What changed in this filing

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Item 1. Business

2026-05-27 compared with 2025-05-29 · 148 added, 120 removed, 189 unchanged (59% of the section changed)

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Loop Industries is committed to contributing to the global movement towards a circular economy by reducing plastic waste and recovering waste plastic for a sustainable future.

Loop plans to commercialize the Infinite Loop™ technology through a combination of direct investments with strategic partners to own and operate commercial facilities and the licensing of its technology.

Loop plans to commercialize the Infinite Loop™ technology by developing facilities throughout the world which use its technology to produce rPET.

These facilities will be developed through a combination of direct investments with strategic partners and the licensing of its technology to companies with industry expertise.

As the initial phase of our plan for the commercialization of future Infinite Loop™ manufacturing facilities, we constructed and have successfully operated our Terrebonne, Québec depolymerization production facility (the “Terrebonne Facility”) for the past five years, demonstrating the effectiveness of our technology and supplying Loop PET resin and polyester fiber to customers.

The facility is also used for research and development activities.

The facility has also been used for research and development activities.

Loop is currently executing on its commercialization strategy through two key strategic partnerships.

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The facility's planned production capacity is 70,000 tons per year of Loop branded PET resin and polyester fiber.

In addition, the Company sold its first technology license to Reed Management SAS, known as Reed Societe Generale Group, for one Infinite Loop™ manufacturing facility in Europe for an initial down payment of €10 million with additional milestone payments to be received by Loop as the project advances.

Infinite Loop Europe, an entity to be owned 10% by Loop and 90% by Reed Societe Generale Group, was formed with the purpose of developing Infinite Loop™ manufacturing facilities in Europe.

In addition , the Company sold its first technology license to Reed Management SAS, ("Reed Societe Generale Group"), for one Infinite Loop™ manufacturing facility in Europe for an initial payment of $10.4 million (€10.0 million) with additional milestone payments to be received by Loop as the project advances.

Infinite Loop Europe SAS (“Infinite Loop Europe”), an entity owned 10% by Loop and 90% by Reed Circular Economy (“RCE”), an affiliate of Reed Societe Generale Group, was formed with the purpose of developing Infinite Loop™ manufacturing facilities in Europe.

These initiatives represent key steps in implementing the Company's plan to deploy its proprietary depolymerization technology in global markets.

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Due to the progressive degradation of material properties and the accumulation of impurities, PET can typically only be mechanically recycled a limited number of times before its quality is too poor for further processing or valuable applications.

The quality of mechanically recycled PET can vary considerably and often require blending with virgin PET to meet performance standards.

The quality of mechanically recycled PET can vary considerably and often requires blending with virgin PET to meet performance standards.

This inconsistency poses difficulties for manufacturers aiming to incorporate rPET into products, particularly for demanding applications like food packaging.

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Agreements with Reed Societe Generale Group

On December 12, 2024, the Company entered into an Amended and Restated Share Purchase Agreement (the “Amended Agreement”) with Reed Societe Generale Group, a European investment firm focused on high impact and technology-enabled infrastructure majority-owned by the bank Societe Generale.

On December 12, 2024, the Company entered into an Amended and Restated Share Purchase Agreement (the “Amended Agreement”) wit h Reed Societe Generale Group, a European investment firm focused on high impact and technology-enabled infrastructure majority-owned by the bank Societe Generale.

The Amended Agreement amends the original Share Purchase Agreement dated May 30, 2024 previously reported by the Company in a current report on Form 8-K filed on June 4, 2024.

A joint entity, which under French Law is referred to as a simplified joint-stock company, was incorporated (“Infinite Loop Europe”), to be owned 90% by Reed Societe Generale Group and 10% by Loop, with the purpose of developing Infinite Loop™ manufacturing facilities in Europe.

Pursuant to the Amended Agreement, the Company will enter into a Securityholders Agreement with RCE to establish the framework for the governance, ownership, and operations of Infinite Loop Europe.

On December 23, 2024, the Company received total cash proceeds of $20.8 million (€20.0 million) upon closing of the financing and licensing transactions contemplated by the Amended Agreement.

The Company entered into a license agreement with RCE, acting on behalf of Infinite Loop Europe, granting a license to use Loop’s proprietary depolymerization technology for one facility within Europe.

Pursuant to the terms of the license agreement, the Company received an initial upfront royalty payment of $10.4 million (€10.0 million), with additional milestone-based payments from Reed Societe Generale Group to follow.

Additionally, the Company issued and sold 1,044,430 shares of Series B Convertible Preferred Stock (“Series B CPS”) at $10.00 per share to Reed Circular Economy (“RCE”), an affiliate of Reed Societe Generale Group for cash proceeds of $10.4 million (€10.0 million).

To facilitate the closing of the transactions contemplated by the Amended Agreement and to develop Infinite Loop™ manufacturing facilities in Europe, Infinite Loop Europe was incorporated under French law.

On December 23, 2024, the Company closed the financing and licensing transactions contemplated by the Amended Agreement.

The Company issued and sold 1,044,430 shares of Series B Convertible Preferred Stock at $10.00 per share to RCE.

Additionally, the Company entered into a License Agreement with RCE, acting on behalf of Infinite Loop Europe, granting a non-transferable, royalty-bearing license to use Loop's proprietary depolymerization technology for one facility within Europe.

The Company received total cash proceeds of $20.8 million (€20.0 million) on December 23, 2024.

