transaction with Rabo Lease B.V. and the subsidy receivable related to the DEI grant have been collected in 2024.

Accounting policies

Cash at banks and in hand represent cash in hand, bank balances and deposits with terms of less than three months. Overdrafts at banks are recognized as part of debts to lending institutions under current liabilities. Cash at banks and in hand is valued at nominal value.

Cash and cash equivalents:

As of April 2023, Pryme NV entered into an interest rate agreement with Rabobank. The interest rate is determined by the Euro Short Term Rate (€STR) with a discount of 60 base points and was continued for 2024. All bank balances held by the entity are available for use by the group. The interest rate agreement has been extended until 31 December 2025 under the same conditions.

Authorized share capital:

Ordinary shares issued and fully paid (nominal value):

The company has one class of ordinary shares which carry no right to fixed income. Each share confers the right to cast one vote at the company's general meeting.

Ordinary shares issued and fully paid (number of shares):

At the General Meeting of Shareholders on 27 June 2023 the Supervisory Board asked for and received authorization to issue 4.833.086 shares. This authorization may be used to issue shares under the LTI plan. Reference is made to note 7.5.5 for all awards of shares and options by the Supervisory Board. 
At the Extraordinary General Meeting of Shareholders on 9 April 2024 the Supervisory Board received authorization to issue 12.672.933 shares through a private placement of new shares with gross proceeds of € 12 million (price € 0,9469 per share). For further details regarding awarded shares and stock options, and the issue of shares, reference is made to note 7.5.5.

Share premium reserve:

Nature and purpose of the share premium reserve

The Share Premium related to the issue of shares (private placements) comprises of the difference between the subscription price and the nominal value of the shares. All costs incurred related to the issue of shares are deducted from the proceeds of the issue of shares. In case of issuing ordinary shares related to the vesting of shares according to the LTI plan, the difference between the accrued Share-based Reserve and the nominal value of the shares is added to the Share Premium Reserve, less all costs incurred directly related to the issue of these shares.

General reserve:

Nature and purpose of the General reserve:

The movements in the General reserve only relate to the appropriation of result. The commitments related to the equity-settled share-based payments (LTI plan) provided to (i) Supervisory Board members, and to (ii) employees and contractors, including key management personnel, as part of their remuneration, are recognized in the Share-based Payments Reserve. For further details with regard to the LTI plan reference is made to note 7.3.8.

The commitment to Energietransitiefonds B.V. to provide 300.000 shares (RSUs) at the date of repayment of the loan is recognized as an equity-settled share-based payment. Reference is made to note 7.3.8 and note 7.3.10.

In 2024 and 2023 no dividends have been declared nor distributed.

At the general meeting of shareholders on 27 June 2023 the Supervisory Board asked for and received authorization to issue 4.833.086 shares. This authorization has been used in respect of the LTI plans in 2023 and 2024.

Accounting policies

The Pryme long-term incentive plan (LTI plan) consists of two components: Restricted Stock Units ("RSUs") and Stock Options ("Options"). RSU’s are valued at market value at the grant date. This also applies to share-based payments to external service providers. The fair value of the Options is estimated at the grant date using an option pricing model, considering the terms and conditions on which the Options were granted. However, the above performance condition is only considered in determining the number of instruments that will ultimately vest. The Options can be exercised up to ten years after the date of the grant and taking into account the vesting period. The scheme is equity-settled and only allows cash settlement at the discretion of the company. Pryme does not have a past practice of cash settlement for these Options. Pryme accounts for the LTI plan as an equity-settled plan.

Pryme has elected to present the accrued LTI plan and other share-based payment amounts under the Share-based payments reserve as part of equity. The entity recognizes an increase in equity when the services (performance provided by eligible supervisory board members, directors, managers, contractors, employees and other external service providers) are received. The value of the services rendered is assumed to be equal to the market value of the equity instruments at the date of the grant. The exercise price of the Options is equal to the market price of the underlying shares on the date of grant. The costs are incurred equally over the vesting period of the awarded equity instruments. 

At vesting of Restricted Stock Units (RSUs) and when Options are exercised, the accrued amounts are transferred to the Share premium reserve. Any excess of cash received from employees at settlement over the accrued amount of Options is transferred to the General Reserves and no longer earmarked under accrued amounts LTI plan. In case of a shortfall the additional costs of the settlement are incurred as cost in the Statement of Profit and Loss. After the expiry of options, the accrued amounts LTI plan are transferred to the General reserve in a similar manner.

Long-term incentive plan and other Share-based payments

In 2022, 2023 and 2024, Pryme has awarded equity instruments, Restricted Stock Units (“RSUs”) and or Stock Options (“Options”), to its employees, contractors, and supervisory board members in accordance with the authority granted to Pryme’s supervisory board (“SB”) by Pryme’s general shareholders meetings on multiple occasions. In 2024, in connection with a term loan facility provided by Energietransitiefonds B.V., Pryme committed to provide 300.000 RSUs at the time of repayment of the loan. This commitment is considered a share-based payment and is recognized accordingly.

