Core Insights - PureCycle Technologies has successfully completed larger-scale trials of its PureFive™ resin in biaxially oriented polypropylene (BOPP) film, producing 16,000 meters of film over two days [1][9] - The trials demonstrated that PureFive™ resin, which contains 50% post-consumer recycled (PCR) content, performed comparably to virgin polypropylene on Brückner's film line [2][4] - The produced films include a 25 micron multi-layer film suitable for food packaging and a thicker 50 micron film for labels, with samples now being shared with potential customers [3][4] Company Developments - PureCycle's CEO, Dustin Olson, expressed enthusiasm about the trial results, indicating new application segments for the company and confidence in sharing the film with brand owners for industrial trials [4] - The head of the Technology Center at Brückner, Dr. Markus Koppers, highlighted the significance of these trials, noting that PureCycle's dissolution recycling process can effectively transform post-consumer waste into a high-quality recyclate [5] Industry Context - BOPP film is widely used in food packaging for snacks, candy, and baked goods, as well as for labeling and adhesive tape, due to its transparency and resistance to moisture and chemicals [4] - The successful integration of PCR content into BOPP film represents a potential breakthrough for the industry, addressing the growing demand for sustainable packaging solutions [5]

Core Viewpoint - PureCycle Technologies, Inc. has achieved the APR Post-Consumer Resin Certification for its PureFive™ resin, validating its production from post-consumer sources, which is crucial for enhancing the circular economy and reducing plastic waste [1][3][4] Company Overview - PureCycle Technologies specializes in recycling polypropylene plastic waste using a patented dissolution process developed by Procter & Gamble, transforming it into PureFive™ resin, which can be recycled multiple times [5] Product Details - The HPP15-100 grade of PureFive™ resin is produced at the Ironton Facility and serves as the base recycled content for all of PureCycle's compounded resin grades, appealing to customers seeking a one-pellet solution for applications with historical challenges in integrating recycled content [2][3] Industry Impact - The APR PCR Certification provides third-party validation that supports a reliable market for post-consumer resin, which is essential for the success of recycling initiatives and the circular economy [3][4] - The certification is expected to meet the increasing demand from customers for verified recycled content, aiding in the commercialization of PureCycle's products [3] Association of Plastic Recyclers (APR) - APR is an international non-profit organization focused on improving plastic recycling, providing tools and resources to enhance packaging design and support innovations in recycling [4][6]

Financial Data and Key Metrics Changes - Comprehensive income after tax improved to $3.1 million from a loss of $30 million last year, primarily due to a lower fair value loss [12] - Funds from operations (FFO) increased by 6.7% to $161.4 million, with underlying FFO reflecting a rise of 3.3% to $0.54 per share [15][16] - The weighted average cost of debt at year-end was 5.2%, with interest coverage for the period at 2x [20] Business Line Data and Key Metrics Changes - The Auckland office portfolio delivered like-for-like rental growth of 2.5%, while Wellington generated strong growth of around 6% [13] - Commercial Bay Retail generated an additional $1.3 million in income, reflecting good sales and improved occupancy levels [14] - The investment portfolio's occupancy increased to 97%, with approximately 12,000 square meters leased in the second half [33] Market Data and Key Metrics Changes - The Auckland premium office market remains strong with a vacancy rate of 3.3%, while secondary markets are experiencing increased vacancy [36] - The retail center at Commercial Bay saw FFO up 8.3% and occupancy remaining at 97% [39] - The Wellington market remains subdued, primarily influenced by central government expenditure [38] Company Strategy and Development Direction - The company is focused on capital management and has launched a process to seek a capital partner for 50% of PwC Tower [6] - The development pipeline currently sits at $3.7 billion, with a focus on residential and student accommodation projects [44] - The company aims to grow its capital partnerships from $1.6 billion to $4-5 billion over the medium term [32] Management's Comments on Operating Environment and Future Outlook - The economic environment has been sluggish, particularly in Auckland and Wellington, but growth opportunities are beginning to emerge [6][7] - Management expects the broader economy to improve in the latter part of the year and into 2026 [8] - The company remains optimistic about capitalizing on opportunities in an improving economy [22] Other Important Information - The company has updated its dividend policy to a payout range of 80% to 95% of funds from operations, reflecting a more flexible approach [21] - The InterContinental Hotel sale resulted in a premium to book value, indicating strong pricing achieved [17] Q&A Session Summary Question: Update on the PwC Tower process and potential standalone partnership - The process is in early stages with encouraging engagement from multiple parties, reflecting a positive investment case for premium office [47][48] Question: Likelihood of starting enabling works in Downtown in 2026 - The company anticipates commencing enabling works next year [53] Question: Clarification on one-off items affecting FFO - The adjustments include closure costs related to a hospitality venue and swap closeouts due to capital structure changes [54] Question: Guidance for FY 2026 and tax benefit adjustments - A small tax expense is expected, with conservative estimates around 30-40 basis points [56][57] Question: Update on inquiries for larger vacancies in the office portfolio - Advanced negotiations are ongoing for significant vacancies, with positive demand trends noted [78][80]

Financial Data and Key Metrics Changes - Comprehensive income after tax improved to $31 million from a loss of $30 million last year, primarily due to a lower fair value loss [10] - Funds from operations (FFO) increased by 6.7% to $161.4 million, with underlying FFO reflecting a 3.3% increase to $0.54 per share [14][19] - The weighted average cost of debt at year-end was 5.2%, with interest coverage for the period at 2x [17] Business Line Data and Key Metrics Changes - The Auckland office portfolio delivered like-for-like rental growth of 2.5%, while Wellington generated strong growth of around 6% [11] - Commercial Bay Retail saw FFO increase by 8.3%, with occupancy remaining at 97% and specialty sales over $12,000 per square meter [36] - The investment portfolio's occupancy increased to 97%, with approximately 19,000 square meters leased over the financial year [30] Market Data and Key Metrics Changes - The Auckland premium office market remains strong with a vacancy rate of 3.3%, while secondary markets are experiencing increased vacancy [32] - The Wellington market remains subdued, primarily influenced by central government expenditure [35] - The retail sector is showing signs of recovery with improved trading conditions and anticipated visitor growth [36] Company Strategy and Development Direction - The company is focused on capital management