-Announced $250 million private equity capital raise to support the build out of the Augusta, Georgia multi-line manufacturing complex and other strategic and general corporate purposes; Transaction expected to close on March 17, 2022, subject to the satisfaction of closing conditions

-Plant 1, the first manufacturing plant in Ironton, Ohio, remains on schedule to complete construction in the fourth quarter of 2022

-Plant 2, first multi-line purification complex in Augusta, Georgia, to break ground with initial site work construction scheduled for March 22, 2022

-PureCycle signed letters of intent (LOI) for 60 million pounds of new feedstock from untapped waste streams that are currently landfilled or incinerated

-PureCycle’s chief manufacturing officer, Dustin Olson, has been elevated to chief operating officer

PureCycle Technologies, Inc. (“PureCycle” or “the company”) (NASDAQ: PCT), a U.S.-based advanced recycling company revolutionizing plastic waste, today announced a corporate update and financial results for the fourth quarter ending December 31, 2021.

This includes entering into subscription agreements with a select group of existing stockholders including among others, Sylebra Capital and Samlyn Capital along with a new investor, SK geo centric, for a private placement of common stock and warrants (the “Offering”). Upon closing of the private placement, PureCycle will receive net proceeds of approximately $250 million.

Mike Otworth, PureCycle’s Chairman and Chief Executive Officer, said, “PureCycle remains intently focused on executing against its strategic growth plan and advancing the sustainable plastic revolution through our unique purification process. That growth plan is now further supported by the additional $250 million investment from our long-term shareholders and a new investor.  This transaction underscores the support from our shareholder base and highlights a vote of confidence in our technology.”

Larry Somma, PureCycle’s Chief Financial Officer, stated, “PureCycle’s successful announcement of our oversubscribed private placement financing marks an integral step for our company and highlights trust in our ability to execute. It is also a testament to the support we have from several of our long-term shareholders and a new investor. While we have an ambitious growth objective, this capital will provide sufficient capital to fund our business plan which includes building the first four purification lines in Augusta, the supporting feedstock pre-processing (PreP) facilities, our equity investment for the joint venture with SK geo centric and funding of general corporate purposes. This capital raise is a key element for the project debt process which is underway.  Any news related to the project debt will be provided to the market at a future time. Operationally, we expect to break ground in Augusta on March 22, 2022, and look forward to providing further details during the corporate update call.”

Na Kyung-soo, CEO, SK geo centric, said, “The welcome addition of SK geo centric to the group of investors demonstrates another strong commitment to the PureCycle technology and business plan. SK geo centric and PureCycle engaged across multiple face to face meetings to understand the key technical details as well as chart a path into South Korea and broader Asia. Our company has a strategic goal to increase the usage of recycle material into our core product platform that aligns perfectly with PureCycle’s core mission. Our equity investment into the PureCycle is the first step toward a long-term strategic partnership.”

Private Placement of Common Stock Details 

The Offering included subscription agreements with Sylebra Capital, Samlyn Capital, and partner SK geo centric. Additionally, certain members of the PCT Board of Directors participated in the Offering. Upon closing of the Offering, PureCycle will receive net proceeds of approximately $250 million, resulting from the sale of 35.7 million shares of common stock and warrants to purchase 17.9 million shares of common stock. Subject to the satisfaction of conditions to closing set forth in the securities purchase agreement, the Offering is expected to close on March 17, 2022.  Subscribers in the transaction will pay $7.00 per combination of one share of common stock and warrant to purchase one-half of a share of common stock. Each warrant will have an exercise price of $11.50 per share and can be exercisable through March 17, 2026.

The securities were offered only to accredited investors. PureCycle is required to prepare and file a resale registration statement with the Securities and Exchange Commissions (the “SEC”) under the Securities Act of 1933, as amended (the “Securities Act”), covering the resale of the shares of common stock issued in the Offering and the shares of common stock issuable upon exercise of the warrants issued in the Offering. PureCycle is required to have such resale registration statement declared effective by the SEC within 60 calendar days (or 90 calendar days in the event of a “full review” by the SEC) following the closing of the Offering. The securities being sold in the Offering are being sold and issued without registration under the Securities Act, in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act as a transaction not involving a public offering and/or Rule 506 promulgated thereunder, and in reliance on similar exemptions under applicable state laws.

