Item 1. Financial Statements
ITEM 1. FINANCIAL STATEMENTS
Loop Industries, Inc.
Three and Nine Months Ended November 30, 2025
Index to the Unaudited Interim Condensed Consolidated Financial Statements
Contents
Page(s)
Condensed consolidated balance sheets as at November 30, 2025 (Unaudited) and February 28, 2025
F-2
Condensed consolidated statements of operations and comprehensive loss for the three and nine months ended November 30, 2025 and 2024 (Unaudited)
F-3
Condensed consolidated statements of changes in stockholders ' equity (deficit) for the three and nine months ended November 30, 2025 and 2024 (Unaudited)
F-4
Condensed consolidated statements of cash flows for the nine months ended November 30, 2025 and 2024 (Unaudited)
F-6
Notes to the condensed consolidated financial statements (Unaudited)
F-7
F-1
Table of Contents
Loop Industries, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands of U.S. dollars, except per share data)
As at
November 30,
February 28,
2025
2025
Assets
Current assets
Cash and cash equivalents
$ 5,204 $ 12,973
Accounts receivable and other (Note 3)
300 639
Inventories
85 82
Prepaid expenses (Note 4)
410 158
Total current assets
5,999 13,852
Equity method investments (Note 9)
1,831 1,281
Property, plant and equipment, net (Note 5)
1,690 1,737
Intangible assets, net (Note 6)
1,770 1,708
Total assets
$ 11,290 $ 18,578
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities
Accounts payable and accrued liabilities (Note 8)
$ 2,935 $ 3,545
Unearned revenue
102 102
Current portion of long-term debt (Note 11)
510 312
Total current liabilities
3,547 3,959
Due to customer
882 832
Series B Convertible Preferred stock (Note 10)
11,688 10,647
Long-term debt (Note 11)
2,496 2,773
Total liabilities
18,613 18,211
Stockholders’ Equity (Deficit)
Series A Preferred stock par value $ 0.0001 ; 25,000,000 shares authorized; one share issued and outstanding
- -
Common stock par value $ 0.0001 ; 250,000,000 shares authorized; 48,337,555 shares issued and outstanding (February 28, 2025 – 47,620,263 ) (Note 12)
5 5
Additional paid-in capital
195,452 193,529
Accumulated deficit
( 201,622 ) ( 192,027 )
Accumulated other comprehensive loss
( 1,158 ) ( 1,140 )
Total stockholders’ equity (deficit)
( 7,323 ) 367
Total liabilities and stockholders’ equity (deficit)
$ 11,290 $ 18,578
Going Concern (Note 1)
See accompanying notes to the condensed consolidated financial statements .
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Table of Contents
Loop Industries, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
(in thousands of U.S. dollars, except per share data)
Three Months Ended
Nine Months Ended
November 30, 2025
November 30, 2024
November 30, 2025
November 30, 2024
Revenues:
Products
$
-
$
52
$
8
$
81
Services
86
-
330
-
Total revenues
86
52
338
81
Expenses:
Research and development (Note 13)
967
1,377
3,182
5,559
General and administrative (Note 14)
1,500
2,148
5,018
7,654
Depreciation and amortization (Notes 5 and 6)
94
132
290
398
Loss on equity accounted investments (Note 9)
65
-
410
-
Impairment of machinery & equipment (Note 5)
-
8,460
-
8,460
Total expenses
2,626
12,117
8,900
22,071
Other loss (income):
Interest and other financial expenses
436
110
1,273
289
Interest income
( 43
)
( 23
)
( 212
)
( 155
)
Foreign exchange loss (gain)
11
( 240
)
( 28
)
( 184
)
Total other loss (income)
404
( 153
)
1,033
( 50
)
Net loss
( 2,944
)
( 11,912
)
( 9,595
)
( 21,940
)
Other comprehensive income (loss):
Foreign currency translation adjustment
7
( 135
)
( 18
)
( 147
)
Comprehensive loss
$
( 2,937
)
$
( 12,047
)
$
( 9,613
)
$
( 22,087
)
Net loss per share
Basic and diluted
$
( 0.06
)
$
( 0.25
)
$
( 0.20
)
$
( 0.46
)
Weighted average common shares outstanding
Basic and diluted
48,081,893
47,620,263
47,837,725
47,576,166
Going Concern (Note 1)
See accompanying notes to the condensed consolidated financial statements.
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Loop Industries, Inc.