The company operates a share-based LTI plan, which is classified as equity-settled share-based payment plan. Vesting is dependent on being in service with the company during the vesting period. As a principal, awarded equity instruments will be expensed over the vesting period of the equity instruments.

The intention of this plan is to (i) attract and retain management and staff whose services are important to the Company’s success, (ii) motivate such management and staff to achieve the long-term goals of the Company, (iii) reward such management and staff for outstanding performance and behaviour, (iv) provide variable compensation opportunities that are competitive with those of other companies, and (v) encourage such management and staff to own common shares of the company and thus achieve an alignment of interest with shareholders in the long-term health and value of the company.

The LTI plan makes use of two components: RSUs and Options. The LTI plan defines the terms for both components of the grant. The other share-payment commitment currently only consists of RSUs.

Expenses recognised for employee and other services received during the year:

Movements share-based payments accrual reported in the Statement of changes of equity:

During the year, a reclassification was made from Share-based payments reserve to Share premium reserve in the amount of € 133 thousand (2023: € 59 thousand) and share capital € 5 thousand (2023: € 3 thousand) related to the vesting and issue of RSUs. Forfeited RSUs and Options resulted in a release of € 108 thousand of the Share-based payments reserve in 2024. In 2023 the release of € 1 thousand related to a settlement of Options.

Overview equity instruments awarded, the number of RSUs and Options, strike prices and expiration dates for the Options and vesting years:

LTI plans and other Share-based payments - RSUs

As part of the LTI plans 2022, 2023 and 2024 the company has awarded RSUs to eligible management, contractors, and staff members as well as to an external service provider. Generally, the RSUs vest equally in three years. The first vesting period terminates one year after the grant year. The full costs of the LTI plan and other Share-based payments are borne by the company.

The movements in outstanding LTI plan shares awarded to eligible management, contractors and staff members can be summarised as follows:

Note 1:
Forfeited RSUs during the year fully relate to LTI-participants leaving the company.

LTI plan – Options

On an annual basis and on certain other occasions, Options under the LTI plan may be conditionally granted to eligible management, contractors, and staff members. The Options generally vest yearly over a three-year vesting period. In some specific situations Options have been awarded with deviating vesting periods.

The vested options have an exercise period of 10 years after the grant year, after which the Option expires.

The movements in outstanding LTI plan share options awarded to the supervisory board, management, contractors, and staff members can be summarised as follows:

Note 1)
The weighted average exercise prices are calculated based on the NOK-exchange rate as of the grant date of the Option awards from time to time.

Note 2)
The Options exercisable as of 31 December 2024 refer to the Options awarded to the Supervisory Board members (315.000) and management, contractors, and staff (345.300). The Options awarded to the Supervisory Board members can only be exercised after the end of their term. The other Options can be exercised till the expiration in 2032, 2033 or 2034.

The exercise price of the Options is equal to the market price of the underlying shares on the date of grant.

The maturity date of the awards to the Supervisory Board in 2022 is 4 years. As the Supervisory Board expects the major movements in share price for Pryme to take place within 4 years of the grant date, it was decided to value the Options to the Supervisory Board members at the same value as regular awards under the 2022 LTI plan.

Under certain circumstances, at discretion of the Company, a cash settlement is possible.

As of 2023 the fair value of the Options under the equity-settled share-based payment plans are determined using the Black-Scholes valuation model.

The significant parameters into this model were the following:

Note 1)
For the awards under the LTI plan 2023 and 2024, the valuations applied are strictly in accordance with the Black-Scholes model as trading volumes, patterns and stock price volatility have approached general market levels compared to the situation before 2023. Thus from 2023 onwards, the Black-Scholes model is used as the valuation model for equity awards.

It should be noted that, as is generally customary, a 3-month period is applied for the volatility estimation. A sensitivity analysis where the period used for the volatility calculation was increased to 6 and 12 months showed no significant differences to the model output using a 3-month period. Therefore the 3-month period is used.

Accounting policies

The present value of the expected cost for the decommissioning of an asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met. As part of the identification and measurement of the plant and equipment (Pryme One), a provision for decommissioning is recognized. In determining the fair value of the provision, assumptions and estimates are made in relation to discount rates, the expected cost to dismantle and remove the plant from the site and the expected timing of those costs.

Provision for decommissioning

Pryme is committed to decommissioning the “Plant One Rotterdam” site at the end of the extended lease term (1 March 2032), subject to a further extension of the lease term mutually agreed upon by the lessor and the lessee. The provision for decommissioning encompasses a best estimate of the discounted costs to dismantle the Pryme One installation at the expected end of the lease (March 2032).