and has launched a process to seek a capital partner for 50% of PwC Tower [5] - The development pipeline is valued at $3.7 billion, with a commitment to student accommodation and residential projects [40] - The company aims to grow its capital partnerships from $1.6 billion to $4-5 billion over the medium term [29] Management's Comments on Operating Environment and Future Outlook - The economic environment is sluggish, particularly in Auckland and Wellington, but growth opportunities are emerging [5][6] - Management expects the broader economy to improve in the latter part of the year and into 2026, supported by monetary policy easing [6] - The company remains optimistic about capitalizing on opportunities in an improving economy [41] Other Important Information - The company has updated its dividend policy to a payout range of 80% to 95% of funds from operations, reflecting a more flexible approach [18] - The InterContinental Hotel sale achieved a premium to book value, indicating strong market interest [14] Q&A Session Summary Question: Update on PwC Tower process and potential new partnership - The process is in early stages with encouraging engagement from multiple parties, reflecting strong demand for premium office space [44][45] Question: Likelihood of starting enabling works in 2026 - The company anticipates commencing enabling works next year [50] Question: Clarification on one-off items affecting FFO - One-off items include closure costs related to a hospitality venue and swap closeouts due to capital structure changes [51] Question: Guidance on FY 2026 tax benefit adjustment - A small tax expense is expected, with estimates around 30-40 basis points [54] Question: Capital partnering for 256 Queen student accommodation - Strong interest from both domestic and offshore investors, with options for university or independent operator involvement [80]

Financial Performance - Investment portfolio Funds From Operations (FFO) increased by 3.7% to $150.3 million[9, 49] - Operating Profit before indirect expenses and income tax increased by 1.2% to $152.3 million[9, 48, 49] - Adjusted Funds From Operations (AFFO) was 6.54 cents per security (cps)[9] - Net tangible assets (NTA) per security decreased by $0.04 to $1.21[48] Portfolio & Occupancy - Portfolio occupancy was 97%[7, 39, 123] - Weighted Average Lease Term (WALT) was 6.0 years[9, 39, 123] - Commercial Bay retail FFO increased by 8.3%[9, 49] and MAT increased by 3.7%[9, 123] Capital Management & Investment - Strategic exit of the InterContinental Auckland hotel for $180 million[9] - Repaid $165 million of maturing retail bonds and USPP notes[9] - New $75 million five-year wholesale bond issued[9] - Capital partnerships totalling $1.6 billion on completion value[86]

Core Insights - PureCycle Technologies, Inc. has partnered with the Cleveland Browns to introduce 100% PureFive™ resin in their 2025 line of player souvenir cups, enhancing sustainability efforts at Huntington Bank Field [1][2] - The collaboration aims to improve recycling practices by utilizing polypropylene plastic waste generated during games, which will be processed at PureCycle's Ironton, Ohio facility [1][2] - The Cleveland Browns are the first professional sports team to implement the Run It Back line of cups, which can contain up to 100% PureFive™ resin [4] Company Overview - PureCycle Technologies specializes in patented dissolution recycling technology that transforms polypropylene plastic waste into a renewable resource, producing PureFive™ resin that can be recycled multiple times [6] - The company has established a strong partnership with the Cleveland Browns, which has been ongoing for several years, focusing on educating fans about recycling and now providing sustainable souvenir cups [2][5] Industry Context - The introduction of sustainable products like the PureFive™ resin cups reflects a growing trend in the sports industry towards enhanced sustainability practices [2][5] - The challenge of creating sustainable polypropylene products lies in sourcing a resin that meets food safety and processing requirements, which PureCycle has addressed through its innovative recycling technology [5]

分组1 - PureCycle Technologies reported a quarterly loss of $0.35 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.23, and compared to a loss of $0.32 per share a year ago, indicating a surprise of -52.17% [1] - The company generated revenues of $1.65 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 41.07%, while revenues were zero a year ago [2] - The stock has increased by approximately 26.8% since the beginning of the year, outperforming the S&P 500's gain of 7.9% [3] 分组2 - The earnings outlook for PureCycle Technologies is uncertain, with current consensus EPS estimates of -$0.18 on $11.2 million in revenues for the coming quarter and -$0.49 on $33.9 million in revenues for the current fiscal year [7] - The Zacks Industry Rank for Waste Removal Services is in the bottom 26% of over 250 Zacks industries, suggesting that the industry outlook may negatively impact stock performance [8]

Financial Data and Key Metrics Changes - The company successfully raised $300 million in capital, significantly bolstering its liquidity position, ending the quarter with $298 million in cash, including $284 million of unrestricted cash [33] - Operational and corporate spending was around $39 million, slightly higher than the previous quarter's $37 million, with expectations for operational spending to remain similar while growth capital spending is anticipated to increase gradually [33] Business Line Data and Key Metrics Changes - The company reported a strong quarter with on-stream times approaching 90% in both April and May, and 65 consecutive days of pellet production [12][29] - The company has 17 customer applications in post-trial discussions, with a focus on converting these trials into sales in the second half of the year [18][19] Market Data and Key Metrics Changes - The serviceable addressable market of the sales funnel is currently estimated at £4.8 billion, which is a fraction of the £200 billion global market [20] - The company is experiencing strong demand indications from customers, suggesting that sales will continue to ramp up leading into 2026 [13][27] Company Strategy and Development Direction - The company is focusing on global growth plans, particularly in Thailand, which is expected to provide high returns on invested capital and direct access to Southeast Asia [14][15] - The company aims to achieve roughly 1 billion pounds of installed capacity by 2029, with a projected run rate EBITDA of approximately $600 million [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational reliability improvements at the Ironton facility and the momentum in commercial trials, which supports the belief that demand for recycled polypropylene exceeds supply capabilities [13][14] - The company anticipates a commercial ramp in both Q3 and Q4, with expectations to exit Q3 at a revenue level of $4 million per month and to reach corporate EBITDA breakeven by late Q4 or early Q1 [95][96] Other Important Information - The company has signed a major commercial agreement with Emerald for approximately 5 million pounds of purified resin, which is expected to convert into revenue in Q3 [10][24] - The company earned GreenCircle's recycled content certification for nearly 30 grades of PureCycle resin, verifying that over 90% of its feed comes from qualified post-consumer