Condensed Consolidated Statement of Changes in Stockholders' Equity (Deficit)
(Unaudited)
(in thousands of U.S. dollars, except for share data)
Three months ended November 30, 2025
Common stock
Preferred stock
Additional
Accumulated
par value $0.0001
par value $0.0001
Additional
Paid-in
Other
Total
Number of
Number of
Paid-in
Capital–
Accumulated
Comprehensive
Stockholders’
Shares
Amount
Shares
Amount
Capital
Warrants
Deficit
Income (Loss)
Equity (Deficit)
Balance, August 31, 2025
47,863,478
$
5
1
$
-
$
194,370
$
-
$
( 198,678
)
$
( 1,165
)
$
( 5,468
)
Issuance of shares upon the exercise of stock options (Note 15)
80,000
-
-
64
64
Issuance of common stock under ATM Equity Offering (Note 12)
394,077
-
-
-
724
-
-
-
724
Stock options issued for services (Note 15)
-
-
-
-
185
-
-
-
185
Restricted stock units issued for services (Note 15)
-
-
-
-
132
-
-
-
132
Share issuance costs
-
-
-
-
( 23
)
-
-
-
( 23
)
Foreign currency translation
-
-
-
-
-
-
-
7
7
Net loss
-
-
-
-
-
-
( 2,944
)
-
( 2,944
)
Balance, November 30, 2025
48,337,555
$
5
1
$
-
$
195,452
$
-
$
( 201,622
)
$
( 1,158
)
$
( 7,323
)
(in thousands of U.S. dollars, except for share data)
Three months ended November 30, 2024
Common stock
Preferred stock
Additional
Accumulated
par value $0.0001
par value $0.0001
Additional
Paid-in
Other
Total
Number of
Number of
Paid-in
Capital–
Accumulated
Comprehensive
Stockholders’
Shares
Amount
Shares
Amount
Capital
Warrants
Deficit
Income (Loss)
Equity
Balance, August 31, 2024
47,620,263
$
5
1
$
-
$
185,868
$
7,041
$
( 186,998
)
$
( 1,082
)
$
4,834
Stock options issued for services (Note 15)
-
-
-
-
146
-
-
-
146
Restricted stock units issued for services (Note 15)
-
-
-
-
184
-
-
-
184
Foreign currency translation
-
-
-
-
-
-
-
( 135
)
( 135
)
Net loss
-
-
-
-
-
-
( 11,912
)
-
( 11,912
)
Balance, November 30, 2024
47,620,263
$
5
1
$
-
$
186,198
$
7,041
$
( 198,910
)
$
( 1,217
)
$
( 6,883
)
See accompanying notes to the condensed consolidated financial statements.
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Loop Industries, Inc.
Condensed Consolidated Statement of Changes in Stockholders' Equity (Deficit)
(Unaudited)
(in thousands of U.S. dollars, except for share data)
Nine months ended November 30, 2025
Common stock
Preferred stock
Additional
Accumulated
par value $0.0001
par value $0.0001
Additional
Paid-in
Other
Total
Number of
Number of
Paid-in
Capital–
Accumulated
Comprehensive
Stockholders’
Shares
Amount
Shares
Amount
Capital
Warrants
Deficit
Income (Loss)
Equity (Deficit)
Balance, February 28, 2025
47,620,263
$
5
1
$
-
$
193,529
$
-
$
( 192,027
)
$
( 1,140
)
$
367
Issuance of shares upon the vesting of restricted stock units (Note 15)
126,857
-
-
-
-
-
-
-
-
Issuance of shares upon the exercise of stock options (Note 15)
80,000
-
-
-
64
-
-
-
64
Issuance of common stock under ATM Equity Offering (Note 12)
510,435
-
-
-
917
-
-
-
917
Stock options issued for services (Note 15)
-
-
-
-
836
-
-
-
836
Restricted stock units issued for services (Note 15)
-
-
-
-
136
-
-
-
136
Share issuance costs
-
-
-
-
( 30
)
-
-
-
( 30
)
Foreign currency translation
-
-
-
-
-
-
-
( 18
)
( 18
)
Net loss
-
-
-
-
-
-
( 9,595
)
-
( 9,595
)
Balance, November 30, 2025
48,337,555
$
5
1
$
-
$
195,452
$
-
$
( 201,622
)
$
( 1,158
)
$
( 7,323
)
(in thousands of U.S. dollars, except for share data)
Nine months ended November 30, 2024
Common stock
Series A Preferred stock
Additional
Accumulated
par value $0.0001
par value $0.0001
Additional
Paid-in
Other
Total
Number of
Number of
Paid-in
Capital–
Accumulated
Comprehensive
Stockholders’
Shares
Amount
Shares
Amount
Capital
Warrants
Deficit
Income (Loss)
Equity
Balance, February 29, 2024
47,528,908
$
5
1
$
-
$
171,792
$
20,385
$
( 176,970
)
$
( 1,070
)
$
14,142
Issuance of shares upon the vesting of restricted stock units (Note 15)
91,355
-
-
-
-
-
-
-
-
Expiration of warrants
-
-
-
-
13,344
( 13,344
)
-
-
-
Stock options issued for services (Note 15)
-
-
-
-
441
-
-
-
441
Restricted stock units issued for services (Note 15)
-
-
-
-
621
-
-
-
621
Foreign currency translation
-
-
-
-
-
-
-
( 147
)
( 147
)
Net loss
-
-
-
-
-
-
( 21,940
)
-
( 21,940
)
Balance, November 30, 2024
47,620,263
$
5
1
$
-
$
186,198
$
7,041
$
( 198,910
)
$
( 1,217
)
$
( 6,883
)
See accompanying notes to the condensed consolidated financial statements.
