Fourth Quarter 2024 Corporate Update February 27, 2025 Confidential Information. Do Not Distribute. 11 Confidential Information. Do Not Distribute. Forward-Looking Statements This press release contains forward-looking statements, including statements about the continued expansion of PureCycle's business plan, the expected time of commercial sales, the commercialization of Ironton operations, the expected increase in production of the Ironton operations, the planned compounding operations, the sourcing of m ...

Financial Data and Key Metrics Changes - The company ended the fourth quarter with just under $16 million of unrestricted cash and raised $33 million in February through subscription agreements [70][72][74] - Cash expenses for Q4 totaled $68 million, including $36 million for equipment related to growth projects, resulting in adjusted cash expenses of around $27 million [76][78] Business Line Data and Key Metrics Changes - The company compounded 4 million pounds of material for fiber applications in Q4, leading to a purchase order from Drake Extrusion [39][41] - The company is engaged in 29 trials with potential customers, of which 16 are on an industrial scale, indicating significant demand potential [42][43] Market Data and Key Metrics Changes - The rigid packaging market for polypropylene in North America is approximately 3.8 billion pounds per year, with the company engaged in seven pilot application trials and five industrial trials [44][45] - The automotive market is expected to grow, with approximately 100 pounds of polypropylene per car, and proposed regulations in Europe and Japan aim for 25% recycled content per vehicle by 2030 [50][51] Company Strategy and Development Direction - The company is pursuing a vertically integrated strategy that connects the purchase of bales to the sale of compounded material, aiming to control its destiny in a nascent feedstock market [17][18] - The company is focused on expanding its technology globally, with plans for growth in Europe and Asia, and has already purchased long-lead equipment for future projects [100][102] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the commercialization of Ironton, noting that operational progress is expected to follow an S-curve with significant improvements in production rates and reliability [23][61] - The company anticipates that successful customer applications will lead to increased demand and the need for global expansion [43][49] Other Important Information - The company is in the process of acquiring third-party certification for its product, which is expected to apply retroactively to 7.2 million pounds of finished product in inventory [26] - The company has a strong relationship with Procter and Gamble, entering industrial trials for five different applications, indicating a solid partnership moving forward [30][32] Q&A Session Summary Question: Can you elaborate on the confidence regarding the commercial ramp? - Management highlighted the excitement from successful customer trials, particularly with Drake, which boosts confidence in their ability to meet customer needs [81][82] Question: Can you comment on the current cash position and financing plans? - The company ended the quarter with $15 million of unrestricted cash and raised $33 million in February, with confidence in selling revenue bonds in the near term [84][85] Question: What are the current unit economics regarding sales price and feedstock costs? - Management stated that the sales price remains strong at approximately $1.36 per pound, with good variable cost components and a favorable breakeven range [91][94] Question: Can you discuss future growth projects and timelines? - The company is well-positioned for growth, with relationships in place for projects in Augusta and Antwerp, and has purchased long-lead equipment for future lines [100][102] Question: How is production capacity being managed in relation to customer needs? - Management indicated that production levels are not a limiting factor; rather, the focus is on meeting specific customer application requirements [115][116] Question: What is the current cash burn rate? - The cash burn rate has increased to approximately $9 to $9.5 million, but the company has sufficient liquidity with revenue bonds to support operations [125] Question: Can you provide an update on the Augusta project? - The Augusta site is on track, with civil work ongoing, and the company expects improved financing rates as Ironton continues to perform well [128] Question: What is the status of the automotive pilot projects? - Interest in automotive applications has increased, with ongoing trials and discussions about integrating the company's products into various vehicle components [144][150]

