Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 10, 2021 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-40234 | |
Entity Registrant Name | PureCycle Technologies, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 86-2293091 | |
Entity Address, Address Line One | 5950 Hazeltine National Drive, | |
Entity Address, Address Line Two | Suite 650 | |
Entity Address, City or Town | Orlando | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 32822 | |
City Area Code | 877 | |
Local Phone Number | 648-3565 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 125,025,204 | |
Amendment Flag | false | |
Entity Central Index Key | 0001830033 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Common Stock, par value $0.001 per share | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | PCT | |
Security Exchange Name | NASDAQ | |
Warrants, each exercisable for one share of common stock, $0.001 par value per share, at an exercise price of $11.50 per share | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Warrants, each exercisable for one share of common stock, $0.001 par value per share, at an exercise price of $11.50 per share | |
Trading Symbol | PCTTW | |
Security Exchange Name | NASDAQ | |
Units, each consisting of one share of common stock, $0.001 par value per share, and three quarters of one warrant | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Units, each consisting of one share of common stock, $0.001 par value per share, and three quarters of one warrant | |
Trading Symbol | PCTTU | |
Security Exchange Name | NASDAQ |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
CURRENT ASSETS | ||
Cash | $ 36,672,000 | $ 64,492,000 |
Debt securities available for sale | 184,575,000 | 0 |
Prepaid expenses and other current assets | 2,793,000 | 446,000 |
Total current assets | 224,040,000 | 64,938,000 |
Restricted cash | 272,879,000 | 266,082,000 |
Prepaid expenses and other non-current assets | 5,807,000 | 2,890,000 |
Property, plant and equipment, net | 189,222,000 | 74,067,000 |
TOTAL ASSETS | 691,948,000 | 407,977,000 |
CURRENT LIABILITIES | ||
Accounts payable | 2,084,000 | 1,058,000 |
Accrued expenses | 44,385,000 | 26,944,000 |
Accrued interest | 7,798,000 | 4,951,000 |
Notes payable – current | 0 | 122,000 |
Total current liabilities | 54,267,000 | 33,075,000 |
NON-CURRENT LIABILITIES | ||
Deferred revenue | 5,000,000 | 0 |
Notes payable | 59,670,000 | 26,477,000 |
Bonds payable | 232,270,000 | 235,676,000 |
Warrant liability | 9,530,000 | 0 |
Other non-current liabilities | 1,076,000 | 1,000,000 |
TOTAL LIABILITIES | 361,813,000 | 296,228,000 |
COMMITMENT AND CONTINGENCIES | 0 | 0 |
STOCKHOLDERS' EQUITY | ||
Additional paid-in capital | 468,421,000 | 192,381,000 |
Accumulated other comprehensive loss | (17,000) | 0 |
Accumulated deficit | (138,387,000) | (80,714,000) |
TOTAL STOCKHOLDERS' EQUITY | 330,135,000 | 111,749,000 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 691,948,000 | 407,977,000 |
Common Stock | ||
STOCKHOLDERS' EQUITY | ||
Common stock, issued | 118,000 | 0 |
Class A Common Units | ||
STOCKHOLDERS' EQUITY | ||
Common stock, issued | 0 | 38,000 |
Class B Preferred Units | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, issued | 0 | 21,000 |
Class B-1 Preferred Units | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, issued | 0 | 16,000 |
Class C Profits Units | ||
STOCKHOLDERS' EQUITY | ||
Common stock, issued | $ 0 | $ 7,000 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Common stock, par value (in usd per share) | $ 0.001 | |
Common stock, shares authorized (in shares) | 250,000,000 | |
Common stock, shares issued (in shares) | 118,240,000 | 0 |
Common stock, shares outstanding (in shares) | 118,240,000 | 0 |
Preferred stock, par value (in usd per share) | $ 0.001 | |
Preferred stock, shares authorized (in shares) | 25,000,000 | |
Preferred stock, shares issued (in shares) | 0 | |
Preferred stock, shares outstanding (in shares) | 0 | |
Common Stock | ||
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in shares) | 118,251,000 | 0 |
Common stock, shares outstanding (in shares) | 118,251,000 | 0 |
Class A Common Units | ||
Common stock, par value (in usd per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 0 | 3,981,000 |
Common stock, shares issued (in shares) | 0 | 3,612,000 |
Common stock, shares outstanding (in shares) | 0 | 3,612,000 |
Class B Preferred Units | ||
Preferred stock, par value (in usd per share) | $ 0 | $ 0 |
Preferred stock, shares authorized (in shares) | 0 | 1,938,000 |
Preferred stock, shares issued (in shares) | 0 | 1,938,000 |
Preferred stock, shares outstanding (in shares) | 0 | 1,938,000 |
Class B-1 Preferred Units | ||
Preferred stock, par value (in usd per share) | $ 0 | $ 0 |
Preferred stock, shares authorized (in shares) | 0 | 1,146,000 |
Preferred stock, shares issued (in shares) | 0 | 1,105,000 |
Preferred stock, shares outstanding (in shares) | 0 | 1,105,000 |
Class C Profits Units | ||
Common stock, par value (in usd per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 0 | 1,069,000 |
Common stock, shares issued (in shares) | 0 | 865,000 |
Common stock, shares outstanding (in shares) | 0 | 775,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Costs and expenses | ||||
Operating costs | $ 2,687 | $ 3,564 | $ 7,228 | $ 7,040 |
Research and development | 330 | 171 | 1,101 | 528 |
Selling, general and administrative | 24,489 | 2,232 | 39,372 | 4,518 |
Total operating costs and expenses | 27,506 | 5,967 | 47,701 | 12,086 |
Interest expense | 1,843 | 642 | 5,722 | 1,827 |
Change in fair value of warrants | (8,369) | 0 | 4,893 | 1,775 |
Other income | (3) | 0 | (206) | (100) |
Total other expense | (6,529) | 642 | 10,409 | 3,502 |
Net loss | $ (20,977) | $ (6,609) | $ (58,110) | $ (15,588) |
Loss per share | ||||
Basic (in usd per share) | $ (0.18) | $ (0.28) | $ (0.61) | $ (0.75) |
Diluted (in usd per share) | $ (0.18) | $ (0.28) | $ (0.61) | $ (0.75) |
Weighted average common shares | ||||
Basic (in shares) | 118,255 | 27,156 | 95,773 | 27,156 |
Diluted (in shares) | 118,255 | 27,156 | 95,773 | 27,156 |
Other comprehensive loss: | ||||
Unrealized loss on debt securities available for sale | $ 89 | $ 0 | $ (17) | $ 0 |
Total comprehensive loss | $ (20,888) | $ (6,609) | $ (58,127) | $ (15,588) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Removal of beneficial conversion feature upon adoption of ASU 2020-06 | As reported | Conversion of stock | Common StockCommon Stock | Common StockCommon StockAs reported | Common StockClass A Common Units | Common StockClass A Common UnitsAs reported | Common StockClass A Common UnitsConversion of stock | Common StockClass C Profits Units | Common StockClass C Profits UnitsAs reported | Common StockClass C Profits UnitsConversion of stock | Preferred StockClass B Preferred Units | Preferred StockClass B Preferred UnitsAs reported | Preferred StockClass B Preferred UnitsConversion of stock | Preferred StockClass B-1 Preferred Units | Preferred StockClass B-1 Preferred UnitsAs reported | Preferred StockClass B-1 Preferred UnitsConversion of stock | Additional paid-in capital | Additional paid-in capitalRemoval of beneficial conversion feature upon adoption of ASU 2020-06 | Additional paid-in capitalAs reported | Additional paid-in capitalConversion of stock | Accumulated other comprehensive loss | Accumulated other comprehensive lossAs reported | Accumulated deficit | Accumulated deficitRemoval of beneficial conversion feature upon adoption of ASU 2020-06 | Accumulated deficitAs reported |
Beginning balance (in shares) at Dec. 31, 2019 | 0 | 0 | 27,156,000 | 2,581,000 | 24,575,000 | 4,061,000 | 436,000 | 3,625,000 | 18,388,000 | 1,728,000 | 16,660,000 | 9,300,000 | 630,000 | 8,670,000 | |||||||||||||
Beginning balance at Dec. 31, 2019 | $ 2,380 | $ 2,380 | $ 0 | $ 0 | $ 0 | $ 27 | $ 387 | $ (360) | $ 4 | $ 4,054 | $ (4,050) | $ 18 | $ 1,898 | $ (1,880) | $ 9 | $ 23,656 | $ (23,647) | $ 30,044 | $ 107 | $ 29,937 | $ 0 | $ 0 | $ (27,722) | $ (27,722) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||
Issuance of units (in shares) | 4,578,000 | ||||||||||||||||||||||||||
Issuance of units | 11,574 | $ 5 | 11,569 | ||||||||||||||||||||||||
Issuance of units upon vesting of Legacy PCT profits interests (in shares) | 362,000 | ||||||||||||||||||||||||||
Issuance of units upon vesting of Legacy PCT profits interests | 417 | 417 | |||||||||||||||||||||||||
Net loss | (4,564) | (4,564) | |||||||||||||||||||||||||
Ending balance (in shares) at Mar. 31, 2020 | 0 | 27,156,000 | 4,423,000 | 18,388,000 | 13,878,000 | ||||||||||||||||||||||
Ending balance at Mar. 31, 2020 | 9,807 | $ 0 | $ 27 | $ 4 | $ 18 | $ 14 | 42,030 | 0 | (32,286) | ||||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 0 | 0 | 27,156,000 | 2,581,000 | 24,575,000 | 4,061,000 | 436,000 | 3,625,000 | 18,388,000 | 1,728,000 | 16,660,000 | 9,300,000 | 630,000 | 8,670,000 | |||||||||||||
Beginning balance at Dec. 31, 2019 | $ 2,380 | 2,380 | 0 | $ 0 | $ 0 | $ 27 | $ 387 | $ (360) | $ 4 | $ 4,054 | $ (4,050) | $ 18 | $ 1,898 | $ (1,880) | $ 9 | $ 23,656 | $ (23,647) | 30,044 | 107 | 29,937 | 0 | 0 | (27,722) | (27,722) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||
Issuance of units upon vesting of Legacy PCT profits interests (in shares) | 0 | ||||||||||||||||||||||||||
Net loss | $ (15,588) | ||||||||||||||||||||||||||
Ending balance (in shares) at Sep. 30, 2020 | 0 | 27,156,000 | 5,818,000 | 18,388,000 | 16,316,000 | ||||||||||||||||||||||
Ending balance at Sep. 30, 2020 | 6,835 | $ 0 | $ 27 | $ 6 | $ 18 | $ 16 | 50,078 | 0 | (43,310) | ||||||||||||||||||
Beginning balance (in shares) at Mar. 31, 2020 | 0 | 27,156,000 | 4,423,000 | 18,388,000 | 13,878,000 | ||||||||||||||||||||||
Beginning balance at Mar. 31, 2020 | 9,807 | $ 0 | $ 27 | $ 4 | $ 18 | $ 14 | 42,030 | 0 | (32,286) | ||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||
Issuance of units (in shares) | 393,000 | ||||||||||||||||||||||||||
Issuance of units | 920 | $ 0 | 920 | ||||||||||||||||||||||||
Issuance of units upon vesting of Legacy PCT profits interests (in shares) | 147,000 | ||||||||||||||||||||||||||
Issuance of units upon vesting of Legacy PCT profits interests | 173 | $ 1 | 172 | ||||||||||||||||||||||||
Net loss | (4,415) | (4,415) | |||||||||||||||||||||||||
Ending balance (in shares) at Jun. 30, 2020 | 0 | 27,156,000 | 4,570,000 | 18,388,000 | 14,271,000 | ||||||||||||||||||||||
Ending balance at Jun. 30, 2020 | 6,485 | $ 0 | $ 27 | $ 5 | $ 18 | $ 14 | 43,122 | 0 | (36,701) | ||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||
Issuance of units (in shares) | 2,045,000 | ||||||||||||||||||||||||||
Issuance of units | 5,012 | $ 2 | 5,010 | ||||||||||||||||||||||||
Issuance of units upon vesting of Legacy PCT profits interests (in shares) | 1,256,000 | ||||||||||||||||||||||||||
Issuance of units upon vesting of Legacy PCT profits interests | 1,963 | $ 1 | 1,962 | ||||||||||||||||||||||||
Redemption of vested profit units (in shares) | (8,000) | ||||||||||||||||||||||||||
Redemption of vested profit units | (16) | (16) | |||||||||||||||||||||||||
Net loss | (6,609) | (6,609) | |||||||||||||||||||||||||
Ending balance (in shares) at Sep. 30, 2020 | 0 | 27,156,000 | 5,818,000 | 18,388,000 | 16,316,000 | ||||||||||||||||||||||
Ending balance at Sep. 30, 2020 | 6,835 | $ 0 | $ 27 | $ 6 | $ 18 | $ 16 | 50,078 | 0 | (43,310) | ||||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 0 | 0 | 37,998,000 | 3,612,000 | 34,386,000 | 6,711,000 | 775,000 | 5,936,000 | 20,628,000 | 1,938,000 | 18,690,000 | 16,322,000 | 1,105,000 | 15,217,000 | |||||||||||||
Beginning balance at Dec. 31, 2020 | 111,749 | $ (30,638) | 111,749 | 0 | $ 0 | $ 0 | $ 38 | $ 88,081 | $ (88,043) | $ 7 | $ 11,967 | $ (11,960) | $ 21 | $ 20,071 | $ (20,050) | $ 16 | $ 41,162 | $ (41,146) | 192,381 | $ (31,075) | 31,182 | 161,199 | 0 | 0 | (80,714) | $ 437 | (80,714) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||
Issuance of units upon vesting of Legacy PCT profits interests (in shares) | 116,000 | ||||||||||||||||||||||||||
Issuance of units upon vesting of Legacy PCT profits interests | 239 | 239 | |||||||||||||||||||||||||
Redemption of vested profit units (in shares) | (5,000) | ||||||||||||||||||||||||||
Redemption of vested profit units | (36) | (36) | |||||||||||||||||||||||||
Merger Recapitalization (in shares) | 81,754,000 | (37,998,000) | (6,822,000) | (20,628,000) | (16,322,000) | ||||||||||||||||||||||
Merger Recapitalization | 0 | $ 82 | $ (38) | $ (7) | $ (21) | $ (16) | |||||||||||||||||||||
ROCH Shares Recapitalized, Net of Redemptions, Warrant Liability and Issuance Costs of $27.9 million (in shares) | 34,823,000 | ||||||||||||||||||||||||||
ROCH Shares Recapitalized, Net of Redemptions, Warrant Liability and Issuance Costs of $27.9 million | 293,966 | $ 35 | 293,931 | ||||||||||||||||||||||||
Issuance of restricted stock awards (in shares) | 775,000 | ||||||||||||||||||||||||||
Issuance of restricted stock awards | 0 | $ 1 | (1) | ||||||||||||||||||||||||
Forfeiture of restricted stock (in shares) | (3,000) | ||||||||||||||||||||||||||
Forfeiture of restricted stock | 0 | $ (1) | 1 | ||||||||||||||||||||||||
Reclassification of redeemable warrant to liability | (33) | (33) | |||||||||||||||||||||||||
Equity based compensation | 68 | 68 | |||||||||||||||||||||||||
Net loss | (26,074) | (26,074) | |||||||||||||||||||||||||
Ending balance (in shares) at Mar. 31, 2021 | 117,349,000 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
Ending balance at Mar. 31, 2021 | $ 349,241 | $ 117 | $ 0 | $ 0 | $ 0 | $ 0 | 455,475 | 0 | (106,351) | ||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||
Accounting Standards Update [Extensible List] | pct:AccountingStandardsUpdate2020-06 | ||||||||||||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 0 | 0 | 37,998,000 | 3,612,000 | 34,386,000 | 6,711,000 | 775,000 | 5,936,000 | 20,628,000 | 1,938,000 | 18,690,000 | 16,322,000 | 1,105,000 | 15,217,000 | |||||||||||||
Beginning balance at Dec. 31, 2020 | $ 111,749 | $ (30,638) | $ 111,749 | $ 0 | $ 0 | $ 0 | $ 38 | $ 88,081 | $ (88,043) | $ 7 | $ 11,967 | $ (11,960) | $ 21 | $ 20,071 | $ (20,050) | $ 16 | $ 41,162 | $ (41,146) | 192,381 | $ (31,075) | $ 31,182 | $ 161,199 | 0 | $ 0 | (80,714) | $ 437 | $ (80,714) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||
Issuance of units upon vesting of Legacy PCT profits interests (in shares) | 0 | ||||||||||||||||||||||||||
Net loss | $ (58,110) | ||||||||||||||||||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 118,251,000 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
Ending balance at Sep. 30, 2021 | 330,135 | $ 118 | $ 0 | $ 0 | $ 0 | $ 0 | 468,421 | (17) | (138,387) | ||||||||||||||||||
Beginning balance (in shares) at Mar. 31, 2021 | 117,349,000 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
Beginning balance at Mar. 31, 2021 | 349,241 | $ 117 | $ 0 | $ 0 | $ 0 | $ 0 | 455,475 | 0 | (106,351) | ||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||
Forfeiture of restricted stock (in shares) | (10,000) | ||||||||||||||||||||||||||
Forfeiture of restricted stock | 0 | ||||||||||||||||||||||||||
Equity based compensation | 835 | 835 | |||||||||||||||||||||||||
Unrealized gain on available for sale debt securities | (106) | (106) | |||||||||||||||||||||||||
Net loss | (11,059) | (11,059) | |||||||||||||||||||||||||
Ending balance (in shares) at Jun. 30, 2021 | 117,339,000 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
Ending balance at Jun. 30, 2021 | 338,911 | $ 117 | $ 0 | $ 0 | $ 0 | $ 0 | 456,310 | (106) | (117,410) | ||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||
Issuance of restricted stock awards (in shares) | 1,000,000 | ||||||||||||||||||||||||||
Issuance of restricted stock awards | 0 | $ 1 | (1) | ||||||||||||||||||||||||
Exercise of warrants (in shares) | 17,000 | ||||||||||||||||||||||||||
Exercise of warrants | 196 | 196 | |||||||||||||||||||||||||
Equity based compensation (in shares) | 26,000 | ||||||||||||||||||||||||||
Equity based compensation | 13,611 | 13,611 | |||||||||||||||||||||||||
Stock repurchase (in shares) | (131,000) | ||||||||||||||||||||||||||
Share repurchase | (1,695) | (1,695) | |||||||||||||||||||||||||
Unrealized gain on available for sale debt securities | 89 | 89 | |||||||||||||||||||||||||
Net loss | (20,977) | (20,977) | |||||||||||||||||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 118,251,000 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
Ending balance at Sep. 30, 2021 | $ 330,135 | $ 118 | $ 0 | $ 0 | $ 0 | $ 0 | $ 468,421 | $ (17) | $ (138,387) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Parenthetical) $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Issuance costs | $ 27.9 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||||||
Net loss | $ (20,977) | $ (26,074) | $ (6,609) | $ (4,564) | $ (58,110) | $ (15,588) | |
Adjustments to reconcile net loss to net cash used in operating activities | |||||||
Equity-based compensation | 14,753 | 2,886 | |||||
Fair value change of warrants | (8,369) | 0 | 4,893 | 1,775 | |||
Depreciation expense | 522 | 475 | 1,507 | 1,409 | |||
Accretion of debt instrument discounts | 167 | 0 | |||||
Amortization of debt issuance costs | 2,040 | 0 | |||||
Issuance costs attributable to warrants | 109 | 0 | |||||
Amortization of premium on debt securities | 395 | 0 | |||||
Gain on extinguishment of secured term loan | (314) | 0 | |||||
Changes in operating assets and liabilities | |||||||
Prepaid expenses and other current assets | (2,347) | (128) | |||||
Prepaid expenses and other non-current assets | (2,917) | (100) | |||||
Accounts payable | (399) | (587) | |||||
Accrued expenses | (9,554) | 288 | |||||
Accrued interest | 2,819 | (739) | |||||
Deferred revenue | 5,000 | 0 | |||||
Net cash used in operating activities | (41,958) | (10,784) | |||||
Cash flows from investing activities | |||||||
Construction of plant | (88,153) | (2,423) | |||||
Purchase of debt securities, available for sale | (229,183) | 0 | |||||
Sale and maturity of debt securities, available for sale | 44,197 | 0 | |||||
Net cash used in investing activities | (273,139) | (2,423) | |||||
Cash flows from financing activities | |||||||
Proceeds from secured term loan | 0 | 314 | |||||
Proceeds from promissory note | 91 | 0 | |||||
Payments on promissory note from related parties | 0 | (600) | |||||
Payments on advances from related parties | 0 | (2,704) | |||||
Payments on promissory notes | (91) | (863) | |||||
Proceeds for exercise of warrants | 196 | 0 | |||||
Proceeds from ROCH and PIPE financing, net of issuance costs | 298,461 | 0 | |||||
Convertible notes issuance costs | (480) | 0 | |||||
Bond issuance costs | (4,067) | (155) | |||||
Proceeds from issuance of units | 0 | 17,173 | |||||
Payments on redemption of vested Legacy PCT profit interests | (36) | 0 | |||||
Net cash provided by financing activities | 294,074 | 13,165 | |||||
Net decrease in cash and restricted cash | (21,023) | (42) | |||||
Cash and restricted cash, beginning of period | $ 330,574 | $ 150 | 330,574 | 150 | $ 150 | ||
Cash and restricted cash, end of period | $ 309,551 | $ 108 | 309,551 | 108 | $ 330,574 | ||
Non-cash operating activities | |||||||
Interest paid during the period, net of capitalized interest | 845 | 1,581 | |||||
Non-cash investing activities | |||||||
Additions to property, plant, and equipment in accrued expenses | 25,300 | 0 | |||||
Additions to property, plant, and equipment in accounts payable | 1,425 | 1,319 | |||||
Additions to property, plant, and equipment in accrued interest | 1,708 | 39 | |||||
Non-cash financing activities | |||||||
Share repurchase — additions to accrued expense | 1,695 | 0 | |||||
PIK interest on convertible notes | 1,680 | 0 | |||||
Initial fair value of acquired warrant liability | 4,604 | 0 | |||||
Capitalization of bond issuance costs — additions to accrued expenses | 0 | 1,961 | |||||
Conversion of accounts payable to promissory notes | $ 0 | $ 1,247 |
ORGANIZATION