Accounting policies

On initial recognition other long-term liabilities are recognized at fair value. After initial recognition other long-term liabilities are recognized at amortized cost, being the amount received considering premiums or discounts and transaction costs. This is usually the nominal value.

For the accounting treatment of non-current liabilities related to leasing and government grants we refer to respectively the notes 7.3.3 and 7.3.11.

Non-current liabilities carried at amortized cost:

The loans from third parties relate to the outstanding monthly installments of leased equipment following a sale and leaseback transaction of € 6.1 million (2023: € 6.9 million) in respect of leased equipment and a loan drawn in 2024 (€ 5 million). The loan related to leased equipment is elaborated below.

Sale and leaseback transaction

In October 2022 Pryme entered in a sale and lease back transaction covering the following equipment for a total consideration of € 8.2 million:

• 2 extruders
• Reactor
• Walking Floor

The lease-term of these assets is 102 months (8,5 years), and the interest rate amounts 5,8%. The residual value is determined at 12,5% of the initial cost. The consideration amounted to € 8.2 million of which € 7.6 million was collected in 2022. The remaining amount of € 607 thousand was received upon payment of the outstanding instalments to the equipment suppliers in 2023 (€ 474 thousand) and 2024 (€ 133 thousand).

The reason for entering into this sale and leaseback transaction was improving Pryme’s financial structure and liquidity position. As security for the (financial) leasing liability the legal ownership of the equipment remains with the lessor. At the end of the lease term Pryme has three options: 1) return the equipment, 2) extend for 12 months or more or 3) purchase the equipment for 12,5% of the original purchase price.

The transaction was not accounted for as a sale-and-leaseback transaction in scope of IFRS 16, but as a financing transaction. The transfer of the asset did not meet the requirements of a sale in terms of IFRS 15.

Pryme received a waiver from Rabobank related to the equipment lease agreement, allowing Pryme non-compliance with the revenue convenant (minimum sales 2024 of at least € 6 million) under the condition that no later than 1 July 2025, Pryme will have realized an additional equity contribution (or other subordinated funding) of at least € 6 million in addition to the private placement of € 4 million in January 2025.

Term loan facility:

In June 2024 Pryme has entered into an unsecured term loan facility agreement with Netherlands based Energietransitiefonds B.V. 
(ETF-R) in the amount of € 4 million or, at Pryme’s option, € 5 million with a term until June 2027. The interest rate of the loan is 9.0% p.a. No principal payments will take place before maturity unless the loan is repaid early. Accrued interest will be paid on a quarterly basis except during a grace period that applies until July 2025. In addition to the interest payments, the Company will issue 300.000 new shares in its capital to ETF-R for no consideration upon repayment or early prepayment of the loan. Pryme called the loan under the term loan facility agreement for the amount of € 5 million on 18 October 2024.

Maturity analysis – Non-current liabilities undiscounted cash flows:

For a detailed analysis of risks arising from financial instruments please refer to the Financial Risk Management section (included under note 7.2.4).

Accounting policies

Government grants are recognised at nominal value where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as a deduction of the relevant expenses on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. For grants related to assets Pryme has chosen to reduce the carrying amount of the asset. The grant is then recognised in the Statement of Profit and Loss over the useful life of the depreciable asset by way of a reduced depreciation charge. 

Grant amounts received in advance initially are presented as deferred income.

Government grants:

EU Horizon Project ELECTRO

In 2022 Pryme joined a consortium of 13 partners within the Project ELECTRO under the EU Horizon research and innovation program, which targets demonstration of innovative technology concepts that link the waste and petrochemical industries and provide sustainable, low-carbon and scalable circular solutions for olefin and polyolefin production. Both Pryme’s R&D center and Pryme’s first production site (Pryme One) in Rotterdam participate in the execution of the project activities.

Pryme’s role is to demonstrate on an industrial scale (TRL 7) the new application of proven technology, being an innovative modular extruder for optimal pre-treatment of plastic waste combined with an electrically heated reactor for the catalytic pyrolysis of plastic waste. The main product, pyrolysis oil, will be used as second-life feedstock for steam crackers operated by project partners. Apart from additional funding this project is an opportunity to further develop Pryme’s technology in close collaboration with subject matter experts at Ghent University and consortium partners and gain valuable insights in the requirements of the downstream market.

The project spend is expected to amount € 21.4 million through August 2026, among which Pryme’s share is the largest with an overall budgeted R&D and innovation cost of € 8 million. The EU financially supports the EU Horizon program. Pryme is eligible to receive a subsidy of up to € 4.8 million. In 2024 Pryme received an advance payment of € 0.5 million (2023: € 2.3 million).

In 2024 Pryme incurred € 1.5 million (2023: € 0.8 million) eligible costs related to this project and the related subsidy amounted to € 0.8 million, which has been deducted from the relevant cost line-items.