Production Capacity - PCT's Ironton Facility is expected to achieve a production capacity of approximately 107 million pounds of PureFive™ resin per year when fully operational [174]. - The Augusta Facility is planned to have a total production capacity of approximately 1 billion pounds of PureFive™ resin per year, with each purification line expected to produce around 130 million pounds annually [181]. - PCT's Denver Facility began operating in October 2024 to provide the necessary feedstock for the Ironton Facility [191]. Financial Performance - Net loss for 2024 was $289.1 million, a 184% increase compared to a net loss of $101.7 million in 2023, and a 20% increase from a loss of $84.7 million in 2022 [203]. - Total operating costs and expenses increased to $145.4 million in 2024, up 28% from $113.9 million in 2023, and up 40% from $81.3 million in 2022 [203]. - The company reported a loss per share of $1.75 for 2024, compared to a loss per share of $0.62 in 2023, indicating a significant increase in loss per share [346]. Liquidity and Debt - Unrestricted liquidity as of December 31, 2024, was $15.7 million, down from $121.6 million in 2023 [216]. - The company has $66.2 million in debt service and equipment finance payments due within one year as of December 31, 2024 [220]. - Cash and cash equivalents at the end of the period decreased by 86% to $41.5 million from $302.5 million in 2023 [229]. Research and Development - PCT's research and development expenses are expected to increase as the company invests in feedstock evaluation and new mechanical separators to improve feedstock purity [201]. - Research and development expenses decreased slightly to $6.4 million in 2024, a 3% decrease from $6.6 million in 2023, but a 52% increase from $4.4 million in 2022 [203]. Operational Challenges - The company has experienced intermittent mechanical challenges during the commissioning process, impacting the production of consistent, high-quality PureFive™ resin [179]. - PCT has experienced mechanical challenges at the Ironton facility, impacting production rates and product quality, but is implementing operational enhancements to address these issues [217]. Capital and Financing - On September 11, 2024, the company raised approximately $90 million through a private placement of Series A Preferred Stock, Common Stock, and Series C Warrants [218]. - The company entered into a $150 million revolving credit facility on March 15, 2023, with interest rates varying from 5.00% to 17.50% based on the period [245][247]. - The company completed a private offering of $250 million in Green Convertible Senior Notes with a 7.25% interest rate, netting approximately $218.5 million for financing Eligible Green Projects [272][273]. Future Plans - PCT plans to ramp up commercialization efforts, expecting meaningful sales going into 2025 [223]. - The company plans to expand its production capabilities into Europe and Asia, with a purification facility planned in Antwerp, Belgium, and negotiations for joint ventures in Japan [197]. Sustainability and Innovation - The Company has focused on sustainability opportunities through its PureFive™ resin, supporting a circular economy and advancing recycling technologies [276]. - The Feedstock+ pricing model is expected to provide protection against increased prices in obtaining and processing raw materials utilized in the purification process [320]. Market and Risk Management - The company has no investments in swaps, options, futures, or forward contracts, managing market risk by holding only highly liquid, minimum "A" rated securities [318]. - The company has classified both Series B and Series C Warrants as liabilities under ASC 815 due to the leverage introduced by the Black-Scholes Value calculation [308][312].

Financial Results Announcement - The company announced its financial results for the fourth quarter and fiscal year ending February 27, 2025[7]. - A press release detailing the financial results was issued, which is attached as Exhibit 99.1[7]. - An investor presentation was scheduled for February 27, 2025, and is included as Exhibit 99.2[8]. Company Classification and Compliance - The company is listed on The Nasdaq Stock Market under the trading symbol PCT[5]. - The company has not elected to use the extended transition period for complying with new financial accounting standards[6]. - The company is classified as an emerging growth company[6]. Strategic Focus and Future Plans - The financial results include key metrics that will be elaborated in the investor presentation[8]. - The company is focused on enhancing its market position through strategic initiatives[8]. - The financial condition and operational results will be discussed in detail during the investor presentation[8]. - The company aims to provide insights into future growth strategies and market expansion plans[8].