ORGANIZATION | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION Formation and Organization PureCycle Technologies, Inc. (“PureCycle,” “PCT” or the “Company”) is headquartered in Orlando, Florida, and its planned principal operation is to conduct business as a plastics recycler using PureCycle’s patented recycling process. Developed and licensed by The Procter & Gamble Company (“P&G”), the patented recycling process separates color, odor and other contaminants from plastic waste feedstock to transform it into virgin-like resin. The Company is currently constructing its first planned facility and conducting research and development activities to operationalize the licensed technology. PureCycle Technologies LLC was formed as a Delaware limited liability company on September 15, 2015 as Advanced Resin Technologies, LLC. In November 2016, Advanced Resin Technologies, LLC changed its name to PureCycle Technologies LLC. Business Combination On March 17, 2021, PureCycle consummated the previously announced business combination (“Business Combination”) by and among Roth CH Acquisition I Co., a Delaware corporation (“ROCH”), Roth CH Acquisition I Co. Parent Corp., a Delaware corporation and wholly owned direct subsidiary of ROCH (“ParentCo”), Roth CH Merger Sub LLC, a Delaware limited liability company and wholly owned direct subsidiary of Parent Co, Roth CH Merger Sub Corp., a Delaware corporation and wholly owned direct subsidiary of ParentCo and PureCycle Technologies LLC (“PCT LLC” or “Legacy PCT”) pursuant to the Agreement and Plan of Merger dated as of November 16, 2020, as amended from time to time (the “Merger Agreement”). Upon the completion of the Business Combination and the other transactions contemplated by the Merger Agreement (the “Transactions”, and such completion, the “Closing”), ROCH changed its name to PureCycle Technologies Holdings Corp. and became a wholly owned direct subsidiary of ParentCo, PCT LLC became a wholly owned direct subsidiary of PureCycle Technologies Holdings Corp. and a wholly owned indirect subsidiary of ParentCo, and ParentCo changed its name to PureCycle Technologies, Inc. The Company’s common stock, units and warrants are now listed on the Nasdaq Capital Market (“NASDAQ”) under the symbols “PCT,” “PCTTU” and “PCTTW,” respectively. In connection with the Business Combination, ROCH entered into subscription agreements with certain investors (the “PIPE Investors”), whereby it issued 25.0 million shares of common stock at $10.00 per share (the “PIPE Shares”) for an aggregate purchase price of $250.0 million (the “PIPE Financing”), which closed simultaneously with the consummation of the Business Combination. Upon the Closing of the Business Combination, the PIPE Investors were issued shares of the Company’s common stock. Legacy PCT unitholders will be issued up to 4.0 million additional shares of the Company’s common stock if certain conditions are met (“the Earnout”). The Legacy PCT unitholders will be entitled to 2.0 million shares if after six months after the Closing and prior to or as of the third anniversary of the Closing, the closing price of the common stock is greater than or equal to $18.00 over any 20 trading days within any 30-trading day period. The Legacy PCT unitholders will be entitled to 2.0 million shares upon the commercial-scale plant in Ironton, Ohio (the “Ohio Phase II Facility”) becoming operational, as certified by Leidos Engineering, LLC (“Leidos”), an independent engineering firm, in accordance with criteria established in agreements in connection with construction of the plant. In connection with the Business Combination, the Company incurred direct and incremental costs of approximately $27.9 million related to the equity issuance, consisting primarily of investment banking and other professional fees, which were recorded to additional paid-in capital as a reduction of proceeds. The Company incurred approximately $5.2 million of expenses primarily related to advisory, legal, and accounting fees in conjunction with the Business Combination. Of this, $3.2 million was recorded in general and administrative expenses on the consolidated statement of comprehensive loss for the nine months ended September 30, 2021. Unless the context otherwise requires, “Registrant,” “PureCycle,” “Company,” “PCT,” “we,” “us,” and “our” refer to PureCycle Technologies, Inc., and its subsidiaries at and after the Closing and give effect to the Closing. “Legacy PCT”, “ROCH” and “ParentCo” refer to PureCycle Technologies LLC, ROCH and ParentCo, respectively, prior to the Closing. The aggregate consideration for the Business Combination was $1,156.9 million, payable in the form of shares of the ParentCo Common Stock and assumed indebtedness. The following summarizes the merger consideration (in thousands except per share information): Total shares transferred 83,500 Value per share $ 10.00 Total Share Consideration $ 835,000 Assumed indebtedness Revenue Bonds 249,600 The Convertible Notes 60,000 Term Loan 314 Related Party Promissory Note 12,000 Total merger consideration $ 1,156,914 The following table reconciles the elements of the Business Combination to the condensed consolidated statement of cash flows for the nine months ended September 30, 2021 (in thousands): Cash - ROCH Trust and cash (net of redemptions) $ 76,510 Cash - PIPE 250,000 Less transaction costs (28,049) Net Business Combination and PIPE financing $ 298,461 In addition to cash received by the Company at the Close of the Business Combination, the Company assumed a warrant liability from ROCH measured at $4.6 million at March 18, 2021. Refer to Note 6 – Warrants for further information. Basis of Presentation The accompanying condensed consolidated interim financial statements include the accounts of the Company. The condensed consolidated interim financial statements are presented in U.S. Dollars. Certain information in footnote disclosures normally included in annual financial statements was condensed or omitted for the interim periods presented in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) and accounting principles generally accepted in the United States of America (“U.S. GAAP”). Intercompany balances and transactions were eliminated upon consolidation. These condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements and accompanying notes of Legacy PCT for the fiscal year ended December 31, 2020 as filed on July 1, 2021 in our prospectus filed pursuant to Rule 424(b)(3) of the Securities Act. The results of operations for the nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the entire year ending December 31, 2021. The accompanying condensed consolidated interim financial statements reflect all adjustments, consisting of normal recurring adjustments, that are, in the opinion of management, necessary to present a fair statement of the results for the interim periods presented. Reclassifications Certain amounts in prior periods have been reclassified to conform with the report classifications of the nine months ended September 30, 2021, noting the Company has reflected the reverse recapitalization pursuant to the Business Combination, as well as immaterial corrections related to prior periods for all periods presented within the unaudited condensed consolidated balance sheets, statements of comprehensive loss, statements of stockholders’ equity, and statements of cash flows. Reverse Recapitalization The Business Combination was accounted for as a reverse recapitalization and ROCH was treated as the “acquired” company for accounting purposes. The Business Combination was accounted for as the equivalent of Legacy PCT issuing stock for the net assets of ROCH, accompanied by a recapitalization. Accordingly, all historical financial information presented in these condensed consolidated interim financial statements represents the accounts of Legacy PCT “as if” Legacy PCT is the predecessor to the Company. The units and net loss per unit, prior to the Business Combination, have been adjusted to share amounts reflecting the exchange ratio established in the Business Combination. Potential Impact of COVID-19 on the Company’s Business With the global spread of the COVID-19 pandemic and the local, state and federal responses to the pandemic applicable to the Company’s corporate headquarters, its Ironton, Ohio plant operations, and employees and potentially the Augusta Facility, the Company has implemented policies and procedures to continue its operations under minimum business operations guidelines. The extent to which the COVID-19 pandemic and the restrictions resulting from the pandemic impact the Company’s business, financial condition or results of operations will depend on future developments, which are highly uncertain and cannot be accurately predicted. Liquidity The Company has sustained recurring losses and negative cash flows from operations since its inception. As reflected in the accompanying condensed consolidated interim financial statements, the Company has not yet begun commercial operations and does not have any sources of revenue. In prior periods, substantial doubt was raised about the ability of Legacy PCT to continue as a going concern. The Company believes that the total capital raised through the Business Combination is sufficient to adequately fund its future obligations for at least one year from the date the condensed consolidated interim financial statements are available to be issued. As of September 30, 2021, and December 31, 2020, the Company had an unrestricted cash balance of $36.7 million and $64.5 million, respectively, working capital of $169.8 million and $31.9 million, respectively, and an accumulated deficit of $138.4 million and $80.7 million, respectively. For the nine months ended September 30, 2021 and 2020, the Company incurred a net loss of $58.1 million and $15.6 million, respectively. Emerging Growth Company At September 30, 2021, we qualified as an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and we have taken and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have opted to take advantage of such extended transition period available to emerging growth companies which means that when a standard is issued or revised and it has different application dates for public or private companies, we can adopt the new or revised standard at the time private companies adopt the new or revised standard. Immaterial Corrections Related to Prior Periods We have identified immaterial corrections to prior periods related to capitalization of interest associated with the tax-exempt revenue bonds and the costs associated with issuance of equity that originated during the period presented herein. We evaluated the effects of these corrections on the condensed consolidated financial statements for the year ended December 31, 2020 and the unaudited condensed consolidated financial statements for the three months ended March 31, 2021, as well as the three and six months ended June 30, 2021, individually and in the aggregate, in accordance with the guidance in ASC Topic 250, Accounting Changes and Error Corrections, ASC Topic 250-10-S99-1, Assessing Materiality, and ASC Topic 250-10-S99-2, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements. We have concluded that no period is materially misstated. Accordingly, we have reflected the prior period impacts and associated revisions for these periods presented herein. The revision increased property, plant and equipment, net and decreased interest expense by $3.8 million for the twelve months ended December 31, 2020, $4.1 million for the three months ended March 31, 2021, and $4.2 million and $8.3 million for the three and six months ended June 30, 2021, respectively, as well as reclassified $0, $0 and $11.1 million from net cash used in operating activities to cash paid for construction of plant for the twelve months ended December 31, 2020, three months ended March 31, 2021, and six months ended June 30, 2021, respectively. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Cash and cash equivalents The Company considers all highly liquid investments with an original maturity of three months or less at date of inception to be cash and cash equivalents. As of September 30, 2021, the Company’s cash and cash equivalents balance represents cash and money market funds deposited with financial institutions. As of December 31, 2020, the Company’s cash and cash equivalents balance represents cash deposited with financial institutions. These balances may exceed federally insured limits; however, the Company believes the risk of loss is low. Investments The Company accounts for its investment in Debt Securities in accordance with ASC 320, Investments – Debt Securities . The fair value for fixed-rate debt securities is based on quoted market prices for the same or similar debt instruments and is classified as Level 2. All investment holdings as of September 30, 2021 have been classified as Available for Sale. The Company did not hold any investments in Debt Securities as of December 31, 2020. The Company classifies its Debt Securities investments as current assets as they are highly liquid and the related funds are available for use in current operations. Income Taxes To calculate the interim tax provision, at the end of each interim period the Company estimates the annual effective tax rate and applies that to its ordinary quarterly earnings. The effect of changes in the enacted tax laws or rates is recognized in the interim period in which the change occurs. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and judgments including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in other jurisdictions, permanent differences between book and tax amounts, and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained, or the tax environment changes. Furthermore, in December 2019, the FASB issued ASU No. 2019-12, Income Taxes: Simplifying the Accounting for Income Taxes (“ASU 2019-12”). The new guidance affects general principles within Topic 740, Income Taxes . The amendments of ASU 2019-12 are meant to simplify and reduce the cost of accounting for income taxes. The Company adopted the ASU during the first quarter of 2021 using a prospective approach. The adoption of the ASU did not have a material impact on the Company’s condensed consolidated financial statements. Warrants The Company evaluates all of its financial instruments, including issued warrants, to determine if such instruments are liability classified, pursuant to ASC 480 - Distinguishing Liabilities from Equity (“ASC 480”) or derivatives or contain features that qualify as embedded derivatives pursuant to ASC 815 – Derivatives and Hedging (“ASC 815”). The classification of instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Issuance costs incurred with the Business Combination that are attributable to liability classified warrants are expensed as incurred. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In July 2018, ASU 2018-10, Codification Improvements to Topic 84 2, Leases , was issued to provide more detailed guidance and additional clarification for implementing ASU 2016-02. Furthermore, in July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements , which provides an optional transition method in addition to the existing modified retrospective transition method by allowing a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. Furthermore, on June 3, 2020, the FASB deferred by one year the effective date of the new leases standard for private companies, private not-for-profits (“NFPs”) and public NFPs that have not yet issued (or made available for issuance) financial statements reflecting the new standard. These new leasing standards are effective for the Company beginning after December 15, 2021 and interim periods within fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the effect of the adoption of this guidance on the consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments (“ASU 2016-13”), which, together with subsequent amendments, amends the requirement on the measurement and recognition of expected credit losses for financial assets held. ASU 2016-13 is effective for the Company beginning December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. The Company is currently in the process of evaluating the effects of this pronouncement on the Company's financial statements and does not expect it to have a material impact on the consolidated financial statements. In August 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20 that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock. Two methods of transition were permitted upon adoption: full retrospective and modified retrospective. The Company elected to apply the modified retrospective adoption approach to all contracts. Under this approach, prior periods were not restated. Rather, convertible notes and other disclosures for prior periods were provided in the notes to the financial statements as previously reported under ASC 470-20, and the cumulative effect of initially applying the guidance was recognized as an adjustment to Notes payable, APIC, and Accumulated deficit. As a result of applying the modified retrospective method to adopt ASU 2020-06, adjustments were made to the consolidated balance sheets as of December 31, 2020 and the below illustrates how the notes payable, APIC, and accumulated deficit balances would be effected as of January 1, 2021 (in thousands, as adjusted to show the effect of the reverse recapitalization as described in Note 1): December 31, 2020 January 1, 2021 As reported Adjustments As adjusted Notes payable $ 26,599 $ 30,638 $ 57,237 APIC 192,381 (31,075) 161,306 Accumulated deficit $ (80,714) $ 437 $ (80,277) |
NOTES PAYABLE AND DEBT INSTRUME
NOTES PAYABLE AND DEBT INSTRUMENTS | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE AND DEBT INSTRUMENTS | NOTES PAYABLE AND DEBT INSTRUMENTS Secured Term Loan Enhanced Capital Ohio Rural Fund, LLC On February 28, 2019, Legacy PCT entered into a subordinated debt agreement with Enhanced Capital Ohio Rural Fund, LLC. The agreement provides for principal of $1.0 million with an interest rate of the U.S. Federal prime rate per annum. As of September 30, 2021, and December 31, 2020, the outstanding balance of the loan is $0. On October 7, 2020, upon the closing of the revenue bond offering, the full outstanding balance was paid off. Legacy PCT incurred $9 thousand and $29 thousand of interest cost during the three and nine months ended September 30, 2020, respectively. Promissory Notes Koch Modular Process Systems Secured Promissory Note On December 20, 2019, Legacy PCT entered into an agreement with Koch Modular Process Systems LLC (“KMPS”) to convert the current balance of Account Payable due to KMPS into a promissory note. Legacy PCT issued a Secured Promissory Note for a principal amount of $1.7 million with a maximum advance of funds up to $3.0 million. During the nine months ended September 30, 2020, Legacy PCT converted $1.2 million of Accounts Payable into the note. The rate of interest on the loan balance is 21% per annum through the month of November 2019 and 24% per annum for December 2019 and thereafter. As of September 30, 2021, and December 31, 2020, the outstanding balance on the promissory note is $0. On October 7, 2020, upon the closing of the revenue bond offering, the full outstanding balance was paid off. Legacy PCT incurred $107 thousand and $342 thousand of interest cost during the three and nine months ended September 30, 2020, respectively. Denham-Blythe Company, Inc. Secured Promissory Note On December 20, 2019, Legacy PCT and Denham-Blythe Company, Inc. (“DB”) entered into an agreement to convert the current balance of Account Payable due to DB into a promissory note. Legacy PCT issued a Secured Promissory Note for a principal amount of $2.0 million. The rate of interest on the loan balance is 24% per annum for December 2019 and thereafter with interest on the loan payable monthly. As of September 30, 2021 and December 31, 2020, the outstanding balance on the promissory note is $0. On October 7, 2020, upon the closing of the revenue bond offering, the full outstanding balance was paid off. Legacy PCT incurred $122 thousand and $365 thousand of interest cost during the three and nine months ended September 30, 2020, respectively. As the promissory note was used to construct the Company’s property, plant and equipment, a portion of the interest cost incurred was capitalized within Property, Plant and Equipment. Promissory Note to Related Party Innventus Fund I, LP On July 19, 2019, Legacy PCT entered into a Note and Warrant Financing agreement with Innventus Fund I, LP (now known as Innventus ESG Fund I L.P.) to obtain a $600 thousand loan and warrant financing. The Negotiable Promissory Note had a maturity date of October 21, 2019, and an interest rate of 1-month LIBOR plus 8.0%. The aggregate unpaid principal amount of the loan and all accrued and unpaid interest is due on the maturity date. Legacy PCT repaid the principal and all accrued and unpaid interest on February 5, 2020. Legacy PCT incurred $0 and $5 thousand of interest cost during three and nine months ended September 30, 2020, respectively. Auto Now Acceptance Company, LLC On May 5, 2017, Legacy PCT entered into a revolving line of credit facility (the “Credit Agreement”) with Auto Now Acceptance Company, LLC (“Auto Now”), a related party. On May 3, 2018, the Credit Agreement was amended and restated in its entirety and secured by a Security Agreement dated May 3, 2018. The credit facility was increased to $14.0 million, bearing interest at a rate of LIBOR plus 6.12% per annum, payable monthly. The maturity date was extended to August 15, 2018. On July 31, 2018, the Credit Agreement was amended to extend the maturity date to February 15, 2019. Under the agreement, Auto Now’s advances of funds to Legacy PCT ceased on July 31, 2018. On May 29, 2020, Legacy PCT executed a Second Amended and Restated the Security Agreement and entered into a Third Amended and Restated Promissory Note agreement to extend the financing on the loan from Auto Now. The agreement extended the maturity date of the loan to June 30, 2021 and adjusted the interest rate on the third amended loan agreement. The security interests include inventory, equipment, accounts receivables and all the Company’s assets. The interest rate within the amendment increased as follows: • The annual rate of the 1-month LIBOR in U.S. dollars plus 6.12% adjusted daily, from May 3, 2018 through May 18, 2020 • 12% per annum from May 19, 2020 through August 31, 2020 • 16% per annum from September 1, 2020 through December 31, 2020 • 24% per annum from January 1, 2021 through June 30, 2021 As of September 30, 2021 and December 31, 2020, the outstanding balance on the credit facility is $0. On December 21, 2020, Legacy PCT repaid the outstanding balance on the note. Legacy PCT incurred $413 thousand and $1.1 