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Table of Contents
Loop Industries, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in thousands of U.S. dollars)
Nine Months Ended November 30,
2025
2024
Cash Flows from Operating Activities
Net loss
$
( 9,595
)
$
( 21,940
)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization (Notes 5 and 6)
290
398
Stock-based compensation expense (Note 15)
972
1,062
Impairment of machinery & equipment (Note 5)
-
8,460
Accrued interest and other financing costs (Note 10 and 11)
1,125
87
Loss on Equity method investments (Note 9)
410
-
Changes in operating assets and liabilities:
Accounts receivable and other (Note 3)
363
144
Inventories
-
21
Prepaid expenses (Note 4)
( 248
)
180
Accounts payable and accrued liabilities (Note 8)
( 689
)
2,851
Unearned revenue
-
102
Net cash used in operating activities
( 7,372
)
( 8,635
)
Cash Flows from Investing Activities
Distribution from equity investment
-
368
Investments in equity-method investees (Note 9)
( 960
)
-
Additions to intangible assets (Note 6)
( 199
)
( 454
)
Net cash used in investing activities
( 1,159
)
( 86
)
Cash Flows from Financing Activities
Proceeds from exercise of stock options (Note 12)
64
-
Proceeds from ATM equity offering, net of issuance costs (Note 12)
889
-
Borrowings under credit facility (Note 11)
-
2,372
Repayment of long-term debt (Note 11)
( 215
)
( 60
)
Net cash provided by financing activities
738
2,312
Effect of exchange rate changes
24
( 226
)
Net decrease in cash and cash equivalents
( 7,769
)
( 6,635
)
Cash and cash equivalents, beginning of period
12,973
6,958
Cash and cash equivalents, end of period
$
5,204
$
323
Supplemental Disclosure of Cash Flow Information:
Income tax paid
$
-
$
-
Interest paid
$
148
$
214
Interest received
$
212
$
224
Going Concern (Note 1)
See accompanying notes to the condensed consolidated financial statements.
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Table of Contents
Loop Industries, Inc.
Three and Nine Months Ended November 30, 2025 and 2024
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
1. The Company, Basis of Presentation and Going Concern
The Company
Loop Industries, Inc. (the “Company,” “Loop,” “we,” or “our”) is a technology company that owns patented and proprietary technology that depolymerizes no and low-value waste polyethylene terephthalate (“PET”) plastic and polyester fiber to its base building blocks (monomers). The monomers are filtered, purified and polymerized to create virgin-quality Loop™ branded PET resin suitable for use in food-grade packaging and polyester fiber. The Company is currently in the pre-commercialization stage with limited revenues.
Basis of Presentation
These unaudited interim condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“US GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures included in these unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company's Annual Report on Form 10 -K for the fiscal year ended February 28, 2025 , filed with the SEC on May 29, 2025, as amended by the Amendment No. 1 on Form 10 -K/A filed with the SEC on May 30, 2025. The unaudited interim condensed consolidated financial statements comprise the consolidated financial position and results of operations of Loop Industries, Inc. and its subsidiaries, Loop Innovations, LLC and Loop Canada Inc. All subsidiaries are, either directly or indirectly, wholly owned subsidiaries of Loop Industries, Inc. (collectively, the “Company”). The Company owns, through Loop Innovations, LLC, a 50 % interest in a joint venture, Indorama Loop Technologies, LLC, which is accounted for under the equity method. The Company also owns a 50 % interest in a joint venture, Ester Loop Infinite Technologies Private Limited ("India JV"), which is accounted for under the equity method. The Company owns a 10 % equity interest in Infinite Loop Europe SAS ("Infinite Loop Europe"), accounted for under the equity method, over which it has significant influence but not joint control; the remaining 90 % is owned by Reed Circular Economy ("RCE").
Intercompany balances and transactions are eliminated on consolidation. The condensed consolidated balance sheet as of February 28, 2025 , included herein, was derived from the audited financial statements as of that date, but does not include all disclosures including certain notes required by US GAAP on an annual reporting basis. In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements present fairly the financial position, results of operations, comprehensive loss and cash flows for the interim periods. The results for the three - and nine -month periods ended November 30, 2025 are not necessarily indicative of the results to be expected for any subsequent quarter, for the fiscal year ending February 28, 2026 , or for any other period.
All monetary amounts in these notes to the condensed consolidated financial statements are in thousands of U.S. dollars unless otherwise specified, except for per share data.
Going Concern
These unaudited interim condensed consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplate the realization of assets and settlement of liabilities in the normal course of business as they come due. In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but
not limited to,
twelve months from the date of issuance of these consolidated financial statements.
Since its inception, the Company has been in the pre-commercialization stage with no recurring revenues, and its ongoing operations and commercialization plans have been financed primarily by raising equity and debt. The Company has recurring net losses, negative cash flow from operating activities since its inception, and a net capital deficiency. Management continuously monitors the Company's cash resources against its cash commitments to determine whether there is sufficient liquidity to fund its costs for at least twelve months from the financial statement issuance date. In preparing this going concern assessment in accordance with US GAAP, the Company included cash flows that meet the 'probable' threshold under ASC 205 - 40 in its going concern evaluation and has excluded forecasted cash flows that lack substantive support or binding commitments.