recycled feedstocks [26] Q&A Session Summary Question: Can you provide more detail on the growth plans and progress since the last update? - Management highlighted three growth projects: Thailand, Antwerp, and Gen two facilities, emphasizing the readiness of sites and the operational support from Ironton [37][38] Question: Can you elaborate on the 17 applications that are post-trial and the likelihood of success? - Management indicated that the technology is working, with customers moving into further discussions, and emphasized the flexibility to operate in various market segments [48][50] Question: How is the company thinking about customer diversification and production allocation? - Management stated that customers who move fastest will have priority, and there will be opportunities across various segments to maintain good margins [80][82] Question: What are the anticipated challenges in scaling to a 300 million plus pound facility? - Management noted that the experience gained from Ironton will improve the reliability of future facilities, and the team is confident in scaling operations effectively [84][86] Question: What does the ramp look like for the second half of the year? - Management confirmed that Q3 is expected to show higher revenue than Q2, with a goal to exit Q3 at $4 million per month in revenue [92][93]

Growth & Capacity Expansion - The company aims to reach 1 billion pounds of installed polypropylene recycling capacity by the end of 2029[6,9] - Thailand plant is expected to be operational in Q3 2027 with 130 million pounds capacity[9,11] - Antwerp plant is expected to be operational in Q3 2028 with 130 million pounds capacity[9,11] - Augusta Gen 2 Line 1 is expected to have 300 million+ pounds capacity and be operational in 2029[11] - A second Gen 2 line is planned for an unconfirmed location, also with 300 million+ pounds capacity, expected in 2029[11] Commercial Progress - A commercial agreement is in place with Emerald Carpets for approximately 5 million pounds of fiber sales[6,20] - The company is engaged in 17 post-trial negotiations representing approximately 80 million pounds of potential annual production volume[6] - The company has a strong pipeline with 26 active trials and 70 pending trials[6] Operational Achievements - Ironton facility achieved 87% onstream time in April/May and produced pellets for 65 consecutive days in Q2[6] - A rate test was successfully completed at 14,000 lbs/hr on August 1, nearing nameplate capacity[6] - The company is initiating a project to add approximately 100 million pounds of annual compounding capacity to Ironton[6,26] Financial Update - Approximately $300 million was raised from a perpetual preferred security in June[6] - Unrestricted cash increased from $22.5 million on March 31, 2025, to $284.1 million on June 30, 2025, a change of $261.6 million[30]

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements of PureCycle Technologies, Inc. for the periods ended June 30, 2025, and December 31, 2024, including balance sheets, statements of comprehensive loss, statements of mezzanine equity and stockholders' equity, and statements of cash flows, along with detailed notes explaining significant accounting policies, liquidity, related party transactions, debt, equity, and fair value measurements [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific points in time | (in thousands, except per share data) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | **ASSETS** | | | | Cash and cash equivalents | $ 284,067 | $ 15,683 | | Total current assets | 314,885 | 53,899 | | TOTAL ASSETS | $ 1,042,472 | $ 798,385 | | **LIABILITIES, MEZZANINE EQUITY, AND STOCKHOLDERS' EQUITY** | | | | Total current liabilities | 147,108 | 90,877 | | TOTAL LIABILITIES | 649,543 | 617,936 | | MEZZANINE EQUITY | | | | Series B Convertible Perpetual Preferred Stock | 294,058 | — | | TOTAL STOCKHOLDERS' EQUITY | 98,871 | 180,449 | | TOTAL LIABILITIES, MEZZANINE EQUITY, AND STOCKHOLDERS' EQUITY | $ 1,042,472 | $ 798,385 | - Total assets increased from **$798.4 million** as of December 31, 2024, to **$1,042.5 million** as of June 30, 2025, primarily driven by a significant increase in cash and cash equivalents[9](index=9&type=chunk) - Cash and cash equivalents surged from **$15.7 million** at year-end 2024 to **$284.1 million** by June 30, 2025[9](index=9&type=chunk) - Mezzanine equity, specifically Series B Convertible Perpetual Preferred Stock, was introduced with a value of **$294.1 million** as of June 30, 2025, which was not present at December 31, 2024[9](index=9&type=chunk) - Total stockholders' equity decreased from **$180.4 million** to **$98.9 million**, largely due to an accumulated deficit of **$(768.8) million** as of June 30, 2025[9](index=9&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) This section details the company's revenues, expenses, and net loss over specific reporting periods, highlighting factors impacting profitability | (in thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $ 1,650 | $ — | $ 3,230 | $ — | | Cost of operations | 29,991 | 22,220 | 53,273 | 43,414 | | Research and development | 1,397 | 1,565 | 2,938 | 3,396 | | Selling, general and administrative | 15,860 | 16,137 | 30,338 | 32,094 | | Operating loss | (45,598) | (39,922) | (83,319) | (78,904) | | Interest expense | 17,640 | 12,055 | 32,704 | 27,109 | | Change in fair value of warrants | 82,295 | (4,311) | 25,626 | 9,633 | | Net loss | $ (144,240) | $ (48,212) | $ (135,408) | $ (133,819) | | Basic and Diluted Loss per share | $ (0.81) | $ (0.29) | $ (0.76) | $ (0.81) | - The Company reported revenues of **$1.7 million** for the three months and **$3.2 million** for the six months ended June 30, 2025, compared to no revenue in the prior year periods, indicating the start of meaningful operations and sales[10](index=10&type=chunk)[221](index=221&type=chunk) - Net loss significantly increased to **$(144.2) million** for the three months ended June 30, 2025, from **$(48.2) million** in the prior year, primarily due to an **$82.3 million** increase in the change in fair value of warrants[10](index=10&type=chunk)[231](index=231&type=chunk) - For the six months ended June 30, 2025, net loss was **$(135.4) million**, a slight increase from **$(133.8) million** in the prior year, with a **$16.0 million** increase in warrant fair value changes[10](index=10&type=chunk)[231](index=231&type=chunk) [Condensed Consolidated Statements of Mezzanine Equity and Stockholder's Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Mezzanine%20Equity%20and%20Stockholder%27s%20Equity) This section outlines changes in the company's mezzanine equity and stockholders' equity, reflecting financing activities and accumulated losses - Mezzanine Equity saw a significant increase with the issuance of **300,000 shares** of Series B Convertible Perpetual Preferred Stock, valued at **$293.5 million**, and accrued dividends of **$0.6 million** during the six months ended June 30, 2025[13](index=13&type=chunk)[101](index=101&type=chunk)[109](index=109&type=chunk) - Stockholders' Equity decreased from **$180.4 million** at December 31, 2024, to **$98.9 million** at June 30, 2025, primarily due to a net loss of **$(144.2) million** for the three months ended June 30, 2025, and **$(135.4) million** for the six months ended June 30, 2025[13](index=13&type=chunk)[10](index=10&type=chunk) - Additional Paid-in Capital increased by **$54.1 million**, driven by common stock issuances (**$33.1 million**), warrants exercised (**$14.2 million**), and equity-based compensation (**$9.8 million**) during the six months ended June 30, 2025[13](index=13&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section categorizes cash inflows and outflows from operating, investing, and financing activities, illustrating liquidity changes | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $ (75,590) | $ (79,608) | | Net cash (used in)/provided by investing activities | (23,609) | 23,857 | | Net cash provided by/(used in) financing activities | 355,632 | (223,308) | | Net increase/(decrease) in cash and restricted cash | 256,433 | (279,059) | | Cash and restricted cash, end of period | $ 297,944 | $ 23,455 | - Net cash used in operating activities decreased by **$4.0 million** to **$(75.6) million** for the six months ended June 30, 2025, compared to **$(79.6) million** in the prior year, mainly due to lower construction-related costs for the Ironton Facility[20](index=20&type=chunk)[244](index=244&type=chunk) - Investing activities shifted from providing **$23.9 million** in cash in 2024 (due to debt securities sales) to using **$(23.6) million** in 2025, primarily for capital expenditures[20](index=20&type=chunk)[245](index=245&type=chunk) - Financing activities provided significant cash of **$355.6 million** in 2025, a substantial increase from using **$(223.3) million** in 2024, driven by proceeds from Series B Preferred Stock (**$300.0 million**) and Common Stock issuance (**$33.3 million**)[20](index=20&type=chunk)[246](index=246&type=chunk)[247](index=247&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [NOTE 1 - ORGANIZATION](index=9&type=section&id=NOTE%201%20-%20ORGANIZATION) This note describes PureCycle Technologies, Inc.'s business, its patented recycling technology, and its mission to produce sustainable polypropylene resin - PureCycle Technologies, Inc. (PCT) is a Florida-based corporation focused on commercializing a patented purification recycling technology, licensed globally from The Procter & Gamble Company (P&G), to restore waste polypropylene into PureFive™ resin[21](index=21&type=chunk) - The Company's objective is to introduce a new product to the global polypropylene market to help multinational corporations achieve sustainability goals, provide sustainable polypropylene products, and reduce waste[21](index=21&type=chunk) [NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=9&type=section&id=NOTE%202%20-%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the key accounting principles and methods used in preparing the financial statements, including revenue recognition and segment reporting - The condensed consolidated financial statements are prepared in accordance with U.S. GAAP and SEC rules, reflecting all necessary adjustments for fair presentation[22](index=22&type=chunk) - Revenue is primarily generated from the sale of finished products or byproducts, recognized when control is transferred to customers[28](index=28&type=chunk) - Management operates the Company as a single operating segment, with performance evaluated on a consolidated net income or loss basis[30](index=30&type=chunk) - The Company is evaluating the impact of recently issued accounting pronouncements, including ASU 2024-04 (Debt with Conversion and Other Options), ASU 2024-03 (Income Statement – Disaggregation Disclosures), and ASU 2023-09 (Income Taxes Disclosures)[31](index=31&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk) [NOTE 3 - LIQUIDITY AND GOING CONCERN](index=11&type=section&id=NOTE%203%20-%20LIQUIDITY%20AND%20GOING%20CONCERN) This note assesses the company's ability to meet its financial obligations for the foreseeable future, addressing going concern status and mitigating factors - As of August 7, 2025, the Company concluded that the substantial doubt about its ability to continue as a going concern for the next twelve months, previously disclosed in the March 31, 2025 10-Q, has been alleviated[35](index=35&type=chunk)[38](index=38&type=chunk) - This improvement is attributed to raising approximately **$300.0 million** in gross proceeds from the sale of Series B Convertible Perpetual Preferred Stock in June 2025[36](index=36&type=chunk)[37](index=37&type=chunk) - Longer-term going concern is dependent on continued operational improvement at the Ironton Facility, commercialization of PureFive™ resin, and successful construction and product sales from the Thailand facility[38](index=38&type=chunk) [NOTE 4 - RELATED PARTY TRANSACTIONS](index=12&type=section&id=NOTE%204%20-%20RELATED%20PARTY%20TRANSACTIONS) This note details financial dealings and relationships between the company and its principal owners, affiliates, and other related entities - Related party transactions primarily involve financing activities with principal owners and affiliates such as Sylebra Capital Management, Samlyn Capital, LLC, Pure Plastics LLC, Pure Crown LLC, Glockner Family Venture Fund LP, and Milliken & Company[40](index=40&type=chunk)[41](index=41&type=chunk) - PCT purchased **$0.5 million** of chemicals from Milliken during the six months ended June 30, 2025[42](index=42&type=chunk) - The Company borrowed and repaid **$10.0 million** from the **$200.0 million** Revolving Credit Facility with Sylebra in May-June 2025, incurring **$0.2 million** in interest[43](index=43&type=chunk) - In June 2025, the Company executed and repaid a **$4.9 million** promissory note with Pure Plastic, including **$0.02 million** in interest[44](index=44&type=chunk) - PCT LLC sold **$11.4 million** in aggregate par amount of Series A Bonds to related parties for gross proceeds of **$10.1 million** during the six months ended June 30, 2025[45](index=45&type=chunk) | (dollars in thousands) | Sylebra | Samlyn | Pure Plastic | Pure Crown LLC | Glockner | | :--------------------- | :------ | :----- | :----------- | :------------- | :------- | | Related Party Bonds Payable (June 30, 2025) | $ 785 | $ 3,900 | $ 112,045 | $ — | $ — | | Series B Convertible Perpetual Preferred Stock (shares in thousands, June 30, 2025) | 40 | 50 | — | 5 | — | | Series A Warrants (shares in thousands, June 30, 2025) | 10,250 | 2,857 | — | 1,071 | 714 | [NOTE 5 - INVENTORY](index=13&type=section&id=NOTE%205%20-%20INVENTORY) This note provides a breakdown of the company's inventory components, including raw materials, work in process, and finished goods | (in thousands) | June 30, 2025 | December 31, 2024 | | :------------- | :------------ | :---------------- | | Raw materials | $ 4,442 | $ 4,485 | | Work in process | 769 | 824 | | Finished goods | 5,549 | 2,778 | | Total inventory | $ 10,760 | $ 8,087 | - Total inventory increased by **$2.7 million**, from **$8.1 million** at December 31, 2024, to **$10.8 million** at June 30, 2025, primarily driven by a significant increase in finished goods[49](index=49&type=chunk) [NOTE 6 – PROPERTY, PLANT AND EQUIPMENT](index=13&type=section&id=NOTE%206%20%E2%80%93%20PROPERTY%2C%20PLANT%20AND%20EQUIPMENT) This note details the company's tangible assets, including their cost, accumulated depreciation, and net book value | (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------- | :------------ | :---------------- | | Total property, plant and equipment at cost | $ 732,796 | $ 729,852 | | Less: Accumulated depreciation | (73,831) | (55,773) | | Property, plant, and equipment, net | $ 658,965 | $ 674,079 | - Net property, plant, and equipment decreased from **$674.1 