million of interest cost during the three and nine months ended September 30, 2020, respectively. As the promissory note was used to construct the Company’s property, plant and equipment, a portion of the interest cost incurred was capitalized within Property, Plant and Equipment. Advances from Related Parties During 2019 and 2020, Legacy PCT received $746 thousand of funding and support services from Innventure1 LLC (formerly Innventure LLC) and Wasson Enterprises. On March 26, 2020, $375 thousand of the balance was repaid. The remaining balance of $371 thousand was assigned from Wasson Enterprise to Innventure LLC (Formerly WE-Innventure LLC). Convertible Notes On October 6, 2020, Legacy PCT entered into a Senior Notes Purchase Agreement (the “Agreement”) with certain investors. The Agreement provides for the issuance of Senior Convertible Notes (the “Notes” or “Convertible Notes”), which have an interest rate of 5.875% and mature on October 15, 2022 (the “Maturity Date”) and are subject to a six-month maturity extension at the Company’s option with respect to 50% of the then outstanding Notes on a pro rata basis, unless repurchased or converted prior to such date (“Maturity Date Extension”). The initial closing took place on the date of the Indenture on October 7, 2020 (the “First Closing”), upon which $48.0 million in aggregate principal of Notes were issued to the Investors (“the Magnetar Investors”). The Agreement also includes an obligation for the Company to issue and sell, and for each of the Magnetar Investors to purchase, Notes in the principal amount of $12.0 million within 45 days after the Company enters into the Merger Agreement as defined in Note 1 (“Second Closing Obligation”). On December 29, 2020, the remaining Notes were purchased in accordance with the Agreement. On April 15, 2021, the first interest payment of $1.7 million was paid entirely in kind, which increased the principal amount of the Notes by $1.7 million (“PIK Interest”). The Notes are convertible through the Maturity Date at the option of the holder. Following the consummation of the Business Combination, however, each holder was required to agree not to convert its Notes (except in connection with a Change of Control or Fundamental Change (each as defined in the Indenture) for a period not to exceed one hundred eighty (180) days following the consummation of the Business Combination, or September 13, 2021). As of September 30, 2021 and December 31, 2020, none of the Notes were converted into shares of common stock. The Notes are recorded within notes payable in the condensed consolidated balance sheet. As the Notes were used to construct the Company’s property, plant and equipment, a portion of the interest costs incurred were capitalized within property, plant and equipment. The following provides a summary of the interest expense of PCT’s convertible debt instruments (in thousands): Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Contractual interest expense $ 906 $ — $ 2,689 $ — Amortization of deferred financing costs 466 — 1,546 — Effective interest rate 9.0 % — % 9.0 % — % The following provides a summary of the convertible notes (in thousands): As of September 30, 2021 December 31, 2020 Unamortized deferred issuance costs $ 2,010 $ 3,288 Net carrying amount 59,670 56,712 Fair value $ 123,332 $ 123,532 Fair value level Level 3 Level 3 As of September 30, 2021, as a result of the Business Combination, the conversion price of the notes changed to the quotient of (A) $1,000 and (B) the SPAC transaction PIPE valuation; provided that if the Equity Value of the Company in connection with the SPAC Transaction is greater than $775.0 million, the conversion rate shall equal the product of (1) the amount that would otherwise be calculated pursuant to this clause set forth above and (2) a fraction equal to the Equity Value of the Company divided by $775.0 million (as such terms are defined in the indenture governing the Notes). The conversion price is $6.93 for potential conversion of the Notes outstanding as of September 30, 2021 into approximately 8.9 million shares of common stock. As of December 31, 2020 the conversion price of the Notes was the quotient of $1,000 and the quotient of (A) 80% of the Adjusted Equity Value of the Company as determined based upon the sale of approximately 684 thousand Legacy PCT Class A Units at $87.69 per unit (the “November Investment”) and (B) the number of outstanding shares of Capital Stock of the Company on a Fully-Diluted Basis immediately prior to the November Investment (as such terms are defined in the indenture governing the Notes). Revenue Bonds On October 7, 2020, the Southern Ohio Port Authority (“SOPA”) issued certain revenue bonds (“Bonds” or “Revenue Bonds”) and loaned the proceeds from their sale to PureCycle: Ohio LLC, an Ohio limited liability company (“PCO”), pursuant to a loan agreement dated as of October 1, 2020 between SOPA and PCO (“Loan Agreement”), to be used to (i) acquire, construct and equip the Ohio Phase II Facility; (ii) fund a debt service reserve fund for the Exempt Facility Revenue Bonds (PureCycle Project), Tax-Exempt Series 2020A Bonds (“Series 2020A Bonds”); (iii) finance capitalized interest; and (iv) pay the costs of issuing the Bonds. The Bonds were offered in three series, including (i) Tax-Exempt Series 2020A Bonds; (ii) Subordinate Exempt Facility Revenue Bonds (PureCycle Project), Tax-Exempt Series 2020B (“Series 2020B Bonds”); and (iii) Subordinated Exempt Facility Revenue Bonds (PureCycle Project), Taxable Series 2020C (“Series 2020C Bonds”), each series in the aggregate principal amount, bearing interest and maturing as shown in the table below. The Series 2020A Bonds were issued at a total discount of $5.5 million. The discount is amortized over the term of the Bonds using the effective interest method. The purchase price of the Bonds was paid and immediately available to SOPA on October 7, 2020, the date of delivery of the Bonds to their original purchaser. PureCycle is not a direct obligor on the Bonds and is not a party to the Loan Agreement or the indenture of trust dated as of October 1, 2020 (“Indenture”), between SOPA and UMB Bank, N.A as trustee (“Trustee”), pursuant to which the Bonds have been issued. Legacy PCT has executed a guaranty of completion dated as of October 7, 2020 (“Completion Guaranty”), with respect to the full and complete performance by PCO of PCO’s obligations with respect to construction and completion of the Project, including construction by the Completion Date, free and clear of any liens (other than permitted liens), and the payment of all Project costs incurred prior to completion of the Project, and all claims, liabilities, losses and damages owed by PCO to each counterparty under the Project Documents (as such terms are defined in the Indenture). In addition, pursuant to the Guaranty, PureCycle is obligated to fund and maintain a liquidity reserve for the Project during the term of the Guaranty in the amount of $50.0 million to be held in an escrow account with U.S. Bank National Association, as escrow agent (“Liquidity Reserve”). Pursuant to the terms of the Loan Agreement PCO executed promissory notes, one in the aggregate principal amount of each series of Bonds, in favor of SOPA, which were assigned to the Trustee on October 7, 2020. (in thousands) Bond Series Term Principal Amount Interest Rate Maturity Date 2020A A1 $ 12,370 6.25 % December 1, 2025 2020A A2 $ 38,700 6.50 % December 1, 2030 2020A A3 $ 168,480 7.00 % December 1, 2042 2020B B1 $ 10,000 10.00 % December 1, 2025 2020B B2 $ 10,000 10.00 % December 1, 2027 2020C C1 $ 10,000 13.00 % December 1, 2027 The proceeds of the Bonds and certain equity contributions have been placed in various trust funds and non-interest-bearing accounts established and administered by the Trustee under the Indenture. Before each disbursement of amounts in the Project Fund held by the Trustee under the Indenture, PCO is required to submit to the Trustee a requisition for funds to be disbursed outlining the specified purpose of the disbursement and substantiating the expenditure. In addition, 100% of revenue attributable to the production of the Ohio Phase II Facility must be deposited into an operating revenue escrow fund held by U.S. Bank National Association, as escrow agent. Funds in the trust accounts and operating revenue escrow account will be disbursed by the Trustee when certain conditions are met, and will be used to pay costs and expenditures related to the development of the Ohio Phase II Facility, make required interest and principal payments (including sinking fund redemption amounts) and any premium, in certain circumstances required under the Indenture, to redeem the Bonds. As conditions for closing the Bonds, Legacy PCT contributed $60.0 million in equity at closing and PureCycle and certain affiliates contributed an additional $40.0 million in equity upon the Closing of the Business Combination. PureCycle provided the Liquidity Reserve for the Ohio Phase II Facility construction of $50.0 million and deposited the amount upon the Closing of the Business Combination. In addition, PureCycle must maintain at least $75.0 million of cash on its balance sheet as of July 31, 2021 and $100.0 million of cash on its balance sheet as of January 31, 2022, in each case, including the Liquidity Reserve. The Company has met this requirement as of July 31, 2021. The Bonds are recorded within Bonds payable in the condensed consolidated balance sheet. The Company incurred $4.8 million and $0 of interest cost during the three months ended September 30, 2021 and 2020, respectively, and $14.4 million and $0 of interest cost during the nine months ended September 30, 2021 and 2020, respectively. As the Bond proceeds will be used to construct the Company’s property, plant and equipment, the interest costs related to the tax-exempt portion of the Revenue Bonds have been capitalized within Property, Plant and Equipment. The Company capitalized $4.3 million and $0 of interest cost during the three months ended September 30, 2021 and 2020, respectively, and $12.8 million and $0 of interest cost during the nine months ended September 30, 2021 and 2020, respectively. Management believes the fair value of the Revenue Bonds is not materially different than the carrying amount. In connection with its obligations under that certain Security Agreement dated as of October 7, 2020, between PCO, as debtor, and the Trustee, as secured party, entered into when the Bonds were issued (the “Security Agreement”), PCO must deliver consent and agreements (“Consents”) to the Trustee with respect to each agreement entered into in connection with the Project, each of which agreements is required under the Loan Agreement to be assigned to the Trustee. The forms of the Consents relating to a certain feedstock supply agreement from one supplier of feedstock to the Project (the “Supplier”) and from two purchasers of offtake from the Project (“Offtaker 2” and “Offtaker 3” and together with the Supplier, the “Counterparties”) delivered to the Trustee contained terms inconsistent with the form of the Consent required under the Security Agreement. On May 11, 2021, the Guaranty was amended and restated in an amended and restated guaranty of completion (the “ARG”) executed by PureCycle and delivered to the Trustee, which broadens the purposes for which draws by the Trustee on the Liquidity Reserve may be utilized, extends the period during which the Liquidity Reserve must be maintained, includes conditions that would permit a reduction in the amount of the Liquidity Reserve required to be maintained by PureCycle, and includes conditions precedent to the elimination of the requirement that PureCycle replenish the Liquidity Reserve and to the termination of the ARG and the escrow agreement under which the Liquidity Reserve is held by the escrow agent (the “Escrow Agreement”), upon which termination, the balance of the Liquidity Reserve will be returned to PureCycle. So long as there are any Series 2020A Bonds outstanding under the Indenture, the ARG and the Escrow Agreement will remain in place upon the conditions stated in the ARG. The terms of the ARG are summarized as follows: The Liquidity Reserve shall be maintained in the amount of $50.0 million, subject to replenishment by PureCycle until certain conditions stated in the ARG relating to the following have been met: (i) the completion of construction and acquisition of the Project, (ii) the payment of all Project costs, and (iii) the replacement of the assigned agreements of the Counterparties underlying the Consents which have expired or terminated, with one or more agreements between counterparties and PCO upon terms at least as favorable to PCO as the expired or terminated agreements of the Counterparties, (a) for which a Consent that conforms to the form of Consent required by the Security Agreement is executed by the counterparties and provided to the Trustee, (b) which, in the case of supply of feedstock to the Project, provide in the aggregate for the supply of at least the minimum and maximum volumes of feedstock meeting substantially similar feedstock specifications as the Supplier had committed to supply, and (c) which, in the case of purchase of offtake from the Project, provide in the aggregate for the purchase of the minimum and maximum volumes of offtake from the Project meeting substantially similar specifications as Offtaker 2 and Offtaker 3 had committed to purchase from PCO. When the conditions stated in (i), (ii) and (iii) above have been satisfied but so long as there are Series 2020A Bonds outstanding under the Indenture, the Escrow Agreement shall remain in place but the Liquidity Reserve amount shall be reduced to $25 million and PureCycle shall no longer be required to replenish the amount of the reduced Liquidity Reserve if and when disbursements are made therefrom. If the conditions of (i) and (ii) have been met but only a portion of the feedstock and offtake contracted for by the Counterparties, respectively, has been replaced under replacement agreements as aforesaid in (iii) above, then the Liquidity Reserve amount may be reduced only by the applicable proportion of the amounts stated in the ARG which evidence the intent of the parties of the amount of value representing the supply or offtake of the agreements of the Counterparties. When the conditions precedent of (i), (ii), and (iii) have been satisfied and there are no longer any Series 2020A Bonds then outstanding, then PureCycle shall have no obligation to maintain the reduced Liquidity Reserve, the ARG and the Escrow Agreement shall terminate and the balance on deposit in the Liquidity Reserve escrow fund held by the escrow agent shall be returned to PureCycle. So long as any Series 2020A Bonds remain outstanding under the Indenture, upon the occurrence of an Event of Default under the Loan Agreement or Indenture, if the Trustee takes control of the Liquidity Reserve held by the escrow agent, such funds may be used for any purpose, including the payment of debt service on the Series 2020A Bonds, as may be determined by the Trustee or directed by a majority of the holders of the Series 2020A Bonds then outstanding. Paycheck Protection Program On May 4, 2020, Legacy PCT entered into a Paycheck Protection Program (the “Program”, or “PPP loan”) Term Note with PNC Bank to obtain principal of approximately $314 thousand (the “Term Note”). This Term Note was issued pursuant to the Coronavirus Aid, Relief, and Economic Security Act’s (the “CARES Act”) (P.L. 116-136) Paycheck Protection Program. During the period from May 4, 2020 until the forgiveness amount was known, (“Deferral Period”), interest on the outstanding principal balance accrued at the fixed rate of 1% per annum, but neither principal nor interest was due during the Deferral Period. Legacy PCT applied for loan forgiveness as of |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | STOCKHOLDERS’ EQUITY The condensed consolidated statements of stockholders’ equity reflect the reverse recapitalization as discussed in Note 1 as of March 17, 2021. As Legacy PCT was deemed the accounting acquirer in the reverse recapitalization with ROCH, all periods prior to the consummation date reflect the balances and activity of Legacy PCT. The consolidated balances and the audited consolidated financial statements of Legacy PCT, as of December 31, 2020, and the share activity and per share amounts in these condensed consolidated statements of equity were retroactively adjusted, where applicable, using the recapitalization exchange ratio of 10.52 for Legacy PCT Class A Units. Legacy PCT Class B Preferred Units were converted into shares of PCT common stock at a share conversion factor of 10.642 whereas Legacy PCT Class B-1 Preferred Units were converted into shares of PCT common stock at a share conversion factor of 14.768 as a result of the reverse recapitalization. Legacy PCT Class C Units were converted into shares of PCT common stock at a share conversion factor of 9.32, 7.40, or 2.747, based on the distribution threshold of the Class C Unit. Common Stock Holders of PCT common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. The holders do not have cumulative voting rights in the election of directors. Upon the Company’s liquidation, dissolution or winding up and after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation preferences, if any, the holders of the Company’s common stock will be entitled to receive pro rata the Company’s remaining assets available for distribution. Holders of the Company’s common stock do not have preemptive, subscription, redemption or conversion rights. All shares of the Company’s common stock are fully paid and non-assessable. The Company is authorized to issue 250.0 million shares of common stock with a par value of $0.001. As of September 30, 2021 and December 31, 2020, 118.24 million and 0 shares are issued and outstanding, respectively. Preferred Stock As of September 30, 2021, the Company is authorized to issue 25.0 million shares of preferred stock with a par value of $0.001, of which no shares are issued and outstanding. |
EQUITY-BASED COMPENSATION
EQUITY-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
