PureCycle Technologies (PCT) risk factors, FY2024 10-K

Risks Related to PCT’s Status as a Low Revenue Early Commercial Stage Company

1. 01PCT is a low revenue early commercial stage company and may never achieve or sustain profitability
2. 02PCT’s ability to be profitable in the future will depend on PCT’s ability to successfully commercialize PureFive™ resin products, and any other products PCT may develop in the future, to scale in the United States, Europe and beyond
3. 03The License Agreement sets forth certain construction and sales deadlines which, if missed, could result in a termination or conversion of the license granted under the License Agreement
4. 04PCT’s outstanding secured and unsecured indebtedness, ability to incur additional debt and the provisions in the agreements governing PCT’s debt, and certain other agreements, could have a material adverse effect on PCT’s business, financial condition, results of operations and prospects
5. 05PCT faces risks and uncertainties related to litigation, regulatory actions and investigations
6. 06divert management resources, or otherwise have a material adverse effect on PCT’s business, financial condition, results of operations and prospects

Risks Related to PCT’s Operations

1. 07Delays in commissioning and obtaining an independent engineer’s certificate of operational performance at the Ironton Facility or any new project could severely impact PCT’s business, financial condition, results of operations and prospects
2. 08Construction of one or more additional pre-processing and purification facilities may be delayed or abandoned
3. 09Initially, PCT will rely on a single facility for all of its operations, and its business is not diversified
4. 10Cybersecurity incidents and the failure to maintain the integrity of PCT’s systems or infrastructure, or those of third parties with which PCT does business, could have a material adverse effect on PCT’s business, financial condition, results of operations and prospects
5. 11PCT may be unable to sufficiently protect its proprietary rights and may encounter disputes from time to time relating to its use of the intellectual property of third parties
6. 12Climate change, or legal, regulatory or market measures to address climate change may materially adversely affect our financial condition and business operations
7. 13PCT may be negatively impacted by volatility in the political and economic environment, which could have an adverse impact on PCT’s business, financial condition, results of operations and prospects

Risks Related to PCT’s Production of PureFive™ Resin

1. 14There is no guarantee the Technology is scalable to commercial-scale profitability
2. 15PCT may not be successful in consummating strategic endeavors for the sale of PureFive™ products
3. 16PCT’s failure to secure waste polypropylene could have a negative impact on PCT’s business, financial condition, results of operations and prospects
4. 17There is no guarantee the Feed PreP facilities will be viable or achieve the expected efficiencies
5. 18There is no guarantee the “Feedstock+” pricing model will be successful

Risks Related to the Market for PureFive™ Resin

1. 19The market for PureFive™ resin is still in the development phase and the acceptance of PureFive™ resin by manufacturers and potential customers is not guaranteed
2. 20Certain of PCT’s offtake agreements are subject to index pricing, and fluctuation in index prices may adversely impact PCT’s financial results
3. 21Delays to direct customer commercial sales may adversely impact PCT's financial results

Risks Related to Regulatory Developments

1. 22The Company’s current LNO from the FDA allows for purified product to be 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)
2. 23PureFive™ resin does not meet applicable regulatory requirements in a particular country or at all, then PCT may face reduced market demand in those countries and PCT’s business, financial condition, results of operations and prospects will be adversely affected
3. 24Legislative, regulatory or judicial developments could affect PCT’s business, financial condition, results of operations and prospects

Risks Related to Human Capital Management

1. 25PCT is dependent on management and key personnel, and PCT’s business would suffer if it fails to retain its key personnel and attract additional highly skilled employees

Risks Related to PCT’s Common Stock

1. 26Certain current and former stockholders of PCT have the right to elect a certain number of directors to PCT’s board of directors
2. 27Future offerings of debt or offerings or issuances of equity securities by PCT may adversely affect the market price of PCT’s common stock or otherwise dilute all other stockholders
3. 28Conversion of the Convertible Notes may dilute the ownership interest of PCT stockholders or may otherwise depress the price of our common stock
4. 29PCT may be unable to obtain additional financing to fund the operations and growth of the business