Company Overview - PureCycle Technologies, headquartered in Orlando, FL, was founded in 2015 and specializes in plastics recycling [1] - The company has commercialized a technology that converts polypropylene (PP) waste, classified as number 5 plastic, into a sustainable product [1] Investment Perspective - The investment philosophy emphasizes the importance of compounding, dividend reinvesting, and patient investing through various market conditions to achieve wealth creation [1] - The approach combines steady investment in high-quality assets with opportunities in high-risk/high-reward sectors, underappreciated turnaround plays, and transformative technologies [1] - The company aims to invest in industries that contribute positively to the world [1]

Production Capacity and Facilities - PCT's Ironton Facility is expected to have a UPR resin capacity of approximately 107 million pounds per year when fully operational, with pellet production commencing later in 2023 [202]. - The Augusta Facility is projected to have a total UPR resin production capacity of approximately 1 billion pounds per year, with each purification line expected to produce about 130 million pounds annually [205]. - PCT has invested approximately $95.9 million for pre-construction engineering and long-lead equipment for the Augusta Facility, with a commitment to create 82 full-time jobs and invest at least $440 million by December 31, 2026 [206]. - The company plans to build Feed PreP facilities near feed sources to optimize supply chain economics, with operations commencing in Denver, Pennsylvania in October 2024 [213]. - Future expansion plans include a joint venture with Mitsui & Co. Ltd. in Japan and a potential new location in South Korea for production capabilities [220]. Financial Performance - PCT's revenue through the first nine months of 2024 has been immaterial, with no significant operational volumes or revenue generation yet achieved [221]. - Total operating costs for the three months ended September 30, 2024, were $31.298 million, a decrease of 1% from $31.603 million in the same period of 2023 [226]. - Research and development expenses for the nine months ended September 30, 2024, were $4.940 million, showing no significant change from $4.917 million in 2023 [226]. - Selling, general, and administrative expenses increased by 15% for the nine months ended September 30, 2024, totaling $44.883 million compared to $39.063 million in 2023 [226]. - Interest expense rose by 158% for the nine months ended September 30, 2024, amounting to $41.676 million, up from $16.183 million in 2023 [226]. - The net loss for the three months ended September 30, 2024, was $90.639 million, a significant increase from a net income of $8.530 million in the same period of 2023 [226]. Cash Flow and Financing - As of September 30, 2024, the company had $83.7 million in cash and cash equivalents, an increase from $73.4 million as of December 31, 2023 [238]. - The company entered into subscription agreements on September 11, 2024, raising approximately $90 million through a private placement of Series A Preferred Stock, Common Stock, and Series C Warrants [235]. - Net cash used in operating activities increased by $51.7 million to $112.985 million for the nine months ending September 30, 2024, compared to $61.330 million in the same period of 2023, representing an 84% increase [248]. - Cash provided by investing activities increased by $69.9 million, with capital expenditure payments decreasing by $108.7 million for the nine months ending September 30, 2024 [250]. - Net cash used in financing activities increased by $383.7 million, primarily due to $253.2 million paid to purchase outstanding Revenue Bonds and a decrease of $225.2 million in proceeds from debt [251]. - Cash and cash equivalents at the end of the period decreased to $93.653 million from $384.139 million, a decline of 76% [248]. - Higher interest payments on debt amounted to $31.1 million, including $17.7 million for green convertible notes and $5.9 million for Revenue Bonds [249]. - Cash payments related to operating expenses increased by $22.1 million, driven by higher operational site costs and legal fees [249]. - As of September 30, 2024, there were $117.6 million of outstanding Revenue Bonds that the company intends to re-market [257]. - The company renewed a surety bond increasing the amount from $25.0 million to $45.9 million, later decreased to $8.1 million [273]. - The Revolving Credit Facility was increased from $150.0 million to $200.0 million on March 1, 2024 [266]. - The company entered into a $40.0 million term loan facility on May 8, 2023, maturing on December 31, 2025 [269]. Operational Challenges - The company has experienced intermittent mechanical challenges during the commissioning process, impacting the ability to produce consistent, high-quality UPR resin [204]. - The company is currently addressing mechanical challenges at the Ironton Facility to improve production consistency and volume [240]. - The company has not yet reached significant continuous operational volumes, focusing on customer sampling and qualifications to drive future sales [239]. Market and Regulatory Developments - PCT's "Feedstock+" pricing model effectively passes on the cost of feedstock and reduces operating margin volatility, linking feedstock prices to market indices [211]. - The FDA has granted PCT a Letter of No Objection for its UPR resin, allowing it to be used in contact with all food types under specified conditions, expanding its market potential [217]. - PCT is pursuing various structures for project financing for the Augusta Facility due to challenging market conditions, which may affect its business and financial condition [210]. Future Capital Requirements - Future capital requirements will depend on various factors, including the construction schedule of the Augusta Facility and the need for additional financing [245].

