PureCycle Technologies, Inc.
For the period ended Jun 30, 2025. Filed Aug 7, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 7, 2025
PCT$1.67-11.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-07.
0000950170-25-065671
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-07.
0000950170-25-105036
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 126 previous paragraphs and 109 current paragraphs.
61 unchanged; 28 reworded; 20 added; 36 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (20)
Current report
PCT's ability to execute its growth plan to bring an additional one billion pounds of installed polypropylene recycling capability online before 2030, including its ability to meet related construction, regulatory, and financing requirements;
Current report
turnover in employees and increases in employee-related costs;
Current report
Recent Developments
Current report
In June 2025, we entered into binding subscription agreements with certain investors, including related parties, to which we agreed to sell to the investors, in a private placement transaction, an aggregate of 300,000 shares of the Company’s Series B Convertible Perpetual Preferred Stock, par value $0.001 per share, at an initial issue price of $1,000 per share. The gross proceeds from the Offering were approximately $300.0 million before deducting fees and expenses.
Current report
In conjunction with the $300.0 million capital raise, we outlined our future growth plans to increase our installed capacity, which includes the following:
Current report
We announced that we will begin construction of a 130.0 million pound polypropylene recycling facility in Thailand. We will be working with IRPC Public Company Limited ("IRPC") at IRPC’s eco-industrial zone in Rayong, Thailand. IRPC is an integrated petrochemical operator in Southeast Asia. Its production structure comprises petroleum and petrochemical complexes, complete with utilities and infrastructure supporting the operations, including a deep-sea port, oil depots and power plants. We can leverage this existing site infrastructure to reduce the costs of construction activities. Construction of this facility will begin in the second half of 2025 and is expected to become operational in mid-2027.
Current report
We also plan to construct a 130.0 million pound polypropylene recycling facility at our Antwerp, Belgium site. We are currently advancing the permitting process in Belgium and expect to receive the required permits in 2026. The facility in Antwerp is projected to be operational in 2028.
Current report
We also plan to build a 300.0 million pound multi-line purification facility at our Augusta, Georgia location. The design of the larger purification facility will incorporate learnings from our Ironton Facility. Construction is expected to begin on the Augusta Facility in mid-2026. This line is planned to be integrated with pre-processing ("PreP") and compounding assets. We expect to have the PreP facilities operational in mid-2026 and the first purification line at the Augusta Facility operational in 2029.
Current report
In July 2025, we received an additional FDA LNO, which expands upon previous LNOs and allows our PureFive™ resin to be produced under a broader range of process conditions. These broader conditions allow for greater flexibility and reduced energy usage in the purification process. Under these process conditions, our resin can be used in articles in contact with all types of food under FDA’s Conditions of Use ("COU") "A" (“high temperature heat-sterilized”) through "H" (“frozen or refrigerated storage: ready-prepared foods intended to be reheated in containers at time of use”), provided the feedstock comes from food contact articles and complies with all applicable authorizations.
Current report
Our revenue is primarily generated from the sale of finished products or byproducts to customers. Those sales predominantly contain a single performance obligation and revenue is recognized at the point in time when control of the product is transferred to customers, along with the title, risk of loss and rewards of ownership. Depending on the arrangement with the customer, these criteria are met either at the time the product is shipped or when the product is made available or delivered to the destination specified in the agreement with the customer. Sales revenue is recognized in an amount that reflects the consideration the Company expects to be entitled to in exchange for that finished product.
Current report
Cost of operations increased approximately $9.9 million for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. Cost of operations for the six months ended June 30, 2025 included approximately $4.3 million higher production-related costs due to the ramp-up in production that occurred during the current year, $3.7 million in loss on disposal of fixed assets, $2.8 million higher employee-related expenses, and $1.3 million higher supplies and materials, partially offset by $1.6 million lower depreciation expense and $1.3 million lower facilities costs due to extra costs incurred during the prior year to progress operations at our Ironton Facility.
Current report
Research and development expenses decreased approximately $0.2 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. This decrease was mainly driven by lower employee costs.
Current report
Selling, general and administrative expenses decreased approximately $0.3 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. This decrease was primarily driven by approximately $3.8 million of lower legal costs mostly as a result of settlement of outstanding cases in the prior year, partially offset by $3.1 million of higher equity-based compensation from new awards issued since the prior year, including a special grant valued at $2.3 million to the Chief Executive Officer that immediately vested upon grant and $0.9 million higher employee-related expenses to support the growth of the business.
Current report
Interest expense increased by $5.6 million for both the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024. The increase in interest expense was primarily attributed to sales of our Revenue Bonds during the second quarter of 2025, which increased the level of outstanding debt, and interest paid on our draw on the Sylebra line of credit.