EQUITY-BASED COMPENSATION | EQUITY-BASED COMPENSATION 2021 Equity Incentive Plan In connection with the Business Combination, on March 17, 2021, our stockholders approved the PureCycle Technologies, Inc. 2021 Equity and Incentive Compensation Plan (the “Plan”). The Plan provides for the grant of stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units (“RSUs”), performance shares, performance units, dividend equivalents, and certain other awards. As of September 30, 2021, approximately 8.28 million shares of common stock are reserved for issuance under the Plan. Restricted Stock Agreements In connection with the Closing, on March 17, 2021, PCT entered into restricted stock agreements with various PureCycle employees who held unvested Legacy PCT Class C Units at the Closing (the “Restricted Stock Agreements”). The outstanding unvested Legacy PCT Class C Units, issued pursuant to the PCT Technologies LLC Amended and Restated Equity Incentive Plan, were converted to PCT’s restricted shares, subject to the same vesting schedule and forfeiture restrictions as the unvested Legacy PCT Class C Units they replace. The shares issued pursuant to the Restricted Stock Agreements are time-based and vest over the period defined in each individual grant agreement or upon a change of control event as defined in the agreement. The Company has the option to repurchase all vested shares upon a stockholder’s termination of employment or service with the Company. The Company recognizes compensation expense for the shares equal to the fair value of the equity-based compensation awards and is recognized on a straight-line basis over the vesting period of such awards. The fair value of the stock is estimated on the date of grant using the Black-Scholes option-pricing model using the following assumptions: 2021 2020 Expected annual dividend yield — % — % Expected volatility 49.1 % 42.1 - 63.3% Risk-free rate of return 0.1 % 1.6 - 1.7% Expected option term (years) 0.2 0.8 - 4.4 The expected term of the shares granted is determined based on the period of time the shares are expected to be outstanding. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. The expected volatility was based on the Company’s capital structure and volatility of similar entities referred to as guideline companies. In determining similar entities, the Company considered industry, stage of life cycle, size and financial leverage. The dividend yield on the Company’s shares is assumed to be zero as the Company has not historically paid dividends. The fair value of the underlying Company shares for the nine months ending September 30, 2021 was determined using an initial public offering scenario. The fair value of the underlying Company shares for the nine months ended September 30, 2020 was determined using a hybrid method consisting of an option pricing method and an initial public offering scenario. A summary of restricted stock activity for the nine months ended September 30, 2021 and 2020 is as follows (in thousands except per share data): Number of RSU's Weighted average grant date fair value Weighted average remaining recognition period Non-vested at December 31, 2019 73 $ 2.21 Recapitalized 607 (1.97) Non-vested at December 31, 2019 (after effect of recapitalization) 680 0.24 Granted 1,937 1.73 Vested (1,777) 1.37 Forfeited (11) 1.95 Non-vested at September 30, 2020 829 $ 1.27 2.18 Number of RSU's Weighted average grant date fair value Weighted average remaining recognition period Non-vested at December 31, 2020 91 $ 11.58 Recapitalization 671 (10.19) Non-vested at December 31, 2020 (after effect of recapitalization) 762 1.39 Granted 2,353 18.88 Vested (699) 9.83 Forfeited (26) 3.92 Non-vested at September 30, 2021 2,390 $ 16.12 2.63 Equity-based compensation cost is recorded within the selling, general and administrative expenses and operating costs in the condensed consolidated statements of comprehensive loss, and totaled approximately $9.2 million and $2.0 million for the three months ended September 30, 2021 and 2020, respectively, and $9.7 million and $2.6 million for the nine months ended September 30, 2021 and 2020, respectively. Stock Options The stock options issued pursuant to the Plan are time-based and vest over the period defined in each individual grant agreement or upon a change of control event as defined in the Plan. The Company recognizes compensation expense for the shares equal to the fair value of the equity-based compensation awards and is recognized on a straight-line basis over the vesting period of such awards. The fair value of the stock is estimated on the date of grant using the Black-Scholes option-pricing model using the following assumptions: 2021 2020 Expected annual dividend yield — % — % Expected volatility 47.5 % — % Risk-free rate of return 0.7 % — % Expected option term (years) 4.5 0 The expected term of the shares granted is determined based on the period of time the shares are expected to be outstanding. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. The expected volatility was based on the Company’s capital structure and volatility of similar entities referred to as guideline companies. In determining similar entities, the Company considered industry, stage of life cycle, size and financial leverage. The dividend yield on the Company’s shares is assumed to be zero as the Company has not historically paid dividends. The fair value of the underlying Company shares was determined using the Company’s closing stock price on the grant date. A summary of stock option activity for the nine months ended September 30, 2021 and 2020 is as follows (in thousands except per share data): Number of Options Weighted Average Exercise Price Weighted Balance, December 31, 2019 — $ — — Granted — — — Exercised — — — Forfeited — — — Balance, September 30, 2020 — $ — — Number of Options Weighted Average Exercise Price Weighted Balance, December 31, 2020 — $ — — Granted 613 28.90 7 Exercised — — — Forfeited — — — Balance, September 30, 2021 613 $ 28.90 6.46 Exercisable — — — Equity-based compensation cost is recorded within the selling, general and administrative expenses within the condensed consolidated statements of comprehensive loss and totaled approximately $583 thousand and $0 for the three months ended September 30, 2021 and 2020, respectively, and $1.3 million and $0 for the nine months ended September 30, 2021 and 2020, respectively. The weighted average grant-date fair values of options granted during the nine months ended September 30, 2021 and 2020 were $11.41 and $0, respectively. There were no stock options exercised during 2021 or 2020. Performance-Based Restricted Stock Agreements The shares issued pursuant to the Performance-Based Restricted Stock Agreements vest depending on if the performance obligations are met. In general, the performance-based stock units (“Performance PSUs”) will be earned based on achievement of pre-established performance objectives related to production at the Company’s operational manufacturing facilities by December 31, 2023 and will vest on the date the attainment of such performance objectives is determined by the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”), subject to the participant’s continued employment with the Company through December 31, 2023. The Company has also issued PSUs that vest if the market price of the Company’s common stock exceeds a defined target during the performance period (“Market PSUs”, together with the Performance PSUs, the “PSUs”). As of September 30, 2021, and 2020, the outstanding PSUs issued by the Company were 424 thousand and 0, respectively. No PSUs were granted in fiscal year 2020. As of September 30, 2021, the performance-based provision has not been achieved for any of the outstanding performance-based award. The Company recognizes compensation expense for the Performance PSUs equal to the fair value of the equity-based compensation awards and is recognized on a straight-line basis over the vesting period of such awards as the Company has concluded the performance condition is probable to be met. The Company recognizes compensation expense for the Market PSUs equal to the fair value of the equity-based compensation awards and is recognized on a straight-line basis over the derived service period. The fair value and derived service period of the Market PSUs is estimated on the date of grant using a Monte Carlo simulation with the following assumptions: 2021 2020 Expected annual dividend yield — % — % Expected volatility 55.0 % — % Risk-free rate of return — % — % Expected option term (years) 2.7 0.0 The expected term of the shares granted is determined based on the period of time the shares are expected to be outstanding. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. The expected volatility was based on the Company’s capital structure and volatility of similar entities referred to as guideline companies. In determining similar entities, the Company considered industry, stage of life cycle, size and financial leverage. The dividend yield on the Company’s shares is assumed to be zero as the Company has not historically paid dividends. The fair value of the underlying Company shares was determined using the Company’s closing stock price on the grant date. A summary of the PSU activity for the nine months ended September 30, 2021 and 2020 is as follows (in thousands except per share data): Number of PSUs Weighted Average Exercise Price Weighted Balance, December 31, 2019 — $ — — Granted — — — Vested — — — Forfeited — — — Balance, September 30, 2020 — $ — — Number of PSUs Weighted Average Exercise Price Weighted Balance, December 31, 2020 — $ — — Granted 424 18.65 — Vested — — — Forfeited — — — Balance, September 30, 2021 424 $ 18.65 2 Exercisable — — — Equity-based compensation cost is recorded within the selling, general and administrative expenses within the consolidated statements of comprehensive loss and totaled approximately $3.5 million and $0 for the three months |
WARRANTS
WARRANTS | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
WARRANTS | WARRANTS Warrants issued to purchase Legacy PCT Class B Preferred Units On October 16, 2015, Legacy PCT issued a unit purchase warrant to P&G in connection with the patent licensing agreement described in Note 10, for 211 thousand warrants at an aggregate exercise price of $1.00, allowing P&G to purchase a variable number of Legacy PCT Class B Preferred Units during the exercise period of April 15, 2019 through April 15, 2024. The warrants were determined to vest at the start of the exercise period. The number of warrants available to P&G to purchase is equal to an amount that initially represented 5% of all outstanding equity of Legacy PCT on a fully diluted basis. Additionally, the warrant agreement contains an anti-dilution provision, which states that the number of warrants exercisable upon full exercise of the warrant will be subject to adjustment, such that the ownership percentage is not reduced below 2.5% sharing percentage in the Company, on a fully diluted basis. Legacy PCT determined the warrants issued are liability classified under ASC 480. Accordingly, the warrants were held at their initial fair value and remeasured at fair value at each subsequent reporting date with changes in the fair value presented in the statements of comprehensive loss. On October 15, 2020, P&G exercised all 211 thousand of the warrants for total proceeds of $1. The fair value of the Legacy Class B Preferred Units on the date of exercise was $18.17 million and was recorded in APIC. In connection with the exercise, the Company recorded a loss of $211 thousand. A summary of the Legacy PCT Class B warrant activity for nine months ended September 30, 2020 is as follows (in thousands except per share data): Number of warrants Weighted average exercise price Weighted average grant date fair value Weighted average remaining contractual term (years) Outstanding at December 31, 2019 211 $ 1.00 $ 30.63 4.29 Granted — — — — Exercised — — — — Outstanding at September 30, 2020 211 $ 1.00 $ 30.63 3.54 Exercisable 211 The Company recognized expense of $0 and $1.78 million for the nine months ended September 30, 2021 and 2020, respectively, in connection with these warrants, which was recorded within the Change in fair value of warrants line item in the condensed consolidated statements of comprehensive loss. The warrants were exercised in the fourth quarter of 2020, therefore there was no activity during the nine months ended September 30, 2021. Warrants issued to purchase Legacy PCT Class B-1 Preferred Units On June 5, 2019, in connection with a Legacy PCT Class B-1 Preferred Unit purchase agreement with a related party, Legacy PCT issued a unit purchase warrant for 8 thousand warrants at an exercise price of $37.61, allowing the related party to purchase a variable number of Legacy PCT Class B-1 Preferred Units during the exercise period of June 5, 2019 through June 4, 2024. Legacy PCT determined the warrants are not a freestanding instrument under ASC 480. Also, the warrants are determined to be clearly and closely related to the Legacy PCT Class B-1 Preferred Units under ASC 815, Derivatives and Hedging . Accordingly, they are not recorded in the financial statements until exercised. On March 12, 2021, the warrants were cancelled prior to the closing of the Business Combination. On July 22, 2019, in connection with a bridge note and warrant financing agreement with Innventus Fund I, L.P. (now known as Innventus ESG Fund I L.P.), Legacy PCT issued a unit purchase warrant for 5 thousand warrants at an exercise price of $37.61, allowing Innventus to purchase a variable number of Legacy PCT Class B-1 Preferred Units during the exercise period of July 22, 2019 through July 22, 2024. Legacy PCT determined the warrants issued are equity classified under ASC 480. Accordingly, the warrants were held at their initial fair value with no subsequent remeasurement. On March 12, 2021, the warrants were cancelled prior to the closing of the Business Combination. A summary of the Class B-1 warrant activity for the nine months ended September 30, 2021 and 2020 is as follows (in thousands except per share data): Number of warrants Weighted average exercise price Weighted average grant date fair value Weighted average remaining contractual term (years) Outstanding at December 31, 2019 5 $ 37.61 $ 15.52 4.56 Granted — — — 0 Exercised — — — 0 Outstanding at September 30, 2020 5 $ 37.61 $ 15.52 3.81 Outstanding at December 31, 2020 5 $ 37.61 $ 15.52 3.56 Granted — — — 0 Exercised — — — 0 Cancelled $ (5) $ 37.61 $ 15.52 3.56 Outstanding at September 30, 2021 — $ — $ — — Exercisable — The Company recognized no expense for the nine months ended September 30, 2021 and 2020, respectively. Warrants issued to purchase Legacy PCT Class C Units On June 29, 2018, the Legacy PCT Board approved the issuance of warrants to RTI Global (“RTI”) under the terms of a professional services agreement to purchase an aggregate of 144 thousand of Legacy PCT Class C Units at an aggregated exercise price of $37.605 per unit. The warrants vested immediately upon issuance and expire on June 29, 2023 or upon a change in control event, as defined in the warrant agreement. The Company determined the warrants issued are equity classified under ASC 480. Accordingly, the warrants were held at their initial fair value with no subsequent remeasurement. In connection with the Business Combination discussed in Note 1, the Company modified the warrant agreement to purchase 971 thousand shares of PCT common stock instead of Legacy PCT Class C Units on November 20, 2020. RTI can exercise these warrants upon the first anniversary of Closing of the Business Combination. The warrants expire on December 31, 2024. In connection with the modification of the agreement, the Company determined the warrants issued are liability classified under ASC 480. Accordingly, the warrants were held at their initial fair value and will be remeasured at fair value at each subsequent reporting date with changes in the fair value presented in the statements of comprehensive loss. A summary of the RTI warrant activity for the nine months ended September 30, 2021 and 2020 is as follows (in thousands, except per share data, as adjusted to show the effect of the reverse recapitalization as described in Note 1): Number of warrants Weighted average exercise price Weighted average grant date fair value Weighted average remaining contractual term (years) Outstanding at December 31, 2019 971 $ 5.56 $ 0.03 5 Granted — — — — Exercised — — — — Outstanding at September 30, 2020 971 $ 5.56 $ 0.03 4.25 Exercisable 971 Number of warrants Weighted average exercise price Weighted average grant date fair value Weighted average remaining contractual term (years) Outstanding at December 31, 2020 971 $ 5.56 $ 0.03 4 Granted — — — — Exercised — — — — Outstanding at September 30, 2021 971 $ 5.56 $ 0.03 3.25 Exercisable 971 The Company recognized $6.8 million and $0 of benefit for the three months ended September 30, 2021 and 2020, and $8.2 million and $0 of expense for the nine months ended September 30, 2021 and 2020, respectively. Refer to Note 12 – Fair Value of Financial Instruments for further information. Public Warrants and Private Warrants Upon the closing of the Business Combination, there were approximately 5.9 million outstanding public and private warrants to purchase shares of the Company’s common stock that were issued by ROCH prior to the Business Combination. Each whole warrant entitles the registered holder to purchase one whole share of the Company’s Common Stock at a price of $11.50 per share, subject to adjustment as discussed below, at the later of the closing of the Business Combination or one year after ROCH’s initial public offering, provided that the Company has an effective registration statement under the Securities Act covering the shares of Common Stock issuable upon exercise of the warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of shares of Common Stock. The warrants will expire five years after the completion of the Business Combination, or earlier upon redemption or liquidation. The private warrants are identical to the public warrants, except that the private warrants and the common stock issuable upon exercise of the private warrants were not transferable, assignable or salable until after the completion of an Initial Business Combination, subject to certain limited exceptions. Additionally, the private warrants are non-redeemable so long as they are held by the initial holder or any of its permitted transferees. If the private warrants are held by someone other than the initial holder or its permitted transferees, the private warrants will be redeemable by the Company and exercisable by such holders on the same basis as the public warrants. The Company may redeem the outstanding warrants in whole, but not in part, at a price of $0.01 per warrant upon a minimum of 30 days’ prior written notice of redemption, if and only if the last sale price of the Company’s common stock equals or exceeds $18.00 per share for any 20-trading days within a 30-trading day period ending three do so on a cashless basis. In no event will the Company be required to net cash settle the warrant exercise. The public warrants are accounted for as equity classified warrants as they were determined to be indexed to the Company’s stock and meet the requirements for equity classification. The Company has classified the private warrants as a warrant liability as there is a provision within the warrant agreement that allows for private warrants to be exercised via a cashless exercise while held by the Sponsor and affiliates of the Sponsor, but would not be exercisable at any time on a cashless basis if transferred and held by another investor. Therefore, the Company will classify the private warrants as a liability pursuant to ASC 815 until the private warrants are transferred from the initial purchasers or any of their permitted transferees. At September 30, 2021, there were approximately 5.7 million Public Warrants and 0.2 million Private Placement Warrants outstanding. Refer to Note 12 – Fair Value of Financial Instruments for further information. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Innventure LLC (“Innventure”) had a significant ownership stake in Legacy PCT. Innventure, in turn, was majority owned by Innventure1. WE-INN LLC (“WE-INN”) held a minority interest in Innventure, and WE-INN is majority owned by Wasson Enterprises. Innventure held significant interests in the following legal entities: Innventure Management Services LLC, Innventure GP LLC, and Aeroflexx LLC. Innventure had a significant financial interest over each of the legal entities within the group and had decision-making ability over the group whereby significant managerial and operational support was provided by Innventure personnel. This includes certain executive management and officers of Legacy PCT and other legal entities that were employees or officers of Innventure. The legal entities, including Legacy PCT, were deemed to be under common control by Innventure. There were no transactions between PCT and its affiliates, Innventure GP LLC and Aeroflexx LLC, during the nine months ended September 30, 2021 and 2020. Innventure Management Services LLC provided significant managerial support to the other legal entities below Innventure, including Legacy PCT. Management services During the nine months ended September 30, 2021 and 2020, PureCycle reimbursed Innventure Management Services LLC for certain expenses incurred on its behalf. The Company paid $46 thousand and $128 thousand to Innventure Management Services LLC related to this arrangement for the three months ended September 30, 2021 and 2020, respectively, and $167 thousand and $315 thousand for the nine months ended September 30, 2021 and 2020, respectively. These amounts were included in selling, general and administrative expenses in the condensed consolidated statements of comprehensive loss. As of September 30, 2021, and December 31, 2020, the Company owed Innventure Management Services LLC $6 thousand and $30 thousand, respectively, related to this arrangement, which is classified as accounts payable in the accompanying condensed consolidated balance sheets. Related party receivables In 2020, the Company prepaid certain tax payments on behalf of unitholders. As of September 30, 2021 and December 31, 2020 the receivable balance was $78 thousand recorded in prepaid expenses and other current assets in the condensed consolidated balance sheets. Leases |
NET LOSS PER SHARE
NET LOSS PER SHARE | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | NET LOSS PER SHAREThe 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. As result of the reverse recapitalization, the Company has retroactively adjusted the weighted average shares outstanding prior to the Business Combination to give effect to the Exchange Ratio used to determine the number of shares of common stock into which they were converted. Presented in the table below is a reconciliation of the numerator and denominator for the basic and diluted earnings per share (“EPS”) calculations for the three and nine months ended September 30, 2021 and 2020 (in thousands, except per share data): Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Numerator: Net income (loss) attributable to PureCycle Technologies $ (20,977) $ (6,609) $ (58,110) $ (15,588) Less cumulative earnings to preferred stockholder — 882 — 4,833 Net income (loss) attributable to common stockholders $ (20,977) $ (7,491) $ (58,110) $ (20,421) Denominator: Weighted average common shares outstanding, basic and diluted 118,255 27,156 95,773 27,156 Net loss per share attributable to common stockholder, basic and diluted $ (0.18) $ (0.28) $ (0.61) $ (0.75) |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT Presented in the table below are the major classes of property, plant and equipment by category as of the below dates: As of September 30, 2021 (in thousands) Cost Accumulated Depreciation Net Book Value Building $ 12,029 $ 618 $ 11,411 Machinery and equipment 18,569 3,645 14,924 Fixtures and Furnishings 104 34 70 Land improvements 150 10 140 Land 1,150 — 1,150 Construction in process 161,527 — 161,527 Total property, plant and equipment $ 193,529 $ 4,307 $ 189,222 As of December 31, 2020 (in thousands) Cost Accumulated Net Book Value Building $ 12,029 $ 387 $ 11,642 Machinery and equipment 15,982 2,388 13,594 Fixtures and Furnishings 104 22 82 Land improvements 150 3 147 Land 1,150 — 1,150 Construction in process 47,452 — 47,452 Total property, plant and equipment $ 76,867 $ 2,800 $ 74,067 Depreciation expense is recorded within operating costs in the condensed consolidated statements of comprehensive loss and amounted to $1.5 million and $1.4 million for the nine months ended September 30, 2021 and 2020, respectively, and $522 thousand and $475 thousand for the three months ended September 30, 2021 and 2020, respectively. |