Key terms of the Series B CPS include:

13% PIK dividend rate

13% Paid-in-kind ("PIK") dividend rate

Convertible to Loop common stock at $4.75 per share or redeemable in cash

We believe the licensing and financing transactions mark a pivotal step in Loop’s commercialization strategy, enabling the deployment of its patented recycling technology across Europe and supporting capital investment in cost-effective manufacturing regions, including its joint venture in India with strategic partner Ester.

Proceeds from these transactions are being used to fund the India JV project and Loop’s operational cash flow needs.

We believe the licensing and financing transactions marked a pivotal step in Loop's commercialization strategy, enabling the deployment of its patented recycling technology across Europe and supporting capital investment in cost-effective manufacturing regions, including its joint venture in India with strategic partner Ester.

Proceeds from these transactions have been used to fund the India JV project and Loop's operational cash flow needs.

We further believe the sale of our first license underscores the commercial readiness of Loop's technology, which has been validated by five years of operations at its Terrebonne facility.

Under the agreed terms of the partnership with Reed Societe Generale Group, Loop retains the right to increase its equity stake in the European manufacturing facility, as well as potential future facilities, to a maximum of 50% for each facility.

As the license is to build one Infinite Loop™ manufacturing facility in Europe, future facilities under this partnership would require the purchase of additional technology licenses from Loop.

Loop and Reed Societe Generale Group are actively assessing opportunities for the first Infinite Loop™ facility in Europe.

Current activities include evaluating potential project locations, engaging with local and national governments to assess the availability of subsidies and incentives, and identifying potential strategic partners to support the execution of the project.

In parallel, Loop is in the process of implementing a modular construction strategy, including the development of a standardized facility design and pre-fabrication approach aimed at reducing construction costs and timelines, with the objective of improving scalability for future projects across Europe and other regions with high construction costs.

On September 23, 2025, Loop entered into a formal agreement with RCE to establish the framework for the governance, ownership, and operations of Infinite Loop Europe , a European entity formed to pursue the non-exclusive development, financing, construction, ownership, operation, and commercialization of chemical upcycling plants and related products using Loop’s technology within Europe.

Under this agreement, RCE and Loop hold equity interests in Infinite Loop Europe on a 90/10 basis.

In September 2025, Loop purchased 250 shares of Infinite Loop Europe for $0.3 (€0.3) in consideration for its 10% ownership stake.

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 up to 50% of project-level equity, and confirms that Loop retains ownership of its intellectual property while granting Infinite Loop Europe limited use rights.

Infinite Loop Europe is managed by a chief executive officer proposed by RCE, with governance provided by a four-member board of directors, of which Loop is entitled to nominate one director and RCE nominates the remaining directors.

Certain transactions that could risk the disclosure of Loop’s technology, as well as certain related-party transactions, require unanimous board approval.

RCE has provided Infinite Loop Europe with a $10.4 million (€10.0 million) shareholder loan to fund the first royalty tranche under the license agreement, which accrues payment-in-kind interest at 11.9% per annum and matures on December 27, 2027.

On February 17, 2026, Loop announced that Infinite Loop Europe has selected BASF Industriepark Lausitz in Schwarzheide, Germany, as the site for its inaugural European manufacturing facility.

The project will be the first under Loop’s licensed technology model.

This selection marks a major step in Loop’s global commercialization strategy, with the site expected to be operational by 2030.

The facility is designed to utilize Loop’s proprietary depolymerization technology to produce 70,000 metric tons per year of virgin-quality Loop™ PET made from 100% recycled content.

By addressing a critical supply gap for food-grade and pharmaceutical applications in the European market, the project pairs technical reliability with a high-demand commercial opportunity.

Integration within BASF’s Industriepark Lausitz provides access to world-class industrial infrastructure and operational expertise, while the partnership wit h Reed Societe Generale Group br ings strong institutional capital support, reducing execution risk and accelerating commercialization.

The facility is positioned to benefit from the European Commission’s 2025 pilot actions aimed at modernizing and strengthening the EU plastics recycling sector.

Following site selection, the projec t moves i nto the engineering and permitting phase.

Joint Venture with Ester

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The India JV intends to leverage the complementary skill sets of each partner by combining Loop's innovative technology and global customer relationships with Ester's nearly 40 years of specialized polymer production, operational proficiency, and local expertise, including sourcing of PET plastic and polyester fiber waste feedstocks.

The India facility will leverage the Infinite Loop™ Technology and existing engineering package which should accelerate the lead-time towards groundbreaking.

The India facility will leverage the Infinite Loop™ Technology and Loop’s existing engineering package

The planned production capacity of the Infinite Loop™ India facility is 70,000 tons per year of Loop branded PET resin and polyester fiber.

We believe the India JV offers attractive projected economic returns without the need for substantial sustainability-linked premium pricing.

Loop and Ester made the decision to incorporate a continuous polymerization line at the Infinite Loop™ India facility.

By integrating polymerization assets within the Infinite Loop™ India facility, we expect improved efficiency and lower operating costs with a minimal impact on overall project cost.

Loop and Ester anticipate that the total funding required for the India JV for the purposes of construction, development and operationalization of the project, including the initial working capital requirements, will be financed by a combination of debt and equity capital.

Ester and Loop are each contributing 50% of the equity capital of the India JV.

