EX-99.3 4 pctq32023ex993purecycleohi.htm EX-99.3
Exhibit 99.3
Unaudited Consolidated Financial Statements
PureCycle Technologies, LLC
September 30, 2023
1

PureCycle Technologies, LLC.
QUARTERLY SUBMISSION SUMMARY

Delivery Requirement: | Submission Compliance
Interim Financial Statements (Guarantor) | See Form 10-Q for the period ended 9/30/2023 as filed with the SEC.
Interim Financial Statements (Company) | Included herein
Compliance Certificates | Included herein for Guarantor and Company
Operating Statements a) Budget to Actual for the period b) Total product sold c) Amount of Product sold under offtake contracts (in total) and amount of other products sold (with information about sale/purchaser) d) Production Yield and values by weight/value e) Supplied waste processed by weight / values f) IHS/Chemical Data indices used g) Terms/ extensions / replacements of Offtake or Feedstock contracts h) Additional production capacity under development i) hours of operation for the Project | a) Refer to budget to actual b) Not applicable for Q3. There has been no product sold. c) Not applicable for Q3. There has been no product sold under Offtake Contracts or of other Products which require disclosure. d) Zero. e) 2.4M lbs. processed for the quarter ended September 30, 2023. f) IHS Average Price for Q3 = $0.5617/lb Chemical Market Data Q3 = $0.3617/lb g) None other than those previously disclosed. h) Not applicable. There have been no changes to production capacity. i) Zero hours of beneficial operations.
Reconciliation Statements (Operating Revenue Fund) | Not applicable for Q3.

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PureCycle Technologies, LLC.
TABLE OF CONTENTS

| Page
Unaudited Consolidated Financial Statements | 4
Balance Sheets as of September 30, 2023 (Unaudited) and December 31, 2022 | 4
Unaudited Statements of Operations for the Three Months Ended September 30, 2023 and 2022 | 5
Unaudited Statements of Member's Equity for the Nine months ended September 30, 2023 and 2022 | 6
Unaudited Statements of Cash Flows for for the Nine months ended September 30, 2023 and 2022 | 7
Comparison of Actual to Budgeted Results for the Three Months Ended September 30, 2023 and 2022 | 8
Covenant Compliance for the Three Months Ended September 30, 2023 | 9

3

PureCycle Technologies, LLC.
CONSOLIDATED BALANCE SHEETS

| (Unaudited) |  |
(in thousands) | September 30, 2023 |  | December 31, 2022
CURRENT ASSETS |  |  |
Cash and cash equivalents | $ 780 |  | $ 50,928
Restricted cash - current | 19,827 |  | 29,389
Prepaid expense and other current assets | 6,449 |  | 1,612
Total current assets | 27,056 |  | 81,929
Restricted cash - noncurrent | 150,149 |  | 93,415
Property, plant and equipment, net | 420,959 |  | 373,848
Operating lease right-of-use assets | 4,802 |  | 5,042
Other long term assets | 4,071 |  | 4,206
TOTAL ASSETS | $ 607,037 |  | $ 558,440
LIABILITIES AND MEMBER'S EQUITY
CURRENT LIABILITIES |  |  |
Accounts payable | $ 1,706 |  | $ 816
Accrued expenses | 18,602 |  | 26,715
Accrued interest | 6,127 |  | 1,532
Current portion of long-term debt | 3,425 |  | —
Total current liabilities | 29,860 |  | 29,063
Deferred revenue | 5,000 |  | 5,000
Bonds payable | 230,901 |  | 233,513
Operating lease right-of-use liabilities | 3,633 |  | 3,956
Other Liabilities | 1,054 |  | 1,117
Due to parent | 282,766 |  | 188,989
TOTAL LIABILITIES | $ 553,214 |  | $ 461,638
MEMBER'S EQUITY |  |  |
LLC Member Interest | 223,387 |  | 223,387
Accumulated deficit | (169,564) |  | (126,585)
TOTAL MEMBERS' EQUITY | $ 53,823 |  | $ 96,802
TOTAL LIABILITIES AND MEMBERS' EQUITY | $ 607,037 |  | $ 558,440

4

PureCycle Technologies, LLC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

| Three months ended September 30,
| 2023 |  | 2022
(in thousands) |  |  |
Costs and expenses |  |  |
Operating costs | $ | 17,323 |  |  | $ | 3,076 |
Research and development | 48 |  |  | 210 |
Selling, general and administrative | 2,692 |  |  | 1,942 |
Total operating costs and expenses | 20,063 |  |  | 5,228 |
Interest expense (income), net | 3,315 |  |  | (481) |
Other expense | (13) |  |  | (32) |
Total other expense | 3,302 |  |  | (513) |
Net loss | $ | (23,365) |  |  | $ | (4,715) |

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PureCycle Technologies, LLC.
CONSOLIDATED STATEMENTS OF MEMBER'S EQUITY
(Unaudited)

|  | For the nine months ended September 30, 2023
(in thousands) |  | LLC Member Interest |  | Accumulated deficit |  | Total Member's Equity
Balance, December 31, 2022 |  | $ 223,387 |  | $ (126,585) |  | $ 96,802
Net Loss |  | — |  | (6,685) |  | (6,685)
Balance, March 31, 2023 |  | $ 223,387 |  | $ (133,270) |  | $ 90,117
Net Loss |  | — |  | (12,929) |  | (12,929)
Balance, June 30, 2023 |  | $ 223,387 |  | $ (146,199) |  | $ 77,188
Net Loss |  | — |  | $ (23,365) |  | (23,365)
Balance, September 30, 2023 |  | $ 223,387 |  | $ (169,564) |  | $ 53,823
|  | For the nine months ended September 30, 2022
(in thousands) |  | LLC Member Interest |  | Accumulated deficit |  | Total Member's Equity
Balance, December 31, 2021 |  | $ 223,387 |  | $ (104,276) |  | $ 119,111
Net Loss |  | — |  | (5,480) |  | (5,480)
Balance, March 31, 2022 |  | $ 223,387 |  | $ (109,756) |  | $ 113,631
Net Loss |  | — |  | (5,459) |  | (5,459)
Balance, June 30, 2022 |  | $ 223,387 |  | $ (115,215) |  | $ 108,172
Net Loss |  | — |  | (4,715) |  | (4,715)
Balance, September 30, 2022 |  | $ 223,387 |  | $ (119,930) |  | $ 103,457