DEVELOPMENT PARTNER ARRANGEMENT
DEVELOPMENT PARTNER ARRANGEMENTS | 9 Months Ended |
Sep. 30, 2021 | |
Collaborative Arrangements And Noncollaborative Arrangement Transaction [Abstract] | |
DEVELOPMENT PARTNER ARRANGEMENTS | DEVELOPMENT PARTNER ARRANGEMENTS License Agreements On October 16, 2015, Legacy PCT entered into a patent license agreement with P&G (the “Original Patent License Agreement”). Legacy PCT and P&G entered into an Amended and Restated Patent License Agreement on July 28, 2020 (the “Amended and Restated Patent License Agreement”). PCT and P&G entered into a side letter agreement on February 12, 2021 amending certain provisions of the Amended and Restated License Agreement (the “Side Letter Agreement” and, together with the Original Patent License Agreement and the Amended and Restated Patent License Agreement, the “License Agreement”). The License Agreement outlines three phases with specific deliverables for each phase. During Phase 1 of the License Agreement, P&G provided Legacy PCT with up to one full-time employee to assist in the execution of Legacy PCT’s research and development activities. During Phase 2, P&G provided up to two full-time employees to assist in the execution of Legacy PCT’s research and development activities. In April 2019, Legacy PCT elected to enter into Phase 3 of the License Agreement and prepaid a royalty payment in the amount of $2.0 million, which will be reduced against future royalties payable as sales occur. Phase 3 of the License Agreement relates to the commercial manufacture period for the manufacture of the licensed product. This phase includes the construction of the first commercial plant for the manufacture of the licensed product, details on the commercial sales capacity and the pricing of the licensed product to P&G and to third parties. Where the Company has made royalty payments to its product development partners, the Company expenses such payments as incurred unless it has determined that is it probable that such prepaid royalties have future economic benefit to the Company. In such cases prepaid royalties will be reduced as royalties would otherwise be due to the partners. Effective January 1, 2021, the Company entered into an agreement with P&G to provide certain research assistance through June 30, 2021. Under the terms of the January agreement, the Company is obligated to pay P&G $0.5 million for such services. Effective July 1, 2021, the Company entered into a consulting agreement with P&G. The agreement will expire effective June 30, 2022. Under the terms of the agreement, we are obligated to pay P&G $0.1 million for certain research assistance. As of September 30, 2021 and December 31, 2020, the Company is in Phase 3 of the License Agreement and has recorded $2.0 million within prepaid expenses and other non-current assets in the condensed consolidated balance sheets. On November 13, 2019, Legacy PCT entered into a patent sublicense agreement with Impact Recycling Limited (“Impact”) through the term of the patents. The agreement outlines an initial license fee of $2.5 million and royalties on production using the license. In 2020, Legacy PCT paid $890 thousand of the initial license fee, and during the nine months ended September 30, 2021, the Company paid the remaining $1.6 million of the initial fee. The initial license fee of $2.5 million is recorded in prepaid expenses and other non-current assets in the condensed consolidated balance sheets and will be ratably amortized over the term of the underlying patent using the straight-line method. In May 2021, the Company began using the technology covered by the Impact agreement and commenced amortization as of this date. Block and Release Agreement On June 23, 2020, Legacy PCT entered into a block and release agreement with Total Petrochemicals & Refining S.A./N.V. (“Total”). Upon execution of the agreement, Total made a prepayment consisting of a payment of $5.0 million for future receipt of resin consisting of recycled polypropylene (“recycled PP”). The prepayment was placed in an escrow account until the “release condition” of the Company closing the bond offering and overall capital funding of at least $370.0 million has occurred. After the Company successfully raised the required capital, the $5.0 million was released during the nine months ended September 30, 2021 to the Company and recorded as deferred revenue in the condensed consolidated balance sheets. Strategic Alliance Agreement On December 13, 2018, Legacy PCT entered into a strategic alliance agreement with Nestle Ltd. (“Nestle”), which expires on December 31, 2023. Upon execution of the agreement, Nestle committed to provide $1.0 million to Legacy PCT to fund further research and development efforts. The funding provided by Nestle may be convertible, in whole or in part, into a prepaid product purchase arrangement at Nestle’s option, upon the time of product delivery beginning in 2020. Additionally, because the research and development efforts were not successful as of December 31, 2020, up to 50% of the funding may be convertible into a 5-year term loan obligation, payable to Nestle at an interest rate equivalent to the U.S. prime rate. As of the issuance of these statements, Nestlé has not elected to convert any funding into a term loan. Legacy PCT received the funding from Nestle on January 8, 2019. The Company has recorded $1.0 million as a deferred research and development obligation within other non-current liabilities in the condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020. Recognition related to the funding received will be deferred until it is probable that Nestle will not exercise their option. If the prepaid product purchase option is exercised, the obligation will be recognized as an adjustment to the transaction price of future product sales (e.g., net revenue presentation). If the option is not exercised, or in the case of development efforts not being successful, any amounts not converted to a loan obligation will be recognized as a reduction to research and development costs. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Historically, Legacy PCT was a limited liability company which had elected to be treated as a partnership for income tax purposes. As such, the Company was not directly liable for income taxes for federal purposes. As of the date of the Business Combination, the operations of the Company ceased to be taxed as a partnership resulting in a change in tax status for federal and state income tax purposes. This change in tax status requires immediate recognition of any deferred tax assets or liabilities as of the transaction date as the Company will now be directly liable for income taxes. The recognition of these initial deferred balances, if any, would be recorded as additional tax expense in the period of the transaction. In addition, the Company will accrue current and deferred tax expense based on ongoing activity from that date. The Company has determined that any net deferred tax assets are not more likely than not to be realized in the future as of the date of the change in tax status, and a full valuation allowance is required. In addition, the Company has determined that any current forecasted operations would result in federal and state income tax losses which are also not more likely than not to be realized. As a result, for the periods ended September 30, 2021 and 2020, the Company has reported tax expense of $0 and $0, respectively. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and sets out a fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Inputs are broadly defined as assumptions market participants would use in pricing an asset or liability. Assets and liabilities carried at fair value are classified and disclosed in one of the following three categories: Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 - Inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly, and fair value is determined through the use of models or other valuation methodologies Level 3 - Inputs are unobservable for the asset or liability and include situations where there is little, if any, market activity for the asset or liability. The inputs into the determination of fair value are based upon the best information in the circumstances and may require significant management judgment or estimation. Assets and liabilities measured and recorded at Fair Value on a recurring basis As of September 30, 2021 and December 31, 2020, the Company’s financial assets and liabilities measured and recorded at fair value on a recurring basis were classified within the fair value hierarchy as follows (in thousands): September 30, 2021 December 31, 2020 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Investments: Commercial paper, available for sale $ — $ 83,723 $ — $ 83,723 $ — $ — $ — $ — Corporate Bonds, available for sale — 94,974 — 94,974 — — — — Municipal bonds, available for sale — 5,878 — 5,878 — — — — Total investments $ — $ 184,575 $ — $ 184,575 $ — $ — $ — $ — Liabilities Warrant liability: RTI warrants $ — $ — $ 8,214 $ 8,214 $ — $ — $ — $ — Private warrants — — 1,316 1,316 — — — — Total warrant liability $ — $ — $ 9,530 $ 9,530 $ — $ — $ — $ — Measurement of the Private Warrants The private warrants are measured at fair value on a recurring basis using a Black-Scholes model. The private warrants are classified as Level 3 for both initial measurement upon close of the Business Combination and subsequent measurement using the following assumptions: September 30, 2021 March 18, 2021 (Initial Recognition) Expected annual dividend yield — % — % Expected volatility 56.2 % 47.3 % Risk-free rate of return 0.86 % 0.86 % Expected option term (years) 4.47 5.0 The expected term of the warrants granted are determined based on the duration of time the warrants are expected to be outstanding. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. The expected volatility was based on the Company’s capital structure and volatility of similar entities referred to as guideline companies. In determining similar entities, the Company considered industry, stage of life cycle, size and financial leverage. The dividend yield on the Company’s warrants is assumed to be zero as the Company has not historically paid dividends. The fair value of the underlying Company shares was determined using the Black-Scholes calculation. The aggregate values of the private warrants were $1.3 million and $4.6 million on September 30, 2021 and March 18, 2021, respectively. A summary of the private warrants activity from the Business Combination date at March 18, 2021 to September 30, 2021 is as follows: Fair value Balance at March 18, 2021 $ 4,604 Change in fair value (3,288) Balance at September 30, 2021 $ 1,316 Refer to Note 6 – Warrants for further information. Measurement of the RTI warrants Significant changes in any of the significant unobservable inputs in isolation would not result in a materially different fair value estimate. The interrelationship between these inputs is insignificant. The Company has determined its warrant to be a Level 3 fair value measurement and has remeasured using the Black-Scholes option pricing model to calculate its fair value for both initial measurement upon close of the Business Combination and subsequent measurement using the following assumptions: September 30, 2021 March 18, 2021 (Initial Recognition) Expected annual dividend yield — % — % Expected volatility 55.49 % 48.51 % Risk-free rate of return 0.59 % 0.54 % Expected option term (years) 3.25 3.79 The expected term of the warrants granted are determined based on the duration of time the warrants are expected to be outstanding. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. The expected volatility was based on the Company’s capital structure and volatility of similar entities referred to as guideline companies. In determining similar entities, the Company considered industry, stage of life cycle, size and financial leverage. The dividend yield on the Company’s warrants is assumed to be zero as the Company has not historically paid dividends. The fair value of the underlying Company shares was determined using the Black-Scholes calculation. The Company has an option to repurchase the Warrants at any time. The maximum fair value of the Warrants is limited by the fair value of the repurchase option, which cannot exceed $15.0 million. Changes in Level 3 liabilities measured at fair value for nine months ended September 30, 2021 are as follows (in thousands): Fair value (Level 3) Balance at December 31, 2020 $ — Change in fair value 8,214 Balance at September 30, 2021 $ 8,214 Assets and liabilities recorded at carrying value In determining the appropriate levels, the Company performs a detailed analysis of the assets and liabilities that are subject to fair value measurements. |
AVAILABLE-FOR-SALE SECURITIES
AVAILABLE-FOR-SALE SECURITIES | 9 Months Ended |
Sep. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
AVAILABLE-FOR-SALE SECURITIES | AVAILABLE-FOR-SALE INVESTMENTS The Company classifies its investments in debt securities as available-for-sale. Debt securities are comprised of highly liquid investments with minimum “A” rated securities and, as of September 30, 2021, consist of corporate entity commercial paper and securities and municipal bonds. The debt securities are reported at fair value with unrealized gains or losses recorded in accumulated other comprehensive income in the condensed consolidated balance sheets. Refer to Note 12, "Fair Value of Financial Instruments," for information related to the fair value measurements and valuation methods utilized. The following table represents the Company’s available-for-sale investments by major security type as of September 30, 2021 and December 31, 2020 (in thousands): September 30, 2021 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Total Fair Value Commercial Paper $ 83,732 $ 3 $ (12) $ 83,723 Corporate Bonds 94,978 17 (21) 94,974 Municipal Bonds 5,883 — (5) 5,878 Total $ 184,593 $ 20 $ (38) $ 184,575 December 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Total Fair Value Commercial Paper $ — $ — $ — $ — Corporate Bonds — — — — Municipal Bonds — — — — Total $ — $ — $ — $ — The following table summarizes the fair value and amortized cost bases of the Company’s available-for-sale investments by contractual maturity of September 30, 2021 and December 31, 2020 (in thousands): September 30, 2021 December 31, 2020 Amortized Cost Fair Value Amortized Cost Fair Value Due within one year $ 125,538 $ 125,524 $ — $ — Due after one year through five years 59,055 59,051 — — Total $ 184,593 $ 184,575 $ — $ — Debt securities as of September 30, 2021 had an average remaining maturity of 0.9 years. |
CONTINGENCIES
CONTINGENCIES | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIES Legal Proceedings PCT is subject to legal and regulatory actions that arise from time to time in the ordinary course of business. The assessment as to whether a loss is probable or reasonably possible, and as to whether such loss or a range of such loss is estimable, often involves significant judgment about future events, and the outcome of litigation is inherently uncertain. Other than as described below, there is no material pending or threatened litigation against PCT that remains outstanding as of September 30, 2021. Regulatory Investigations On or around September 30, 2021, the SEC issued an investigative subpoena to PCT’s Chief Executive Officer requesting testimony in connection with a non-public, fact-finding investigation of the Company. The investigation pertains to, among other things, statements made in connection with PCT’s technology, financial projections, key supply agreements, and management. PCT and its Chief Executive Officer intend to cooperate with the SEC’s subpoena and investigation. Shareholder Securities Litigation Beginning on or about May 11, 2021, two putative class action complaints were filed against PCT, certain senior members of management and others, asserting violations of federal securities laws under Section 10(b) and Section 20(a) of the Exchange Act. The complaints generally allege that the applicable defendants made false and/or misleading statements in press releases and public filings regarding the Technology, PCT’s business and PCT’s prospects. The first putative class action complaint was filed in the U.S. District Court for the Middle District of Florida by William C. Theodore against PCT and certain senior members of management (the “Theodore Lawsuit”). The second putative class action complaint was filed in the U.S. District Court for the Middle District of Florida by David Tennenbaum against PCT, certain senior members of management and others (the “Tennenbaum Lawsuit” and, together with the Theodore Lawsuit, the “Lawsuits”). On July 14, 2021, the court granted a motion to consolidate the Lawsuits and on July 26, 2021, Tennenbaum filed a motion to voluntarily dismiss his complaint without prejudice. On August 5, 2021, the Court entered an order appointing the Ciecko Brothers as Co-Lead Plaintiffs (“Lead Plaintiffs”) and Pomerantz LLP as Lead Counsel. On September 27, 2021, the Lead Plaintiffs filed a consolidated amended complaint. The consolidated amended complaint seeks to represent a class of investors who purchased or otherwise acquired PCT’s securities between November 16, 2020 and May 5, 2021, certification of the alleged class, as well as compensatory and punitive damages. The consolidated amended complaint relies on information included in a research report published by Hindenburg Research LLC. Defendants will be required to answer or otherwise plead on or before November 11, 2021. PCT and the individual defendants constituting senior members of management intend to vigorously defend the Lawsuits. Given the stage of the litigation, PCT cannot reasonably estimate at this time whether there will be any loss, or if there is a loss, the possible range of loss, that may arise from the unresolved Lawsuits. Derivative Litigation On November 3, 2021, Byung-Gook Han, a purported PCT shareholder, derivatively and purportedly on behalf of PCT, filed a shareholder derivative action in the United States District Court for the District of Delaware (Byung-Gook Han v. Otworth et. al., Case No. 1:21-cv-01569-UNA) against certain senior members of PCT’s management, PCT’s directors and others (collectively, the “Individual Defendants”), alleging violations of Section 20(a) of the Exchange Act and breaches of fiduciary duties and bringing claims for unjust enrichment and waste of corporate assets. The shareholder derivative action generally alleges that the Individual Defendants made materially false and misleading statements in press releases, webinars and other public filings regarding the Technology, PCT’s business, PCT’s prospects, and the background and experience of the Individual Defendants. The shareholder derivative action seeks unspecified monetary damages, reform of the Company's corporate governance and internal procedures, unspecified restitution from the Individual Defendants, and costs and fees associated with bringing the action. The Individual Defendants intend to vigorously defend against the shareholder derivative action. Given the stage of the litigation, PCT cannot reasonably estimate at this time whether there will be any loss, or if there is a loss, the possible range of loss, that may arise from the unresolved shareholder derivative action. In the future, PCT may become party to additional legal matters and claims arising in the ordinary course of business. While PCT is unable to predict the outcome of the above or future matters, it does not believe, based upon currently available facts, that the ultimate resolution of any such pending matters will have a material adverse effect on its overall financial position, results of operations, or cash flows. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS In connection with the preparation of the condensed consolidated interim financial statements for the period ended September 30, 2021, management has evaluated events through November 10, 2021 to determine whether any events required recognition or disclosure in the condensed consolidated interim financial statements. The following subsequent events were identified through the date of these condensed consolidated interim financial statements: On October 15, 2021, the Company issued 235,796 shares of common stock to Aptar Group, Inc. (“Aptar”) for proceeds of $1 million, related to the closing of the FDA Letter Milestone. On October 15, 2021, the approximately $1.8 million interest payment due for the Notes was paid entirely in kind, which increased the principal amount of the Notes by approximately $1.8 million. On October 21, 2021, the Company received notice that certain holders of the Notes intended to convert approximately $45.3 million of the principal amount of the Notes. On October 22, the Company issued 6,533,532 shares of common stock to the converting Note holders. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Business Combination | Business Combination On March 17, 2021, PureCycle consummated the previously announced business combination (“Business Combination”) by and among Roth CH Acquisition I Co., a Delaware corporation (“ROCH”), Roth CH Acquisition I Co. Parent Corp., a Delaware corporation and wholly owned direct subsidiary of ROCH (“ParentCo”), Roth CH Merger Sub LLC, a Delaware limited liability company and wholly owned direct subsidiary of Parent Co, Roth CH Merger Sub Corp., a Delaware corporation and wholly owned direct subsidiary of ParentCo and PureCycle Technologies LLC (“PCT LLC” or “Legacy PCT”) pursuant to the Agreement and Plan of Merger dated as of November 16, 2020, as amended from time to time (the “Merger Agreement”). |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated interim financial statements include the accounts of the Company. The condensed consolidated interim financial statements are presented in U.S. Dollars. Certain information in footnote disclosures normally included in annual financial statements was condensed or omitted for the interim periods presented in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) and accounting principles generally accepted in the United States of America (“U.S. GAAP”). Intercompany balances and transactions were eliminated upon consolidation. These condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements and accompanying notes of Legacy PCT for the fiscal year ended December 31, 2020 as filed on July 1, 2021 in our prospectus filed pursuant to Rule 424(b)(3) of the Securities Act. The results of operations for the nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the entire year ending December 31, 2021. The accompanying condensed consolidated interim financial statements reflect all adjustments, consisting of normal recurring adjustments, that are, in the opinion of management, necessary to present a fair statement of the results for the interim periods presented. |
