In a recent development, PureCycle Technologies, Inc. (NASDAQ:PCT), a company specializing in the recycling of plastics, has made material modifications to the rights of its security holders. The changes come after the company entered into waiver agreements with investors holding its Series A Preferred Stock.
On Monday, PureCycle filed a Certificate of Designations with the Delaware Secretary of State, outlining the preferences and rights of the newly issued Series A Preferred Stock. Subsequently, on September 17, 2024, all investors in possession of the Series A Preferred Stock signed waivers to alter their rights under the original terms.
The waivers effectively change the rights of the preferred stockholders in several ways. Investors have agreed to forgo their option to receive shares of common stock or pre-funded warrants in the event of redemption scenarios defined by the Certificate of Designations.
Additionally, they have consented to receive additional Series A Preferred Stock only on specific return payment dates. Moreover, the agreement alters the schedule for return payments, consolidating them to occur on the fourth quarterly return payment date each year rather than being spread across the first three quarters.
Furthermore, the investors have waived the requirement for the company to register the shares of common stock that would be issuable upon the redemption of the preferred stock on a registration statement filed by PureCycle.
The implications of these waivers are significant for both the company and its preferred stockholders. The changes may influence the liquidity and market behavior of PureCycle's securities, particularly with regards to the timing and method of return payments and the conditions under which common stock is issued.
This move by PureCycle and its investors reflects a strategic adjustment of the company's financial instruments, as detailed in the SEC filing. The information presented is based on the press release statement and aims to provide shareholders and the public with a clear understanding of the recent changes to PureCycle's securities.
In other recent news, PureCycle Technologies has secured a $90 million funding package from Sylebra Capital Management and Samlyn Capital, boosting its production capabilities. This funding is expected to bolster PureCycle's operations and its Augusta project, supporting the company's efforts to commercialize its advanced recycling technology for polypropylene plastic. Initial sales have commenced, with expectations of increased revenues in the fourth quarter.
The company has also made operational strides, including the implementation of CP2 removal improvements at its Ironton facility, which have increased the facility's production rates. PureCycle has secured a bond sale agreement, boosting liquidity by $30 million, and received regulatory approval from the U.S. Food and Drug Administration for its PureFive™ Ultra-Pure Recycled resin.
TD Cowen and Stifel have maintained their Buy ratings for PureCycle, reflecting confidence in the company's direction and potential for growth. These recent developments highlight PureCycle's focus on improving product quality, enhancing operational efficiency, and meeting the growing demand for sustainable materials in the production of plastic products.
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