million** at December 31, 2024, to **$659.0 million** at June 30, 2025, mainly due to increased accumulated depreciation[50](index=50&type=chunk) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total depreciation expense | $ 7,263 | $ 7,167 | $ 14,613 | $ 16,423 | - Total depreciation expense for the six months ended June 30, 2025, was **$14.6 million**, a decrease from **$16.4 million** in the prior year[50](index=50&type=chunk) [NOTE 7 - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES](index=13&type=section&id=NOTE%207%20-%20ACCRUED%20EXPENSES%20AND%20OTHER%20CURRENT%20LIABILITIES) This note itemizes short-term financial obligations, such as accrued purchases, lease obligations, and employee-related costs | (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------------- | :------------ | :---------------- | | Accrued purchases | $ 17,314 | $ 39,078 | | Accrued lease obligations | 3,733 | 3,289 | | Employee-related costs | 2,628 | 698 | | Other | 199 | 194 | | Total other current liabilities | $ 23,874 | $ 43,259 | - Total accrued expenses and other current liabilities decreased by **$19.4 million**, from **$43.3 million** at December 31, 2024, to **$23.9 million** at June 30, 2025, primarily due to a significant reduction in accrued purchases[51](index=51&type=chunk) [NOTE 8 – LONG-TERM DEBT AND BONDS PAYABLE](index=14&type=section&id=NOTE%208%20%E2%80%93%20LONG-TERM%20DEBT%20AND%20BONDS%20PAYABLE) This note describes the company's long-term financial obligations, including various debt instruments, their terms, and maturity schedules | (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------------------- | :------------ | :---------------- | | Long-term Debt, less current portion | $ 273,405 | $ 256,886 | | Related party debt, less current portion | $ 76,542 | $ 66,471 | | Sylebra Line of Credit (borrowing capacity $200.0M) | $ — | $ — | - Long-term debt, net of current portion, increased by **$16.5 million** to **$273.4 million** as of June 30, 2025, primarily due to increased Revenue Bonds[53](index=53&type=chunk) - Related party debt, net of current portion, increased by **$10.1 million** to **$76.5 million** as of June 30, 2025[53](index=53&type=chunk) - The Company has a **$200.0 million** Revolving Credit Facility with Sylebra, which was undrawn as of June 30, 2025, but saw a **$10.0 million** draw and repayment in June 2025[53](index=53&type=chunk)[68](index=68&type=chunk) - Green Convertible Notes total **$250.0 million** principal amount, bearing **7.25%** interest, maturing August 2030, with an initial conversion price of **$14.82** per share[69](index=69&type=chunk)[80](index=80&type=chunk)[81](index=81&type=chunk) - Proceeds from Green Convertible Notes were allocated to Eligible Green Projects, including the Augusta Facility, PreP equipment, and a research and development lab, with plans to re-direct **$195 million** of long-lead equipment to Antwerp and/or Thailand projects[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk) | Years Ending December 31, | Long-Term Debt (in thousands) | Related Party Bonds Payable (in thousands) | | :------------------------ | :---------------------------- | :----------------------------------------- | | 2025 (July through December) | $ 5,853 | $ 9,820 | | 2026 | 9,027 | 7,570 | | 2027 | 2,735 | 25,105 | | 2028 | 3,299 | 7,710 | | 2029 | 5,600 | 8,220 | | 2030 | 250,000 | 8,760 | | Thereafter | 31,900 | 49,545 | [NOTE 9 - INCOME TAXES](index=19&type=section&id=NOTE%209%20-%20INCOME%20TAXES) This note explains the company's income tax position, including deferred tax assets and liabilities, and the impact of valuation allowances - The Company has a full valuation allowance against net deferred tax assets, as their realization is not considered more likely than not[86](index=86&type=chunk) - No tax expense was reported for the three and six months ended June 30, 2025, and 2024, due to forecasted income tax losses[86](index=86&type=chunk) [NOTE 10 - COMMITMENTS AND CONTINGENCIES](index=20&type=section&id=NOTE%2010%20-%20COMMITMENTS%20AND%20CONTINGENCIES) This note discloses the company's contractual obligations, legal proceedings, and other potential future liabilities or claims - The Company renewed a surety bond for **$25.0 million** on March 14, 2024, which was increased to **$45.9 million** on July 1, 2024, and then decreased to **$8.1 million** on October 4, 2024, due to funding a restricted escrow account[89](index=89&type=chunk) - A significant legal proceeding involves an arbitration demand by Denham-Blythe Company, Inc. (DB) seeking approximately **$17.0 million** for unapproved change orders and payment applications related to the Ironton Facility EPC Contract[93](index=93&type=chunk) - PCO (a subsidiary) filed a counterclaim alleging damages in excess of DB's demand due to deficiencies in DB's work[93](index=93&type=chunk) - The Company cannot reasonably estimate the potential loss from the Denham-Blythe arbitration at this stage[99](index=99&type=chunk) - A shareholder derivative action (Piot v. Bouck, et al.) was dismissed with prejudice on July 23, 2025[100](index=100&type=chunk) [NOTE 11 - MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY](index=21&type=section&id=NOTE%2011%20-%20MEZZANINE%20EQUITY%20AND%20STOCKHOLDERS%27%20EQUITY) This note provides detailed information on the company's equity structure, including preferred stock, common stock, and equity-based compensation - In June 2025, the Company issued **300,000 shares** of Series B Convertible Perpetual Preferred Stock in a private placement, generating **$300.0 million** in gross proceeds[101](index=101&type=chunk) - The Series B Preferred Stock is classified as temporary (mezzanine) equity due to a cash redemption scenario upon events not within the Company's control (change in control)[102](index=102&type=chunk) - Holders of Series B Preferred Stock are entitled to cumulative dividends at **7%** per annum, payable in kind or cash, and can convert into Common Stock at an initial conversion price of **$14.02**[106](index=106&type=chunk)[109](index=109&type=chunk) - Series A Preferred Stock, issued in September 2024, is accounted for as a liability, with a value of **$20.7 million** as of June 30, 2025, and bears **8%** annual dividends[120](index=120&type=chunk) - The Put Option liability associated with Series A Preferred Stock decreased to **$0** as of June 30, 2025, from **$3.4 million** at December 31, 2024, due to the adjusted timeline for the Augusta Facility making exercise remote[121](index=121&type=chunk)[186](index=186&type=chunk) - As of June 30, 2025, **179.8 million shares** of Common Stock were issued and outstanding, increasing from **173.6 million** at December 31, 2024, partly due to a **$33.0 million** private placement in February 2025[126](index=126&type=chunk)[127](index=127&type=chunk) [NOTE 12 - EQUITY-BASED COMPENSATION](index=26&type=section&id=NOTE%2012%20-%20EQUITY-BASED%20COMPENSATION) This note details the company's equity incentive plans, including restricted stock units, stock options, and performance share units, and related expenses - The 2021 Equity Incentive Plan authorizes approximately **27.2 million shares**, with **17.6 million** remaining available for issuance as of June 30, 2025[132](index=132&type=chunk) | RSU Activity (in thousands) | Number of RSUs | Weighted Average Grant Date Fair Value | | :-------------------------- | :------------- | :------------------------------------- | | Non-vested