Management has determined that current cash and cash equivalents on hand of $ 5,204 , together with the $ 2,504 available under its undrawn credit facility, will not be sufficient to fund the Company's ongoing operations, obligations and commitments for the next twelve months from the date of issuance of these unaudited interim condensed consolidated financial statements. These events and conditions are material uncertainties that raise substantial doubt upon the Company's ability to continue as a going concern and, accordingly, the appropriateness of the use of accounting principles applicable to a going concern.
The Company’s ability to continue as a going concern and execute upon management's plans to move to the next stage of its strategic development is dependent on, among other factors, whether the Company can obtain the necessary financing through a combination of the issuance of debt and/or equity, technology licensing and engineering services arrangements, and/or financing from government incentive programs. While the Company is actively engaged in financing discussions, there is no assurance that the Company will be successful in attracting additional funding on terms acceptable to the Company.
These unaudited interim condensed consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and balance sheet classifications that would be necessary if the Company were unable to realize its assets and settle its liabilities as a going concern in the normal course of operations. Such adjustments could be material.
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2. Summary of Significant Accounting Policies
Use of estimates
The preparation of financial statements in conformity with US GAAP requires management to use its judgment to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Those estimates and assumptions include the going concern assessment, estimates for depreciable lives of property, plant and equipment and intangible assets, recoverability of property, plant and equipment, recoverability of equity accounted investments, assumptions made in calculating the fair value of stock-based compensation and other equity instruments, and the assessment of performance conditions for stock-based compensation awards.
Net loss per share
The Company computes net loss per share in accordance with FASB ASC 260, Earnings Per Share . Basic loss per share is computed by dividing the net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the year. The Company includes common stock issuable in its calculation. Diluted loss per share is computed by dividing the net loss applicable to common stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential common shares are excluded from the computation if their effect is antidilutive.
For the three and nine months ended November 30, 2025 and 2024 , the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an antidilutive effect. As at November 30, 2025 , the potentially dilutive securities consisted of 5,243,138 outstanding stock options ( 2024 – 2,771,216 ), 4,261,512 outstanding restricted stock units ( 2024 – 4,448,179 ), and nil outstanding warrants ( 2024 – 2,357,407 )
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Recently adopted accounting pronouncements
In August 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023 - 05, Joint Venture Formations, which requires joint ventures to apply a new basis of accounting by measuring assets and liabilities at fair value upon formation. The amendments address diversity in practice by establishing requirements for recognition and measurement of net assets and liabilities on the formation date. The updated standard is effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. The adoption of this accounting guidance for the nine -month period ended November 30, 2025 did not impact the disclosures in our interim condensed consolidated financial statements.
Recently issued accounting pronouncements not yet adopted
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023 - 09—Income Taxes (Topic 740 ): Improvements to Income Tax Disclosures, which enhances the transparency and decision usefulness of income tax disclosures. The amendments in this Update address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information and includes certain other amendments to improve the effectiveness of income tax disclosures. The ASU is effective for our annual period beginning after December 15, 2024 and all joint ventures formed on or after January 1, 2025, which for the Company is the annual period ending February 28, 2026. Early adoption is permitted. Management is currently evaluating the impact that the updated standard will have on our consolidated financial statements and related disclosures.
In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2024 - 03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220 - 40 ): Disaggregation of Income Statement Expenses, which requires public business entities to disclose, in interim and annual reporting periods, additional information about certain expenses in the notes to financial statements. The updated standard is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. Management is currently evaluating the impact that the updated standard will have on our consolidated financial statements and related disclosures.
In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2024 - 04, Debt—Debt with Conversion and Other Options (Subtopic 470 - 20 ): Induced Conversions of Convertible Debt Instruments, which clarifies the accounting for settlements of convertible debt instruments that occur on terms different from the original contractual conversion terms. The amendments introduce a "preexisting contract approach," requiring that, to qualify for induced conversion accounting, the inducement offer must preserve the form of consideration and provide an amount of consideration that is no less than what was issuable under the original conversion privileges. This guidance applies to convertible debt instruments with cash conversion features and to instruments that are not currently convertible but had substantive conversion features at issuance and at the time the inducement offer is accepted. The updated standard is effective for annual reporting periods beginning after December 15, 2025, including interim periods within those fiscal years. Early adoption is permitted for entities that have adopted the amendments in ASU 2020 - 06. Management is currently evaluating the impact that the updated standard will have on our consolidated financial statements and related disclosures.
In January 2025, the Financial Accounting Standards Board (FASB) issued ASU 2025 - 01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220 - 40 ): Clarifying the Effective Date. This update clarifies the effective date of ASU 2024 - 03, which requires public business entities to provide disaggregated disclosures of certain income statement expenses. Specifically, ASU 2025 - 01 confirms that the guidance in ASU 2024 - 03 is effective for annual reporting periods beginning after December 15, 2026, and for interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. Management is currently evaluating the impact that the updated standard will have on our consolidated financial statements and related disclosures.