Current report
During the three months ended June 30, 2025, the $0.6 million of other income was primarily comprised of a $0.3 million decrease in the fair value of the Series A Preferred Stock put option, resulting in a gain recorded in other income. During the three months ended June 30, 2024, the $1.1 million of other expense was primarily attributed to a $0.8 million impairment charge related to an operating right-of-use asset.
Current report
Our ongoing operations have primarily been funded to date by a combination of equity financing through the issuance of common stock and preferred stock, as well as the issuance of various debt instruments. The Company's current financial projections support the Company's ability to meet its obligations as they become due for at least the twelve-month period from the date that these financial statements were issued. The Company’s ability to meet its requirements longer term is dependent on continued improvement in operations at our Ironton Facility, the commercialization of our PureFive TM resin product, and the successful construction and sale of product from our Thailand facility. Management continues to evaluate different strategies and may pursue additional actions to further increase its liquidity position.
Current report
Net cash used in operating activities for the six months ended June 30, 2025 decreased by $4.0 million as compared to the six months ended June 30, 2024. This decrease is mainly attributed to costs connected with the construction of our Ironton Facility in the prior year.
Current report
Cash provided by financing activities for the six months ended June 30, 2025 is primarily comprised of $300.0 million of proceeds from the issuance of the Series B Convertible Perpetual Preferred Stock during the second quarter of 2025, $33.3 million of proceeds from the issuance of the Company's Common Stock, $26.9 million of proceeds from the sale of revenue bonds, $14.9 million in proceeds on draws on our Sylebra revolving line of credit facility and a short-term borrowing from a related party, and $5.4 million in proceeds from the exercise of the RTI Warrants during 2025. These cash inflows were partially offset by $14.9 million in payments on our Sylebra revolving line of credit facility and a short-term borrowing from a related party, $4.3 million in payments on equipment financing, $2.8 million payments to repurchase shares, $1.0 million in debt issuance costs paid, and $1.3 million for other financing activities.
Current report
Cash used in financing activities for the six months ended June 30, 2024 is mainly comprised of $253.2 million paid to purchase the outstanding Revenue Bonds during 2024, $1.6 million in payments on equipment financing, and $1.1 million in debt issuance costs paid, partially offset by $30.0 million of proceeds from the sale of revenue bonds during 2024, and $3.8 million of other proceeds from financing activities during 2025.
Current report
The Company sold $30.5 million par value in Revenue Bonds during the six months ended June 30, 2025. See Note 8 –Long-term Debt and Bonds Payable to our unaudited condensed consolidated financial statements included in Part I, Item 1. "Financial Statements."
Removed paragraphs (36)
Previous report
The Feedstock Evaluation Unit
Previous report
The Feedstock Evaluation Unit ("FEU") is an 11,000 square foot facility located adjacent to the commercial line at the Ironton Facility with over 1 mile of stainless-steel piping. The facility was completed in July 2019 and has been producing PureFive™ resin since that time. The FEU is considered a pilot scale replica of the larger commercial line at the Ironton Facility.
Previous report
The Ironton Facility
Previous report
Located on the same site as the FEU, we commenced construction in October 2020 of our first commercial-scale plant, the Ironton Facility. We commenced commissioning activities at the Ironton Facility in April 2023, and later in 2023, we achieved mechanical completion of the plant and commenced pellet production from post-industrial and post-consumer materials. The Ironton Facility is expected to have PureFive™ resin capacity of approximately 107 million pounds per year when fully operational. While the facility is currently operational, we are pacing production with the level of anticipated commercial sales, while working on improving the operating rates, reliability and product quality. During 2024, we initiated compounding operations to blend our resin with either post-industrial recycled material or virgin polypropylene, which is expected to improve product consistency and accelerate the product delivery to customers. We are currently focused on customer sampling and qualifications and believe that this will lead to meaningful future sales.
Previous report
During the first quarter of 2025, we reported our first quarterly revenues of approximately $1.6 million. Numerous customer trials are on-going and are expected to lead to higher future revenues; however, there is uncertainty as to the success or the timing of future orders from any trials.
Previous report
The Research and Development Lab
Previous report
The lease for our research and development lab in Durham, North Carolina commenced in 2023 and the facility opened in 2024. The lab is instrumental in developing cutting-edge analytical techniques to characterize polymer-solvent interaction in supercritical fluids, advancing fundamental process understanding to target hard to recycle polypropylene materials, generating insights into process modifications that drive energy reduction and capital expenditure reductions for future plant sites, leveraging research and development analytical techniques and expertise to allow industries with traditionally low recycling rates to adopt recycled polypropylene material, and supporting zero-waste efforts by engaging third parties to utilize byproducts, including polyethylene and other materials.