Liquidity and Capital Resources

Total liquidity of $431.2 million including $200.7 million of cash, cash equivalents and debt securities available for sale and $230.5 million in restricted cash. PureCycle had $249.6 million in debt and accrued interest, less $17.1 million of discount and issuance costs as of December 31, 2021. Plant 1’s original budget was $242.1 million, which was funded through bond financing. As of December 31, 2021, the remaining capital allocated from the bond funds was $121.4 million.

Operational Update

PureCycle’s chief manufacturing officer, Dustin Olson, has been elevated to chief operating officer. This change reflects the integral role Olson plays within PureCycle and will continue to shepherd key projects through to completion such as the Ironton and Augusta facilities. The company’s first manufacturing facility in Ironton, Ohio continues to progress and remains on schedule. With up to 220 construction craftsmen on site daily, 90% of utilities equipment, and 65% of PreP equipment on site daily, PureCycle is on track for completion in the fourth quarter of 2022. PureCycle’s partnership with Gulfspan has allowed the company to build facilities at a much faster rate and module construction is progressing with all 26 modules on site at Gulfspan’s facility. With module construction on track, the company remains confident in the previously disclosed timeline for the completion of PureCycle’s flagship facility, which will have a production capacity of 107 million pounds per year of Ultra-Pure Recycled (UPR) resin. PureCycle expects the Ironton feedstock preprocessing facility (PreP) to be operational in the third quarter of 2022.

The first multi-line purification complex in Augusta, Georgia is scheduled to break ground on March 22, 2022. The multi-line purification complex is designed to support up to 8 lines and produce up to 1.04 billion pounds of UPR resin per year. PureCycle has implemented strategic decisions to strengthen the company’s business model to mitigate and anticipate ever-changing market conditions. This includes an early decision to ensure all facilities are Born Digital, which aides in reducing the commissioning timeline.

PureCycle previously announced its first non-binding head of agreement (HOA) with SK geo centric to open Asia’s first UPR resin facility in Ulsan, South Korea, advancing the company’s joint discussions following the memorandum of understanding (MOU) signed in August 2021.

Feedstock and Commercial Update

In the fourth quarter, PureCycle signed letters of intent (LOI) for 60 million pounds of new feedstock within the post-consumer, non-curbside waste stream, a stream that is not currently moving through the market and is either landfilled or incinerated. PureCycle’s feedstock supply pipeline comprises three diverse types of waste streams: post-consumer non-curbside. post-consumer curbside, and post-industrial. PureCycle recently passed partner tests at our Feedstock Evaluation Unit for impact polymer which opens, for the first time, the automotive feedstock market.

PureCycle’s regionalized PreP strategy is expected to deliver strong economics and feed security. Through this strategy, new feedstock sources should be more easily accessible and the PreP facilities themselves are currently expected to generate a return on investment within 3 years. Further, regional PreP facilities will play a key role in our optimization of sort operations to extract No. 5 plastic waste regardless of the quality of the mixed bales. These facilities will play a key role in our overall strategy and are designed to diversify our feed system.

The Central Florida PreP facility, which is designed to provide feedstock to Augusta, remains on schedule and is expected to be operational in the third quarter of 2022. This facility will have the capacity to process 75 million pounds of polypropylene feedstock per year with a scalable annual capacity of 150 million pounds. Conversations with Titus in California are progressing for a second regional PreP facility and site selection for an additional U.S. PreP facility in the Northeast is underway.

PureCycle continues to see strong demand across the packaging and consumer goods segments, and continued market acceptance of the company’s feedstock+ pricing model. PureCycle added 164 million pounds to the pipeline in the fourth quarter and has a total sales pipeline of 822 million pounds.

The company commissioned an independent Life Cycle Assessment (LCA) that was conducted based on the final design of the Ironton facility and without operational data. The LCA shows the Ironton facility is expected to be below new fossil-fueled derived polypropylene across both carbon emissions and energy consumption. PureCycle effectively improves customer value proposition with a tangible alternative to expensive carbon credit purchase programs.

PureCycle received follow up questions from the FDA regarding its previously filed Letter of No Objection (LNO) and as such, amended the request for a LNO for categories C-G, which covers many products that consumers use on a regular basis. The company anticipates additional submissions designed to expand approved feedstocks and enter into extreme heat applications (COU: A,B,H).

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Any offering of these securities under the resale registration statement will only be by means of a prospectus.