6

PureCycle Technologies, LLC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

|  | Nine months ended September 30,
|  | 2023 |  | 2022
Cash flows from operating activities |  |  |  |
Net loss |  | $ | (42,979) |  |  | $ | (15,654) |
Adjustments to reconcile net loss to net cash used in operating activities |  |  |  |
Depreciation expense |  | 13,149 |  |  | 1,935 |
Accretion of debt instrument discounts |  | 192 |  |  | 177 |
Amortization of debt issuance costs |  | 621 |  |  | 569 |
Operating lease amortization |  | 874 |  |  | 126 |
Changes in operating assets and liabilities: |  |  |  |
Prepaid expenses and other current assets |  | (4,837) |  |  | (1,723) |
Prepaid expenses and other non-current assets |  | 135 |  |  | 24 |
Accounts payable |  | 982 |  |  | 1,031 |
Accrued expenses |  | 1,619 |  |  | 1,505 |
Accrued interest |  | 6,019 |  |  | 324 |
Operating right-of-use liabilities |  | (686) |  |  | (122) |
Net cash used in operating activities |  | $ | (24,911) |  |  | $ | (11,808) |
Cash flows from investing activities |  |  |  |
Purchases of property, plant and equipment |  | (71,818) |  |  | (124,628) |
Net cash used in investing activities |  | $ | (71,818) |  |  | $ | (124,628) |
Cash flows from financing activities |  |  |  |
Due to Parent |  | 93,777 |  |  | 39,216 |
Payments on capital leases |  | (23) |  |  | (31) |
Net cash provided by financing activities |  | $ | 93,754 |  |  | $ | 39,185 |
Net (decrease) increase in cash and restricted cash |  | (2,976) |  |  | (97,251) |
Cash and restricted cash, beginning of year |  | 173,732 |  |  | 229,561 |
Cash and restricted cash, end of year |  | $ | 170,756 |  |  | $ | 132,310 |
Supplemental disclosure of cash flow information |  |  |  |
Non-cash operating activities: |  |  |  |
Interest paid during the period, net of capitalized interest |  | $ | 650 |  |  | $ | 650 |
Non-cash investing activities: |  |  |  |
Additions to property, plant, and equipment in accrued expenses |  | $ | 14,968 |  |  | $ | 19,586 |
Additions to property, plant, and equipment in accounts payable |  | $ | 422 |  |  | $ | 367 |
Additions to property, plant, and equipment in accrued interest |  | $ | — |  |  | $ | 4,271 |

7

PureCycle Technologies, LLC.
BUDGET TO ACTUAL

| For the Quarter Ended September 30, 2023
| Actual |  | Budget |  | $ Variance |  | % Variance |  | Explanations
(in thousands) |  |  |  |  | favorable / (unfavorable) |  |
Costs and expenses |  |  |  |  |  |  |  |  |
Operating costs | $ | 17,323 |  |  | $ | 16,617 |  |  | $ (706) |  | (4) % |  | ~$5.3M unfavorable non-cash depreciation expense, offset by favorable variances in variable costs due to production delays.
Research and development | 48 |  | 40 |  | (8) |  | (20) % |  | immaterial for review
Selling, general and administrative | 2,692 |  | 5,456 |  | 2,764 |  | 51 % |  | ~$2M favorable for shared services allocation vs. budget for Q3
Total operating costs and expenses | 20,063 |  | 22,113 |  | 2,050 |  | 9 % |  |
Interest expense, net | $ 3,315 |  | $ 4,872 |  | $ 1,557 |  | 32 % |  | $4.8M of interest expense offset by $1.6M of interest income
Other expense | (13) |  | — |  | 13 |  | 100 % |  | immaterial for review
Total other expense, net | $ 3,302 |  | $ 4,872 |  | $ 1,570 |  | 32 % |  |
Net loss | $ | (23,365) |  |  | $ | (26,985) |  |  | $ 3,620 |  | 13 % |  |

8

PureCycle Technologies, LLC.
COVENANT COMPLIANCE

Days Cash on Hand: >75 | As of September 30, 2023 |
Cash on Hand1 | $ | 102,970 |  |
Operating Expenses2 | (11,275) |
Debt Service for Period3 | — |
Total Operating Expenses + Debt Service | $ | (11,275) |  |
Daily Cash Required4 | 123 |
Days Cash on Hand | 840 | pass

Minimum Cash Required (at least $100M) | As of September 30, 2023 |
Cash & cash equivalents | $ | 780 |  |
Liquidity Escrow Reserve | 51,186 |
PureCycle Trustee Account | 51,003 |
Operating Revenue Escrow Fund | 273 |
Total Cash | $ | 103,242 |  | pass

1 Cash on hand includes the following amounts: Unrestricted cash & cash equivalents, the PureCycle Trustee Account, and the Operating Revenue Fund
2 Operating expenses include all operating costs except for depreciation and amortization
3 None for Q2 2023
4 Daily cash required = (total operating expenses + debt service) / days in period
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