Reclassifications | Reclassifications Certain amounts in prior periods have been reclassified to conform with the report classifications of the nine months ended September 30, 2021, noting the Company has reflected the reverse recapitalization pursuant to the Business |
Reverse Recapitalization | Reverse Recapitalization The Business Combination was accounted for as a reverse recapitalization and ROCH was treated as the “acquired” company for accounting purposes. The Business Combination was accounted for as the equivalent of Legacy PCT issuing stock for the net assets of ROCH, accompanied by a recapitalization. Accordingly, all historical financial information presented in these condensed consolidated interim financial statements represents the accounts of Legacy PCT “as if” Legacy PCT is the predecessor to the Company. The units and net loss per unit, prior to the Business Combination, have been adjusted to share amounts reflecting the exchange ratio established in the Business Combination. |
Cash and cash equivalents | Cash and cash equivalents The Company considers all highly liquid investments with an original maturity of three months or less at date of inception to be cash and cash equivalents. As of September 30, 2021, the Company’s cash and cash equivalents balance represents cash and money market funds deposited with financial institutions. As of December 31, 2020, the Company’s cash and cash equivalents balance represents cash deposited with financial institutions. These balances may exceed federally insured limits; however, the Company believes the risk of loss is low. |
Investments | Investments The Company accounts for its investment in Debt Securities in accordance with ASC 320, Investments – Debt Securities . The fair value for fixed-rate debt securities is based on quoted market prices for the same or similar debt instruments and is classified as Level 2. All investment holdings as of September 30, 2021 have been classified as Available for Sale. The Company did not hold any investments in Debt Securities as of December 31, 2020. The Company classifies its Debt Securities investments as current assets as they are highly liquid and the related funds are available for use in current operations. |
Income Taxes | Income Taxes To calculate the interim tax provision, at the end of each interim period the Company estimates the annual effective tax rate and applies that to its ordinary quarterly earnings. The effect of changes in the enacted tax laws or rates is recognized in the interim period in which the change occurs. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and judgments including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in other jurisdictions, permanent differences between book and tax amounts, and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained, or the tax environment changes. Furthermore, in December 2019, the FASB issued ASU No. 2019-12, Income Taxes: Simplifying the Accounting for Income Taxes (“ASU 2019-12”). The new guidance affects general principles within Topic 740, Income Taxes . The amendments of ASU 2019-12 are meant to simplify and reduce the cost of accounting for income taxes. The Company adopted the ASU during the first quarter of 2021 using a prospective approach. The adoption of the ASU did not have a material impact on the Company’s condensed consolidated financial statements. |
Warrants | Warrants The Company evaluates all of its financial instruments, including issued warrants, to determine if such instruments are liability classified, pursuant to ASC 480 - Distinguishing Liabilities from Equity (“ASC 480”) or derivatives or contain features that qualify as embedded derivatives pursuant to ASC 815 – Derivatives and Hedging (“ASC 815”). The classification of instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Issuance costs incurred with the Business Combination that are attributable to liability classified warrants are expensed as incurred. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In July 2018, ASU 2018-10, Codification Improvements to Topic 84 2, Leases , was issued to provide more detailed guidance and additional clarification for implementing ASU 2016-02. Furthermore, in July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements , which provides an optional transition method in addition to the existing modified retrospective transition method by allowing a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. Furthermore, on June 3, 2020, the FASB deferred by one year the effective date of the new leases standard for private companies, private not-for-profits (“NFPs”) and public NFPs that have not yet issued (or made available for issuance) financial statements reflecting the new standard. These new leasing standards are effective for the Company beginning after December 15, 2021 and interim periods within fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the effect of the adoption of this guidance on the consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments (“ASU 2016-13”), which, together with subsequent amendments, amends the requirement on the measurement and recognition of expected credit losses for financial assets held. ASU 2016-13 is effective for the Company beginning December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. The Company is currently in the process of evaluating the effects of this pronouncement on the Company's financial statements and does not expect it to have a material impact on the consolidated financial statements. In August 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20 that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock. Two methods of transition were permitted upon adoption: full retrospective and modified retrospective. The Company elected to apply the modified retrospective adoption approach to all contracts. Under this approach, prior periods were not restated. Rather, convertible notes and other disclosures for prior periods were provided in the notes to the financial statements as previously reported under ASC 470-20, and the cumulative effect of initially applying the guidance was recognized as an adjustment to Notes payable, APIC, and Accumulated deficit. |
ORGANIZATION (Tables)
ORGANIZATION (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Reverse Capitalization | The following summarizes the merger consideration (in thousands except per share information): Total shares transferred 83,500 Value per share $ 10.00 Total Share Consideration $ 835,000 Assumed indebtedness Revenue Bonds 249,600 The Convertible Notes 60,000 Term Loan 314 Related Party Promissory Note 12,000 Total merger consideration $ 1,156,914 The following table reconciles the elements of the Business Combination to the condensed consolidated statement of cash flows for the nine months ended September 30, 2021 (in thousands): Cash - ROCH Trust and cash (net of redemptions) $ 76,510 Cash - PIPE 250,000 Less transaction costs (28,049) Net Business Combination and PIPE financing $ 298,461 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of Accounting Standards Update | As a result of applying the modified retrospective method to adopt ASU 2020-06, adjustments were made to the consolidated balance sheets as of December 31, 2020 and the below illustrates how the notes payable, APIC, and accumulated deficit balances would be effected as of January 1, 2021 (in thousands, as adjusted to show the effect of the reverse recapitalization as described in Note 1): December 31, 2020 January 1, 2021 As reported Adjustments As adjusted Notes payable $ 26,599 $ 30,638 $ 57,237 APIC 192,381 (31,075) 161,306 Accumulated deficit $ (80,714) $ 437 $ (80,277) |
NOTES PAYABLE AND DEBT INSTRU_2
NOTES PAYABLE AND DEBT INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Summary of the Convertible Notes | The following provides a summary of the interest expense of PCT’s convertible debt instruments (in thousands): Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Contractual interest expense $ 906 $ — $ 2,689 $ — Amortization of deferred financing costs 466 — 1,546 — Effective interest rate 9.0 % — % 9.0 % — % The following provides a summary of the convertible notes (in thousands): As of September 30, 2021 December 31, 2020 Unamortized deferred issuance costs $ 2,010 $ 3,288 Net carrying amount 59,670 56,712 Fair value $ 123,332 $ 123,532 Fair value level Level 3 Level 3 |
Summary of Revenue Bonds | (in thousands) Bond Series Term Principal Amount Interest Rate Maturity Date 2020A A1 $ 12,370 6.25 % December 1, 2025 2020A A2 $ 38,700 6.50 % December 1, 2030 2020A A3 $ 168,480 7.00 % December 1, 2042 2020B B1 $ 10,000 10.00 % December 1, 2025 2020B B2 $ 10,000 10.00 % December 1, 2027 2020C C1 $ 10,000 13.00 % December 1, 2027 |
EQUITY-BASED COMPENSATION (Tabl
EQUITY-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Equity-based Compensation, Valuation Assumptions | The fair value of the stock is estimated on the date of grant using the Black-Scholes option-pricing model using the following assumptions: 2021 2020 Expected annual dividend yield — % — % Expected volatility 49.1 % 42.1 - 63.3% Risk-free rate of return 0.1 % 1.6 - 1.7% Expected option term (years) 0.2 0.8 - 4.4 2021 2020 Expected annual dividend yield — % — % Expected volatility 47.5 % — % Risk-free rate of return 0.7 % — % Expected option term (years) 4.5 0 2021 2020 Expected annual dividend yield — % — % Expected volatility 55.0 % — % Risk-free rate of return — % — % Expected option term (years) 2.7 0.0 |
Schedule of Restricted Stock Activity | A summary of restricted stock activity for the nine months ended September 30, 2021 and 2020 is as follows (in thousands except per share data): Number of RSU's Weighted average grant date fair value Weighted average remaining recognition period Non-vested at December 31, 2019 73 $ 2.21 Recapitalized 607 (1.97) Non-vested at December 31, 2019 (after effect of recapitalization) 680 0.24 Granted 1,937 1.73 Vested (1,777) 1.37 Forfeited (11) 1.95 Non-vested at September 30, 2020 829 $ 1.27 2.18 Number of RSU's Weighted average grant date fair value Weighted average remaining recognition period Non-vested at December 31, 2020 91 $ 11.58 Recapitalization 671 (10.19) Non-vested at December 31, 2020 (after effect of recapitalization) 762 1.39 Granted 2,353 18.88 Vested (699) 9.83 Forfeited (26) 3.92 Non-vested at September 30, 2021 2,390 $ 16.12 2.63 |
Schedule of Stock Option Activity | A summary of stock option activity for the nine months ended September 30, 2021 and 2020 is as follows (in thousands except per share data): Number of Options Weighted Average Exercise Price Weighted Balance, December 31, 2019 — $ — — Granted — — — Exercised — — — Forfeited — — — Balance, September 30, 2020 — $ — — Number of Options Weighted Average Exercise Price Weighted Balance, December 31, 2020 — $ — — Granted 613 28.90 7 Exercised — — — Forfeited — — — Balance, September 30, 2021 613 $ 28.90 6.46 Exercisable — — — |
Schedule of Performance-Based Restricted Stock Activity | A summary of the PSU activity for the nine months ended September 30, 2021 and 2020 is as follows (in thousands except per share data): Number of PSUs Weighted Average Exercise Price Weighted Balance, December 31, 2019 — $ — — Granted — — — Vested — — — Forfeited — — — Balance, September 30, 2020 — $ — — Number of PSUs Weighted Average Exercise Price Weighted Balance, December 31, 2020 — $ — — Granted 424 18.65 — Vested — — — Forfeited — — — Balance, September 30, 2021 424 $ 18.65 2 Exercisable — — — |
WARRANTS (Tables)
WARRANTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Schedule of Warrant Activity | A summary of the Legacy PCT Class B warrant activity for nine months ended September 30, 2020 is as follows (in thousands except per share data): Number of warrants Weighted average exercise price Weighted average grant date fair value Weighted average remaining contractual term (years) Outstanding at December 31, 2019 211 $ 1.00 $ 30.63 4.29 Granted — — — — Exercised — — — — Outstanding at September 30, 2020 211 $ 1.00 $ 30.63 3.54 Exercisable 211 A summary of the Class B-1 warrant activity for the nine months ended September 30, 2021 and 2020 is as follows (in thousands except per share data): Number of warrants Weighted average exercise price Weighted average grant date fair value Weighted average remaining contractual term (years) Outstanding at December 31, 2019 5 $ 37.61 $ 15.52 4.56 Granted — — — 0 Exercised — — — 0 Outstanding at September 30, 2020 5 $ 37.61 $ 15.52 3.81 Outstanding at December 31, 2020 5 $ 37.61 $ 15.52 3.56 Granted — — — 0 Exercised — — — 0 Cancelled $ (5) $ 37.61 $ 15.52 3.56 Outstanding at September 30, 2021 — $ — $ — — Exercisable — A summary of the RTI warrant activity for the nine months ended September 30, 2021 and 2020 is as follows (in thousands, except per share data, as adjusted to show the effect of the reverse recapitalization as described in Note 1): Number of warrants Weighted average exercise price Weighted average grant date fair value Weighted average remaining contractual term (years) Outstanding at December 31, 2019 971 $ 5.56 $ 0.03 5 Granted — — — — Exercised — — — — Outstanding at September 30, 2020 971 $ 5.56 $ 0.03 4.25 Exercisable 971 Number of warrants Weighted average exercise price Weighted average grant date fair value Weighted average remaining contractual term (years) Outstanding at December 31, 2020 971 $ 5.56 $ 0.03 4 Granted — — — — Exercised — — — — Outstanding at September 30, 2021 971 $ 5.56 $ 0.03 3.25 Exercisable 971 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Summary of Net Income (Loss) per Share | Presented in the table below is a reconciliation of the numerator and denominator for the basic and diluted earnings per share (“EPS”) calculations for the three and nine months ended September 30, 2021 and 2020 (in thousands, except per share data): Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Numerator: Net income (loss) attributable to PureCycle Technologies $ (20,977) $ (6,609) $ (58,110) $ (15,588) Less cumulative earnings to preferred stockholder — 882 — 4,833 Net income (loss) attributable to common stockholders $ (20,977) $ (7,491) $ (58,110) $ (20,421) Denominator: Weighted average common shares outstanding, basic and diluted 118,255 27,156 95,773 27,156 Net loss per share attributable to common stockholder, basic and diluted $ (0.18) $ (0.28) $ (0.61) $ (0.75) |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | Presented in the table below are the major classes of property, plant and equipment by category as of the below dates: As of September 30, 2021 (in thousands) Cost Accumulated Depreciation Net Book Value Building $ 12,029 $ 618 $ 11,411 Machinery and equipment 18,569 3,645 14,924 Fixtures and Furnishings 104 34 70 Land improvements 150 10 140 Land 1,150 — 1,150 Construction in process 161,527 — 161,527 Total property, plant and equipment $ 193,529 $ 4,307 $ 189,222 As of December 31, 2020 (in thousands) Cost Accumulated Net Book Value Building $ 12,029 $ 387 $ 11,642 Machinery and equipment 15,982 2,388 13,594 Fixtures and Furnishings 104 22 82 Land improvements 150 3 147 Land 1,150 — 1,150 Construction in process 47,452 — 47,452 Total property, plant and equipment $ 76,867 $ 2,800 $ 74,067 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Summary of Assets and Liabilities Measurements on a Recurring Basis | As of September 30, 2021 and December 31, 2020, the Company’s financial assets and liabilities measured and recorded at fair value on a recurring basis were classified within the fair value hierarchy as follows (in thousands): September 30, 2021 December 31, 2020 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Investments: Commercial paper, available for sale $ — $ 83,723 $ — $ 83,723 $ — $ — $ — $ — Corporate Bonds, available for sale — 94,974 — 94,974 — — — — Municipal bonds, available for sale — 5,878 — 5,878 — — — — Total investments $ — $ 184,575 $ — $ 184,575 $ — $ — $ — $ — Liabilities Warrant liability: RTI warrants $ — $ — $ 8,214 $ 8,214 $ — $ — $ — $ — Private warrants — — 1,316 1,316 — — — — Total warrant liability $ — $ — $ 9,530 $ 9,530 $ — $ — $ — $ — |
RTI warrants | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Fair Value Measurement Inputs | The Company has determined its warrant to be a Level 3 fair value measurement and has remeasured using the Black-Scholes option pricing model to calculate its fair value for both initial measurement upon close of the Business Combination and subsequent measurement using the following assumptions: September 30, 2021 March 18, 2021 (Initial Recognition) Expected annual dividend yield — % — % Expected volatility 55.49 % 48.51 % Risk-free rate of return 0.59 % 0.54 % Expected option term (years) 3.25 3.79 |
Level 3 Liabilities Measured at Fair Value | Changes in Level 3 liabilities measured at fair value for nine months ended September 30, 2021 are as follows (in thousands): Fair value (Level 3) Balance at December 31, 2020 $ — Change in fair value 8,214 Balance at September 30, 2021 $ 8,214 |
Private warrants | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Fair Value Measurement Inputs | The private warrants are measured at fair value on a recurring basis using a Black-Scholes model. The private warrants are classified as Level 3 for both initial measurement upon close of the Business Combination and subsequent measurement using the following assumptions: September 30, 2021 March 18, 2021 (Initial Recognition) Expected annual dividend yield — % — % Expected volatility 56.2 % 47.3 % Risk-free rate of return 0.86 % 0.86 % Expected option term (years) 4.47 5.0 |
Level 3 Liabilities Measured at Fair Value | A summary of the private warrants activity from the Business Combination date at March 18, 2021 to September 30, 2021 is as follows: Fair value Balance at March 18, 2021 $ 4,604 Change in fair value (3,288) Balance at September 30, 2021 $ 1,316 |
AVAILABLE-FOR-SALE SECURITIES (
AVAILABLE-FOR-SALE SECURITIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Available-for-sale Investments by Major Security Type | The following table represents the Company’s available-for-sale investments by major security type as of September 30, 2021 and December 31, 2020 (in thousands): September 30, 2021 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Total Fair Value Commercial Paper $ 83,732 $ 3 $ (12) $ 83,723 Corporate Bonds 94,978 17 (21) 94,974 Municipal Bonds 5,883 — (5) 5,878 Total $ 184,593 $ 20 $ (38) $ 184,575 December 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Total Fair Value Commercial Paper $ — $ — $ — $ — Corporate Bonds — — — — Municipal Bonds — — — — Total $ — $ — $ — $ — |
Schedule of Fair Value and Amortized Cost Bases of Available-for-sale Investments by Maturity Date | The following table summarizes the fair value and amortized cost bases of the Company’s available-for-sale investments by contractual maturity of September 30, 2021 and December 31, 2020 (in thousands): September 30, 2021 December 31, 2020 Amortized Cost Fair Value Amortized Cost Fair Value Due within one year $ 125,538 $ 125,524 $ — $ — Due after one year through five years 59,055 59,051 — — Total $ 184,593 $ 184,575 $ — $ — |
ORGANIZATION - Additional Infor
ORGANIZATION - Additional Information (Details) $ / shares in Units, $ in Thousands | Mar. 31, 2021USD ($) | Mar. 17, 2021USD ($)employee$ / sharesshares | Sep. 30, 2021USD ($) | Jun. 30, 2021USD ($) | Mar. 31, 2021USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||
Shares issued (in shares) | shares | 25,000,000 | ||||||||||
