NET INCOME (LOSS) PER SHARE

9 Months Ended

Sep. 30, 2023

The Company follows the two-class method when computing net loss per common share when shares are issued that meet the definition of participating securities. The two-class method requires income available to common shareholders for the period to be allocated between common and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. The two-class method also requires losses for the period to be allocated between common and participating securities based on their respective rights if the participating security contractually participates in losses. As holders of participating securities do not have a contractual obligation to fund losses, undistributed net losses are not allocated to nonvested restricted stock for purposes of the loss per share calculation.

Presented in the table below is a reconciliation of the numerator and denominator for the basic earnings per share (“EPS”) calculations for the three and nine months ended September 30, 2023 and 2022 (in thousands):


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022

Net income (loss) attributable to PureCycle Technologies	$	4,886	$	(34,948)	$	(77,532)	$	(75,384)
Less income attributable to participating warrants	(480)		—		—		—
Net income (loss) attributable to common shareholders	$	4,406	$	(34,948)	$	(77,532)	$	(75,384)

Weighted average common shares outstanding, basic	164,018		163,490		163,783		153,513
Net loss per share attributable to common stockholder, basic	$	0.03	$	(0.21)	$	(0.47)	$	(0.49)

Presented in the table below is a reconciliation of the numerator and denominator for the diluted EPS calculations for the three and nine months ended September 30, 2023 and 2022 (in thousands):


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Numerator:
Net income (loss) attributable to PureCycle Technologies	$	4,886	$	(34,948)	$	(77,532)	$	(75,384)
Less change in fair value of RTI Warrants	(4,049)		—		(1,485)		(553)

Less income attributable to participating warrants	(81)		—		—		—
Net income (loss) attributable to common shareholders	$	756	$	(34,948)	$	(79,017)	$	(75,937)
Denominator:
Weighted average common shares outstanding, basic	164,018		163,490		163,783		153,513

Add common equivalent shares from warrants	395		—		197		186
Add common equivalent shares from equity awards	1,135		—		—		—
Weighted average common shares outstanding, diluted	165,548		163,490		163,980		153,699

Net loss per share attributable to common stockholder, diluted	$	0.00	$	(0.21)	$	(0.48)	$	(0.49)

Certain outstanding common share equivalents were excluded from the computation of diluted net income (loss) per share attributable to common stockholders for the periods presented as including them would have been anti-dilutive. For the three months ended September 30, 2023 and 2022, the Company had outstanding instruments of approximately 23.8 million and 24.7 million warrants, 0.6 million and 0.6 million stock options, 0.7 million and 2.6 million non-vested restricted stock units, 1.5 million and 1.1 million non-vested performance stock units, 4.0 million and 4.0 million contingently-issuable shares related to the Earnout, and 16.9 million and 0 shares issuable upon conversion of the Green Convertible Notes (as described further in Note 3 – Notes Payable and Debt Instruments) which could be dilutive to the calculation in the future, respectively. For the nine months ended September 30, 2023 and 2022, the Company had outstanding instruments of approximately 23.8 million and 23.8 million warrants, 1.1 million and 0.6 million stock options, 3.1 million and 2.6 million non-vested restricted stock units, 1.5 million and 1.1 million non-vested performance stock units, 4.0 million and 4.0 million contingently-issuable shares related to the Earnout, and 16.9 million and 0 shares issuable upon conversion of the Green Convertible Notes which could be dilutive to the calculation in the future, respectively.