In July 2025, the FASB issued ASU 2025 - 05, Financial Instruments—Credit Losses (Topic 326 ): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606, including those assets acquired in a business combination. The practical expedient permits an entity to assume that current conditions as of the balance sheet date do not change for the remaining life of the current accounts receivable and current contract assets. This guidance is effective for the Company for its fiscal year and all interim periods beginning February 1, 2026 on a prospective basis. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this guidance on its condensed consolidated financial statements.
3. Accounts Receivable and Other
Accounts Receivable and Other as at November 30, 2025 and February 28, 2025 are comprised of the following:
November 30, 2025
February 28, 2025
Accounts receivable from customers
$ 3 $ 52
Accounts receivable from joint venture
86 368
Research and development tax credits
64 121
Sales tax
57 89
Other receivables
90 9
$ 300 $ 639
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4. Prepaid Expenses
Prepaid expenses as at November 30, 2025 and February 28, 2025 were as follows:
November 30, 2025
February 28, 2025
Insurance
$ 280 $ 69
Utilities
32 29
Software
33 28
Other
65 32
$ 410 $ 158
5. Property, Plant and Equipment, Net
As at November 30, 2025
Accumulated
depreciation,
write-down
Cost
and impairment
Net book value
Machinery and equipment
$ 8,460 $ ( 8,460 ) $ -
Building
1,773 ( 464 ) 1,309
Land
219 - 219
Building and Land Improvements
1,799 ( 1,722 ) 77
Office equipment and furniture
267 ( 182 ) 85
$ 12,518 $ ( 10,828 ) $ 1,690
As at February 28, 2025
Accumulated
depreciation,
write-down
Cost
and impairment
Net book value
Machinery and equipment
$ 8,460 $ ( 8,460 ) $ -
Building
1,717 ( 406 ) 1,311
Land
212 - 212
Building and Land Improvements
1,741 ( 1,616 ) 125
Office equipment and furniture
259 ( 170 ) 89
$ 12,389 $ ( 10,652 ) $ 1,737
Depreciation expense for the three - and nine -month periods ended November 30, 2025 amounted to $ 34 and $ 104 , respectively ( 2024 – $ 79 and $ 249 ).
During the year ended February 28, 2025 the Company recorded an impairment charge for equipment of $ 8,460 . This impairment was due to the termination of the joint venture arrangement between the Company and SK Geo Centric Co. Ltd. under which they had intended to construct and operate an Infinite Loop™ manufacturing facility in Ulsan, South Korea. While the equipment may be utilized in a future commercial production facility, there are no active deployment plans for the use of this specific equipment, therefore the recoverability of the carrying value of the equipment is highly uncertain, and when tested for impairment, resulted in an impairment loss of $ 8,460 being recognized in the year ended February 28, 2025.
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6. Intangible Assets, Net
Intangible assets as at November 30, 2025 and February 28, 2025 were $ 1,770 and $ 1,708 , respectively.
During the nine -month periods ended November 30, 2025 and 2024 , we made additions relating to patent application costs to intangible assets of $ 199 and $ 454 , respectively.
Amortization expense for the three - and nine -month periods ended November 30, 2025 amo unted to $ 60 and $ 186 , respectively ( 2024 – $ 53 and $ 149 ).
7. Fair Value of Financial Instruments
The following tables disclose the estimated fair value of the Company's financial liabilities as at November 30, 2025 and February 28, 2025 :
Fair Value at November 30, 2025
Carrying
Level in the
Amount
Fair Value
hierarchy
Financial liabilities accounted for at amortized cost:
Series B Convertible Preferred stock (Note 10)
$ 11,688 $ 11,688 Level 2
Long-term debt (Note 11)
$ 3,006 $ 3,006 Level 2
Due to customer
$ 882 $ 882 Level 2
Fair Value at February 28, 2025
Carrying
Level in the
Amount
Fair Value
hierarchy
Financial liabilities accounted for at amortized cost:
Series B Convertible Preferred stock (Note 10)
$ 10,647 $ 10,647 Level 2
Long-term debt (Note 11)
$ 3,085 $ 3,085 Level 2
Due to customer
$ 832 $ 832 Level 2
The fair value of cash, restricted cash, accounts receivable and other, and accounts payable and accrued liabilities approximate their carrying values due to their short-term maturity.
8. Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities as at November 30, 2025 and February 28, 2025 were as follows:
November 30, 2025
February 28, 2025
Trade accounts payable
$ 1,234 $ 2,010
Accrued employee compensation
645 554
Accrued engineering fees
452 431
Accrued professional fees
290 276
Other accrued liabilities
314 274
$ 2,935 $ 3,545
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9. Equity Method Investments
Joint Venture with Ester
On May 1, 2024, the Company entered into an agreement with Ester Industries Ltd. (“Ester”), a manufacturer of polyester films and specialty polymers in India, to form a 50/50 joint venture based in India (“India JV”). The purpose of the India JV is to build and operate an Infinite Loop™ manufacturing facility in India which will produce lower carbon footprint rDMT, rMEG and specialty polymers, using the Infinite Loop™ Technology. During the year ended February 28, 2025, Ester Loop Infinite Technologies Private Limited (“ELITe”) was incorporated as the India JV.