Topsector Energie (TSE) grant valorization non-condensable gases

In 2024 Pryme was awarded a TSE grant for a feasibility study regarding the valorization of non-condensable gases. The primary objective of the study is to investigate technological and economic viability, with the aim to make Pryme’s conversion technology completely circular by means of non-condensable gas valorization. This is crucial to create a sustainable process and achieve substantial GHG-emission reductions.

The project period ran from 1 March 2024 until 28 February 2025 and the maximum subsidy amount is € 481 thousand. In 2024 Pryme received advance payments for in total € 361 thousand. The TSE grant as of 31 December 2024 amounts to € 246 thousand and is a current liability. Reference is made to note 7.3.12.

In 2024 Pryme incurred € 164 thousand eligible costs related to this project and the related subsidy amounted to € 115 thousand, which has been deducted from the relevant cost line-items.

Subsidies deducted from cost line-items

Accounting policies

On initial recognition current liabilities are recognized at fair value. After initial recognition current liabilities are recognized at amortized cost. This is usually the nominal value.

Trade payables, other liabilities, and accrued expenses:

Trade payables mainly relate to suppliers of equipment and services on behalf of the operation and enhancements of Pryme One.

Payables relating to taxes and social security contributions:

Other liabilities and accrued expenses:

Accruals and invoices to be received mainly relate to the operation and enhancements of Pryme One and accrued interest relating to the Energietransitiefonds loan. Interest on this loan is paid on a quarterly basis except during a grace period that applies until July 2025. For further details regarding the repayment obligations other non-current liabilities, we refer to note 7.3.10.

Accounting policies

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. 

Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Pryme offsets deferred tax assets and deferred tax liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

Deferred tax assets and liabilities:

Deferred tax liabilities have been recognized related to the right-of-use assets (leases) and plant and equipment (recognition plant and equipment decommissioning).

The unused tax losses as of 31 December 2024 amount € 71.1 million (31 December 2023: € 25.4 million), subject to an applicable effective tax rate in The Netherlands of 25,8%. According to the current Dutch tax law, unused tax losses may be compensated with future taxable profits for an indefinite period of time.

Pryme recognizes and offsets deferred tax assets up to the level of the deferred tax liabilities (€ 1.0 million related to continued activities and € 0,5 million related to discontinued activities) to reflect that Pryme will not be in a tax paying position in The Netherlands in the upcoming years.

Accounting policies

Assets are only classified as assets held for sale if the sale is highly probable and management is committed to a plan to sell the asset (or disposal group). Further, the asset (or disposal group) must be actively marketed for sale at a price that is reasonable in relation to its current fair value. In addition, the sale should be expected to qualify for recognition as a completed sale within one year from the date of classification. Events or circumstances may extend the period to complete the sale beyond one year. An extension of the period required to complete a sale does not preclude an asset (or disposal group) from being classified as held for sale if the delay is caused by events or circumstances beyond the entity’s control and there is sufficient evidence that the entity remains committed to its plan to sell the asset (or disposal group).

Assets that meet the criteria to be classified as held for sale have to be presented separately in the statement of financial position and the results of discontinued operations have to be presented separately in the Statement of Profit and Loss.

Non-current assets shall be classified as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. Assets classified as non-current shall not be reclassified as current assets until they meet the criteria to be classified as held for sale. An entity shall measure a non-current asset (or disposal group) classified as held for sale at the lower of its carrying amount and fair value less costs to sell.

Deferred tax assets are measured based on a ‘going concern’ basis.

Assets held for sale

On February 6th, 2024, Pryme decided to sell the Amsterdam site. The assets and liabilities related to the site are held by CCT Circular Cleantech Amsterdam B.V. These discontinued operations will encompass all site related activities and all assets and liabilities. Therefore, on the balance sheet as of 31 December 2024 all related assets and liabilities have been reclassified as net assets directly associated with the anticipated sale. The site dimensions and availability of utilities do not meet Pryme’s selection criteria for a Pryme Two site.

Pryme management has intensified its efforts to sell the Amsterdam site in the course of 2024. The site characteristics and ground lease conditions lead to a limited number of potential buyers. Therefore, the timing of the disposal is surrounded by uncertainty.

Financial position

Plant and equipment are the main assets and encompass the foundations and (utilities) infrastructure at the Amsterdam site. The carrying value consists of the purchase price of € 4.1 million minus an impairment of € 3.5 million in total (2024: € 1.2 million, 2023: € 2.3 million). The carrying value amount to € 0.6 million and reflects the fair value less costs to sell.

Considering the specific nature of the Amsterdam site (harbor location, zoning plan of the plot and specific conditions of the ground lease contract) and the slow sales process so far, Pryme management engaged a specialized broker to provide an updated valuation report. This valuation report has been used as input for the impairment test as of 31 December 2024.