As of February 28, 2025, Loop and Ester had each made total equity contributions of $1.9 million in cash to the India JV.

The funds injected in the India JV are being used for preliminary project costs, which are mainly engineering fees.

Subject to the terms of the relevant governing documents, Ester will be the exclusive producer of specialty polymers for the India JV, and Loop will be the exclusive seller and marketing agent of the India JV’s products.

Ester and Loop are working in collaboration on all financing activities for the India JV pursuant to the terms of the agreement.

The India JV will also enter into (i) a technology license agreement with Loop (the “Loop Technology License Agreement”), (ii) a service agreement with Ester, and (iii) a sales and marketing agreement with Loop, each on terms mutually agreed upon by the parties.

As of February 28, 2026, Loop and Ester had each made total equity contrib utions of $2.9 million in cash to the India JV.

Th e funds injected in the India JV are being used for preliminary project costs, which are mainly engineering fees and the purchase of land.

The India JV will enter into (i) a technology license agreement with Loop (the “Loop Technology License Agreement”), (ii) a service agreement with Ester, and (iii) a sales and marketing agreement with Loop, each on terms mutually agreed upon by the parties.

Pursuant to the Loop Technology License Agreement, the India JV will be granted an exclusive, subject to certain exceptions, license to exploit the Infinite Loop™ Technology in India at a royalty rate set forth in the Loop Technology License Agreement.

Loop has entered into an engineering services agreement with the India JV to provide engineering services and support the local engineering firm.

This has resulted in Loop generating engineering services revenue of $0.4 million in the quarter ended February 28, 2025.

The development of the Infinite Loop™ India facility continues to progress towards groundbreaking.

Following the completion of a detailed land study by an external engineering firm, the India JV partners have identified the Gujarat province of India as the optimal location for the facility based on several key requirements such as infrastructure, proximity to a seaport for exports, renewable energy for a reduction in CO2 emissions and proximity to waste PET and polyester feedstocks.

Additionally, feedstock sourcing for the facility, of which there is abundant supply from textile waste in India, is well advanced.

Two globally recognized firms are currently executing two key mandates for the India JV.

A leading global advisory firm is leading the debt syndication process, while a globally renowned engineering firm is performing the local engineering work, supported by Loop’s engineering team.

Based on the engineering study completed in May 2025, the estimated total investment cost for the facility, including continuous polymerization, financing costs during construction and initial working capital requirements, is expected to be approximately $176 million.

Groundbreaking for the Infinite Loop™ India facility is now expected to occur in the second half of calendar 2025, with commercial operations projected to commence in calendar 2027.

Recent Product Activations

Loop has collaborated with multiple customers and prospective customers in recent and upcoming launches for products and product packaging incorporating Loop ™ PET manufactured from monomers produced at the Terrebonne Facility.

Most recently:

On February 23, 2025, Loop, Hyosung TNC (“Hyosung”), a complete sustainable textile solutions provider, and Pleatsmama, a sustainable fashion brand, announced a three-way collaboration to produce 100% recycled drawn textured yarn used in limited-edition handbags using Loop’s virgin-quality polyester produced using the Infinite Loop™ technology.

Under this collaboration, Loop supplied 100% recycled, virgin-quality polyester chips, Hyosung transformed the Loop polyester chips into high-performance drawn textured yarn, and Pleatsmama crafted stylish, eco-friendly handbags emphasizing circular design principles.

Loop and On AG, the Swiss sportswear brand, collaborated to launch the Cloudeasy Cyclon shoe which was unveiled on May 21 st , 2024.

The upper of the Cloudeasy shoe is crafted with 100% recycled and infinitely recyclable yarn, using monomers that were produced at our Terrebonne Facility with the Infinite Loop™ technology.

On AG is the first footwear company to launch a shoe using the Infinite Loop™ technology which enables fiber-to-fiber recycling.

The Cloudeasy Cyclon shoe is part of On AG’s monthly subscription service Cyclon™ where customers receive, wear, and then return Cylon™ products, which are then recycled.

Loop continues to pursue opportunities for new activations and marketing campaigns with additional consumer goods brand and apparel companies.

Termination of Partnership with SKGC

Effective January 14, 2025, Loop and SK Geo Centric (“SKGC”) have mutually agreed to terminate their joint venture agreement executed by the parties on April 27, 2023 to construct and operate an Infinite Loop™ manufacturing facility in Ulsan, South Korea.

This joint decision reflected Loop’s strategy to focus capital deployment in low-cost jurisdictions and prioritize a licensing and engineering services model in higher cost countries, as well as a strategic restructuring and re-orientation within the SK Group.

Although SKGC continues to have the right to nominate a director on Loop’s Board of Directors (the “Board”), Mr.

Jonghyuk Lee resigned from the Board on January 13, 2025 with immediate effect, due to a change in his role within the restructured SKGC organization.

Suspension of European partnership with Suez and SKGC

On September 10, 2020, we announced a strategic partnership with SUEZ Group (“Suez”), with the objective to build the first Infinite Loop™ manufacturing facility in Europe.

On June 16, 2022, Loop, together with Suez and SKGC, announced that the three companies would become equal participants in the strategic partnership.

The Company, Suez and SKGC have mutually agreed to suspend the project.

Loop currently plans to deploy its technology in Europe through its partnership with Reed Societe Generale Group as discussed above.