Price per share (in usd per share) | $ / shares | $ 10 | ||||||||||
Aggregate purchase price | $ 250,000 | ||||||||||
Maximum entitled shares issued (in shares) | shares | 4,000,000 | ||||||||||
Shares entitled (in shares) | shares | 2,000,000 | ||||||||||
Earnout period | 6 months | ||||||||||
Earnout stock price trigger (in usd per share) | $ / shares | $ 18 | ||||||||||
Earnout period, threshold trading days | employee | 20 | ||||||||||
Earnout period, threshold trading day period | employee | 30 | ||||||||||
Transaction costs incurred | $ 27,900 | ||||||||||
Advisory, legal, and accounting fees incurred | 5,200 | ||||||||||
General and administrative fees incurred | $ 3,200 | ||||||||||
Aggregate consideration | $ 1,156,914 | ||||||||||
Initial fair value of acquired warrant liability | $ 4,600 | 4,604 | $ 0 | ||||||||
Cash | $ 36,672 | 36,672 | $ 64,492 | ||||||||
Working capital | 169,800 | 169,800 | 31,900 | ||||||||
Accumulated deficit | 138,387 | 138,387 | $ 80,714 | ||||||||
Net loss | $ 20,977 | $ 11,059 | $ 26,074 | $ 6,609 | $ 4,415 | $ 4,564 | $ 58,110 | $ 15,588 |
ORGANIZATION - Merger Considera
ORGANIZATION - Merger Consideration (Details) $ / shares in Units, $ in Thousands | Mar. 17, 2021USD ($)$ / sharesshares |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Total shares transferred (in shares) | shares | 83,500,000 |
Value per share (in usd per share) | $ / shares | $ 10 |
Total Share Consideration | $ 835,000 |
Revenue Bonds | 249,600 |
The Convertible Notes | 60,000 |
Term Loan | 314 |
Related Party Promissory Note | 12,000 |
Total merger consideration | $ 1,156,914 |
ORGANIZATION - Business Combina
ORGANIZATION - Business Combination in the Condensed Consolidated Statement of Cash Flows (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Cash - ROCH Trust and cash (net of redemptions) | $ 76,510 | |
Cash - PIPE | 250,000 | |
Less transaction costs | (28,049) | |
Net Business Combination and PIPE financing | $ 298,461 | $ 0 |
ORGANIZATION - Immaterial Corre
ORGANIZATION - Immaterial Corrections Related to Prior Periods (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Decrease in interest expense | $ (1,843,000) | $ (642,000) | $ (5,722,000) | $ (1,827,000) | ||||
Increase in cash paid for construction of plan | 88,153,000 | 2,423,000 | ||||||
Decrease in cash used in operating activities | $ 41,958,000 | $ 10,784,000 | ||||||
Revision of Prior Period, Error Correction, Adjustment | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Increase in property, plant and equipment, net | $ 4,200,000 | $ 4,100,000 | $ 8,300,000 | $ 3,800,000 | ||||
Decrease in interest expense | $ 4,200,000 | 4,100,000 | 8,300,000 | 3,800,000 | ||||
Increase in cash paid for construction of plan | 0 | 11,100,000 | 0 | |||||
Decrease in cash used in operating activities | $ 0 | $ 11,100,000 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||
Debt securities available for sale | $ 184,575,000 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Summary of Accounting Standards Update (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Notes payable | $ 26,599 | |
Additional paid-in capital | $ 468,421 | 192,381 |
Accumulated deficit | $ (138,387) | (80,714) |
Adjustments | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Notes payable | 30,638 | |
Additional paid-in capital | (31,075) | |
Accumulated deficit | (437) | |
As adjusted | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Notes payable | 57,237 | |
Additional paid-in capital | 161,306 | |
Accumulated deficit | $ 80,277 |
NOTES PAYABLE AND DEBT INSTRU_3
NOTES PAYABLE AND DEBT INSTRUMENTS - Additional Information (Details) | Apr. 15, 2021USD ($) | Mar. 17, 2021USD ($)$ / sharesshares | Oct. 06, 2020USD ($) | Mar. 26, 2020USD ($) | Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($) | Jan. 31, 2022USD ($) | Jul. 31, 2021USD ($) | Apr. 09, 2021USD ($) | Oct. 07, 2020USD ($)seriepurchasersupplier | May 04, 2020USD ($) | Dec. 20, 2019USD ($) | Nov. 30, 2019 | Jul. 19, 2019USD ($) | Feb. 28, 2019USD ($) | May 03, 2018USD ($) |
Debt Instrument [Line Items] | ||||||||||||||||||||
Paid-in-kind interest payment on notes | $ 1,680,000 | $ 0 | ||||||||||||||||||
Conversion price, quotient | $ 1,000 | 1,000 | $ 1,000 | |||||||||||||||||
Conversion price, equity value threshold | $ 775,000,000 | $ 775,000,000 | ||||||||||||||||||
Conversion price (in usd per share) | $ / shares | $ 6.93 | $ 6.93 | ||||||||||||||||||
Conversion amount (in shares) | shares | 8,900,000 | 8,900,000 | ||||||||||||||||||
Conversion price, adjusted equity value, percent | 80.00% | |||||||||||||||||||
Shares issued (in shares) | shares | 25,000,000 | |||||||||||||||||||
Price per share (in usd per share) | $ / shares | $ 10 | |||||||||||||||||||
Number of suppliers | supplier | 1 | |||||||||||||||||||
Number of purchasers | purchaser | 2 | |||||||||||||||||||
Class A Common Units | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Shares issued (in shares) | shares | 684,000 | |||||||||||||||||||
Price per share (in usd per share) | $ / shares | $ 87.69 | |||||||||||||||||||
Notes Payable | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Escrow deposit | $ 50,000,000 | |||||||||||||||||||
Escrow deposit, stated conditions satisfied, amount | $ 25,000,000 | |||||||||||||||||||
Notes Payable | PureCycle Ohio LLC | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Number of debt offering series | serie | 3 | |||||||||||||||||||
Debt instrument, discount | $ 5,500,000 | |||||||||||||||||||
Revenue Bonds | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Interest expense | $ 4,800,000 | $ 0 | $ 14,400,000 | 0 | ||||||||||||||||
Escrow deposit | $ 50,000,000 | |||||||||||||||||||
Operating revenue deposit requirement, percent | 100.00% | |||||||||||||||||||
Equity investments | $ 40,000,000 | $ 60,000,000 | ||||||||||||||||||
Cash required to maintain | $ 75,000,000 | |||||||||||||||||||
Capitalized interest | 4,300,000 | 0 | 12,800,000 | 0 | ||||||||||||||||
Revenue Bonds | Forecast | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Cash required to maintain | $ 100,000,000 | |||||||||||||||||||
Enhanced Capital Ohio Rural Fund, LLC | Line of Credit | Secured Debt | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Maximum borrowing capacity | $ 1,000,000 | |||||||||||||||||||
Carrying amount | 0 | 0 | $ 0 | |||||||||||||||||
Interest expense | 9,000 | 29,000 | ||||||||||||||||||
Koch Modular Process Systems Secured Promissory Note | Promissory Note | Secured Debt | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Carrying amount | 0 | 0 | 0 | |||||||||||||||||
Interest expense | 107,000 | 342,000 | ||||||||||||||||||
Principal amount | $ 1,700,000 | |||||||||||||||||||
Maximum advance | 3,000,000 | |||||||||||||||||||
Conversion of accounts payable to promissory notes | 1,200,000 | |||||||||||||||||||
Interest rate, percent | 24.00% | 21.00% | ||||||||||||||||||
Denham-Blythe Company, Inc. Secured Promissory Note | Promissory Note | Secured Debt | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Carrying amount | 0 | 0 | 0 | |||||||||||||||||
Interest expense | 122,000 | 365,000 | ||||||||||||||||||
Principal amount | $ 2,000,000 | |||||||||||||||||||
Interest rate, percent | 24.00% | |||||||||||||||||||
Senior Notes Purchase Agreement | Convertible Debt | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Principal amount | $ 48,000,000 | |||||||||||||||||||
Conversion of accounts payable to promissory notes | 0 | 0 | ||||||||||||||||||
Interest rate, percent | 5.875% | |||||||||||||||||||
Maturity extension, term | 6 months | |||||||||||||||||||
Maturity extension, percent | 50.00% | |||||||||||||||||||
Obligation to issue and sell | $ 12,000,000 | |||||||||||||||||||
Obligation to issue and sell, term | 45 days | |||||||||||||||||||
Paid-in-kind interest payment on notes | $ 1,700,000 | |||||||||||||||||||
Extension period for holders not to convert notes, except with change in control | 180 days | |||||||||||||||||||
Term Note | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Principal amount | 0 | 0 | 314,000 | $ 314,000 | $ 314,000 | |||||||||||||||
Interest rate, percent | 1.00% | |||||||||||||||||||
Term Note | Notes Payable, Current | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Carrying amount | 0 | 0 | 122,000 | |||||||||||||||||
Term Note | Notes Payable, Noncurrent | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Carrying amount | 0 | 0 | 192,000 | |||||||||||||||||
Innventus ESG Fund I, L.P. | Promissory Note | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Interest expense | 0 | 5,000 | ||||||||||||||||||
Principal amount | $ 600,000 | |||||||||||||||||||
Innventus ESG Fund I, L.P. | Promissory Note | LIBOR | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Variable rate, percent | 8.00% | |||||||||||||||||||
Auto Now | Line of Credit | Revolving Credit Facility | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Maximum borrowing capacity | $ 14,000,000 | |||||||||||||||||||
Carrying amount | $ 0 | $ 0 | 0 | |||||||||||||||||
Interest expense | $ 413,000 | $ 1,100,000 | ||||||||||||||||||
Auto Now | Line of Credit | Revolving Credit Facility | May 19, 2020 through August 31, 2020 | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Interest rate, percent | 12.00% | |||||||||||||||||||
Auto Now | Line of Credit | Revolving Credit Facility | September 1, 2020 through December 31, 2020 | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Interest rate, percent | 16.00% | |||||||||||||||||||
Auto Now | Line of Credit | Revolving Credit Facility | January 1, 2021 through June 30, 2021 | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Interest rate, percent | 24.00% | |||||||||||||||||||
Auto Now | Line of Credit | Revolving Credit Facility | LIBOR | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Variable rate, percent | 6.12% | |||||||||||||||||||
Auto Now | Line of Credit | Revolving Credit Facility | LIBOR | May 3, 2018 through May 18, 2020 | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Variable rate, percent | 6.12% | |||||||||||||||||||
Innventure LLC and Wasson Enterprises | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Funding and support services received | $ 746,000 | $ 746,000 | ||||||||||||||||||
Innventure LLC | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Principal amount | $ 371,000 | |||||||||||||||||||
Repayments of debt | $ 375,000 |
NOTES PAYABLE AND DEBT INSTRU_4
NOTES PAYABLE AND DEBT INSTRUMENTS - Summary of Interest Expense of PCT's Convertible Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Debt Instrument [Line Items] | ||||
Amortization of deferred financing costs | $ 2,040 | $ 0 | ||
Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Contractual interest expense | $ 906 | $ 0 | 2,689 | 0 |
Amortization of deferred financing costs | $ 466 | $ 0 | $ 1,546 | $ 0 |
Effective interest rate | 9.00% | 0.00% | 9.00% | 0.00% |
NOTES PAYABLE AND DEBT INSTRU_5
NOTES PAYABLE AND DEBT INSTRUMENTS - Summary of the Convertible Notes (Details) - Convertible Debt - Level 3 - USD ($) $ in Thousands | Sep. 30, 2021 | Sep. 30, 2020 |
Debt Instrument [Line Items] | ||
Unamortized deferred issuance costs | $ 2,010 | $ 3,288 |
Net carrying amount | 59,670 | 56,712 |
Fair value | $ 123,332 | $ 123,532 |
NOTES PAYABLE AND DEBT INSTRU_6
NOTES PAYABLE AND DEBT INSTRUMENTS - Summary of Revenue Bonds (Details) - Notes Payable | Sep. 30, 2021USD ($) |
2020A Bond Series Maturing December 1, 2025 | |
Debt Instrument [Line Items] | |
Principal amount | $ 12,370,000 |
Interest rate, percent | 6.25% |
2020A Bond Series Maturing December 1, 2030 | |
Debt Instrument [Line Items] | |
Principal amount | $ 38,700,000 |
Interest rate, percent | 6.50% |
2020A Bond Series Maturing December 1, 2042 | |
Debt Instrument [Line Items] | |
Principal amount | $ 168,480,000 |
Interest rate, percent | 7.00% |
2020B Bond Series Maturing December 1, 2025 | |
Debt Instrument [Line Items] | |
Principal amount | $ 10,000,000 |
Interest rate, percent | 10.00% |
2020B Bond Series Maturing December 1, 2027 | |
Debt Instrument [Line Items] | |
Principal amount | $ 10,000,000 |
Interest rate, percent | 10.00% |
2020C Bond Series Maturing December 1, 2027 | |
Debt Instrument [Line Items] | |
Principal amount | $ 10,000,000 |
Interest rate, percent | 13.00% |
STOCKHOLDERS_ EQUITY (Details)
STOCKHOLDERS’ EQUITY (Details) | Sep. 30, 2021vote$ / sharesshares | Mar. 17, 2021$ / shares | Dec. 31, 2020$ / sharesshares |
Class of Stock [Line Items] | |||
Conversion price (in usd per share) | $ / shares | $ 6.93 | ||
Number of votes for each share held | vote | 1 | ||
Common stock, shares authorized (in shares) | 250,000,000 | ||
Common stock, par value (in usd per share) | $ / shares | $ 0.001 | $ 11.50 | |
Common stock, shares issued (in shares) | 118,240,000 | 0 | |
Common stock, shares outstanding (in shares) | 118,240,000 | 0 | |
Preferred stock, shares authorized (in shares) | 25,000,000 | ||
Preferred stock, par value (in usd per share) | $ / shares | $ 0.001 | ||
Preferred stock, shares issued (in shares) | 0 | ||
Preferred stock, shares outstanding (in shares) | 0 | ||
Class A Common Units | |||
Class of Stock [Line Items] | |||
Exchange ratio | 10.52 | ||
Common stock, shares authorized (in shares) | 0 | 3,981,000 | |
Common stock, par value (in usd per share) | $ / shares | $ 0 | $ 0 | |
Common stock, shares issued (in shares) | 0 | 3,612,000 | |
Common stock, shares outstanding (in shares) | 0 | 3,612,000 | |
Class B Preferred Units | |||
Class of Stock [Line Items] | |||
Conversion price (in usd per share) | $ / shares | $ 10.642 | ||
Preferred stock, shares authorized (in shares) | 0 | 1,938,000 | |
Preferred stock, par value (in usd per share) | $ / shares | $ 0 | $ 0 | |
Preferred stock, shares issued (in shares) | 0 | 1,938,000 | |
Preferred stock, shares outstanding (in shares) | 0 | 1,938,000 | |
Class B-1 Preferred Units | |||
Class of Stock [Line Items] | |||
Conversion price (in usd per share) | $ / shares | $ 14.768 | ||
Preferred stock, shares authorized (in shares) | 0 | 1,146,000 | |
Preferred stock, par value (in usd per share) | $ / shares | $ 0 | $ 0 | |
Preferred stock, shares issued (in shares) | 0 | 1,105,000 | |
Preferred stock, shares outstanding (in shares) | 0 | 1,105,000 | |
Class C Profits Units | |||
Class of Stock [Line Items] | |||
Common stock, shares authorized (in shares) | 0 | 1,069,000 | |
Common stock, par value (in usd per share) | $ / shares | $ 0 | $ 0 | |
Common stock, shares issued (in shares) | 0 | 865,000 | |
Common stock, shares outstanding (in shares) | 0 | 775,000 | |
Distribution Threshold One | Class C Profits Units | |||
Class of Stock [Line Items] | |||
Conversion price (in usd per share) | $ / shares | $ 9.32 | ||
Distribution Threshold Two | Class C Profits Units | |||
Class of Stock [Line Items] | |||
Conversion price (in usd per share) | $ / shares | 7.40 | ||
Distribution Threshold Three | Class C Profits Units | |||
Class of Stock [Line Items] | |||
Conversion price (in usd per share) | $ / shares | $ 2.747 |
EQUITY-BASED COMPENSATION - Add
EQUITY-BASED COMPENSATION - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Weighted average grant-date fair value (in usd per share) | $ 11.41 | $ 0 | ||||
Stock options exercised (in shares) | 0 | 0 | ||||
RSUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Expected annual dividend yield | 0.00% | 0.00% | ||||
Equity-based compensation cost | $ 9,200,000 | $ 2,000,000 | $ 9,700,000 | $ 2,600,000 | ||
Awards outstanding (in shares) | 2,390,000 | 829,000 | 2,390,000 | 829,000 | 762,000 | 680,000 |
Awards granted (in shares) | 2,353,000 | 1,937,000 | ||||
Stock Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Expected annual dividend yield | 0.00% | 0.00% | ||||
Equity-based compensation cost | $ 583,000 | $ 0 | $ 1,300,000 | $ 0 | ||
PSUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Expected annual dividend yield | 0.00% | 0.00% | ||||
Equity-based compensation cost | $ 3,500,000 | $ 0 | $ 3,500,000 | $ 0 | ||
Awards outstanding (in shares) | 424,000 | 0 | 424,000 | 0 | 0 | 0 |
Awards granted (in shares) | 424,000 | 0 | ||||
2020 Equity Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares authorized (in shares) | 8,280,000 | 8,280,000 |
EQUITY-BASED COMPENSATION - Res
EQUITY-BASED COMPENSATION - Restricted Stock Units, Valuation Assumptions (Details) - RSUs | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected annual dividend yield | 0.00% | 0.00% |
Expected volatility | 49.10% | |
Risk-free rate of return | 0.10% | |
Expected option term (years) | 2 months 12 days | |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 42.10% | |
Risk-free rate of return | 1.60% | |
Expected option term (years) | 9 months 18 days | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 63.30% | |
Risk-free rate of return | 1.70% | |
Expected option term (years) | 4 years 4 months 24 days |
EQUITY-BASED COMPENSATION - R_2
EQUITY-BASED COMPENSATION - Restricted Stock Activity (Details) - RSUs - $ / shares shares in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Number | ||
Beginning balance (in shares) | 762 | 680 |
Granted (in shares) | 2,353 | 1,937 |
Vested (in shares) | (699) | (1,777) |
Forfeited (in shares) | (26) | (11) |
Ending balance (in shares) | 2,390 | 829 |
Weighted average grant date fair value | ||
Beginning balance (in usd per share) | $ 1.39 | $ 0.24 |
Granted (in usd per share) | 18.88 | 1.73 |
Vested (in usd per share) | 9.83 | 1.37 |
Forfeited (in usd per share) | 3.92 | 1.95 |
Ending balance (in usd per share) | $ 16.12 | $ 1.27 |
Weighted average remaining recognition period | ||
Non-vested at the end of the period | 2 years 7 months 17 days | 2 years 2 months 4 days |
As reported | ||
Number | ||
Beginning balance (in shares) | 91 | 73 |
Weighted average grant date fair value | ||
Beginning balance (in usd per share) | $ 11.58 | $ 2.21 |
Recapitalization | ||
Number | ||
Beginning balance (in shares) | 671 | 607 |
Weighted average grant date fair value | ||
Beginning balance (in usd per share) | $ (10.19) | $ (1.97) |
EQUITY-BASED COMPENSATION - Sto
EQUITY-BASED COMPENSATION - Stock Options, Valuation Assumptions (Details) - Stock Options | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected annual dividend yield | 0.00% | 0.00% |
Expected volatility | 47.50% | 0.00% |
Risk-free rate of return | 0.70% | 0.00% |
Expected option term (years) | 4 years 6 months | 0 years |
EQUITY-BASED COMPENSATION - S_2
EQUITY-BASED COMPENSATION - Stock Option Activity (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Number of Options | ||
Beginning balance (in shares) | 0 | 0 |
Granted (in shares) | 613,000 | 0 |
Exercised (in shares) | 0 | 0 |
Forfeited (in shares) | 0 | 0 |
Ending balance (in shares) | 613,000 | 0 |
Exercisable (in shares) | 0 | |
Weighted Average Exercise Price | ||
Beginning balance (in usd per share) | $ 0 | $ 0 |
Granted (in usd per share) | 28,900 | 0 |
Exercised (in usd per share) | 0 | 0 |
Forfeited (in usd per share) | 0 | 0 |
Ending balance (in usd per share) | 28,900 | $ 0 |
Exercisable (in usd per share) | $ 0 | |
Additional Disclosures | ||
Granted, Weighted Average Remaining Contractual Term (Years) | 7 years | |
Weighted Average Remaining Contractual Term (Years) | 6 years 5 months 15 days |
EQUITY-BASED COMPENSATION - Per
EQUITY-BASED COMPENSATION - Performance-Based Restricted Stock, Valuation Assumptions (Details) - PSUs | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected annual dividend yield | 0.00% | 0.00% |
Expected volatility | 55.00% | 0.00% |
Risk-free rate of return | 0.00% | 0.00% |
Expected option term (years) | 2 years 8 months 12 days | 0 years |
EQUITY-BASED COMPENSATION - P_2
EQUITY-BASED COMPENSATION - Performance-Based Restricted Stock Activity (Details) - PSUs - $ / shares | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Number | ||
Beginning balance (in shares) | 0 | 0 |
Granted (in shares) | 424,000 | 0 |
Vested (in shares) | 0 | 0 |
Forfeited (in shares) | 0 | 0 |
Ending balance (in shares) | 424,000 | 0 |
Exercisable (in shares) | 0 | |
Weighted average grant date fair value | ||
Beginning balance (in usd per share) | $ 0 | $ 0 |
Granted (in usd per share) | 18,650 | 0 |
Vested (in usd per share) | 0 | 0 |
Forfeited (in usd per share) | 0 | 0 |
Ending balance (in usd per share) | 18,650 | $ 0 |
Exercisable (in usd per share) | $ 0 | |
Weighted average remaining recognition period | ||
Non-vested at the end of the period | 2 years |
WARRANTS - Additional Informati
WARRANTS - Additional Information (Details) | Mar. 17, 2021employee$ / sharesshares | Nov. 20, 2020shares | Oct. 15, 2020USD ($)shares | Jul. 22, 2019$ / sharesshares | Jun. 05, 2019$ / sharesshares | Jun. 29, 2018$ / sharesshares | Oct. 16, 2015$ / sharesshares | Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2020USD ($)$ / sharesshares | Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2020USD ($)$ / sharesshares | Dec. 31, 2020$ / sharesshares | Dec. 31, 2019$ / sharesshares |
Class of Warrant or Right [Line Items] | |||||||||||||
Proceeds for exercise of warrants | $ | $ 196,000 | $ 0 | |||||||||||
Warrants outstanding (in shares) | 5,900,000 | ||||||||||||
Number of shares of common stock entitled to be purchased by each warrant (in shares) | 1 | ||||||||||||
Common stock, par value (in usd per share) | $ / shares | $ 11.50 | $ 0.001 | $ 0.001 | ||||||||||
Weighted average remaining contractual term (years) | 5 years | ||||||||||||