Previous report
The Augusta Facility
Previous report
In July 2021, we reached an agreement with the Augusta Economic Development Authority (“AEDA”) to build our first U.S. facility with multiple lines for both Feed PreP and purification in Augusta, Georgia (the “Augusta Facility”). We expect the approximately 200-acre location to eventually include up to eight production lines, which are expected to collectively have PureFive™ resin production capacity of approximately 1 billion pounds per year. When fully operational, each purification line at the Augusta Facility is expected to have annual production capacity of approximately 130 million pounds of PCT’s PureFive™ resin. We have allocated 40% of the Augusta Facility output for Lines 1 and 2 to existing customers and expect that additional offtake agreements will continue to be negotiated.
Previous report
On June 30, 2023, we executed an Economic Development Agreement (“EDA”) with the AEDA related to our plans to construct the Augusta Facility. Pursuant to the AEDA, we expect to receive certain property tax abatement benefits as well as certain other incentives, including site infrastructure development assistance (“Incentive Benefits”). In order to receive the Incentive Benefits under Phase One (as defined below) of the Augusta Project, we will be obligated to create 82 full-time jobs with investments of at least $440.0 million no later than December 31, 2026. If we elect to activate the second phase of the Augusta Project, we will be required to create an additional 25 full-time jobs and investments of $295.0 million no later than December 31, 2028. To the extent we fail to achieve an average of 80% of the jobs and investment commitments in any year over the 20-years of each phase, we will be required to make a repayment to the AEDA of a pro rata portion of the total value of the Incentive Benefits we received in such year.
Previous report
Also on June 30, 2023, we entered into a series of agreements with the AEDA to construct phase one (“Phase One”) of the Augusta Facility. We are leasing 150 acres of land (“Real Property”) owned by the AEDA and will construct buildings, building equipment, and other structures (the “Improvements”) on the land. We will also acquire and install the necessary processing, warehousing, and other equipment, as well as conveyors and pipelines (the “Equipment”, together with the Real Property and the Improvements, the “Augusta Project”). The Improvements and Equipment will be transferred to the AEDA and leased back to us. We anticipate that the first portion of Phase One will consist of one purification line. As noted above, construction of the first purification line must be completed by December 31, 2026.
Previous report
The legal sale-leaseback structure provides the Incentive Benefits to us as lessee of the Augusta Project. We will remain the owner of the Improvements and Equipment for accounting purposes during the term of the lease as we will have the right to acquire title to the Augusta Project for a nominal amount during the term and at the conclusion of the arrangement, which has an initial expiration date in 2044. The payments we make to the AEDA during the term of the arrangement are not otherwise expected to be material.
Previous report
In November 2024, we commenced early works construction activities including site clearing and grading. When early works are successfully completed, expected next steps should include underground utility installation, piling, and foundations. Pursuant to the EDA, we must continue construction progress on the first purification line under the first phase of the Augusta Project during 2025 or risk losing certain future Incentive Benefits. While we believe we have satisfied the contractual obligations regarding financing and construction of Phase One to date, the AEDA believes that it could seek to terminate our lease if we do not demonstrate further progress on Phase One. Market conditions remain challenging and have created uncertainty as to the timing or likelihood of success of the currently anticipated project financing for the Augusta Facility. As a result, we are currently pursuing various structures for project financing of the Augusta Facility. While we remain confident in our ability to finance the Augusta Facility, we are limiting our expenses and adjusting our timeline in light of this uncertainty. If we are unable to raise additional debt or equity, when desired, or on terms favorable to us, our business, financial condition, and results of operations would be adversely affected.
Previous report
Feedstock Pricing
Previous report
We see a robust pipeline of demand for our recycled polypropylene and we are seeing market acceptance of our “Feedstock+” pricing model for our PureFive™ resin. Our Feedstock+ pricing model divides the market cost of feedstock by a set yield-loss and adds a fixed price, which effectively passes on the cost of feedstock and reduces the risk of our operating margin volatility.
Previous report
For the Ironton Facility, our feedstock price was linked, in part, to changes in the Chemical Market Analysis, the index for virgin polypropylene, and a price schedule that contained a fixed, collared price around an index price range, which was further adjusted based on the percentage of polypropylene in the feedstock supplied. For the Augusta Facility and future purification facilities, we plan to link the feedstock price, in part, to the price of a #5 plastic bale of polypropylene as reported by recyclingmarkets.net (“Feedstock Market Pricing”). We will procure both feedstock in line with Feedstock Market Pricing as well as low value feedstocks that we can process, below Feedstock Market Pricing for the Augusta Facility.
Previous report
PreP Facilities
Previous report
We have installed a feedstock processing system with advanced sorting capabilities that can handle various types of plastics in addition to polypropylene (designated as #5 plastic). Our enhanced sorting should allow us to process plastic bales between #1 and #7. Our Feed PreP facilities extract polypropylene used in our purification process, while the non-polypropylene feed will be sorted, baled, and subsequently sold on the open market.