Loop has entered into two engineering services agreements with the India JV to provide engineering services, underscoring the role of engineering services in Loop's commercialization strategy as an important and growing source of revenue.

The first engineering services agreement with the India JV had a value of $0.5 million and was fulfilled over fourth quarter of the fiscal year ended February 28, 2025 and the first quarter of fiscal year ended February 28, 2026.

It resulted in $0.2 million of revenue in first quarter of fiscal year ended February 28, 2026.

On June 22, 2025, Loop entered into its second engineering services agreement with the India JV to support it through construction as it moves towards breaking ground on the Infinite Loop™ India facility.

This agreement has a value of $1.5 million, and the Company commenced performance under it in November 2025, resulting in Loop generating $0.4 million of engineering services revenue in the year ended February 28, 2026.

Accordingly, Loop generated aggregate engineering services revenue of $0.6 million from the India JV during the year ended February 28, 2026.

Following the completion of a detailed land study by an external engineering firm, the India JV partners have identified the state of Gujarat, India's synthetic textile capital as the optimal location for the facility based on several key requirements such as infrastructure, proximity to a seaport for exports, renewable energy for a reduction in CO₂ emissions and proximity to waste PET and polyester feedstocks.

On August 13, 2025, the India JV executed an agreement with a group of sellers for the acquisition of approximately 93 acres in Gujarat, India, for total consideration o f approximately US $0.1 million (9.1 million Indian rupees) p er acre.

The sellers are obligated to consolidate the parcels, deliver marketable title with requisite governmental approvals, and construct access road infrastructure.

The purchase price is payable through advance payments secured by equitable mortgages over designated parcels, with remaining consideration due upon title transfer.

The agreement incorporates customary representations, warranties, and covenants, together with termination provisions permitting India JV to reject non-compliant parcels or terminate for material breach, including failure to deliver contiguous parcels, with full restitution of payments made.

Strategically located within the Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR), the site offers direct access to abundant polyester textile waste feedstock, a skilled petrochemical workforce, and a streamlined permitting process.

Its proximity to a deep-water seaport will further support cost-efficient exports of the India JV’s products.

Feedstock sourcing for the facility, of which there is abundant supply from textile waste in India, is well advanced.

Loop has signed a multi-year offtake agreement with Nike, Inc., which will serve as an anchor customer for the facility.

Loop has also signed an offtake agreement with Taro Plats S.p.A.

to supply 100% recycled, virgin-quality Loop™ DMT.

Furthermore, the India JV has engaged a leading global advisory firm to manage the debt syndication process for financing the construction of the Infinite Loop™ India facility.

The debt financing process is progressing, with term sheets having been received from international lenders who are moving into the technical due diligence stage of the process.

The front-end engineering design for the Infinite Loop™ India facility was completed by Tata Consulting Engineers.

In December 2025, the India JV awarded the detailed engineering contract for the Infinite Loop™ India facility to Toyo Engineering India Private Limited, covering the full scope of detailed design, procurement engineering, and technical documentation.

The net total investment cost for the facility, including continuous polymerization, financing costs during construction and initial working capital requirements, is budgeted to be approximat ely $165 to $170 million, including approximately $13 million of a GST t ax which will be refunded to the India JV as it generates international sales.

The Company expects the Infinite Loop™ India facility to be operational in calendar 2028.

Market Opportunity

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We believe Loop™ PET resin and polyester fiber provides the ideal solution for these brands because it is recyclable and is made from 100% recycled PET and polyester fiber waste, while being virgin-quality and suitable for use in food-grade packaging, packaging applications in the pharmaceutical industry and polyester fiber.

Due to the commitments by large global consumer brands to incorporate more recycled content into their product packaging, the regulatory requirements for minimum recycled content in packaging imposed by governments, the virgin quality of Loop™ branded PET resin and its marketability to enhance the sustainability credentials of consumer brands that incorporate it, we believe we will be able to sell Loop™ branded PET resin at a premium price relative to virgin and mechanically recycled PET resin.

In 2023, global production of PET plastic and polyester fiber totaled an estimated 101 million metric tons.

Supported by steady growth across the packaging and textile industries, total production volumes are expected to rise to approximately 135 million metric tons by 2032, reflecting a weighted average compound annual growth rate of 3.5%.

We believe plastic pollution and climate change continue to be the most persistently covered environmental issues by media and local and global environmental non-governmental organizations.

Due to the commitments by large global consumer brands to incorporate more recycled content into their product packaging, the regulatory requirements for minimum recycled content in packaging imposed by governments, the virgin quality of Loop™ branded PET resin and its marketability to enhance the sustainability credentials of consumer brands that incorporate it, we believe there will be strong demand for Loop™ branded PET resin.

According to a 2023 report of Wood Mackenzie in 2023, global production of PET plastic and polyester fiber totaled an estimated 86 million metric tons, of which 11 million metric tons is recycled PET plastic and polyester fiber.

Supported by steady growth across the packaging and textile industries, total production volumes are expected to rise to approximately 134 million metric tons by 2033, with recycled PET plastic and polyester fiber increasing to 17 million metric tons, reflecting compound annual growth rates of approximately 4.5% for total volumes and 4.4% for recycled volumes.

We believe plastic pollution and climate change continue to be environmental issues focused on by media and local and global environmental non-governmental organizations.

Some of the main concerns associated with PET are the greenhouse gas (“GHG”) emissions associated with its production from non-renewable hydrocarbons and the length of time it persists in landfills and the natural environment.