Warrants redemption price (in usd per share) | $ / shares | $ 0.01 | ||||||||||||
Warrants written notice of redemption threshold | 30 days | ||||||||||||
Earnout stock price trigger (in usd per share) | $ / shares | $ 18 | ||||||||||||
Earnout period, threshold trading days | employee | 20 | ||||||||||||
Earnout period, threshold trading day period | employee | 30 | ||||||||||||
Earnout period, business days prior to notice of redemption | 3 days | ||||||||||||
Class B Preferred Units | |||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||
Warrants issued (in shares) | 211,000 | ||||||||||||
Warrants exercise price (in usd per share) | $ / shares | $ 1 | $ 1 | $ 1 | $ 1 | |||||||||
Number of warrants available to purchase, percent | 5.00% | ||||||||||||
Ownership threshold, percent | 2.50% | ||||||||||||
Warrants exercised (in shares) | 211,000 | 0 | |||||||||||
Proceeds for exercise of warrants | $ | $ 1 | ||||||||||||
Warrants, fair value | $ | 18,170,000 | ||||||||||||
Loss on warrants exercised | $ | $ 211,000 | ||||||||||||
Expense (benefit) recognized | $ | $ 0 | $ 1,780,000 | |||||||||||
Warrants outstanding (in shares) | 211,000 | 211,000 | 211,000 | ||||||||||
Weighted average remaining contractual term (years) | 3 years 6 months 14 days | 4 years 3 months 14 days | |||||||||||
Class B-1 Preferred Units | |||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||
Warrants issued (in shares) | 5,000 | 8,000 | |||||||||||
Warrants exercise price (in usd per share) | $ / shares | $ 37.61 | $ 37.61 | $ 0 | $ 37.61 | $ 0 | $ 37.61 | $ 37.61 | $ 37.61 | |||||
Warrants exercised (in shares) | 0 | 0 | |||||||||||
Expense (benefit) recognized | $ | $ 0 | $ 0 | |||||||||||
Warrants outstanding (in shares) | 0 | 5,000 | 0 | 5,000 | 5,000 | 5,000 | |||||||
Weighted average remaining contractual term (years) | 3 years 9 months 21 days | 3 years 6 months 21 days | 4 years 6 months 21 days | ||||||||||
Class C Profits Units | |||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||
Warrants issued (in shares) | 144,000 | ||||||||||||
Warrants exercise price (in usd per share) | $ / shares | $ 37.605 | ||||||||||||
Common Stock | |||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||
Warrants issued (in shares) | 971,000 | ||||||||||||
Warrants exercise price (in usd per share) | $ / shares | $ 5.56 | $ 5.56 | $ 5.56 | $ 5.56 | $ 5.56 | $ 5.56 | |||||||
Warrants exercised (in shares) | 0 | 0 | |||||||||||
Expense (benefit) recognized | $ | $ (6,800,000) | $ 0 | $ 8,200,000 | $ 0 | |||||||||
Warrants outstanding (in shares) | 971,000 | 971,000 | 971,000 | 971,000 | 971,000 | 971,000 | |||||||
Weighted average remaining contractual term (years) | 3 years 3 months | 4 years 3 months | 4 years | 5 years | |||||||||
Public Warrants | |||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||
Warrants outstanding (in shares) | 5,700,000 | 5,700,000 | |||||||||||
Private warrants | |||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||
Warrants outstanding (in shares) | 200,000 | 200,000 |
WARRANTS - Class B Warrant Acti
WARRANTS - Class B Warrant Activity (Details) - $ / shares | Mar. 17, 2021 | Oct. 15, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Number of warrants | ||||
Ending balance, Number of warrants (in shares) | 5,900,000 | |||
Additional disclosures | ||||
Weighted average remaining contractual term (years) | 5 years | |||
Class B Preferred Units | ||||
Number of warrants | ||||
Beginning balance, Number of warrants (in shares) | 211,000 | |||
Granted, Number of warrants (in shares) | 0 | |||
Exercised, Number of warrants (in shares) | (211,000) | 0 | ||
Ending balance, Number of warrants (in shares) | 211,000 | 211,000 | ||
Exercisable, Number of warrants (in shares) | 211,000 | |||
Weighted average exercise price | ||||
Beginning balance, Weighted average exercise price (in usd per share) | $ 1 | |||
Granted, Weighted average exercise price (in usd per share) | 0 | |||
Exercised, Weighted average exercise price (in usd per share) | 0 | |||
Ending balance, Weighted average exercise price (in usd per share) | 1 | $ 1 | ||
Weighted average grant date fair value | ||||
Beginning balance, Weighted average grant date fair value (in usd per share) | 30.63 | |||
Granted, Weighted average grant date fair value (in usd per share) | 0 | |||
Exercised, Weighted average grant date fair value (in usd per share) | 0 | |||
Ending balance, Weighted average grant date fair value (in usd per share) | $ 30.63 | $ 30.63 | ||
Additional disclosures | ||||
Weighted average remaining contractual term (years) | 3 years 6 months 14 days | 4 years 3 months 14 days |
WARRANTS - Class B-1 Warrant Ac
WARRANTS - Class B-1 Warrant Activity (Details) - $ / shares | Mar. 17, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Number of warrants | |||||
Ending balance, Number of warrants (in shares) | 5,900,000 | ||||
Additional disclosures | |||||
Weighted average remaining contractual term (years) | 5 years | ||||
Class B-1 Preferred Units | |||||
Number of warrants | |||||
Beginning balance, Number of warrants (in shares) | 5,000 | 5,000 | 5,000 | ||
Granted, Number of warrants (in shares) | 0 | 0 | |||
Exercised, Number of warrants (in shares) | 0 | 0 | |||
Cancelled, Number of warrants (in shares) | (5,000) | ||||
Ending balance, Number of warrants (in shares) | 0 | 5,000 | 5,000 | 5,000 | |
Exercisable, Number of warrants (in shares) | 0 | ||||
Weighted average exercise price | |||||
Beginning balance, Weighted average exercise price (in usd per share) | $ 37.61 | $ 37.61 | $ 37.61 | ||
Granted, Weighted average exercise price (in usd per share) | 0 | 0 | |||
Exercised, Weighted average exercise price (in usd per share) | 0 | 0 | |||
Cancelled, Weighted average exercise price (in usd per share) | 37.61 | ||||
Ending balance, Weighted average exercise price (in usd per share) | 0 | 37.61 | 37.61 | $ 37.61 | |
Weighted average grant date fair value | |||||
Beginning balance, Weighted average grant date fair value (in usd per share) | 15.52 | 15.52 | 15.52 | ||
Granted, Weighted average grant date fair value (in usd per share) | 0 | 0 | |||
Exercised, Weighted average grant date fair value (in usd per share) | 0 | 0 | |||
Cancelled, Weighted average grant date fair value (in usd per share) | 15.52 | ||||
Ending balance, Weighted average grant date fair value (in usd per share) | $ 0 | $ 15.52 | $ 15.52 | $ 15.52 | |
Additional disclosures | |||||
Weighted average remaining contractual term (years) | 3 years 9 months 21 days | 3 years 6 months 21 days | 4 years 6 months 21 days | ||
Weighted average remaining contractual term, cancelled (years) | 3 years 6 months 21 days |
WARRANTS - RTI Warrant Activity
WARRANTS - RTI Warrant Activity (Details) - $ / shares | Mar. 17, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Number of warrants | |||||
Ending balance, Number of warrants (in shares) | 5,900,000 | ||||
Additional disclosures | |||||
Weighted average remaining contractual term (years) | 5 years | ||||
Common Stock | |||||
Number of warrants | |||||
Beginning balance, Number of warrants (in shares) | 971,000 | 971,000 | 971,000 | ||
Granted, Number of warrants (in shares) | 0 | 0 | |||
Exercised, Number of warrants (in shares) | 0 | 0 | |||
Ending balance, Number of warrants (in shares) | 971,000 | 971,000 | 971,000 | 971,000 | |
Exercisable, Number of warrants (in shares) | 971,000 | 971,000 | |||
Weighted average exercise price | |||||
Beginning balance, Weighted average exercise price (in usd per share) | $ 5.56 | $ 5.56 | $ 5.56 | ||
Ending balance, Weighted average exercise price (in usd per share) | 5.56 | 5.56 | 5.56 | $ 5.56 | |
Weighted average grant date fair value | |||||
Beginning balance, Weighted average grant date fair value (in usd per share) | 0.03 | 0.03 | 0.03 | ||
Ending balance, Weighted average grant date fair value (in usd per share) | $ 0.03 | $ 0.03 | $ 0.03 | $ 0.03 | |
Additional disclosures | |||||
Weighted average remaining contractual term (years) | 3 years 3 months | 4 years 3 months | 4 years | 5 years |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | |||||
Due from related parties | $ 78 | $ 78 | $ 78 | ||
Innventure Management Services LLC | |||||
Related Party Transaction [Line Items] | |||||
Expenses from transactions with related party | 46 | $ 128 | 167 | $ 315 | |
Due to related party | $ 6 | $ 6 | $ 30 |
NET LOSS PER SHARE (Details)
NET LOSS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Numerator: | ||||||||
Net loss | $ (20,977) | $ (11,059) | $ (26,074) | $ (6,609) | $ (4,415) | $ (4,564) | $ (58,110) | $ (15,588) |
Less cumulative earnings to preferred stockholder | 0 | 882 | 0 | 4,833 | ||||
Net income (loss) attributable to common stockholders, basic (in shares) | (20,977) | (7,491) | (58,110) | (20,421) | ||||
Net income (loss) attributable to common stockholders, diluted (in shares) | $ (20,977) | $ (7,491) | $ (58,110) | $ (20,421) | ||||
Denominator: | ||||||||
Weighted average common shares outstanding, basic (in shares) | 118,255 | 27,156 | 95,773 | 27,156 | ||||
Weighted average common shares outstanding, diluted (in shares) | 118,255 | 27,156 | 95,773 | 27,156 | ||||
Net loss per share attributable to common stockholder, basic (in usd per share) | $ (0.18) | $ (0.28) | $ (0.61) | $ (0.75) | ||||
Net loss per share attributable to common stockholder, diluted (in usd per share) | $ (0.18) | $ (0.28) | $ (0.61) | $ (0.75) |
PROPERTY, PLANT AND EQUIPMENT -
PROPERTY, PLANT AND EQUIPMENT - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Cost | $ 193,529 | $ 76,867 |
Accumulated Depreciation | 4,307 | 2,800 |
Net Book Value | 189,222 | 74,067 |
Building | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 12,029 | 12,029 |
Accumulated Depreciation | 618 | 387 |
Net Book Value | 11,411 | 11,642 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 18,569 | 15,982 |
Accumulated Depreciation | 3,645 | 2,388 |
Net Book Value | 14,924 | 13,594 |
Fixtures and Furnishings | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 104 | 104 |
Accumulated Depreciation | 34 | 22 |
Net Book Value | 70 | 82 |
Land improvements | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 150 | 150 |
Accumulated Depreciation | 10 | 3 |
Net Book Value | 140 | 147 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 1,150 | 1,150 |
Accumulated Depreciation | 0 | 0 |
Net Book Value | 1,150 | 1,150 |
Construction in process | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 161,527 | 47,452 |
Accumulated Depreciation | 0 | 0 |
Net Book Value | $ 161,527 | $ 47,452 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT - Additional information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Payments to Acquire Property, Plant, and Equipment [Abstract] | ||||
Depreciation expense | $ 522 | $ 475 | $ 1,507 | $ 1,409 |
DEVELOPMENT PARTNER ARRANGEME_2
DEVELOPMENT PARTNER ARRANGEMENTS (Details) - Collaborative Arrangement, Transaction with Party to Collaborative Arrangement $ in Thousands | Jun. 23, 2020USD ($) | Nov. 13, 2019USD ($) | Dec. 13, 2018USD ($) | Sep. 30, 2021USD ($) | Dec. 31, 2020USD ($) | Jul. 01, 2021USD ($) | Jan. 01, 2021USD ($) | Apr. 30, 2019USD ($) | Oct. 16, 2015phaseemployee |
P&G | |||||||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||||||
Number of phases outlined by research and development agreement | phase | 3 | ||||||||
Number of full-time employees to assist in execution of research and development activities, phase one | employee | 1 | ||||||||
Number of full-time employees to assist in execution of research and development activities, phase two | employee | 2 | ||||||||
Prepaid expenses and other non-current assets | $ 2,000 | $ 2,000 | $ 2,000 | ||||||
Obligation to pay for services | $ 100 | $ 500 | |||||||
Impact | |||||||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||||||
Initial license fee | $ 2,500 | ||||||||
Payment for license agreement | 1,600 | 890 | |||||||
Total | |||||||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||||||
Prepayment for block and release agreement | $ 5,000 | ||||||||
Block and release agreement, capital funding, minimum requirement | 370,000 | ||||||||
Escrow released | $ 5,000 | ||||||||
Nestle | |||||||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||||||
Payment committed to fund further research and development | $ 1,000 | ||||||||
Maximum funding convertible, percent | 50.00% | ||||||||
Term loan obligation | 5 years | ||||||||
Other non-current liabilities | $ 1,000 | $ 1,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense | $ 0 | $ 0 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS - Summary of Liabilities Measurements on a Recurring Basis (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Assets | ||
Investments | $ 184,575,000 | $ 0 |
Commercial paper, available for sale | ||
Assets | ||
Investments | 83,723,000 | 0 |
Corporate Bonds, available for sale | ||
Assets | ||
Investments | 94,974,000 | 0 |
Municipal bonds, available for sale | ||
Assets | ||
Investments | 5,878,000 | 0 |
Fair Value Measurements on Recurring Basis | ||
Assets | ||
Total investments | 184,575,000 | 0 |
Liabilities | ||
Total warrant liability | 9,530,000 | 0 |
Fair Value Measurements on Recurring Basis | RTI warrants | ||
Liabilities | ||
Warrant liability | 8,214,000 | 0 |
Fair Value Measurements on Recurring Basis | Private warrants | ||
Liabilities | ||
Warrant liability | 1,316,000 | 0 |
Fair Value Measurements on Recurring Basis | Commercial paper, available for sale | ||
Assets | ||
Investments | 83,723,000 | 0 |
Fair Value Measurements on Recurring Basis | Corporate Bonds, available for sale | ||
Assets | ||
Investments | 94,974,000 | 0 |
Fair Value Measurements on Recurring Basis | Municipal bonds, available for sale | ||
Assets | ||
Investments | 5,878,000 | 0 |
Fair Value Measurements on Recurring Basis | Level 1 | ||
Assets | ||
Total investments | 0 | 0 |
Liabilities | ||
Total warrant liability | 0 | 0 |
Fair Value Measurements on Recurring Basis | Level 1 | RTI warrants | ||
Liabilities | ||
Warrant liability | 0 | 0 |
Fair Value Measurements on Recurring Basis | Level 1 | Private warrants | ||
Liabilities | ||
Warrant liability | 0 | 0 |
Fair Value Measurements on Recurring Basis | Level 1 | Commercial paper, available for sale | ||
Assets | ||
Investments | 0 | 0 |
Fair Value Measurements on Recurring Basis | Level 1 | Corporate Bonds, available for sale | ||
Assets | ||
Investments | 0 | 0 |
Fair Value Measurements on Recurring Basis | Level 1 | Municipal bonds, available for sale | ||
Assets | ||
Investments | 0 | 0 |
Fair Value Measurements on Recurring Basis | Level 2 | ||
Assets | ||
Total investments | 184,575,000 | 0 |
Liabilities | ||
Total warrant liability | 0 | 0 |
Fair Value Measurements on Recurring Basis | Level 2 | RTI warrants | ||
Liabilities | ||
Warrant liability | 0 | 0 |
Fair Value Measurements on Recurring Basis | Level 2 | Private warrants | ||
Liabilities | ||
Warrant liability | 0 | 0 |
Fair Value Measurements on Recurring Basis | Level 2 | Commercial paper, available for sale | ||
Assets | ||
Investments | 83,723,000 | 0 |
Fair Value Measurements on Recurring Basis | Level 2 | Corporate Bonds, available for sale | ||
Assets | ||
Investments | 94,974,000 | 0 |
Fair Value Measurements on Recurring Basis | Level 2 | Municipal bonds, available for sale | ||
Assets | ||
Investments | 5,878,000 | 0 |
Fair Value Measurements on Recurring Basis | Level 3 | ||
Assets | ||
Total investments | 0 | 0 |
Liabilities | ||
Total warrant liability | 9,530,000 | 0 |
Fair Value Measurements on Recurring Basis | Level 3 | RTI warrants | ||
Liabilities | ||
Warrant liability | 8,214,000 | 0 |
Fair Value Measurements on Recurring Basis | Level 3 | Private warrants | ||
Liabilities | ||
Warrant liability | 1,316,000 | 0 |
Fair Value Measurements on Recurring Basis | Level 3 | Commercial paper, available for sale | ||
Assets | ||
Investments | 0 | 0 |
Fair Value Measurements on Recurring Basis | Level 3 | Corporate Bonds, available for sale | ||
Assets | ||
Investments | 0 | 0 |
Fair Value Measurements on Recurring Basis | Level 3 | Municipal bonds, available for sale | ||
Assets | ||
Investments | $ 0 | $ 0 |
FAIR VALUE OF FINANCIAL INSTR_4
FAIR VALUE OF FINANCIAL INSTRUMENTS - Fair Value Measurement Inputs (Details) - Level 3 - Fair Value Measurements on Recurring Basis | Sep. 30, 2021 | Mar. 18, 2021 |
Expected annual dividend yield | Private warrants | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrant, measurement input | 0 | 0 |
Expected annual dividend yield | RTI warrants | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrant, measurement input | 0 | 0 |
Expected volatility | Private warrants | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrant, measurement input | 0.562 | 0.473 |
Expected volatility | RTI warrants | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrant, measurement input | 0.5549 | 0.4851 |
Risk-free rate of return | Private warrants | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrant, measurement input | 0.0086 | 0.0086 |
Risk-free rate of return | RTI warrants | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrant, measurement input | 0.0059 | 0.0054 |
Expected option term (years) | Private warrants | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrant, expected option term (years) | 4 years 5 months 19 days | 5 years |
Expected option term (years) | RTI warrants | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrant, expected option term (years) | 3 years 3 months | 3 years 9 months 14 days |
FAIR VALUE OF FINANCIAL INSTR_5
FAIR VALUE OF FINANCIAL INSTRUMENTS - Additional Information (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2021 | Mar. 18, 2021 | Dec. 31, 2020 | |
RTI warrants | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Warrants repurchase maximum threshold | $ 15,000,000 | ||
Level 3 | Private warrants | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Dividend yield on warrants | 0.00% | ||
Aggregate value | $ 1,316,000 | $ 4,604,000 | |
Level 3 | RTI warrants | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Dividend yield on warrants | 0.00% | ||
Aggregate value | $ 8,214,000 | $ 0 |
FAIR VALUE OF FINANCIAL INSTR_6
FAIR VALUE OF FINANCIAL INSTRUMENTS - Level 3 Liabilities Measured at Fair Value (Details) - Level 3 - USD ($) $ in Thousands | 6 Months Ended | 9 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | |
Private warrants | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | $ 4,604 | |
Change in fair value | (3,288) | |
Ending Balance | 1,316 | $ 1,316 |
RTI warrants | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | 0 | |
Change in fair value | 8,214 | |
Ending Balance | $ 8,214 | $ 8,214 |
AVAILABLE-FOR-SALE SECURITIES -
AVAILABLE-FOR-SALE SECURITIES - Investments by Major Security Type (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 184,593,000 | $ 0 |
Gross Unrealized Gains | 20,000 | 0 |
Gross Unrealized Losses | (38,000) | 0 |
Total Fair Value | 184,575,000 | 0 |
Commercial Paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 83,732,000 | 0 |
Gross Unrealized Gains | 3,000 | 0 |
Gross Unrealized Losses | (12,000) | 0 |
Total Fair Value | 83,723,000 | 0 |
Corporate Bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 94,978,000 | 0 |
Gross Unrealized Gains | 17,000 | 0 |
Gross Unrealized Losses | (21,000) | 0 |
Total Fair Value | 94,974,000 | 0 |
Municipal Bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 5,883,000 | 0 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (5,000) | 0 |
Total Fair Value | $ 5,878,000 | $ 0 |
AVAILABLE-FOR-SALE SECURITIES_2
AVAILABLE-FOR-SALE SECURITIES - Investments by Contractual Maturity (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale, Maturity, Amortized Cost, Rolling Maturity [Abstract] | ||
Due within one year | $ 125,538,000 | $ 0 |
Due after one year through five years | 59,055,000 | 0 |
Amortized Cost | 184,593,000 | 0 |
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Rolling Maturity, Fair Value [Abstract] | ||
Due within one year | 125,524,000 | 0 |
Due after one year through five years | 59,051,000 | 0 |
Debt securities available for sale | $ 184,575,000 | $ 0 |
AVAILABLE-FOR-SALE SECURITIES_3
AVAILABLE-FOR-SALE SECURITIES - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Average remaining maturity of available-for-sale securities | 10 months 24 days | |||
Other-than-temporary impairment losses recognized on available-for-sale securities | $ 0 | $ 0 | $ 0 | $ 0 |
CONTINGENCIES (Details)
CONTINGENCIES (Details) | May 11, 2021classAction |
Commitments and Contingencies Disclosure [Abstract] | |
Number of class actions | 2 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ in Thousands | Oct. 21, 2021 | Oct. 15, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Subsequent Event [Line Items] | ||||
Paid-in-kind interest payment on notes | $ 1,680 | $ 0 | ||
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Paid-in-kind interest payment on notes | $ 1,800 | |||
Increase in principal amount of notes for paid-in-kind interest | $ 1,800 | |||
Principal amount of debt converted | $ 45,300 | |||
Subsequent Event | Common Stock | ||||
Subsequent Event [Line Items] | ||||
Shares issued in debt conversion (in shares) | 6,533,532 | |||
Subsequent Event | Aptar | Common Stock | ||||
Subsequent Event [Line Items] | ||||
Shares issued for proceeds related to the closing of FDA Letter Milestone (in shares) | 235,796 | |||
Proceeds related to the closing of FDA Letter Milestone | $ 1,000 |