PureCycle Technologies(US:PCT)2023-08-07 16:00Production Capacity and Facilities - PCT's Ironton Facility is expected to achieve a production capacity of approximately 107 million pounds of ultra-pure recycled (UPR) resin per year when fully operational, with initial production commencing in 2023 and full capacity expected by early 2024[234]. - 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 around 130 million pounds annually[239]. - PCT is evaluating alternative preprocessing sites in Central Florida and has signed a lease for a future PreP facility in Denver, Pennsylvania, expected to be operational in the first half of 2024[247]. - The Ironton Facility is expected to reach a nameplate production capacity of 107 million pounds per year by January 31, 2024[289]. Financial Performance and Revenue - The company has not generated any operating revenue to date but expects to begin generating revenue in 2023 with the commercial operation of the Ironton Facility[254]. - For the three months ended June 30, 2023, operating costs increased to $14,023,000, a 117% increase from $6,449,000 in 2022[259]. - The total operating costs and expenses for the six months ended June 30, 2023, were $49,622,000, reflecting a 28% increase from $38,787,000 in 2022[259]. - The net loss for the three months ended June 30, 2023, was $56,576,000, a 277% increase compared to a net loss of $15,004,000 in 2022[259]. - The company anticipates generating revenue from its commercial plant in Ironton in 2023[267]. Investments and Financing - As of June 30, 2023, PCT anticipates an additional investment of approximately $10.0 million to $22.5 million to complete the Ironton Facility, influenced by various contract contingencies[235]. - PCT has invested approximately $74 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[240]. - The company has capital commitments of approximately $13.3 million related to the Augusta Facility and $15.8 million for future facilities[273]. - On March 15, 2023, PCT entered into a $150 million Revolving Credit Facility, which matures on March 31, 2025, to support working capital and capital expenditures[298]. - PCT entered into a $40 million term loan facility maturing on December 31, 2025, to be used for repaying indebtedness and general corporate purposes[308]. Cash Flow and Liquidity - As of June 30, 2023, the company had $28.9 million in available unrestricted liquidity, down from $162.5 million in 2022[269]. - Cash and cash equivalents at the end of the period were $216,328,000, a 24% decrease from $285,050,000 in 2022[279]. - Net cash used in operating activities for the six months ended June 30, 2023, was $40,424,000, a 15% increase from $35,090,000 in 2022[279]. Strategic Partnerships and Development - PCT is pursuing a joint venture with SK geo centric Co., Ltd. to develop a UPR purification facility in Ulsan, South Korea, with completion expected in 2025[251]. - The company is focused on expanding its market presence and has plans for new product development in the recycling sector[342]. - PureCycle Technologies is actively pursuing strategic partnerships to enhance its technological capabilities and market reach[342]. - PureCycle Technologies is exploring potential mergers and acquisitions to accelerate growth and expand its product offerings[342]. Governance and Management - The company has implemented changes to its board structure to enhance governance and operational oversight[341]. - PCT's management concluded that disclosure controls and procedures were not effective as of June 30, 2023, due to material weaknesses in internal control over financial reporting[320]. Research and Development - PCT's research and development expenses are expected to increase as the company invests in new front-end feedstock mechanical separators and enhances in-house analytical capabilities[256]. - The company has received FDA food contact grades for its recycled feedstocks, allowing for use in various food types under specified conditions[250]. Interest and Debt Management - The increase in interest expense for the three and six month periods was primarily due to additional financing incurred in the second quarter of 2023[263]. - The interest rate on borrowings under the Revolving Credit Agreement varies, starting at 5.00% and increasing to 17.50% over time[300]. - The term loan bears interest at a variable annual rate equal to Term SOFR plus an applicable margin of 7.5%[309].