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In the last few years, governments in North America, Europe and Asia have been enacting and proposing laws and regulations mandating the use of minimum recycled content in packaging, which underlies the strength of this issue in the marketplace.

As a recent example, India has mandated a 40% recycled content requirement for food grade PET packaging starting April 1, 2026.

Consumer brands are actively addressing the challenges posed by plastic and polyester fiber waste.

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Global consumer packaged goods companies ("CPG companies"), apparel manufacturers, and retail brands have announced significant public commitments and targets to make the transition to a circular plastic economy, for example:

Nike has announced a 2025 target of diverting 100% of its waste from landfills, with at least 80% recycled back into its products and goods;

H&M Group aims to incorporate 50% recycled materials by 2030, aiming for 100% of materials to be either recycled or sustainably sourced by the same year;

Ikea maintains its goal that, all plastics used in products to be from renewable or recycled sources by 2030;

By 2025, Lululemon aims to achieve at least 75% sustainable materials for their products, including fibers that are recycled, renewable, regenerative, sourced responsibly and are manufactured using low-resource processes;

Adidas Group aims to use 100% recycled polyester wherever technically possible by the end of 2024;

Evian aims to use 100% rPET in all bottles globally by 2025;

already achieved in the U.S.

market in 2024;

L’OCCITANE committed to implementing 100% recycled content plastic in their bottles by 2025;

L’Oréal Group committed to using 100% recycled or biobased plastic in their packaging by 2030;

PepsiCo has set new goals to cut virgin plastic per serving by 50% across its global food & beverage portfolio by 2030 and plans to utilize 50% recycled content in its plastic packaging.

In the U.S., the company plans to increase its use of rPET in its bottled products, with an objective to roll out 100% rPET bottles in multiple U.S.

areas by 2030.

Nike has committed to reducing absolute Scope 1 and 2 emissions by 65% by 2030 (from a 2015 baseline) and Scope 3 emissions by 30%, driven by material innovation, renewable energy adoption, and supply-chain efficiency improvements;

By 2030, Danone has committed to designing >_95% of packaging to meet the designed for recycling standard under the EU Packaging and Packaging Waste Regulation, supporting the transition to a circular packaging system;

By 2030, Inditex's target is that 25% of textile fibers used will be next-generation materials, including innovations emerging from chemical recycling, advanced textile processing technologies, and material-science startups;

Coca-Cola plans to incorporate 35–40% recycled material in primary packaging globally by 2035, including 30–35% recycled PET in plastic packaging;

PepsiCo aims to achieve ≥40% recycled content in plastic packaging by 2035 and at least 97% reusable, recyclable, or compostable packaging by design by 2030 across primary and secondary packaging;

By 2030, Puma aims to transition to 100% recycled polyester fabric, including 30% of polyester fabric in apparel sourced from textile-to-textile recycling, accelerating circular material adoption across its product portfolio;

There is a growing regulatory and policy environment to encourage a reduction in the production of virgin fossil fuel-based plastic and for minimum recycled content in packaging imposed by various governments:

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Canada has announced a goal of zero-plastic waste by 2030 and is targeting for all plastic packaging to contain 50% recycled content by 2030;

California law requires that plastic bottles contain at least 25% post-consumer resin by 2025, and at least 50% by 2030.

As of January 2021, the European Union introduced a new tax of €800/ton on non-recycled plastic packaging based on the amount of plastic packaging placed on each member state’s market.

California law requires that plastic beverage bottles contain at least 50% post-consumer recycled content by 2030.

European Union €800/tonne levy on non-recycled plastic packaging waste remains in effect.

However, it is now supplemented by the Packaging and Packaging Waste Regulation (PPWR), which entered into force in 2025 and begins broad application in August 2026, setting harmonized EU-wide targets for recyclability and reuse;

Spain imposed a tax of €450 per ton on non-reusable plastic packaging, effective January 1, 2023;

Effective April 2022, a new £200/ton tax applies in the UK to plastic packaging produced or imported into the UK that does not contain at least 30% recycled plastic.

France maintains its goal of having 100% plastics recycled by 2025 and 77% of beverage bottles to be collected.

India has mandated consumer brands to include at least 30% recycled plastic in their packaging by 2025.

In the United Kingdom, the Plastic Packaging Tax (PPT) rate has been adjusted for inflation to £228.82 per tonne to any plastic packaging produced or imported that does not contain at least 30% recycled plastic;

Starting in 2026, France provides incentives (up to €1,000/tonne) for using domestically sourced, "hard-to-recycle" resins in food packaging, while penalizing non-recyclable materials.

The target for PET beverage bottles is currently set at 25% recycled content, rising to 30% by 2030.

India has mandated a 40% recycled content requirement for food grade PET packaging starting April 1, 2026;

Japan has set national targets to reduce single-use plastic waste by 25% by 2030, achieve 60% reuse or recycling of plastic containers and packaging by 2030, and ensure 100% effective utilization of all plastic waste by 2035 through reuse, recycling, or energy recovery;

South Korea continues to target reduction of plastic waste by 20%, an increase in recycling rates from 54% to 70% by 2025, and utilization of 30% renewable plastic by 2030.

The growing regulatory environment combined with global consumer goods companies, apparel manufacturers, and retail brand commitments for 2025 and beyond are expected to further increase the demand for rPET.