ELITe meets the accounting definition of a joint venture where neither party has control of the joint venture entity and both parties have joint control over the decision-making process. As such, the Company uses the equity method of accounting to account for its share of the investment in ELITe.
During the nine -month period ended November 30, 2025 , Loop and Ester each contributed $ 960 ( 2024 – nil ) to ELITe. During the three - and nine -month periods ended November 30, 2025 , ELITe incurred losses of $ 130 and $ 820 , respectively ( 2024 – nil ), resulting in the Company recording its share of the loss on equity accounted investment of $ 65 and $ 410 ( 2024 – nil ) for the respective periods. As at November 30, 2025 , and February 28, 2025 the carrying value of the Company's investment in ELITe was $ 1,817 and $ 1,267 , respectively.
Equity-Method Investment with Reed Circular Economy
On September 23, 2025, Loop entered into a formal agreement with Reed Circular Economy ("RCE"), an affiliate of Reed Management SAS, to establish the framework for the governance, ownership, and operations of Infinite Loop Europe SAS ("Infinite Loop Europe"). Under this agreement, and as previously announced, RCE and Loop hold their interests in Infinite Loop Europe on a 90/10 basis to pursue the non-exclusive development, financing, construction, ownership, operation, and commercialization of chemical upcycling plants using Loop's technology within Europe. The agreement provides Infinite Loop Europe with priority rights to evaluate European project opportunities, establishes financing arrangements between the shareholders, grants Loop options to participate in project equity, and confirms that Loop retains ownership of its intellectual property while granting Infinite Loop Europe limited use rights.
Infinite Loop Europe does not meet the accounting definition of a joint venture, as the Company does not have joint control over the entity. However, the Company has significant influence over Infinite Loop Europe and, accordingly, accounts for its investment using the equity method.
In September 2025, Loop purchased 250 shares of Infinite Loop Europe for €0.25 ($ 0.305 ) ( 2024 – nil ). Infinite Loop Europe has not yet commenced operations. As at November 30, 2025 , th e carrying value of the Company's investment in Infinite Loop Europe was nominal.
10. Series B Convertible Preferred Stock
The balance of Series B Convertible Preferred Stock as at November 30, 2025 and February 28, 2025 was as follows:
November 30, 2025
February 28, 2025
Stated value
$ 11,439 $ 10,395
Accrued PIK dividends
249 252
Series B Convertible Preferred Stock
$ 11,688 $ 10,647
During the three - and nine -month periods ended November 30, 2025 , the Company recorded PIK dividends of $ 360 and $ 1,041 respectively, ( 2024 – nil ), which were recorded in “Interest and other financial expenses” in our Consolidated Statements of Operations and Comprehensive Loss. On September 30, 2025, the annual dividend payment date, in accordance with the terms of the Series B Preferred Stock, the Company did not pay the accrued dividend in cash. The dividend of $ 1,044 was added to the Stated Value of the Series B Preferred Stock as a payment-in-kind dividend. The Stated Value as of September 30, 2025 includes this PIK dividend and will serve as the base for calculating future dividend accruals at the applicable dividend rate.
11. Long ‑ Term Debt
Long-term debt as of November 30, 2025 and February 28, 2025 , was comprised of the following:
November 30, 2025
February 28, 2025
Investissement Québec financing facility:
Principal amount
$ 3,004 $ 3,099
Unamortized discount
( 109 ) ( 138 )
Accrued interest
111 124
Total Investissement Québec financing facility
3,006 3,085
Less: current portion of long-term debt
( 510 ) ( 312 )
Long-term debt, net of current portion
$ 2,496 $ 2,773
Investissement Qu é bec financing facility
The Company recorded interest expense on the Investissement Québec loan for the three - and nine -month periods ended November 30, 2025 in the amount of $ 36 and $ 106 , respectively ( 2024 – $ 29 and $ 59 ) and an accretion expense of $ 11 and $ 34 , respectively ( 2024 – $ 14 and $ 27 ). During the nine -month period ended November 30, 2025 , the Company made repayments of $ 215 ( 2024 – $ 50 ) on the Investissement Québec loan.
Total repayments due on the Company's indebtedness over the next five years are as follows:
Years ending
Amount
February 28, 2026
107
February 28, 2027
537
February 29, 2028
824
February 28, 2029
824
February 28, 2030
823
Thereafter
-
Total
$ 3,115
Credit facility from a Canadian bank
On July 26, 2022, Loop Canada, Inc., a wholly-owned subsidiary of the Company (the "Borrower"), entered into an Operating Credit Facility (the “Credit Facility”) with a Canadian bank. The Credit Facility allows for borrowings of up to $ 2,504 in aggregate principal amount. The Credit Facility is secured by the Company's Terrebonne, Québec property and was initially subject to a minimum equity covenant, tested quarterly.