The valuation report indicates two valuation scenarios, depending on whether the potential buyer has activities in line with the current zoning plan of Petroleumhaven Amsterdam and if the buyer can make use of the foundations and (utilities) infrastructure on site. In the valuation, no value has been recognized related to the ground lease contract taking into consideration the condition that the specific usage of the site should relate to converting high caloric waste into oil products. Given the niche market for these type of sites, Pryme management has valued the site at € 0.6 million (selling costs for buyer). This translates into an additional impairment of € 1.2 million in 2024 (impairment 2023: € 2.3 million).

The ground lease agreement (right-of-use assets related to ground lease) related to this plot of land expires in 2067.

Other liabilities concern the overdue ground lease related to the Amsterdam site. The repayment terms of the overdue ground lease as of 31 December 2024 comprises five fixed bi-annual installments of € 54.395, due in January and July until full redemption. No interest costs apply. The non-current liabilities amount to € 163 thousand, and the current liability amounts to € 109 thousand.

Accounting policies

Pryme converts plastic waste into pyrolysis oil. Revenue from contracts with customers is recognised using the output method. According to the output method revenue is recognized based on direct measurements of the value of the goods transferred to the customer. The value of the goods is determined by the number of units (metric tons) delivered to the carrier nominated by the customer (FCA Plant conditions). 

The volumes transferred are measured reliably and consistently by tank storage meters as well as through weighbridges for the road tankers. The consideration reflects the volumes measured against the prices per metric ton to which Pryme is entitled according to the agreements with customers. Revenue from contracts with customers according to the contractual conditions typically is recognized upon delivery of the pyrolysis oil (FCA). Generally, this will be upon delivery - measured by flowmeters - into the road tanker, usually nominated and paid for by the customer.

Revenue from contracts with customers

Pryme has agreed upon several contracts with customers committing the delivery of pyrolysis oil volumes at predetermined price formulas and within certain product specifications (composition pyrolysis oil). The transaction price as per metric ton pyrolysis oil is determined at the time of the delivery, based on the price formula and benchmarks, like market pricing as per ton of plastic waste monthly published by EUWID, agreed upon in the respective customer contracts. The consideration is calculated by multiplying the number of metric tons delivered and the transaction price, from time to time. The consideration does neither encompass a financing component nor variable components apart from the pricing formula agreed upon. Invoices may be issued on a monthly basis, however recognition of sales is determined as per delivery. Payment conditions generally are 15 days after invoice date.

The committed minimum volumes are spread over several years and dependent on the Pryme production volumes achieved on an annualized basis. The full production volumes of Pryme One for 2025 already has been committed to customers. The committed volumes for delivery from 2026 through 2031 for Pryme One and Pryme Two are 86% of the total production capacity.

Segment information

Pryme’s current business activities are not organized on the basis of differences in related products and services or differences in geographical areas of operations. As such, management assesses that Pryme has a single reportable segment. In terms of the entity-wide disclosures the only material non-current assets present, apart from the assets related to Pryme One and the assets held for sale (Amsterdam site), concern the intellectual property which is owned by CCT International B.V. (Belgium). Reference is made to note 7.3.1 for the further details.

The costs of raw materials reflect the costs of plastic waste feedstock, mark-ups for inbound transport costs and plastic waste inventory costs included. Energy and utility costs mainly encompass electricity, gas, water and nitrogen.

Accounting policies

Short-term employee benefits: wages, salaries, costs for contractors, social security contributions, annual leave and sickness absenteeism, incentives and non-monetary benefits are recognized in the year in which the related services are rendered by employees and contractors. Contractor costs are reported under personnel costs if contractors perform similar work as own employees.

Termination benefits are payable when employment is terminated by Pryme before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. Pryme recognizes termination benefits as soon as management has taken the decision to make someone redundant and has communicated the termination during the reporting period.

Accruals for expenses related to incentive plans are set-up in a systematic way where contractually obliged or where there is a past practice that has created a constructive obligation. For the accounting policies related to share-based payments and pensions, please refer to respectively note 7.3.8 and 7.4.4.

Capitalized personnel expenses are costs directly attributable to the construction of Pryme One or the development costs related to our lab-scale plant at Ghent University. Capitalized costs need to meet the recognition criteria and are capitalized as part of respectively the costs of plant & equipment and intangible assets.

The total remuneration of the Management Board amounts to € 491 thousand (2023: € 665 thousand). For further details refer to note 7.7.14.

Key management are those persons having authority and responsibility for planning, directing, and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity. Within Pryme the members of the Management Board and the Supervisory Board are considered key management.

For further details regarding the long-term incentive plan, we refer to note 7.3.8.

Pension expenses

Contingent pension obligations related to guaranteed returns on pension plan assets in Belgium are not reported due to the low materiality. The minimum guaranteed return on these pension plan assets amounts to 2%. At the end of the financial year 2024 the pension plan assets amount to less than € 100 thousand and therefore the risk is considered not material.