Group 1 - The conference call is focused on PureCycle Technologies' corporate developments for Q3 2024 [4] - Key participants in the call include the CEO, CFO, and Director of Communications [3] - The presentation is available on the company's investor website [4] Group 2 - The call includes forward-looking statements based on management's beliefs and current information [4] - The company acknowledges that statements are subject to known and unknown risks and uncertainties [5]

Financial Data and Key Metrics Changes - The third quarter was the strongest production quarter ever, with production growing more than 200% quarter-over-quarter [14][25] - Operating cash expenses totaled $23.5 million for Q3, down from nearly $35 million in the previous quarter [42][92] - The company raised over $105 million in net proceeds from capital raising efforts, supporting ongoing operations and growth [13] Business Line Data and Key Metrics Changes - The compounding strategy is operational, producing approximately $400,000 per week of sellable product [11] - The company achieved significant advancements in feedstock operations, including the startup of the Denver, Pennsylvania plastic sort facility, which has a nameplate capacity of approximately 22,000 pounds per hour [19][20] - The PP concentration has increased from less than 85% to 95% and is expected to reach 97% in Q4, improving plant yield and efficiency [22] Market Data and Key Metrics Changes - Global polypropylene demand exceeds 187 billion pounds and is expected to grow at 3% to 4% per year, with demand for recycled products also increasing due to brand commitments [30][31] - The demand for recycled material is projected to grow to approximately 60 billion pounds by 2030 [31] Company Strategy and Development Direction - The company is focused on scaling commercial aspects of the business, with ongoing trials for compounded and PureCycle stand-alone pellets [12][41] - The strategy includes proving product capabilities across multiple applications, including fiber, film, injection molding, and automotive [34][41] - The company aims to build a strong commercial foundation for future projects, with revenue expected to ramp up significantly in 2025 [41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving nameplate capacity targets over time and emphasized the importance of establishing a commercial lane [10][46] - Positive initial commercial feedback has been received, indicating strong margins and attractive economics for the business [25] - The future outlook is bright, with significant interest from large companies recognizing the need for sustainable solutions [42] Other Important Information - The company is pursuing financing for additional capacity in Augusta and Antwerp [13] - The Denver sort facility is expected to lower feedstock costs and build stability into operations [20] Q&A Session Summary Question: How are the production milestones looking in early Q4? - Management expressed high confidence in their ability to reproduce results and ramp up production to meet commercial demand [45][46] Question: Should we expect meaningful revenue levels in 2025? - Management indicated that while specific revenue projections for 2025 were not provided, there are solid signs for commercial progress [47][51] Question: What is the status of the production line in Ohio? - Management reported that the Ironton facility is in a great place, with improvements in CP2 removal and higher quality feed [78][80] Question: What is the expected timeline for the Augusta facility? - Management indicated a timeline of six to ten quarters for the Augusta facility, with a consistent message of a two-line operation [85][91]

Third Quarter 2024 Corporate Update November 7, 2024 Confidential Information. Do Not Distribute. 11 Confidential Information. Do Not Distribute. TM Forward-Looking Statements This press release contains forward-looking statements, including statements about the continued expansion of PureCycle's business plan, the expected time of commercial sales, the commercialization of Ironton operations, the expected increase in production of the Ironton operations, the planned compounding operations, the sourcing of ...

Financial Results - The company issued a press release on November 7, 2024, detailing its financial results and operational updates[4] - The presentation to investors included key financial metrics and strategic initiatives for future growth[5] Stock Information - The company is listed on The Nasdaq Stock Market under the symbol PCT for common stock[2]