NOTE 11 - MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY

Mezzanine Equity

Series B Convertible Perpetual Preferred Stock

On June 16, 2025, the Company entered into binding subscription agreements (the "Series B Subscription Agreements") with certain investors, including investment entities affiliated with Longview, Sylebra, Daniel Gibson, and Samlyn, pursuant to which the Company agreed to sell, in a private placement, an aggregate of 300,000 shares of Series B Convertible Perpetual Preferred Stock at an initial issue price of $1,000 per share. The transactions closed on June 20, 2025, generating gross proceeds of $300.0 million before placement agent fees and other offering expenses.

In accordance with ASC 480, Distinguishing Liabilities from Equity, the Company has classified the Series B Convertible Perpetual Preferred Stock in temporary (mezzanine) equity because the Company can be forced into a cash redemption scenario upon certain change in control events not within its control. The Company initially measured the Series B Convertible Perpetual Preferred Stock at total proceeds less offering costs. Because the Series B Convertible Perpetual Preferred Stock is neither currently redeemable nor probable of becoming redeemable, no subsequent measurement is required at this time. The Company will continue to monitor the probability of redemption at each reporting period.

The Series B Convertible Perpetual Preferred Stock ranks, with respect to dividend rights and rights upon any liquidation, dissolution or winding up of the Company (a “Liquidation Event”): (a) senior to the Company’s Common Stock and other capital stock of the Company, the terms of which do not expressly provide that such class or series ranks senior to or on a parity with the Series B Convertible Perpetual Preferred Stock other than the Company’s Series A Preferred Stock, as to dividend rights and rights upon Liquidation Events; (b) on a parity with any other class or series of capital stock of the Company, the terms of which expressly provide that such class or series ranks on a parity with the Series B Convertible Perpetual Preferred Stock as to dividend rights and rights upon Liquidation Events; (c) junior to the Series A Preferred Stock and any other class or series of capital stock of the Company, the terms of which expressly provide that such class or series ranks senior to the Series B Convertible Perpetual Preferred Stock as to dividend rights and rights upon Liquidation Events; and (d) junior to all existing and future indebtedness of the Company.

A holder of the Series B Convertible Perpetual Preferred Stock may elect to convert their holdings into shares of the Company's Common Stock at any time. On or after the dividend payment date following the fourth anniversary of the closing date, subject to the terms of the Series B Subscription Agreements, the Company may elect to convert all outstanding shares of the Series B Convertible Perpetual Preferred Stock into Common Stock if the closing price of the Company's Common Stock has been at least 175% of the applicable conversion price for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading days. The Series B Convertible Perpetual Preferred Stock is convertible into the Company's Common Stock at an initial conversion price of $14.02 per share, representing

a 30% premium to the 10-day volume weighted average price of the Company's Common Stock on the trading day immediately prior to execution of the Series B Subscription Agreements. In no event will the conversion rate exceed 87.5611 shares of Common Stock per $1,000 liquidation preference.

Except as may be expressly required by the Delaware General Corporation Law, holders of the Series B Convertible Perpetual Preferred Stock are not entitled to any voting rights.

Holders of the Series B Convertible Perpetual Preferred Stock are entitled to receive cumulative dividends at a rate equal to 7% per annum, payable in kind or in cash at the Company’s option, which dividends, if paid in kind, will be capitalized to the Series B Accrued Value (as defined below). During the three months ended June 30, 2026 and 2025, there were $5.5 million and $0.6 million, respectively, of in-kind dividends accrued on the Series B Convertible Perpetual Preferred Stock, and $10.8 million and $0.6 million during the six months ended June 30, 2026 and 2025, respectively, which increased the outstanding Series B Convertible Perpetual Preferred Stock value.

In the event of any Liquidation Event, each holder of the Series B Convertible Perpetual Preferred Stock will be entitled to receive a per share amount equal to the greater of (i) the per share purchase price of the Series B Convertible Perpetual Preferred Stock (as adjusted for any in-kind dividends) plus all accrued and unpaid dividends (the “Series B Accrued Value”) and (ii) the amount that such Series B Convertible Perpetual Preferred Stock would have been entitled to receive if it had converted into the Company's Common Stock immediately prior to such Liquidation Event.

Except in the case of a change in control, the Series B Convertible Perpetual Preferred Stock may not be redeemed or repurchased upon the election of the holders of the Series B Convertible Perpetual Preferred Stock. Upon certain change in control events involving the Company, (i) the holders of the Series B Convertible Perpetual Preferred Stock will have the right to require the Company to redeem any or all of their Series B Convertible Perpetual Preferred Stock and (ii) the Company will have the option to redeem all (but not less than all) of the then-outstanding Series B Convertible Perpetual Preferred Stock, in each case, for a cash amount equal to the Series B Accrued Value, on a per share basis. In connection with the Company delivering a Series B Conversion Notice or in connection with a change in control, the Company will, in certain circumstances, be required to increase the conversion rate for shares of Series B Convertible Perpetual Preferred Stock converting in connection therewith (a “Make-Whole Change”). Such Make-Whole Change will be calculated using a make-whole table calculated over a 10-year period. In no event will the conversion rate be increased to an amount that exceeds 87.5611 shares of Common Stock per $1,000 liquidation preference of Series B Preferred Stock.