South Korea has officially transitioned to a mandatory regulatory phase as of January 1, 2026, requiring major beverage producers to incorporate at least 10% recycled PET into their bottles, a requirement that will scale to 30% by 2030.

The growing regulatory environment combined with global consumer goods companies, apparel manufacturers, and retail brand commitments for 2026 a nd beyond are expected to further increase the demand for rPET.

Closed-loop circularity and keeping materials within their own cycle (bottle-to-bottle and textile-to-textile) is gaining increasing attention as the focus on sustainability intensifies.

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The European Union is advancing a regulatory framework aimed at establishing a circular textile economy.

Key measures include a prohibition on the destruction of unsold textiles, which has been enforced in France since 2022 and under consideration for EU-wide adoption by 2025, and a mandate for all member states to implement separate textile waste collection systems starting January 1, 2025 under the Waste Framework Directive.

Extended Producer Responsibility (EPR) requirements are taking effect beginning in 2025, with full implementation anticipated by 2027.

Further, the Ecodesign for Sustainable Products Regulation (ESPR) will impose mandatory design standards focused on durability, recyclability, and minimum recycled content, alongside the introduction of Digital Product Passports for all textile products by 2030.

Key measures include a prohibition on the destruction of unsold textiles, which has been enforced in France since 2022 and was officially adopted for EU-wide enforcement starting July 2026, and a mandate for all member states to implement separate textile waste collection systems which took effect January 1, 2025 under the Waste Framework Directive.

Extended Producer Responsibility (EPR) requirements were finalized in late 2025, with full operational implementation mandated by April 2028.

Further, the Ecodesign for Sustainable Products Regulation (ESPR) is now imposing mandatory design standards focused on durability, recyclability, and minimum recycled content, alongside the introduction of Digital Product Passports for all textile products starting in 2027.

In alignment with these developments, leading global brands are increasingly seeking to adopt textile-to-textile recycling technologies, which offer a compliant, closed-loop solution superior to mechanical recycling in both quality retention and scalability.

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We expect that revenue generation from direct investments in commercial facilities will be driven by two key streams:

(i) profits from the operation of commercial facilities, and (ii) royalties paid to Loop for licensing its technology and exclusive responsibility of sales and marketing.

(i) profits from the operation of commercial facilities, and (ii) royalties paid to Loop for licensing its technology and exclusive responsibility for sales and marketing.

We believe these income sources will support long-term financial sustainability and growth.

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This approach focused on licensing is currently being deployed in our European partnership with Reed Societe Generale Group.

The Company sold its first technology license to Reed Societe Generale Group for one Infinite Loop™ manufacturing facility in Europe for an initial down payment of €10.0 million with additional milestone payments to be received by Loop as the project advances.

Infinite Loop Europe was formed with the purpose of developing Infinite Loop™ manufacturing facilities in Europe to be owned 10% by Loop and 90% by Reed Societe Generale Group.

The Company sold its first technology license to Reed Societe Generale Group for one Infinite Loop™ manufacturing facility in Europe for an initial down payment of $10.4 million (€10.0 million) with additional milestone payments to be received by Loop as the project advances.

Infinite Loop Europe was formed with the purpose of developing Infinite Loop™ manufacturing facilities in Europe to be owned 10% by Loop and 90% by RCE.

Loop has the right to increase its ownership in each project developed through Infinite Loop Europe up to 50% subject to a binding funding commitment.

Additionally, we aim to generate income by providing engineering services throughout all phases of project development, construction, and startup for all Infinite Loop™ commercial facilities, supporting efficient project execution and creating a steady revenue stream prior to the startup of the facility.

Loop has entered into an engineering services agreement with the India JV to provide engineering services and support the completion of the engineering for the planned Infinite Loop™ manufacturing facility in India.

This has resulted in Loop generating engineering services revenue of $0.4 million in the quarter ended February 28, 2025.

We are also in the process of implementing a modular construction strategy, in order to reduce overall capital expenditures and operating expenses, while improving project timelines and ensuring standardized design and quality, and providing a scalable solution for global expansion.

This strategy envisages that we would manufacture plant modules in a low-cost country to be transported and assembled on site at global locations, and would potentially provide an additional income stream alongside returns from owned facilities and royalties.

Loop has entered into engineering services agreements with the India JV to provide engineering services and support the completion of the engineering for the planned Infinite Loop™ manufacturing facility in India.

This has resulted in Loop generating engineering services revenue of $0.5 million in the year ended February 28, 2026.

This strategy consists of the manufacture of plant modules in a low-cost country which can then be transported and assembled on site at global locations.

This would provide a more economical scalable approach for global expansion and would potentially provide an additional income stream for Loop as it coordinates the process.

The Company’s ability to move to the next stage of its strategic development, including the construction of manufacturing plants and the commercialization of its technology and products at scale, is dependent on, among other factors, its ability to obtain the necessary financing through a combination of the issuance of equity, project debt, and/or government incentive programs.

Market Development and Strategic Relationship

Offtake Agreement with Nike

In September 2025, we entered into a multi-year offtake agreement with NIKE, Inc.

("Nike"), a global leader in athletic footwear and apparel.

Under this agreement and subject to its terms, we will supply agreed minimum volumes of Twist™, our virgin-quality circular polyester resin made exclusively from textile waste, once the Company's planned Infinite Loop™ India Facility becomes operational.