On July 4, 2025, the Borrower, the Company and the Canadian bank executed an amendment to the Credit Facility, modifying the minimum equity covenant to include the balance of Series B Convertible Preferred Stock as at February 28, 2025 of $ 10,647 in the calculation of stockholders' equity.
On
October 10, 2025, the Borrower, the Company and the Canadian bank executed an amendment to the Credit Facility, which removed the minimum equity covenant tested quarterly
for the duration of the term of the Credit Facility.
All borrowings under the Credit Facility bear interest at an annual rate equal to the bank's Canadian prime rate plus 1.0 %. As at November 30, 2025 , the $ 2,504 Credit Facility was available and undrawn. As at February 28, 2025 , the credit facility was available and undrawn.
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12. Stockholders' Equity (Deficit)
Common Stock
For the period ended November 30, 2025
Number of shares
Amount
Balance, February 28, 2025
47,620,263 $ 5
Issuance of shares upon settlement of restricted stock units
126,857 -
Issuance of shares upon exercise of stock options
80,000 -
Issuance of shares for cash
510,435 -
Balance, November 30, 2025
48,337,555 $ 5
For the period ended November 30, 2024
Number of shares
Amount
Balance, February 29, 2024
47,528,908 $ 5
Issuance of shares upon settlement of restricted stock units
91,355 -
Balance, November 30, 2024
47,620,263 $ 5
During the nine months ended November 30, 2025 , the Company recorded the following common stock transactions:
(i) The Company issued 126,857 shares of common stock to settle restricted stock units that vested in the period.
(ii) The Company issued 80,000 shares of common stock to settle stock options exercised in the period.
(iii) The Company issued 510,435 shares of common stock through its ATM Equity Offering program at an average offering price of $ 1.80 for gross proceed of $ 917 .
During the nine months ended November 30, 2024 , the Company recorded the following common stock transaction:
(i)
The Company issued 91,355 shares of common stock to settle restricted stock units that vested in the period.
13. Research and Development Expenses
Research and development expenses for the three -month periods ended November 30, 2025 and 2024 were as follows:
November 30, 2025
November 30, 2024
Employee compensation
$ 735 $ 876
Machinery and equipment expenditures
- 41
External engineering
18 86
Plant and laboratory operating expenses
183 210
Other
31 164
$ 967 $ 1,377
Research and development expenses for the nine -month periods ended November 30, 2025 and 2024 were as follows:
November 30, 2025
November 30, 2024
Employee compensation
$ 2,377 $ 3,014
Machinery and equipment expenditures
2 44
External engineering
82 1,365
Plant and laboratory operating expenses
562 677
Other
159 459
$ 3,182 $ 5,559
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14. General and Administrative Expenses
General and administrative expenses for the three -month periods ended November 30, 2025 and 2024 were as follows:
November 30, 2025
November 30, 2024
Employee compensation
$ 653 $ 799
Insurance
426 453
Professional fees
157 595
Other
264 301
$ 1,500 $ 2,148
General and administrative expenses for the nine -month periods ended November 30, 2025 and 2024 were as follows:
November 30, 2025
November 30, 2024
Employee compensation
$ 1,956 $ 2,491
Insurance
1,301 1,421
Professional fees
1,130 2,858
Other
631 884
$ 5,018 $ 7,654
15. Share-based Payments
Stock Options
The following table summarizes the continuity of the Company's stock options during the three -month periods ended November 30, 2025 and 2024 :
2025
2024
Number of
Weighted average
Number of
Weighted average
stock options
exercise price
stock options
exercise price
Outstanding, beginning of period
5,493,138 $ 3.19 2,771,216 $ 5.25
Granted
130,000 1.72 - -
Exercised
( 80,000 ) 0.80 - -
Forfeited
( 100,000 ) 1.16 - -
Expired
( 200,000 ) 0.80 - -
Outstanding, end of period
5,243,138 $ 3.32 2,771,216 $ 5.25
Exercisable, end of period
2,581,727 $ 5.30 2,040,000 $ 6.12
The following table summarizes the continuity of the Company's stock options during the nine -month periods ended November 30, 2025 and 2024 :
2025
2024
Number of
Weighted average
Number of
Weighted average
stock options
exercise price
stock options
exercise price
Outstanding, beginning of period
2,771,216 $ 5.25 2,772,000 $ 5.10
Granted
2,931,922 1.18 199,216 2.89
Exercised
( 80,000 ) 0.80 - -
Forfeited
( 180,000 ) 1.31 ( 200,000 ) 0.80
Expired
( 200,000 ) 0.80 - -
Outstanding, end of period
5,243,138 $ 3.32 2,771,216 $ 5.25
Exercisable, end of period
2,581,727 $ 5.30 2,040,000 $ 6.12
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The Company applies the fair value method of accounting for stock-based compensation awards granted. Fair value is calculated based on a Black-Scholes option pricing model. The principal components of the pricing model for the stock options granted in the nine -month period ended November 30, 2025 and 2024 were as follows:
2025
2024
Exercise price
$ 1.18 $ 2.89
Risk-free interest rate
3.56% - 4.11 % 4.09 %
Expected dividend yield
0 % 0 %
Expected volatility
81% - 82 % 73 %
Expected life (years)
3.5 - 5.0 years 7 years
The weighted-average grant-date fair value of options granted during the nine -month periods ended November 30, 2025 and 2024 was $ 0.64 and $ 2.03 , respectively.