Previous report
We have built a Feed PreP facility in Denver, Pennsylvania ("Denver Facility"), which began operating in October 2024, to provide the required mix and quality of feedstock necessary to meet our offtake requirements at the Ironton Facility.
Previous report
In conjunction with the Denver Facility, we also plan to build and operate Feed PreP facilities in locations geographically near the feed sources to optimize our supply chain economics. During the third quarter of 2022, we experienced challenges obtaining the necessary water and sewer permits to construct our first planned Feed PreP facility in Central Florida. We are currently pursuing legal remedies with regard to its obligations for the remaining 8 years of its 11-year lease agreement for the Central Florida facility. We are also evaluating alternative preprocessing sites in other locations.
Previous report
On September 10, 2021, we filed for a FDA LNO for Conditions of Use A – H. Conditions of Use describe the temperature and duration at which a material should be tested to simulate the way the material is intended to be used. Conditions of Use C – H address many consumer product packaging requirements, including applications for hot filled and pasteurized, as well as room temperature, refrigerated and frozen applications. Generally speaking, Conditions of Use A and B relate to extreme temperature applications. Our LNO submission also defines the feedstock sources for our planned commercial recycling process, and this LNO submission pertained to (i) food grade post-industrial recycled feedstocks and (ii) food grade curbside post-consumer recycled feedstocks.
Previous report
On September 6, 2022, we received two separate notifications from the FDA with respect to the following two feedstock sources:
Previous report
(i) Food grade post-industrial recycled feedstocks: an FDA LNO for approving Conditions of Use A – H; and,
Previous report
(ii) Food-grade post-consumer recycled feedstock from stadiums: an FDA LNO for Conditions of Use E – G.
Previous report
On June 11, 2024, we received an additional LNO from the FDA, which expands upon the previous LNO and allows use of our PureFive™ resin (to the extent made from food grade post-consumer recycled material) in contact with all food types under FDA's Conditions of Use A through H.
Previous report
Future Expansion
Previous report
On January 17, 2023, we announced our first European purification facility, which is planned to be in Antwerp, Belgium. We are also planning to expand our production capabilities into Asia. Future expansion is dependent on successful completion of project financing.
Previous report
We reported approximately $1.6 million in revenues through the first three months of 2025, and have not yet reached significant continuous operational volumes at the Ironton Facility or significant revenue generation.
Previous report
Interest expense did not significantly change period over period.
Previous report
Our Ironton facility is working on improving its commercial operating capabilities, including its operating rates, reliability, and product quality. During the first quarter of 2025, we reported our first quarterly revenues of approximately $1.6 million. Numerous customer trials are on-going and are expected to lead to higher future revenues; however, there is uncertainty as to the success or timing of future orders from any successful trials.
Previous report
We believe that our current level of unrestricted liquidity is not sufficient to fund operations, outstanding commitments, and further our future growth plans. The conditions described above raise substantial doubt regarding our ability to continue as a going concern for a period of at least one year from the date of issuance of the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. See Note 2 -Summary of Significant Accounting Policies - Liquidity and Going Concern for further information.
Previous report
On September 11, 2024, we entered into subscription agreements with certain investors pursuant to which we sold, in a private placement, approximately $90.0 million in the aggregate and before deducting fees and other estimated offering expenses of (i) Series A Preferred Stock, par value $0.001 per share ("Series A Preferred Stock"); (ii) Common Stock and (iii) Series C Warrants.
Previous report
In an effort to alleviate these conditions, we are working to improve the operation of the Ironton Facility, and we continue to pursue commercialization of our products with potential customers. Meanwhile, on February 5, 2025, we entered into subscription agreements (the "Offering") with certain investors in a private placement for an aggregate of 4,091,293 shares of the Common Stock at a price of $8.0655 per share. The gross proceeds from the Offering were approximately $33.0 million before deducting fees and other estimated offering expenses. Refer to Note 4 -Common and Preferred Stock Transactions in the notes to the condensed consolidated financial statements included in the Quarterly Report on Form 10-Q for further information. Further, on March 31, 2025, we sold $18.6 million in aggregate par amount of Series A bonds owned by PCT LLC at a purchase price of $880 per $1,000 principal amount under a bond purchase agreement for net proceeds of $16.4 million, and during April 2025, we sold $11.8 million in aggregate par amount of Series A Bonds owned by PCT LLC at a purchase price of $880 per $1,000 principal amount under a bond purchase agreement for gross proceeds of $10.4 million. Refer to Note 3 -
Previous report
Long-term Debt and Bonds Payable in the notes to the condensed consolidated financial statements included in the Quarterly Report on Form 10-Q for further information. As of March 31, 2025, there were $99.0 million of outstanding bonds that we intend to, and have the ability to, re-market based on the need for additional liquidity. The re-marketing process may require the addition of certain covenants to enhance the marketability of the purchased Bonds. The ability to re-market the purchased Bonds with any such additional new covenants would require a further amendment to, or waiver of, provisions included within the Revolving Credit Facility. In addition, we have a $200.0 million Revolving Credit Facility with Sylebra Capital that is currently unused and expires on September 30, 2026, as extended on April 11, 2025. Any borrowings under the Revolving Credit Facility would accrue interest at SOFR plus 17.5% as of March 31, 2025.
