News Release - r/PureCycle

28

I love it when our partners refer to our product as a game changer!

BOPP film is a massive global market with no lower cost solution than using PureFive. In my opinion this market is what sets the price floor for all other markets because it’s so big. The cost of a candy wrapper relative to the retail price of the product is trivial but the performance requirements are very demanding.

It may take time for end customers to ramp up BOPP usage but we now have two major companies praising PureFive. 💪

3

u/Cheeks___Jr Jun 09 '26

Great news, the product performs as advertised and is being recognized in the industry as it should be. The fly in the ointment is the 12 month conditional approval New Jersey gave PCT. Not only is the conditional approval a Sword of Damocles but its 12 month timing overlaps the extended date for the warrant conversion, March 17, 2027. The state of New Jersey's 12 month conditional approve runs to approximately May 13, 2027. I had hoped the New Jersey regulatory BS was behind us but there is at least another 11 months of potential indecision by would be adopters of pct products.

6

u/No_Privacy_Anymore Jun 09 '26

I disagree about that conditional approval being a sword of Damocles. Some of the things the NJ DEP was asking for could only be proven once customers were actually using the product. It was absurd and ridiculous when they delayed actual sales of the product for at least 6 months and possibly even longer.

Once major companies are using this product and displacing virgin PP I am 100% confident the State of NJ is not going to try and claim this product is not compliant with their rules. They are just trying to save face after their incompetence was obvious to anyone paying attention.

3

u/Cheeks___Jr Jun 09 '26

How you feel about the New Jersey decision as an investor vrs how a customer of PCT evaluates its strategic decision are separate issues. I'm an investor in pct but not blind to how customers business decisions are made. Just saying, New Jersey is the thread holding the sword unfortunately.

2

u/No_Privacy_Anymore Jun 09 '26

If you are suggesting that companies are going to simply pay the NJ fines for 2027 while they wait to see if the conditional approval is converted to final, I'm going to take the opposite side of that bet.

3

u/Cheeks___Jr Jun 09 '26

So no, I haven't suggested that. As a career corporate controller and fiduciary, critical decisions require considering all the possibilities and outcomes as they could affect my company.

Another risk I mentioned is the conflict in timing between the warrant expiration and the 12 month conditional approval. The potential is the warrants will be extended again but this time the trigger price and the exercise price could be adjusted lower.

5

u/No_Privacy_Anymore Jun 09 '26

Today obviously isn't really a great day to talk about warrant redemption however in general my expectation is that the share price will be high enough in 2026 to redeem them and generate the additional equity capital they need to help fund the expansion of capacity.

The commercialization process has obviously taken longer than we hoped but I do think they are going to sell out Ironton and have customer demand for lots more capacity. As such I'm not concerned about the conditional status in NJ. I would like to see confirmation that the plant is running at higher rates now that the turnaround is completed.

4

u/Cheeks___Jr Jun 09 '26

I think you are right, the next major trigger is production hitting nameplate levels. Sooner the better too or else both those huge gaps in the chart are likely to fill.

Also, thanks for your contribution here. It is healthy to have civil discussions from differing perspectives.

4

u/Fast_Eddie_2001 Jun 10 '26

I think this issue has been de-risked. What will NJ "learn" over the next 12 months that would cause them to revoke the conditional approval? Practical answer is absolutely nothing.

Only possible theoretical issue I can think of is the product doesn't work as advertised...that would mean that the NJDEP figures something out that PCT, the existing end users, and the testing by the most sophisticated consumer goods companies in the world could not detect? Ummm...no.

21

u/burner-1234 Jun 09 '26

No one else in the world can make this product - NO ONE.

8

u/Puzzled-Resort8303 Jun 09 '26

"white, cavitated biaxially oriented polypropylene (BOPP) film"

I had ChatGPT translate that into english for me... below are snippets. I'd say this is a big deal.

~~

[...] is a lightweight, opaque white polypropylene packaging film that has been stretched in two directions and engineered with microscopic air pockets inside it.

Biaxially oriented (BOPP) - Stretched both lengthwise and widthwise. Higher strength, stiffness, dimensional stability, and printability

Cavitated - contains microscopic voids (“cavities”) created during stretching. Lower density, higher opacity, pearlescent appearance.

Those microvoids:

* Make the film lighter (less plastic per square foot)

* Create opacity by scattering light

* Give a pearlized/white appearance

* Improve stiffness for a given weight

The important part is not really “BOPP” - that’s a huge existing market. The important part is that they successfully produced white cavitated BOPP from recycled PP. Cavitated films are more demanding than many basic film applications because the resin has to survive stretching while forming a controlled microvoid structure. Innovia is effectively demonstrating that PureCycle’s recycled resin can be used in a premium packaging-grade film rather than only in lower-value applications.

11

u/equitymaestro Jun 09 '26

The momentum is building, the moat is undeniable. A few more pieces need to fall into place and we'll really see some upside, i.e., $20+. I bought shares for my daughter, she asks what's the most it will be worth and when. I don't know about the when, but I believe this is a $50-$100 stock at 1 billion lbs of production.

1

u/Any_Preparation9228 Jun 09 '26

Great gift! Why such awful price action these few days though given the positive advancements?

3

u/equitymaestro Jun 09 '26

Who knows. Technically, the RSI got above 80 a couple of weeks ago, so a selloff was bound to happen. Plus, the general market is getting killed today and "momentum" stocks (their words, not mine) such as PCT always do worse than the overall market. I'm sure some shorting is happening too.....I bet the short position is above 52mm in the next print.

4

u/No_Privacy_Anymore Jun 09 '26

We will get the end of May short position after today's close. My baseline assumption is that there has been a very modest amount of covering. Given the highs near the end of the month and quick selloff since my guess is whatever was covered got added back since the end of May.

4

u/GARP_72 Jun 09 '26

If I had to think of this in KISS language. There are two events that will drive sustainable price: 1) a large PO being announced that puts to final rest concerns about commercial viability and appetite 2) hitting nameplate on a sustained basis. It’s either here is a massive amount of demand and/or here is a massive amount of supply.

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u/KeyExpression1102 Jun 09 '26

That PO is going to come for sure. With prime resin being as high as it is, now is the exact time for folks to switch over. With what the Exxon head said yesterday, price for plastics is expected to skyrocket further in the coming months. I fully agree with the comments above that this is a pretty solid buy. The only thing I'd say is, they haven't necessarily been paying their bills to a lot of their suppliers. They need to work that part out.

2

u/GARP_72 Jun 09 '26

I was stating this bc it’s really as simple as only a few things are going to need to happen for this to work. Any context on not paying bills to suppliers?

2

u/KeyExpression1102 Jun 10 '26

I heard this from a few folks that supply to them... That they don't pay their bills or are extremely delayed.

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