Stockholders' Equity

Series A Preferred Stock

On September 13, 2024, the Company issued 50,000 shares of the Company’s Series A Preferred Stock, par value $0.001 per share, at $1,000 per share as part of a broader private placement that also included 8,528,786 shares of Common Stock, sold at a price of $4.69 per share, and Series C Warrants to purchase an aggregate of 5,000,000 shares of Common Stock at an exercise price of $11.50 per share. Holders of the Series A Preferred Stock are entitled to receive dividend payments at a return equal to 8% per annum, payable in cash or in kind at the election of the Company. As of June 30, 2026 and December 31, 2025, there were 100,000 shares of Series A Preferred Stock authorized, and 54,003 shares issued and outstanding, respectively. Refer to Note 13 - Warrants for further information on the Series C Warrants.

Holders of the Series A Preferred Stock do not have voting rights. The Series A Preferred Stock is not convertible, nor are there any sinking-fund requirements. The Series A Preferred Stock is redeemable at the Company’s option or mandatorily on September 13, 2027. The Company accounts for the Series A Preferred Stock as a liability in accordance with ASC 480, Distinguishing Liabilities from Equity. The Series A Preferred Stock is measured at the present value of the settlement amount, accruing interest cost using the rate implicit at inception. As of June 30, 2026 and December 31, 2025, the Series A Preferred Stock liability was $37.4 million and $29.6 million, respectively. The Company recognized $4.1 million and $2.6 million of interest expense (which includes amortization of original

issuance discount) on the Series A Preferred Stock during the three months ended June 30, 2026 and 2025, respectively, and $7.8 million and $4.9 million during the six months ended June 30, 2026 and 2025, respectively.

The holders of the Series A Preferred Stock have a contingent put right (the “Put Option”), which was bifurcated and recognized separately at fair value through earnings pursuant to ASC 815-15, Embedded Derivatives. The Put Option is contingent upon the Company incurring any indebtedness after the initial issue date that is senior to the Series A Preferred Stock and/or secured by the assets of PureCycle Augusta, LLC. The Company recognized income of $0.6 million and $0.3 million related to the change in the Put Option fair value during the three months ended June 30, 2026 and 2025, respectively, and expense of $0.9 million and income of $3.4 million during the six months ended June 30, 2026 and 2025, respectively, which is recorded in other (income)/expense in the Condensed Consolidated Statements of Comprehensive Loss.

The shares of Series A Preferred Stock will be redeemed in cash at a price equal to $1,050 per share (105% of the initial issue price) regardless of whether they are called by the Company, put back to the Company by the holders, or redeemed on September 13, 2027. The Series A Preferred Stock is liability classified and presented within noncurrent liabilities, as Series A Preferred Stock liability, and the Put Option liability is recorded within other noncurrent liabilities on the Condensed Consolidated Balance Sheets.

Preferred Stock

As of June 30, 2026 and December 31, 2025, the Company was authorized to issue 25.0 million shares of preferred stock with a par value of $0.001, of which 0.4 million shares in each period were issued and outstanding, respectively.

Common Stock

Holders of the Company's Common Stock are entitled to one vote per share on all matters submitted to a vote of stockholders. The holders do not have cumulative voting rights in the election of directors. The Company is authorized to issue 450.0 million shares of Common Stock with a par value of $0.001. As of June 30, 2026 and December 31, 2025, 200.9 million and 180.3 million shares were issued and outstanding, respectively.

In June 2026, the Company issued 19,854,000 shares of the Company's Common Stock at $8.21 per share pursuant to the Company’s shelf registration statement on Form S-3 (the "2026 Common Stock Offering"). The Common Stock issuance generated gross proceeds of approximately $163.0 million before deducting underwriting fees and other offering expenses.

On February 5, 2025, the Company entered into subscription agreements (the "Subscription Agreements") with certain investors, including affiliates of Sylebra, Pleiad Asia Master Fund, Pleiad Asia Equity Master Fund and affiliates of Samlyn, pursuant to which the Company agreed to sell in a private placement, an aggregate of 4,091,293 shares of the Company's Common Stock at $8.0655 per share. Included in the Subscription Agreements were 524,349 shares of the Company's Common Stock sold to affiliates of Sylebra and Samlyn, both of which are related parties due to their greater than 5% ownership interest in the Company, for approximately $4.2 million in proceeds before deducting fees and other estimated offering expenses. The transactions contemplated by the Subscription Agreements closed on February 6, 2025, generating gross proceeds of approximately $33.0 million before deducting fees and other offering expenses. As part of the Subscription Agreements, the Company filed a prospectus supplement on March 4, 2025 to an existing shelf registration statement dated January 31, 2025, registering the resale of the Common Stock sold in the offering.