at Dec 31, 2024 | 3,438 | $ 7.90 | | Granted | 850 | $ 9.67 | | Vested | (763) | $ 6.03 | | Forfeited | (107) | $ 6.44 | | Non-vested at June 30, 2025 | 3,418 | $ 8.80 | - A special restricted stock award of **0.2 million shares**, valued at **$2.3 million**, was granted to the CEO in June 2025 and immediately vested[137](index=137&type=chunk) | Stock Option Activity (in thousands) | Number of Options | Weighted Average Exercise Price | | :----------------------------------- | :---------------- | :------------------------------ | | Balance, December 31, 2024 | 1,290 | $ 16.75 | | Granted | 223 | $ 10.16 | | Forfeited | (24) | $ 5.73 | | Balance, June 30, 2025 | 1,489 | $ 15.94 | | PSU Activity (in thousands) | Number of PSUs | Weighted Average Grant Date Fair Value | | :-------------------------- | :------------- | :------------------------------------- | | Balance, December 31, 2024 | 1,341 | $ 6.82 | | Granted | 194 | $ 10.15 | | Forfeited | (595) | $ 7.63 | | Balance, June 30, 2025 | 940 | $ 6.99 | | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total equity-based stock compensation expense | $ 6,411 | $ 3,072 | $ 9,765 | $ 5,754 | - Total equity-based compensation expense increased to **$9.8 million** for the six months ended June 30, 2025, from **$5.8 million** in the prior year[148](index=148&type=chunk) [NOTE 13 - WARRANTS](index=29&type=section&id=NOTE%2013%20-%20WARRANTS) This note describes the various types of warrants issued by the company, their classification as equity or liability, and changes in their fair value | Warrant series | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Exercise price | | :------------- | :--------------------------- | :------------------------------- | :------------- | | RTI Warrants | — | 1,511 | $ 5.56 | | Public Warrants | 5,720 | 5,720 | $ 11.50 | | Private Warrants | 199 | 199 | $ 11.50 | | Series A Warrants | 17,857 | 17,857 | $ 11.50 | | Series B Warrants | 3,065 | 3,064 | $ 11.50 | | Series C Warrants | 5,000 | 5,000 | $ 11.50 | | Total warrants, issued and outstanding | 31,841 | 33,351 | | - RTI Warrants were exercised on January 16, 2025, generating **$5.4 million** in cash and resulting in the issuance of **1.5 million shares** of Common Stock[150](index=150&type=chunk) - Public Warrants are equity-classified, while Private, Series A, Series B, and Series C Warrants are liability-classified due to specific provisions (e.g., cashless exercise, Black-Scholes value calculation with volatility floor) that prevent equity classification[153](index=153&type=chunk)[155](index=155&type=chunk)[159](index=159&type=chunk)[162](index=162&type=chunk)[166](index=166&type=chunk) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Change in fair value of warrants | $ 82,295 | $ (4,311) | $ 25,626 | $ 9,633 | - The change in fair value of warrants resulted in an expense of **$82.3 million** for the three months and **$25.6 million** for the six months ended June 30, 2025, compared to a benefit of **$(4.3) million** and an expense of **$9.6 million** in the prior year periods, respectively[167](index=167&type=chunk) [NOTE 14 – FAIR VALUE OF FINANCIAL INSTRUMENTS](index=31&type=section&id=NOTE%2014%20%E2%80%93%20FAIR%20VALUE%20OF%20FINANCIAL%20INSTRUMENTS) This note explains the valuation methodologies and hierarchy used for financial instruments, including warrant liabilities and convertible notes - The Company classifies financial instruments into a fair value hierarchy: Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (unobservable inputs)[168](index=168&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk) | (in thousands) | Level 1 | Level 2 | Level 3 | Total (June 30, 2025) | | :------------- | :------ | :------ | :------ | :-------------------- | | Put Option Liability | $ — | $ — | $ — | $ — | | Warrant liability: | | | | | | Private Warrants | — | — | 285 | 285 | | Series A Warrants | — | 77,679 | — | 77,679 | | Series B Warrants | — | — | 23,410 | 23,410 | | Series C Warrants | — | — | 45,400 | 45,400 | | Total warrant liability | $ — | $ 77,679 | $ 69,095 | $ 146,774 | - The Put Option liability was valued at **$0** as of June 30, 2025, down from **$3.4 million** at December 31, 2024, due to the reduced likelihood of its exercise[172](index=172&type=chunk)[186](index=186&type=chunk)[187](index=187&type=chunk) - Series A Warrants are classified as Level 2, valued at **$77.7 million**, while Private, Series B, and Series C Warrants are Level 3, valued using Black-Scholes or Monte Carlo simulations with unobservable inputs like expected volatility and option term[172](index=172&type=chunk)[173](index=173&type=chunk)[178](index=178&type=chunk)[180](index=180&type=chunk)[182](index=182&type=chunk)[184](index=184&type=chunk) | (in thousands) | Level 1 | Level 2 | Level 3 | Total (June 30, 2025) | | :------------- | :------ | :------ | :------ | :-------------------- | | Green Convertible Notes | $ — | $ — | $ 305,691 | $ 305,691 | | Revenue bonds: | | | | | | Related party bonds | — | — | 116,785 | 116,785 | | Third-party bonds | — | — | 31,275 | 31,275 | | Total bonds | $ — | $ — | $ 148,060 | $ 148,060 | - Green Convertible Notes and Revenue Bonds are classified as Level 3, with fair values derived from thinly traded public bonds, indicating significant unobservable inputs[172](index=172&type=chunk) [NOTE 15 – NET LOSS PER SHARE](index=36&type=section&id=NOTE%2015%20%E2%80%93%20NET%20LOSS%20PER%20SHARE) This note details the calculation of basic and diluted net loss per common share, considering the impact of participating and anti-dilutive securities - The Company uses the two-class method for computing net loss per common share, allocating income (but not losses) between common and participating securities[191](index=191&type=chunk) | (in thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss attributable to common stockholders, basic and diluted | $ (144,823) | $ (48,212) | $ (135,991) | $ (133,819) | | Weighted average common shares outstanding, basic and diluted | 179,666 | 164,691 | 178,493 | 164,524 | | Net loss per share attributable to common stockholders, basic and diluted | $ (0.81) | $ (0.29) | $ (0.76) | $ (0.81) | - Basic and diluted loss per share for the three months ended June 30, 2025, was **$(0.81)**, compared to **$(0.29)** in the prior year[192](index=192&type=chunk) - Basic and diluted loss per share for the six months ended June 30, 2025, was **$(0.76)**, compared to **$(0.81)** in the prior year[192](index=192&type=chunk) - Anti-dilutive shares, including warrants, stock options, RSUs, PSUs, contingently-issuable shares, and shares from Green Convertible Notes and Series B Preferred Stock, totaled **77.9 million** for the six months ended June 30, 2025[192](index=192&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on PureCycle Technologies, Inc.'s financial condition and results of operations, including an overview of its business, recent developments, detailed analysis of revenue and expenses, liquidity, and cash flows. It highlights the commercialization of its recycling technology, expansion plans, and the impact of financing activities on its financial performance [CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS](index=37&type=section&id=CAUTIONARY%20STATEMENT%20ON%20FORWARD-LOOKING%20STATEMENTS) This report contains forward-looking statements regarding PCT's financial condition, operations, and prospects, which are subject to inherent uncertainties and changes in circumstances - This report contains forward-looking statements regarding PCT's financial condition, operations, and prospects, which are subject to inherent uncertainties and changes in circumstances[195](index=195&type=chunk) - Key risks include PCT's ability to obtain funding, meet regulatory requirements for PureFive™ resin, commence full-scale commercial operations at the Ironton Facility, complete construction of new facilities (Thailand, Belgium, Augusta), and execute its growth plan[196](index=196&type=chunk)[200](index=200&type=chunk) - PCT undertakes no obligation to update forward-looking statements, and actual results may differ materially from projections[199](index=199&type=chunk)[202](index=202&type=chunk) [Overview](index=40&type=section&id=Overview) This section provides a general description of PureCycle Technologies, Inc.'s business model and operational processes - PureCycle Technologies, Inc. commercializes a patented dissolution recycling technology, licensed from P&G, to transform waste polypropylene into PureFive™ resin, which has properties similar to virgin polypropylene[206](index=206&type=chunk) - The Ironton Facility was certified as mechanically complete in April 2023, with an expected capacity of **107 million pounds** per year when fully operational, though commissioning activities are ongoing[206](index=206&type=chunk) - The recycling process involves Feed PreP (collecting, sorting, preparing waste), Purification (dissolution recycling using supercritical fluids to extract and filter contaminants), and optional Compounding (modifying resin to meet end-user qualifications)[207](index=207&type=chunk) [Recent Developments](index=41&type=section&id=Recent%20Developments) This section highlights significant events and strategic initiatives undertaken by the company in the recent period - In June 2025, the Company raised approximately **$300.0 million** in gross proceeds from a private placement of Series B Convertible Perpetual Preferred Stock[209](index=209&type=chunk) - In July 2025, PCT received an additional FDA Letter of No Objection (LNO), expanding the range of process conditions for PureFive™ resin to be used in food contact articles, allowing for greater flexibility and reduced energy usage[211](index=211&type=chunk) - The Company announced plans to construct a **130.0 million pound** polypropylene recycling facility in Rayong, Thailand, with construction beginning in H2 2025 and expected operation by mid-2027[213](index=213&type=chunk) - Plans also include a **130.0 million pound** facility in Antwerp, Belgium, projected to be operational in 2028, and a **300.0 million pound** multi-line purification facility at the Augusta, Georgia, location, with construction starting mid-2026 and the first purification line operational in 2029[213](index=213&type=chunk) [Components of Results of Operations](index=42&type=section&id=Components%20of%20Results%20of%20Operations) This section breaks down the key revenue and expense categories that contribute to the company's financial performance - Revenue is primarily from finished product or byproduct sales, recognized when control transfers to customers[215](index=215&type=chunk) - Cost of operations includes personnel, feedstock, rent, depreciation, repairs, maintenance, utilities, and supplies, expected to increase with scaling operations[216](index=216&type=chunk) - Research and development expenses cover Technology development, facility/equipment purification processes, and feedstock preparation, including evaluation of new mechanical separators and increased in-house analytical capabilities[217](index=217&type=chunk) - Selling, general and administrative expenses consist of corporate personnel, professional services (legal, audit, accounting), and are expected to increase with business growth[218](index=218&type=chunk) [Results of Operations](index=43&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance over the reporting periods, detailing changes in revenues, expenses, and net loss | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $ 1,650 | $ — | $ 3,230 | $ — | | Cost of operations | 29,991 | 22,220 | 53,273 | 43,414 | | Research and development | 1,397 | 1,565 | 2,938 | 3,396 | | Selling, general and administrative | 15,860 | 16,137 | 30,338 | 32,094 | | Operating loss | (45,598) | (39,922) | (83,319) | (78,904) | | Interest expense | 17,640 | 12,055 | 32,704 | 27,109 | | Interest income | (621) | (514) | (1,000) | (4,116) | | Change in fair value of warrants | 82,295 | (4,311) | 25,626 | 9,633 | | Net loss | $ (144,240) | $ (48,212) | $ (135,408) | $ (133,819) | - Revenues for the three and six months ended June 30, 2025, were **$1.7 million** and **$3.2 million**, respectively, marking the first meaningful sales, with anticipated growth from customer application trials[221](index=221&type=chunk) - Cost of operations increased by **$7.8 million** (3 months) and **$9.9 million** (6 months) YoY, driven by a **$3.7 million** loss on fixed asset disposal and higher production-related and employee expenses due to ramp-up[222](index=222&type=chunk)[223](index=223&type=chunk) - Research and development expenses decreased by **$0.2 million** (3 months) and **$0.5 million** (6 months) YoY, mainly due to lower employee and operational site costs[224](index=224&type=chunk)[226](index=226&type=chunk) - Selling, general and administrative expenses decreased by **$0.3 million** (3 months) and **$1.8 million** (6 months) YoY, primarily due to lower legal costs from prior year settlements, partially offset by higher equity-based compensation and employee-related expenses[227](index=227&type=chunk)[228](index=228&type=chunk) - Interest expense increased by **$5.6 million** for both three and six months YoY, attributed to increased outstanding debt from Revenue Bonds sales and interest on the Sylebra line of credit[229](index=229&type=chunk) - Change in fair value of warrants resulted in an **$86.6 million** increase in expense for the three months and a **$16.0 million** increase for the six months YoY, mainly due to an increase in the underlying common stock value[231](index=231&type=chunk) - Other (income)/expense for the six months ended June 30, 2025, was **$5.2 million** in income, primarily from a **$3.4 million** decrease in the Series A Preferred Stock put option fair value and **$1.3 million** net gain from insurance proceeds[236](index=236&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's ability to generate and manage cash to meet its financial obligations and fund operations - Operations are funded by equity financing (common and preferred stock) and various debt instruments[237](index=237&type=chunk) - Current financial projections indicate the Company can meet obligations for at least 12 months from the financial statements' issuance date[237](index=237&type=chunk) - Longer-term liquidity depends on continued improvement at the Ironton Facility, commercialization of PureFive™ resin, and successful construction and sales from the Thailand facility[237](index=237&type=chunk) | (in thousands) | June 30, 2025 | December 31, 2024 | | :------------- | :------------ | :---------------- | | Cash | $ 284,067 | $ 15,683 | | Restricted cash (current and noncurrent) | 13,877 | 25,828 | | Gross long-term debt and related party bonds payable | $ 375,555 | $ 346,644 | - As of June 30, 2025, the Company had **$284.1 million** in cash and cash equivalents and **$13.9 million** in restricted cash[239](index=239&type=chunk) - The