SCHEDULE 13D/A: Sylebra Capital Increases Stake in PureCycle Technologies with New Preferred Stock Investment

Sylebra Capital and its affiliates have increased their beneficial ownership in PureCycle Technologies, Inc. to 19.46% of common stock, following a private placement of Series B Convertible Preferred Stock.

Summary

• Sylebra Capital LLC, Sylebra Capital Ltd, Sylebra Capital Management, Ltd, and Daniel Patrick Gibson (collectively, the "Reporting Persons") have filed an Amendment No. 3 to their Schedule 13D.
• The Reporting Persons collectively beneficially own 34,934,774 shares of PureCycle Technologies, Inc. Common Stock, representing 19.46% of the class.
• On June 16, 2025, Affiliated Investment Entities managed by Sylebra entered into Subscription Agreements with PureCycle Technologies, Inc. to purchase 40,000 shares of Series B Convertible Preferred Stock in a private placement.
• The transactions for the Series B Convertible Preferred Stock closed on June 20, 2025.
• The Series B Convertible Preferred Stock accrues cumulative dividends at a rate of 7% per annum, payable in kind or cash at the Issuer's option.
• The preferred stock has a liquidation preference equal to the greater of its accrued value or the amount receivable if converted into Common Stock.
• It is convertible into Common Stock at a rate equal to ($1,000 + in kind dividends + accrued dividends) divided by the conversion price, subject to a 19.99% ownership cap.
• In a change of control event, holders may require, or the Issuer may elect, to redeem the preferred stock for cash at its accrued value.
• PureCycle Technologies, Inc. has the right to convert the Series B Convertible Preferred Stock into Common Stock after the third anniversary of the closing date, provided certain trading price conditions are met.
• The Issuer is required to file a registration statement with the SEC covering the resale of the underlying Common Stock.

Sentiment

Score: 8

Explanation: The document indicates a strong vote of confidence from a major investor through an increased stake and a new preferred stock investment, providing capital to the company. While there's potential for future dilution from preferred stock conversion, the immediate impact is positive due to the capital infusion and investor backing.

Positives

• A significant investment from a major institutional investor like Sylebra Capital indicates strong confidence in PureCycle Technologies' business and future prospects.
• The private placement of Series B Convertible Preferred Stock provides PureCycle Technologies with additional capital, strengthening its financial position.
• The 7% cumulative dividend rate on the preferred stock offers a predictable return for the investor, while the Issuer retains flexibility to pay in kind or cash.

Risks

• The conversion of Series B Convertible Preferred Stock into Common Stock could lead to dilution for existing common shareholders, although it is subject to a 19.99% ownership cap.
• The Issuer's option to pay dividends in kind (additional preferred shares) could further increase the potential for future dilution.

Future Outlook

The Reporting Persons may purchase additional securities or dispose of their holdings in PureCycle Technologies, Inc. from time to time, based on their evaluation of the Issuer's business, prospects, financial condition, market conditions, and other factors. The Issuer is required to file a registration statement with the SEC covering the resale of the Common Stock underlying the Series B Convertible Preferred Stock. The Issuer also has the right to convert the Series B Convertible Preferred Stock into Common Stock after the third anniversary of the closing date if certain trading price conditions are met.

Industry Context

This filing reflects a significant capital infusion and increased stake by a major investor in a company operating in the recycling technology sector, indicating continued investor interest and support for sustainable solutions and circular economy initiatives.

Stakeholder Impact

• Shareholders: Potential future dilution upon conversion of the Series B Convertible Preferred Stock, but also a positive signal of investor confidence and strengthened company finances.
• Company: Receives additional capital to support operations and growth, and benefits from the continued backing of a significant investor.

Next Steps

• PureCycle Technologies, Inc. is required to prepare and file a registration statement with the SEC covering the resale of the Common Stock underlying the Series B Convertible Preferred Stock.
• The Issuer may convert the Series B Convertible Preferred Stock into Common Stock after the third anniversary of the closing date, subject to trading price conditions.

Key Dates

Recommendation

Keywords

PureCycle Technologies, Sylebra Capital, Schedule 13D, Preferred Stock, Private Placement, Common Stock, Investment, Beneficial Ownership, SEC Filing, Recycling Technology