Offtake Agreement with Taro Plast

In September 2025, we entered into an offtake agreement with Taro Plast S.p.A.

("Taro Plast"), an Italy-based manufacturer of engineering plastics and compounds.

Under this agreement and subject to its terms, we will supply Taro Plast with agreed volumes of our 100% recycled, virgin-quality Loop™ DMT produced using our proprietary depolymerization technology at our planned Infinite Loop™ facility in India, once the facility becomes operational.

This agreement will expand our product offering beyond bottle-grade and fiber-grade PET resin into the specialty polymers market, where Loop™ DMT can be used for automotive and specialty polymer applications.

Taro Plast has conducted independent testing confirming the high purity and performance of Loop™ DMT, and is expected to be the first company to integrate Loop™ DMT into their product portfolio.

Strategic Alliance with Shinkong

In August 2025, we announced a strategic alliance with Shinkong Synthetic Fibers Corporation ("Shinkong"), a leader in Taiwan's polyester industry and global leader in sustainable polyester yarn solutions.

This partnership combines our textile-to-textile manufacturing technology with Shinkong's polyester fiber spinning capabilities and distribution network.

Under this alliance, Shinkong can convert our Twist™ polyester resin into high-performance yarns for their network of over 100 customers worldwide, while we can now offer high-quality circular polyester yarns to customers.

This collaboration supports our planned Infinite Loop™ India project by providing additional distribution channels and supply chain options for apparel and textile brands across Asian, European, and North American markets.

Strategic Alliance with Hyosung TNC

In September 2025, we announced a strategic alliance with Hyosung TNC, a complete sustainable textile solutions provider and the world's largest manufacturer of spandex by market share.

This alliance combines our Infinite Loop™ depolymerization technology with Hyosung TNC's expertise in advanced textile materials to expand access to circular polyester through textile-to-textile supply chains.

Hyosung TNC will convert our Twist™ polyester resin into performance yarns under its regen™ brand portfolio, trusted by leading brands across fashion, activewear, and other textile markets.

The relationship has been established for products from our Terrebonne facility and will be significantly expanded once our planned India Infinite Loop™ facility is operational.

Launch of Twist ™

During the quarter ended August 31, 2025, the Company announced the launch of Twist™, a new branded circular polyester resin made entirely from textile waste.

This product represents a strategic evolution of the Company's fiber-grade PET resin offering, now repositioned to serve the growing textile-to-textile recycling market.

Twist™ utilizes the Company's patented depolymerization technology to break down polyester textile waste into base monomers, which are then purified and polymerized into virgin-quality resin that is chemically identical to traditional polyester while providing complete traceability from feedstock to final product.

The Company is advancing discussions with apparel brands for offtake agreements from its planned India joint venture facility, where Twist™ will be produced alongside the Company's existing Loop™ branded products.

Proprietary Technology and Intellectual Property

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This allows for a simplified distillation purification process resulting in fewer, and more effective, steps to isolate the desired high purity DMT and MEG monomers suitable to produce virgin-quality PET required to meet food contact regulations as well as the quality and clarity requirements of global consumer product companies;

Allowing the depolymerization of less costly and low-quality feedstocks, which cannot be effectively recycled today, such as carpet fiber, clothing and mixed plastics, and upcycling them into high-quality PET that can be used in food contact use;

The Infinite Loop™ technology uses only trace amounts of water and uses a catalyst at low concentration.

Allowing the depo lymerization of less costly and low-quality feedstocks, which cannot be effectively recycled today, such as carpet fiber, clothing and mixed plastics, and upcycling them into high-quality PET that can be used in food contact use and high quality textile applications;

The use of low amounts of water and a catalyst at low concentration provides cost and environmental benefits.

We believe that the Infinite Loop™ technology requires less energy and fewer resource inputs than conventional PET production processes.

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Most recently, the Infinite Loop™ technology was validated by independent advisors hired by Reed Societe Generale Group, concurrent with their due diligence review performed in the context of the investment and technology licensing transactions closed in December 2024.

Also, our technology was validated in March 2023, when Loop and SKGC announced the successful completion of the technical due diligence conducted by SKGC.

Also, our technology was validated in March 2023, when Loop and SK Geo Centric (" SKGC") a nnounced the successful completion of the technical due diligence conducted by SKGC.

Key parameters of the Infinite Loop™ technology that were validated through SKGC’s comprehensive due diligence include the production yields, operational stability, quality of the output monomers and overall performance of Loop’s Terrebonne Facility.

The technical due diligence validated that the PET resin and polyester fiber produced using Loop’s technology is of virgin quality.

The technical due diligence validated that the PET resin and polyester fiber produced using Loop’s technology are of virgin quality.

As part of our intellectual property and commercialization strategy, we aim to expand the global deployment of the Infinite Loop™ technology through royalty-bearing licensing arrangements, allowing partners to establish and operate manufacturing facilities using our proprietary technology, while we retain full ownership of the underlying intellectual property, including any improvements.

As demonstrated by the licensing agreement we entered into in December 2024 for our European joint venture with Reed Societe Generale Group, we plan to structure these arrangements to generate revenue through a combination of upfront fees and potential ongoing royalties, with licensees typically being granted a non-transferable, facility-specific license, and sublicensing permitted only under defined conditions and subject to our oversight.