Previous report
Our future capital requirements will depend on many factors, including the funding mechanism and construction schedule of additional facilities, funding needs to support other business opportunities, funding for general corporate purposes, debt service, and other challenges or unforeseen circumstances. As a low-revenue operating company, we continually review our cash outlays, pace of hiring, professional services and other expenditures, and capital commitments to proactively manage those needs in tandem with our available unrestricted cash balance. For future growth and investment, we expect to seek additional debt or equity financing from outside sources, which we may not be able to raise on terms favorable to us, or at all. If we are unable to raise additional debt or sell additional equity when desired, or if we are unable to manage our cash outflows, business, financial condition, and results of operations would be adversely affected. In addition, any financing arrangement may have potentially adverse effects on us and/or our stockholders. Debt financing (if available and undertaken) will increase expenses, must be repaid regardless of operating results and may involve restrictions limiting our operating flexibility. If we consummate an equity financing to raise additional funds, the percentage ownership of our existing stockholders will be reduced, and the new equity securities may have rights, preferences or privileges senior to those of the current holders of our common stock.
Previous report
Net cash used in operating activities for the three months ended March 31, 2025 was relatively consistent with the comparable prior year period. The primary driver of the change was due to changes in working capital during each respective period.
Reworded paragraphs (28)
Previous wording
PCT's ability to meet, and to continue to meet, applicable regulatory requirements for the use of PCT’s PureFive™ resin (as defined below) in food grade applications (including in the United States, Europe, Asia and other future international locations);
Current wording
PCT's ability to meet, and to continue to meet, applicable regulatory requirements for the use of PCT’s PureFive™ resin in food grade applications (including in the United States, Europe, Asia and other future international locations);
Previous wording
expectations and changes regarding PCT’s strategies and future financial performance, including its future business plans, expansion plans or objectives, prospective performance and opportunities and competitors, revenues, products and services, pricing, operating expenses, market trends, liquidity, cash flows and uses of cash, capital expenditures, and PCT’s ability to invest in growth initiatives;
Current wording
expectations and changes regarding PCT’s strategies and future financial performance, including its future business plans, expansion plans or objectives, prospective performance and opportunities and competitors, revenues, products and services, pricing, operating expenses, market trends, liquidity, cash flows and uses of cash, capital expenditures, and PCT’s ability to invest in growth initiatives, which could be impacted by significant changes to tariffs on foreign imports;
Previous wording
the ability of PCT’s first commercial-scale recycling facility, the Ironton Facility, to be appropriately certified by Leidos (as defined below), following certain performance and other tests, and commence full-scale commercial operations in a timely and cost-effective manner, or at all;
Current wording
the ability of PCT’s first commercial-scale recycling facility in Lawrence County, Ohio (the "Ironton Facility") to be appropriately certified by Leidos, following certain performance and other tests, and commence full-scale commercial operations in a timely and cost-effective manner, or at all;
Previous wording
PCT’s ability to obtain the necessary funding with respect to, and complete the construction of its first U.S. multi-line facility, located in Augusta, Georgia (the “Augusta Facility”) and its first commercial-scale European plant located in Antwerp, Belgium, as well as other projects to facilitate growth in a timely and cost-effective manner;
Current wording
PCT’s ability to complete the necessary funding with respect to, and complete the construction of its new polypropylene recycling facility in Thailand, its first commercial-scale European plant located in Antwerp, Belgium, and the multi-line purification facility to be built in Augusta, Georgia (the "Augusta Facility") in a timely and cost-effective manner;
Previous wording
PCT’s ability to establish, sort and process polypropylene plastic waste at its plastic waste prep (“Feed PreP”) facilities;
Current wording
PCT’s ability to procure, sort and process polypropylene plastic waste at its planned plastic waste prep (“Feed PreP”) facilities;
Previous wording
turnover or increases in employees and employee-related costs and changes in the availability of labor (including labor shortages);
Current wording
changes in the prices and availability of labor (including labor shortages);
Previous wording
The following discussion and analysis provides information that PCT’s management believes is relevant to an assessment and understanding of PCT’s interim condensed consolidated results of operations and financial condition. The discussion should be read together with the audited consolidated financial statements and the accompanying notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our most recent Annual Report on Form 10-K, as well as the unaudited interim condensed consolidated financial statements, together with related notes thereto, included elsewhere in this Quarterly Report on Form 10-Q. This discussion may contain forward-looking statements based upon current expectations that involve risks, uncertainties, and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” in our most recent Annual Report on Form 10-K. Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “we,” “us,” and “our,” are intended to mean the business and operations of PCT and its consolidated subsidiaries.