Company has an undrawn **$200.0 million** revolving credit facility with Sylebra Capital, expiring September 30, 2026[239](index=239&type=chunk) - No off-balance sheet arrangements are material to investors[240](index=240&type=chunk)[242](index=242&type=chunk) [Cash Flows](index=46&type=section&id=Cash%20Flows) This section analyzes the company's cash generation and usage across operating, investing, and financing activities | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $ (75,590) | $ (79,608) | | Net cash (used in)/provided by investing activities | (23,609) | 23,857 | | Net cash provided by/(used in) financing activities | 355,632 | (223,308) | | Net increase/(decrease) in cash and cash equivalents and restricted cash | 256,433 | (279,059) | - Net cash used in operating activities decreased by **$4.0 million** YoY to **$(75.6) million**, mainly due to lower construction costs for the Ironton Facility[244](index=244&type=chunk) - Investing activities shifted from providing **$23.9 million** in 2024 (from debt securities sales) to using **$(23.6) million** in 2025 (for capital expenditures)[245](index=245&type=chunk) - Net cash provided by financing activities was **$355.6 million** in 2025, a significant increase from net cash used of **$(223.3) million** in 2024, primarily driven by proceeds from Series B Preferred Stock (**$300.0 million**) and Common Stock issuance (**$33.3 million**)[246](index=246&type=chunk)[247](index=247&type=chunk) [Indebtedness](index=47&type=section&id=Indebtedness) This section provides an overview of the company's debt obligations and any significant changes during the reporting period - No material changes to indebtedness from the most recent Annual Report on Form 10-K, except for details provided in Note 8[250](index=250&type=chunk) - The Company sold **$30.5 million** par value in Revenue Bonds during the six months ended June 30, 2025[250](index=250&type=chunk) [Critical Accounting Policies and Estimates](index=47&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section discusses the accounting policies and estimates that require significant judgment and can materially impact financial reporting - There have been no significant changes in critical accounting policies and estimates since the most recent Annual Report on Form 10-K[252](index=252&type=chunk) [Recent Accounting Pronouncements](index=47&type=section&id=Recent%20Accounting%20Pronouncements) This section outlines recently issued accounting standards and their potential impact on the company's financial statements - Information on recent accounting pronouncements, their adoption timing, and potential impact is detailed in Note 2 to the condensed consolidated financial statements[253](index=253&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there have been no material changes in market risks as of June 30, 2025, compared to the information provided in the most recent Annual Report on Form 10-K - Market risks as of June 30, 2025, do not differ materially from those disclosed in the most recent Annual Report on Form 10-K[255](index=255&type=chunk) [Item 4. Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the Company's disclosure controls and procedures as of June 30, 2025, and reports no material changes in internal control over financial reporting during the period - Management concluded that disclosure controls and procedures were effective as of June 30, 2025[256](index=256&type=chunk) - There have been no changes that materially affected, or are reasonably likely to materially affect, internal control over financial reporting during the period[257](index=257&type=chunk) [PART II - OTHER INFORMATION](index=49&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section provides additional disclosures not covered in the financial statements, including legal proceedings, risk factors, and equity sales [Item 1. Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 10 for a description of pending legal proceedings and states that, based on currently available facts, the ultimate resolution of these matters is not expected to have a material adverse effect on the Company's financial position, results of operations, or cash flows - Legal proceedings are described in Note 10 - Commitments and Contingencies[260](index=260&type=chunk) - The Company does not believe that the ultimate resolution of pending or future legal matters will have a material adverse effect on its overall financial position, results of operations, or cash flows[261](index=261&type=chunk) [Item 1A. Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) This section indicates that there have been no material changes to the risk factors previously disclosed in the Company's most recent Annual Report on Form 10-K - No material changes from risk factors previously disclosed in the most recent Annual Report on Form 10-K[262](index=262&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section provides a table summarizing the Company's purchases of its Common Stock during the second quarter of 2025, which were primarily shares withheld to cover tax withholding obligations upon the vesting of restricted stock units | Period | (a) Total number of shares (or units) purchased* | (b) Average price paid per share (or unit)* | | :---------------- | :----------------------------------------------- | :------------------------------------------ | | April 1 to April 30 | 8,957 | $ 5.99 | | May 1 to May 31 | 16,843 | $ 8.28 | | June 1 to June 30 | 78,700 | $ 11.87 | | Total | 104,500 | $ 10.79 | - The Company purchased **104,500 shares** of Common Stock during the second quarter of 2025 at an average price of **$10.79** per share[263](index=263&type=chunk) - These purchases represent shares withheld to cover tax withholding obligations under the net settlement provision upon vesting of restricted stock units[263](index=263&type=chunk) [Item 5. Other Information](index=50&type=section&id=Item%205.%20Other%20Information) This section states that none of the Company's directors or officers adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the fiscal quarter ended June 30, 2025 - No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the fiscal quarter ended June 30, 2025[266](index=266&type=chunk) [Item 6. Exhibits](index=51&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including merger agreements, certificates of incorporation, bylaws, credit agreements, subscription agreements, employment agreements, and certifications - The exhibits include various corporate governance documents, financing agreements, and certifications[269](index=269&type=chunk)[271](index=271&type=chunk)[273](index=273&type=chunk)[274](index=274&type=chunk) - Key exhibits include the Certificate of Designations for Series B Convertible Perpetual Stock (3.6), the Eighth and Ninth Amendments to the Credit Agreement (10.1, 10.3), and the Executive Employment Agreement for Dustin Olson (10.4)[269](index=269&type=chunk) - Financial statements are provided in Inline XBRL format as Exhibit 101.1[271](index=271&type=chunk) [SIGNATURES](index=53&type=section&id=SIGNATURES) This section contains the duly authorized signatures of PureCycle Technologies, Inc.'s Chief Executive Officer, Dustin Olson, and Chief Financial Officer, Jaime Vasquez, certifying the report as of August 7, 2025 - The report is signed by Dustin Olson, Chief Executive Officer, and Jaime Vasquez, Chief Financial Officer, on August 7, 2025[277](index=277&type=chunk)