Movements of number of own employees and contractors:

During the year under review, Pryme on average employed respectively engaged 42.4 (2023 31.5) employees and contractors (in FTE).

Both the Dutch Pension Plan and the Belgium Pension Plan are characterized as defined contribution plans. 

The Belgian Pension Plan is part of an employee insurance policy (“Groepsverzekering”) with a minimum guaranteed return on investments of 2% per annum on the plan assets. Taking into consideration that the Pension Plan in Belgium only was set up in 2023, retrospectively back to 2022, and as of 31 December 2024 the Plan only covers 3 employees, the plan assets and minimum return guarantee are deemed not material. Therefor the reported pension costs are equal to the pension premiums incurred in 2024 resp. 2023. Given the amounts being not material no further actuarial calculations have been carried out.

Company contributions to pension premiums for Management Board memebers for the year ended 31 December 2024 amounted to € 7 thousand (2023: € 9 thousand).

Accounting policies

Operating expenses are recognized in the Statement of Profit and Loss when incurred. This is when services are received, or goods are consumed. In addition, operating expenses can result from a decrease in future economic benefits related to a decrease of an asset or an increase of a liability that has arisen and which can be measured reliably. Costs relating to business development projects are recognized in the year in which the costs are incurred.

Other operating expenses:

The Short-term lease expenses mainly consist of short-term equipment and storage space leases (< 12 months) and some low value leases. For all leases with a duration longer than 12 months, please see note 7.3.3.

The Sales, General & Administration (SG&A) expenses are broken down below.

SG&A expenses:

In 2024 Pryme continued testing and started production. This resulted in higher housing expenses (storage space), energy and water consumption and operating and maintenance expenses.

The R&D related expenses (CCT International B.V.) amounted to € 993 thousand (2023: € 1.177 thousand).

Pryme further upgraded and secured its (outsourced) IT networks, internet connections, data storage and data security to keep up with the growth of the organization. Some ancillary IT tools implemented in 2023, were enhanced in 2024. This resulted in a lower level of IT expenses. 

The audit fees related to the annual report fully relate to the audit 2024 performed by Forvis Mazars Accountants N.V. and encompass also additional one-off costs for the finalization of the first-time adoption of the IFRS Accounting Standards-EU in 2023.

Other SG&A expenses reflect the growing maturity of the Pryme organization and an increase of external advisors expenses related to certification (ISCC+) and product registration (REACH).

The total Supervisory Board fixed annual fees incurred for 2024 amounted € 124 thousand (2023: € 113 thousand). For further details, please see note 7.7.14.

The insurance premiums mainly relate to the coverage of property damage/ business interruption regarding the Pryme One installation as of 1 March 2024.

Accounting policies

The accounting policies for intangible assets and property, plant and equipment are described in respectively note 7.3.1 and 7.3.2. The residual value and useful life of intangible assets and property, plant and equipment are reviewed annually and adjusted if necessary. For the key accounting policies with regards to the right-of-use assets recognized in relation to the leases, we refer to note 7.3.3.

Key accounting estimates and judgements

Plant and equipment at Pryme One form a substantial part of the total assets of the company. The useful life and residual value as determined by the Management Board, based on its estimates and assumptions, have a major impact on the measurement and determination of the results. The useful life of plant and equipment is estimated based on their useful lives, taking into account the duration of the lease of the Pryme One site, and the economic benefits from the utilization of the plant, and equipment.

Depreciation and amortization:

Depreciation of property, plant, and equipment of Pryme One as well as amortization of the intangible assets started on 1 January 2024, when commercial production started.

Accounting policies

All non-financial assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amounts for those assets may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use.

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment annually.

If it is determined that assets are impaired, the carrying amounts of those assets are written down to their recoverable amount. Impairments of a cash-generating unit are allocated to individual assets of the cash-generating unit on a proportionate basis. Impairments of intangible assets and property, plant and equipment are presented in the statement of Profit and Loss. Impairments are reversed to the extent that the events or circumstances that triggered the original impairment have changed.

Losses on the sale of assets are presented separately and are recognized as soon as they are foreseen.

Impairment losses recognized in Profit and Loss

Impairment testing

As of 31 December 2024, like 2023, Pryme management has identified cash-generating units (CGU’s) based on separately identifiable and largely independent cash flows. Based on the company’s structure it has identified the following relevant CGU’s:

• Pryme Management B.V. (principal, commercial and operational management Pryme Group)
• CCT International B.V. (owner intellectual property)
• CCT Circular CleanTech B.V. (owner Pryme One).