A summary of the Company’s nonvested shares as of November 30, 2025 , and changes during the nine -month period ended November 30, 2025 were as follows:
2025
Number of
Weighted average
stock options
exercise price
Nonvested, beginning of period
731,216 $ 1.88
Granted
2,400,000 0.66
Exercised
- -
Forfeited
( 180,000 ) 1.31
Vested
( 289,805 ) 1.88
Nonvested, end of period
2,661,411 $ 0.82
During the three -month periods ended November 30, 2025 and 2024 , stock-based compensation expense attributable to stock options amounted to $ 185 and $ 146 , respectively. During the nine -month periods ended November 30, 2025 and 2024 , stock-based compensation expense attributable to stock options amounted to $ 836 and $ 441 , respectively.
Restricted Stock Units
The following table summarizes the continuity of the restricted stock units during the three -month periods ended November 30, 2025 and 2024 :
2025
2024
Weighted average
Weighted average
Number of units
fair value price
Number of units
fair value price
Outstanding, beginning of period
4,256,532 $ 6.38 4,461,818 $ 6.35
Granted
17,311 1.65 - -
Settled
- - - -
Forfeited
( 12,331 ) 4.76 ( 13,639 ) 4.43
Outstanding, end of period
4,261,512 $ 6.36 4,448,179 $ 6.36
Outstanding vested, end of period
1,833,531 $ 5.71 1,761,421 $ 5.86
The following table summarizes the continuity of the restricted stock units during the nine -month periods ended November 30, 2025 and 2024 :
2025
2024
Weighted average
Weighted average
Number of units
fair value price
Number of units
fair value price
Outstanding, beginning of period
4,466,958 $ 6.32 4,368,897 $ 6.53
Granted
328,081 1.33 184,276 2.25
Settled
( 126,857 ) 2.90 ( 91,355 ) 6.74
Forfeited
( 406,670 ) 2.97 ( 13,639 ) 4.43
Outstanding, end of period
4,261,512 $ 6.36 4,448,179 $ 6.36
Outstanding vested, end of period
1,833,531 $ 5.71 1,761,421 $ 5.86
The Company applies the fair value method of accounting for awards granted through the issuance of restricted stock units. Fair value is calculated based on the intrinsic value at grant date multiplied by the number of restricted stock unit awards granted.
During the three -month periods ended November 30, 2025 and 2024 , stock-based compensation attributable to RSUs amounted to $ 132 and $ 184 , respectively. During the nine -month periods ended November 30, 2025 and 2024 , stock-based compensation expense attributable to RSUs amounted to $ 136 , which include s $( 319 ) for forfeitures recorded in the period, and $ 621 , respectively.
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Stock-Based Compensation Expense
During the three -month periods ended November 30, 2025 and 2024 , stock-based compensation included in research and development expenses amounted to $ 82 and $ 106 , respectively, and in general and administrative expenses amounted to $ 235 and $ 224 , respectively. During the nine -month periods ended November 30, 2025 and 2024 , stock-based compensation included in research and development expenses amounted to $ 426 and $ 367 , respectively, and in general and administrative expenses amounted to $ 545 and $ 695 , respectively.
16. Equity Incentive Plan
On July 6, 2017, the Company adopted the 2017 Equity Incentive Plan (the “Plan”). The Plan permits the granting of warrants, stock options, stock appreciation rights and restricted stock units to employees, directors and consultants of the Company. A total of 3,000,000 shares of common stock were initially reserved for issuance under the Plan at July 6, 2017, with annual automatic share reserve increases, as defined in the Plan, amounting to the lessor of (i) 1,500,000 shares, (ii) 5 % of the outstanding shares on the last day of the immediately preceding fiscal year, or (iii) such number of shares determined by the Administrator of the Plan, effective March 1, 2018. On March 1, 2025, the share reserve was increased by 1,500,000 shares ( 2024 – 1,500,000 ). The Plan is administered by the Board of Directors who designates eligible participants to be included under the Plan, the number of awards granted, the share price pursuant to the awards and the vesting conditions and period. The awards, when granted, will have an exercise price of no less than the estimated fair value of shares at the date of grant and a life not exceeding 10 years from the grant date. However, where a participant, at the time of the grant, owns stock representing more than 10% of the voting power of the Company, the life of the options shall not exceed 5 years.
The following table summarizes the continuity of the units that were authorized for issuance under the Plan as at and during the nine -month periods ended November 30, 2025 and 2024 :
2025
2024
Number of units*
Number of units*
Authorized, beginning of period
2,159,612 848,244
Automatic share reserve increase
1,500,000 1,500,000
Units granted
( 3,260,003 ) ( 383,492 )
Units forfeited
586,670 213,639
Units expired
200,000 -
Authorized, end of period
1,186,279 2,178,391
*The use of the term “units” in the table above describes a combination of stock options and RSUs.
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.