As demonstrated by the licensing agreement we entered into in December 2024 for our European joint venture with Reed Societe Generale Group, we plan to structure these arrangements to generate revenue through a combination of upfront fees and/or ongoing royalties, with licensees typically being granted a non-transferable, facility-specific license, and sublicensing permitted only under defined conditions and subject to our oversight.

However, specific terms of each arrangement may vary depending on the negotiations in each transaction.

This licensing model is a key component of our strategy to scale our technology efficiently and with limited capital investment, as further described under “Commercialization Strategy” in Item 1.

To protect our technology and intellectual property rights, we rely on a combination of patents, trademarks, trade secrets, confidentiality agreements and provisions as well as other contractual provisions to protect our proprietary rights, which are primarily our patents, brand names, product designs and marks.

The Infinite Loop™ technology portfolio currently consists of four patent families:

The Infinite Loop™ technology portfolio currently consists of six patent families:

One family has four issued U.S.

patents, and one pending U.S.

application, the last of which is expected to expire on or around September 2037, not including any patent term extensions.

Internationally, this patent family has twenty-one issued or allowed patents in various foreign jurisdictions, which are expected to expire on or around September 2038, and pending applications in various foreign jurisdictions.

Any patents that issue from these pending applications would be expected to expire on or around September 2038.

An additional aspect of the Infinite Loop™ technology, as claimed in three issued U.S.

patents and one pending U.S.

application, all expected to expire on or around June 2039, not including any patent term extensions.

Internationally, this patent family includes twenty issued or allowed patents in various foreign jurisdictions, which are expected to expire on or around June 2039, and pending applications in various foreign jurisdictions.

Any patents that issue from these pending applications would be expected to expire on or around June 2039.

Another aspect of the Infinite Loop™ technology, which is the subject of one issued U.S.

patent and one pending U.S.

application, both expected to expire on or around March 2040, not including any patent term extensions.

Internationally, this patent family includes one allowed patent in Brazil, which is expected to expire on or around March 2040, and pending applications in various foreign jurisdictions.

Any patents that issue from these pending applications would be expected to expire on or around March 2040.

Another aspect of the Infinite Loop™ technology, which is the subject of two issued U.S.

patents and one pending U.S.

application, all expected to expire on or around March 2040, not including any patent term extensions.

Internationally, this patent family includes twenty-three issued or allowed patents in various foreign jurisdictions, which are expected to expire on or around March 2040, and pending applications in various foreign jurisdictions.

Any patents that issue from these pending applications would be expected to expire on or around March 2040.

We have also filed one international PCT application directed to another aspect of the Infinite Loop™ technology.

Any patents that ultimately issue from this application are expected to expire on or around September 2044, not including any patent term adjustment or extensions.

Loop owns registrations for its trademarks in Cambodia, Canada, China, the European Union, Japan, Taiwan, the United Kingdom, Vietnam, and the U.S.

Loop also has pending applications in South Korea and the U.S.

application, the last of which is expected to expire in September 2037, not including any patent term extensions.

Internationally, this patent family has thirty-five issued or allowed patents in various foreign jurisdictions, such as Europe, Australia, China, Japan, Korea and India, which are expected to expire in September 2038.

In addition, there are several pending applications (around twenty-seven) in various foreign jurisdictions.

Any patents that issue from these pending applications would be expected to expire in or around September 2038.

An additional aspect of the Infinite Loop™ technology is covered in three issued U.S.

patents, all expected to expire in June 2039, not including any patent term extensions.

Internationally, this patent family includes twenty-three issued or allowed patents in various foreign jurisdictions, such as Brazil, Australia, South Africa, China, Japan, Korea which are expected to expire in June 2039, and pending applications (around twenty-eight) in various foreign jurisdictions.

Any patents that issue from these pending applications would be expected to expire in or around June 2039.

Another aspect of the Infinite Loop™ technology is the subject of two issued U.S.

patents, both of which will expire around March 2040, not including any patent term extensions.

Internationally, this patent family includes one allowed patent application in Brazil, which is expected to expire in or around March 2040.

In addition, there are pending applications (approximately six) in various foreign jurisdictions.

Any patents that issue from these pending applications would be expected to expire in or around March 2040.

Another aspect of the Infinite Loop™ technology is the subject of three issued U.S.

patents, expected to expire in or around March 2040, not including any patent term extensions.

Internationally, this patent family includes twenty-eight issued or allowed patents in various foreign jurisdictions such as Brazil, Australia, South Africa, China, Japan, Korea, India, which are expected to expire in or around March 2040.

In addition, there are pending applications (around nineteen) in various foreign jurisdictions.

Any patents that issue from these pending applications would be expected to expire in or around March 2040.

Another aspect of the technology is the subject of three issued U.S.

patents, which are expected to expire in or around July 2035, not including any patent term extensions.

Internationally, this patent family includes fifty-three issued or allowed patents in various foreign jurisdictions, which are expected to expire in or around July 2036.

We have also filed an international PCT application directed to another aspect of the Infinite Loop™ technology.

We plan to file national phase applications in key jurisdictions.

Any patents that ultimately issue from this application are expected to expire in or around September 2044, not including any patent term adjustment or extensions.

Loop owns registrations for its trademarks in Cambodia, Canada, China, the European Union, Japan, South Korea, Taiwan, the United Kingdom, Vietnam, and the U.S.

Loop also has a pending application in the U.S.

Government Regulation and Approvals

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business