Current wording
The following discussion and analysis provides information that PCT’s management believes is relevant to an assessment and understanding of PCT’s interim condensed consolidated results of operations and financial condition. The discussion should be read together with the audited consolidated financial statements and the accompanying notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our most recent Annual Report on Form 10-K, as well as the unaudited interim condensed consolidated financial statements, together with related notes thereto, included elsewhere in this Quarterly Report on Form 10-Q. Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “we,” “us,” and “our,” are intended to mean the business and operations of PCT and its consolidated subsidiaries.
Previous wording
Letter of No Objection Submission and the Granting of FDA Food Packaging Clearances for Certain Feedstocks
Current wording
Letter of No Objection Submission ("LNO") and the Granting of Food and Drug Administration ("FDA") Food Packaging Clearances for Certain Feedstocks
Previous wording
Our FDA food contact grades are capable of being used for all food types per the conditions of use listed and per all applicable authorizations in the food contact regulations listed in the 21 CFR (Code of Federal Regulations, Title 21).
Current wording
Our FDA food contact grade resins are, subject to certain conditions, capable of being used for all food types per the conditions of use listed and per all applicable authorizations in the food contact regulations listed in the 21 CFR (Code of Federal Regulations, Title 21).
Previous wording
We are conducting additional testing and plan to make further LNO submissions for additional post-consumer recycled feedstock sources and expanded Conditions of Use.
Current wording
We are conducting additional testing and plan to make further LNO submissions for additional post-consumer recycled feedstock sources and expanded COU's.
Previous wording
Operating expenses to date have consisted mainly of personnel costs (including wages, salaries and benefits) and other costs directly related to operations at our operating facilities, including rent, depreciation, repairs and maintenance, utilities and supplies. Costs attributable to the design and development of the Ironton Facility, Augusta Facility, and Feed PreP facilities in Central Florida and Denver, Pennsylvania, are capitalized and, when placed in service, will be depreciated over the expected useful life of the asset. We expect our operating costs to increase as we continue to scale operations and increase headcount.
Current wording
Operating expenses to date have consisted mainly of personnel costs (including wages, salaries and benefits) and other costs directly related to operations at our operating facilities, including feedstock, rent, depreciation, repairs and maintenance, utilities and supplies. Costs attributable to the design and development of Feed PreP and purification facilities are capitalized and, when placed in service, depreciated over the expected useful life of the asset. We expect our operating costs to increase as we continue to scale operations and increase headcount.
Previous wording
Research and development expenses consist primarily of costs related to the development of the Technology, the facilities and equipment that will use the Technology to purify recycled polypropylene, and the processes needed to collect, sort, and prepare feedstock for purification. These include mainly personnel costs, depreciation for long-lived assets, third-party consulting costs, and the cost of various recycled waste. We expect our research and development expenses to increase for the foreseeable future as we increase investment in feedstock evaluation, including investment in new front-end feedstock mechanical separators to improve feedstock purity and increase the range of feedstocks PCT can process economically. In addition, we are increasing our in-house feedstock analytical capabilities, which will include additional supporting equipment and personnel.
Current wording
Research and development expenses consist primarily of costs related to the development of the Technology, the facilities and equipment that will use the Technology to purify recycled polypropylene, and the processes needed to collect, sort, and prepare feedstock for purification. These include mainly personnel costs, depreciation for long-lived assets, third-party consulting costs, and the cost of various recycled waste. Research and development expenses include evaluation of new front-end feedstock mechanical separators to improve feedstock purity and increase the range of feedstocks PCT can process economically. In addition, we are increasing our in-house feedstock analytical capabilities, which will include additional supporting equipment and personnel.
Previous wording
Comparison of three months ended March 31, 2025 and 2024
Current wording
Comparison of Three and Six Months Ended June 30, 2025 and 2024
Previous wording
The following table summarizes our operating results for the three months ended March 31, 2025 and 2024:
Current wording
The following table summarizes our operating results for the three and six months ended June 30, 2025 and 2024:
Previous wording
The Company reported approximately $1.6 million in revenues during the first quarter ended March 31, 2025, representing its first period of meaningful operations and sales. The Company is currently in various stages of customer application trials, which is anticipated to generate revenue growth in future periods.