The cash flow projections in the DCF-model to calculate the value in use for Pryme One, currently the only operating unit within Pryme Group, are based on revenues, operating expenses, and capital expenditures of the approved budget for the coming year and the six consecutive planning years (2025 – 2032). The cash flows in the DCF-model beyond the budget 2025 are based on:

• Annual capacity measured in intake of plastic feedstock (2025: 10 thousand mT, 2026: 25 thousand mT and as of 2029: 26 thousand mT)
• Average annual capacity utilization rates
• Yield rate of finished product pyrolysis oil to input of plastic feedstock
• Average expected selling price per mT
• Variable costs per ton of pyrolysis oil
• Fixed costs of Pryme One
• License and management fees
• Limited anticipated future capital expenditures

The present value of the expected cost for the decommissioning of an asset after its use is expected to amount to € 670 thousand. Reference is made to note 7.3.9.

Given that the cash flows are estimated before taxes, the discount rate used to calculate the present value of the cash flows is a pre-tax rate based on the risk-free rates for bonds issued by the Dutch government, adjusted for a risk premium related to Pryme as a small-size start-up company and the risks specific to the assets. The cashflows in the impairment test 2024 were discounted at a rate of 11.4% (2023: 11.4%) on a pre-tax basis.

In October 2024, based on operational experience gained since the start of the production in January 2024, Pryme has significantly lowered the overall production expectations of the Pryme One installation. The main reasons for the lower estimated production capacity relate to the overall process layout and the oil yield levels. Operational experience indicated more downtime for reactor feeding and equipment maintenance and cleaning, resulting in a lower plant availability than previously assumed. Therefore, the estimated annual feedstock intake has been reduced from 40,000 to 26.000 metric tons.

The operational experience also indicated lower oil yields from the feedstock than originally estimated. The expected feedstock to pyrolysis oil yield had to be revised from 75% to approximately 65%, with higher yields to be achieved through the optimization and fine-tuning of the Pryme One installation over time. Consequently, the production capacity of Pryme One has been revised downward from 30.000 to around 17.000 metric tons of pyrolysis oil per annum.

Based on the impairment analysis Pryme management assessed, taking into consideration sensitivity analyses on deviations to the assumptions underlying the DCF-model, that the recoverable value, i.e. the value in use of Pryme One, amounts to € 13.6 million. The carrying value of the assets of the Cash Generating Unit (CGU) Pryme One amounts to € 37.6 million as of 31 December 2024. Therefore, an impairment of € 24 million has been recognized in 2024.

For the development costs of CCT International B.V. (intellectual property) the impairment test confirmed that the generated net cash flows are sufficient to support the value in use of the intangible assets. Potential additional licensing fees from future plants, prudently, have not been factored in.

Pryme Management B.V. is acting as the principal, providing commercial and operational management, for the Pryme Group activities. No impairment is anticipated for this CGU.

In February 2024 Pryme Management has decided to sell the Amsterdam site. Considering the market dynamics and a recent valuation report, an additional impairment of € 1.2 million (2023: € 2.3 million) has been recognized. Reference is made to note 7.3.14 (Assets held for sale) for further details. 

Accounting policies

General and specific interest costs that are directly attributable to the acquisition or construction of a qualifying asset are capitalized during the period that is required to complete and prepare the asset for its intended use. Qualifying assets are assets that necessarily take a substantial period of time (> 1 year) before being ready for their intended use. 

Interest expenses are expensed in the period in which they are incurred. Interest expenses related to leases are reported on a separate line. Interest income from excess cash at hand, based on an interest rate agreement, is recognized in the period when the interest is earned.

Finance income and costs:

Finance income is mainly resulting from interest income on excess cash at hand. The interest on excess cash at hand is based on an interest rate agreement valid as of April 2023 and extended in 2024, with the Euro Short-Term Rate (€STR) as reference rate.

Interest expenses related to leases are reported on a separate line. For further details we refer to note 7.3.3. 

Other financing expenses increased significantly. At the end of December 2023, the construction of Pryme One was completed and in January 2024 production was started. Therefor no interest was capitalized in 2024 (2023: € 464 thousand) related to the equipment financing. The average capitalization rate in 2023 was 5.8%. In October 2024, the Company drew the unsecured loan in the amount of € 5 million. Reference is made to note 7.3.10.

The amounts of interest paid and received have been disclosed in the Consolidated Statement of Cash Flows (refer to note 7.1.4).

Accounting policies

Current income tax

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date in the countries where Pryme operates and generates taxable income.

Deferred tax

Reference is made to the accounting policies regarding deferred taxes in note 7.3.13.

Income taxes:

A deferred tax asset for the carried forward losses is valued at nil, since it is our estimation that considering the uncertainty of future developments coupled with the lack of a track record for the Group, the prudent approach is to value this asset at nil. 

All Dutch entities are part of a fiscal unity for corporate income tax in The Netherlands. No taxable income has been generated, both in 2024 and 2023. Current tax for the Pryme fiscal unity amounts to € 0. The unused tax losses as of 31 December 2023 amount to € 66.3 million (31 December 2023: € 25.4 million), subject to an applicable effective tax rate in The Netherlands of 25,8%. According to the current Dutch tax law, unused tax losses may be compensated with future taxable profits for an indefinite period of time.

