Papyrus Australia Advances TBS Contract Milestones and Strengthens Capital-Raising Efforts

Binding Board Production Contract Execution Signals Major Advancement

Papyrus Australia has successfully executed a binding Board Production Contract with a Vietnam-based paperboard manufacturer, marking a significant milestone as Milestone 1 of the TBS Contract is completed. Under this agreement, Papyrus will supply pulp produced domestically using its proprietary technology, which will be converted into paperboard jumbo rolls. The initial stage involves two fixed-cost production trial runs, after which long-term pricing arrangements will be negotiated, providing financial clarity for both parties.

This contract enables immediate paperboard production while allowing Papyrus to focus on scaling its proprietary fibre technology. By partnering with an established manufacturer, Papyrus can optimize its core competencies and ensure efficient handling of non-core processing steps. This strategic collaboration is expected to boost operational efficiency and support the company’s long-term growth.

Completion of Biodegradable Collar Keeper4 Sample Delivery Marks Key Milestone

Further showcasing its capabilities, Papyrus delivered 200 Biodegradable Collar Keeper4 product samples to TBS, successfully achieving Milestone 2 of the TBS Contract. These samples were produced using pulp processed with Papyrus’ proprietary technology and converted into paperboard via commercial-scale equipment operated by third-party manufacturers. This milestone represents the first production-scale conversion of Papyrus pulp into customer-ready paperboard products.

Completing this milestone is vital for proving the practicality of Papyrus’ technology in real-world applications. Providing tangible product samples validates manufacturing processes and engages potential customers during the evaluation phase. This step is crucial for securing future contracts and expanding market presence, especially within the environmentally conscious sector seeking sustainable material alternatives.

Operational Progress at Adelaide Rapid Prototyping & R&D Facility

The Adelaide Rapid Prototyping & R&D Facility has remained central to Papyrus’ operational strategy throughout the quarter. It has been key in product validation, customer engagement, and scale-up preparation. Activities included optimizing pulp furnish for high-strength board applications and producing materials for customer evaluation.

Additionally, the completion of the second phase of engineering and design work has been a major focus. This phase supports scale production of pulp, ensuring readiness for transitioning from prototype to full-scale manufacturing. Continued refinement at this facility positions Papyrus to meet rising demand and strengthen its competitive advantage.

Financial Update and Capital-Raising Progress

In its latest update, Papyrus detailed progress in a multi-faceted capital-raising program launched in April, which includes a share placement and converting short-term loans into secured and unsecured convertible notes. The funds aim to support commercialization efforts and fulfill the TBS contract obligations.

During an Extraordinary General Meeting on June 24, 2026, shareholders approved all resolutions related to these capital-raising initiatives. This approval demonstrates strong shareholder confidence and equips Papyrus with the financial resources needed to advance its strategic objectives. Successfully executing these initiatives is essential to maintaining operational momentum and funding future growth.

Emphasis on Product Testing and Acceptance in Upcoming Quarter

Looking forward to the September quarter, Papyrus is prioritizing progress on product testing and acceptance under the TBS contract. The company aims to validate board specifications and enhance manufacturing capabilities to support commercial production. This focus ensures products meet quality standards and customer expectations.

As Papyrus continues collaboration with TBS and potential clients, test outcomes will be critical in shaping the company’s commercial trajectory. Successful validation could lead to increased orders and long-term contracts, strengthening Papyrus’ standing in the sustainable materials market.

Technological Enhancements and Manufacturing Pathway Development

Papyrus has made notable advances in refining its technology and manufacturing pathway, including validating pulp performance on commercial-scale board-forming lines. Ensuring pulp meets specifications for high-quality paperboard production enhances product offerings and market competitiveness.

The company has also engaged Hall Chadwick Melbourne Pty Ltd to assist in establishing high-volume production capabilities in Vietnam. This partnership is expected to streamline operations and boost production efficiency, enabling Papyrus to meet growing demand while maintaining quality. Developing a robust manufacturing pathway is vital for long-term success and sustainability.

Expenditure Review and Financial Governance

Financial reports for the quarter ending June 2026 show that Papyrus has managed expenditures prudently. Most costs relate to commercial board production trials, pulp processing, and R&D facility operations. This careful financial oversight is key to maintaining liquidity while pursuing growth.

Importantly, no payments were made to associates or related parties during this period, reflecting strong transparency and governance. By concentrating on core operations and minimizing extraneous spending, Papyrus is well-positioned to effectively utilize capital raised through its initiatives, enhancing operational capacity and market position.