Current wording
The Company reported approximately $1.7 million and $3.2 million in revenues during the three and six months ended June 30, 2025, respectively. 2025 is the first year of meaningful operations and sales. The Company is currently in various stages of customer application trials, which is anticipated to generate revenue growth in future periods.
Previous wording
Total cost of operations increased approximately $2.1 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. Cost of operations for the three months ended March 31, 2025 included approximately $1.7 million higher production-related costs due to the ramp-up in production that occurred during the quarter, $1.2 million higher employee-related expenses, $0.9 million in increased rent expense, and $0.3 million in higher equity-based compensation cost as a result of award issuances, partially offset by $1.8 million lower depreciation expense and $0.3 million in lower operational consulting costs.
Current wording
Cost of operations increased approximately $7.8 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. Cost of operations for the three months ended June 30, 2025 included a $3.7 million loss on disposal of fixed assets, $2.6 million higher production-related costs due to the ramp-up in production that has occurred during the current year as compared to the prior year, $1.8 million higher employee-related expenses, and $0.6 million higher supplies and materials, partially offset by $1.5 million lower facilities costs due to extra costs incurred during the prior year to progress operations at our Ironton Facility.
Previous wording
Research and development expenses decreased approximately $0.3 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. This decrease was primarily driven by $0.2 million of lower employee costs and $0.2 million of lower operational site costs, partially offset by $0.1 million of higher research and development activities.
Current wording
Research and development expenses decreased approximately $0.5 million for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. This decrease was primarily driven by $0.4 million of lower employee costs and $0.2 million of lower operational site costs, partially offset by $0.1 million of higher research and development activities.
Previous wording
Selling, general and administrative expenses decreased approximately $1.5 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. This decrease was primarily driven by approximately $2.1 million of lower legal costs mostly as a result of settlement of outstanding cases in the prior year, partially offset by $0.5 million of higher equity-based compensation from new awards issued since the prior year.
Current wording
Selling, general and administrative expenses decreased approximately $1.8 million for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. This decrease was primarily driven by approximately $6.0 million of lower legal costs mostly as a result of settlement of outstanding cases in the prior year, partially offset by $3.6 million of higher equity-based compensation from new awards issued since the prior year, including a special grant as discussed above, and $1.0 million higher employee-related expenses to support the growth in the business.
Previous wording
The decrease for the three-month period was primarily attributable to the liquidation of our available-for-sale investment portfolio earlier during 2024.
Current wording
Interest income for the three months ended June 30, 2025 remained relatively consistent with the three months ended June 30, 2024. The $3.1 million decrease for the six-month period was primarily attributable to the liquidation of our available-for-sale investment portfolio earlier during 2024.
Previous wording
During the three months ended March 31, 2025, the fair value of our liability-classified awards decreased approximately $56.7 million, primarily driven by a decrease in the underlying value of our common stock, combined with fewer warrants outstanding as a result of the exercise of the RTI warrants during the first quarter of 2025. During the three months ended March 31, 2024, the fair value of our liability-classified awards increased approximately $13.9 million mainly due to an increase in the underlying price of our common stock during the first quarter of 2024.
Current wording
During the three and six months ended June 30, 2025, the fair value of our liability-classified warrants increased approximately $86.7 million and $16.0 million, respectively, as compared to the same periods in 2024, primarily driven by an increase in the underlying value of our common stock, partially offset by fewer warrants outstanding as a result of the exercise of the RTI Warrants during the first quarter of 2025.
Previous wording
The Company recorded a loss associated with the repurchase of the Revenue Bonds during the three months ended March 31, 2024. There was no similar transaction during the three months ended March 31, 2025.
Current wording
The Company recorded a loss associated with the repurchase of the Revenue Bonds in the first quarter of 2024. There have been no similar transactions during 2025.
Previous wording
During the three months ended March 31, 2025, the fair value of the Series A Preferred Stock put option decreased by $3.1 million, resulting in a gain recorded in other income. Additionally, the Company recorded a net gain from insurance proceeds of approximately $1.3 million related to settlement of the shareholder derivative lawsuit, as disclosed in Note 12 -Commitments and Contingencies in the Notes to the Condensed Consolidation Financial Statements. These items were the primary drivers of the change from other expense for the three months ended March 31, 2024 to other income for the three months ended March 31, 2025.
Current wording
During the six months ended June 30, 2025, the $5.2 million in other income was primarily comprised of a $3.4 million decrease in the fair value of the Series A Stock put option, resulting in a gain recorded in other income, and a net gain from insurance proceeds of approximately $1.3 million related to settlement of the shareholder derivative lawsuit. During the six months ended June 30, 2024, the $1.1 million of other expense was primarily attributed to a $0.8 million impairment charge related to an operating right-of-use asset.