Contingent assets relate to corporate income taxes. Currently Pryme does not recognize all deferred tax assets related to losses due to the high level of uncertainty regarding the level of future profits, timing included, necessary to recovering these taxes.

For further information see note 7.3.13.

Disclosure of off-balance commitments

Pryme N.V. is liable (parent guarantee) for the execution and payment of all commitments according to the (facility) agreement between Plant One Rotterdam (POR) and CCT Circular CleanTech B.V. The guarantee covers the full length of the agreement which expires on 1 March 2027 and which will extend for another five years until 1 March 2032, unless terminated by either party before March 2027.

Disclosure of off-balance-sheet rights and arrangements

On February 1, 2024, following renegotiations with Shell, Pryme amended the supply contract with Shell on conditions that the company expected to materially improve the financial performance of Pryme One. The revised terms further establish Shell as the primary customer for the pyrolysis oil produced by Pryme in building a robust and attractive supply chain for both parties. Starting November 2024, Pryme and Shell have renewed negotiations of the supply contract in light of market price developments, product specifications and the financial implications of Pryme's revised capacity expectations. 

In 2023 Pryme Group concluded offtake agreements with two large companies in respectively the Food and Chemical industry to offtake respectively at least 6.6% and 10% of the available production of the future Pryme Two.

Key management

Key management is defined as those persons having legal authority and responsibility for planning, directing, and controlling the activities of Pryme, directly or indirectly, including any director (whether executive or otherwise). Our key management comprises the members of the Management Board and the Supervisory Board.

For further information regarding the composition and remuneration of the Management Board and the Supervisory Board we refer to note 7.7.14.

Transactions with Supervisory Board members and Management Board members

No loans, advances or guarantees have been provided to current or former members of the Supervisory Board and Management Board. For both years presented, the Group has not conducted any transactions with companies in which Board members and/or persons closely related to them have a significant financial interest, with exception of consultancy services provided by Taranis Investment Limited for a total consideration of € 40 thousand and Abacus Consulting AG as described below.

Both in 2024 as well as 2023, certain Supervisory Board members charged consultancy fees for non-recurring activities that do not normally fall under the activities of Supervisory Board members. In 2024 these consultancy fees amounted to € 59 thousand (2023: € 55 thousand) and in 2024 fully encompass consultancy fees related to Henning Jensen, charged by his management company Abacus Consulting AG. The activities performed by Henning Jensen mainly related to additional support during the CEO transition period (€ 28 thousand) and coordination of private placements (€ 31 thousand). Additionally, Henning Jensen received € 28 thousand in RSUs with regard to the support during the CEO transition period.

We refer to note 7.7.14 (Remuneration of Management Board and Supervisory Board). 

List of related parties of the Group:

*   Infinity Recycling B.V. is managing director of Circular Rotterdam B.V. and Circular Plastics Coöperatief U.A.
** SIX SIS AG is the nominee for shares hold by Stichting Multistrat.

Summary of the transactions with the related parties

In June 2024, the company and NIVUS BV, a company closely associated with J. van der Endt, the company’s first CEO, terminated the consultancy agreement between them which originally had a term until May 2026 for a consideration of € 54 thousand.

In June 2024, the company’s group company Pryme Management B.V. entered into a management services agreement with Taranis Investment Limited, a company closely associate with Emmanuel Colombel, a member of the Supervisory Board, to procure their services in data collection and analysis of possible locations for next plant, for a term until 30 July 2024. The fees charged under the agreement amounted to € 40 thousand. The transactions with Abacus Consulting AG, a party related to Henning Jensen, are described in the paragraph ‘Transactions with Supervisory Board members and Management Board members’ above.

No further material related party transactions have been entered into during both financial years presented in these financial statements. Transactions between the legal entities making part of Pryme Group are not listed separately. Reference is made to note 7.2.3 (Basis of consolidation).

Summary of the balances receivable/(payable) with the related parties

Pryme does not have any balances receivable/ payable with the related parties as of 31 December 2024.

Commitments with related parties

On April 5, 2022, the Company entered into a 5-year brokerage agreement with Infinity Recycling B.V. (“Infinity”). Subject to conditions on availability of product given the Company’s other prior commitments, the Company has committed to making available an agreed percentage of its production volume from Pryme One, and of subsequent plants, for Infinity’s brokering of such volume to third parties against compensation to Infinity of a limited brokerage fee/commission on such applicable production volume.

Shareholder information

Pryme was admitted to the Euronext Growth exchange in Oslo on 15 February, 2021 with ticker/ ISIN being PRYME / PRYME.OL / NL00150005Z1 and IPO price of NOK 51,20.