PURECYCLE TECHNOLOGIES WARRANT(PCTTW) - 2025 Q2 - Quarterly Report

Operations and Facilities - PureCycle Technologies, Inc. expects to achieve a capacity of approximately 107 million pounds per year at the Ironton Facility when fully operational [206]. - Construction of a 130.0 million pound polypropylene recycling facility in Thailand is set to begin in the second half of 2025, with operations expected to start in mid-2027 [213]. - A second 130.0 million pound facility is planned for Antwerp, Belgium, with expected operational status in 2028 [213]. - The Augusta, Georgia facility will feature a 300.0 million pound multi-line purification facility, with construction expected to start in mid-2026 and the first purification line operational by 2029 [213]. - The company has a global license for its patented dissolution recycling technology from Procter & Gamble, which was amended to extend construction timelines and exclusivity [206]. Financial Performance - The Company reported revenues of approximately $1.7 million and $3.2 million for the three and six months ended June 30, 2025, marking the first year of meaningful operations and sales [221]. - Cost of operations increased by approximately $7.8 million for the three months and $9.9 million for the six months ended June 30, 2025, compared to the same periods in 2024, driven by higher production-related costs and losses on disposal of fixed assets [222][223]. - Interest expense increased by $5.6 million for both the three and six months ended June 30, 2025, attributed to increased outstanding debt from Revenue Bonds sales [229]. - The fair value of liability-classified warrants increased by approximately $86.7 million and $16.0 million for the three and six months ended June 30, 2025, respectively, due to an increase in the underlying value of common stock [231]. - The Company reported net cash provided by financing activities of approximately $355.6 million for the six months ended June 30, 2025, compared to net cash used of approximately $223.3 million in the prior year [246]. Expenses and Costs - Operating expenses primarily consist of personnel costs and other operational costs, with expectations of increases as operations scale [216]. - Selling, general, and administrative expenses are anticipated to rise as the company scales headcount with business growth [218]. - Research and development expenses focus on developing technology for purifying recycled polypropylene and improving feedstock purity [217]. - Research and development expenses decreased by approximately $0.2 million and $0.5 million for the three and six months ended June 30, 2025, respectively, primarily due to lower employee costs [224][226]. - Selling, general and administrative expenses decreased by approximately $0.3 million and $1.8 million for the three and six months ended June 30, 2025, respectively, mainly due to lower legal costs from prior year settlements [227][228]. Cash and Liquidity - As of June 30, 2025, the Company had approximately $284.1 million in cash and cash equivalents, with an undrawn $200.0 million revolving credit facility [239]. - The Company continues to evaluate strategies to improve liquidity, focusing on operations at the Ironton Facility and the commercialization of the PureFive™ resin product [237]. - Cash used in financing activities for the six months ended June 30, 2024, totaled $253.2 million for purchasing outstanding Revenue Bonds, with $30.0 million proceeds from the sale of revenue bonds during 2024 [249]. - The Company sold $30.5 million par value in Revenue Bonds during the six months ended June 30, 2025 [250]. Internal Controls and Compliance - There have been no significant changes in critical accounting policies and estimates from the previous Annual Report [252]. - Management concluded that disclosure controls and procedures were effective as of June 30, 2025 [256]. - No changes during the reporting period materially affected internal control over financial reporting [257]. - The Company does not anticipate that pending legal matters will have a material adverse effect on its financial position or results of operations [261]. - There have been no material changes in risk factors from the previous Annual Report [262]. - The Company has not adopted or modified any Rule 10b5-1 trading arrangements during the fiscal quarter ended June 30, 2025 [266]. - Recent accounting pronouncements have been assessed for their potential impact on financial condition and results of operations [253].