Previous wording
We commenced commercial operations in 2023 and to date have sold an insignificant amount of PureFive TM resin and have yet to reach significant continuous operational volumes, though we did report our first quarterly revenues for the three months ended March 31, 2025. Our ongoing operations have, to date, been funded by a combination of equity financing through the issuance of units, common stock and preferred stock, and the issuance of various debt instruments. The following is a summary of the components of our current liquidity. As of March 31, 2025, restricted cash consisted primarily of certain amounts required to support outstanding letters of credit and other collateral as well as initial construction commitments for the Augusta Facility.
Current wording
The following is a summary of the components of our current liquidity. As of June 30, 2025, restricted cash consisted primarily of certain amounts required to support outstanding letters of credit and other collateral, initial construction commitments for the Augusta Facility, and bond reserves for the Ironton Facility.
Previous wording
As of March 31, 2025, we had approximately $22.5 million of cash and cash equivalents and approximately $15.0 million of restricted cash. We also have a $200.0 million revolving credit facility with Sylebra Capital (the “Revolving Credit Facility”) that is currently unused and expires on September 30, 2026, per a recent amendment described below.
Current wording
As of June 30, 2025, we had approximately $284.1 million of cash and cash equivalents, which consists primarily of investments in money markets and commercial paper with original maturities of three months or less, as well as approximately $13.9 million of restricted cash. We also have a $200.0 million revolving credit facility with Sylebra Capital (the “Revolving Credit Facility”) that is undrawn and expires on September 30, 2026.
Previous wording
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. We do not have any off-balance sheet arrangements or interests in variable interest entities that would require consolidation. Note that while certain legally binding offtake arrangements have been entered into with customers, these arrangements are not unconditional and definite agreements subject only to customer closing conditions, and do not qualify as off-balance sheet arrangements required for disclosure.
Current wording
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. We do not have any off-balance sheet arrangements or interests in variable interest entities that would require consolidation. While certain legally binding offtake arrangements have been entered into with customers, these arrangements are not unconditional and definite agreements subject only to customer closing conditions, and do not qualify as off-balance sheet arrangements required for disclosure.
Previous wording
During the three months ended March 31, 2025, we reported cash used in investing activities of approximately $15.0 million, which was entirely comprised of cash paid for capital expenditures during that period. During the three months ended March 31, 2024, we reported cash provided by investing activities of approximately $32.0 million, which is comprised of approximately $77.0 million of cash proceeds from the sale of debt securities, partially offset by the purchase of debt securities totaling $30.6 million and capital expenditures of $14.3 million. Capital expenditures remained relatively consistent as compared to the prior year. We sold all of our debt securities during 2024 and had no similar type transactions during 2025.
Current wording
During the six months ended June 30, 2025, we reported cash used in investing activities of approximately $23.6 million, which was entirely comprised of cash paid for capital expenditures during that period. During the six months ended June 30, 2024, we reported cash provided by investing activities of approximately $23.9 million, which is comprised of approximately $79.2 million of cash proceeds from the sale of debt securities, partially offset by the purchase of debt securities totaling $30.6 million and capital expenditures of $24.7 million. We sold all of our debt securities during 2024 and had no similar type transactions during 2025.
Previous wording
We reported net cash provided by financing activities of approximately $49.8 million during the three months ended March 31, 2025 as compared to net cash used in financing activities of approximately $255.4 million during the three months ended March 31, 2024. This change was primarily attributable to $253.2 million paid to purchase the outstanding Revenue Bonds during 2024, $33.2 million of proceeds from the issuance of common stock during 2025, $16.4 million of proceeds from the sale of Revenue Bonds during 2025, $5.4 million in proceeds from the exercise of the RTI warrants during 2025, and $1.1 million of debt issuance costs paid during 2024, partially offset by $1.1 million of higher payments to repurchase shares during 2025 and $2.9 million of higher other payments for financing activities during 2025.
Current wording
We reported net cash provided by financing activities of approximately $355.6 million during the six months ended June 30, 2025 as compared to net cash used in financing activities of approximately $223.3 million during the six months ended June 30, 2024.
Previous wording
There have been no material changes regarding our indebtedness from the information we provided in our most recent Annual Report on Form 10-K, except as outlined in the information below. Refer to Note 3 -Long-Term Debt and Bonds Payable to the Notes to the condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q for additional information regarding our outstanding indebtedness.
Current wording
There have been no material changes regarding our indebtedness from the information we provided in our most recent Annual Report on Form 10-K, except as outlined in the information below. Refer to Note 8 -Long-Term Debt and Bonds Payable to our unaudited condensed consolidated financial statements included in Part I, Item 1. "Financial Statements."
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
changes in the prices and availability of materials, including those changes caused by inflation and supply chain conditions, such as increased transportation costs, and PCT’s ability to obtain materials in a timely and cost-effective manner;