What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-05-27 compared with 2025-05-29 · 356 added, 197 removed, 687 unchanged (45% of the section changed)

13 unchanged sentences

We have audited the accompanying consolidated balance sheets of Loop Industries, Inc.

and its subsidiaries (the Company) as of February 28, 2025 and February 29, 2024, and the related consolidated statements of operations and comprehensive loss, of changes in stockholders’ equity and of cash flows for the years then ended, including the related notes (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of February 28, 2025 and February 29, 2024, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

and its subsidiaries (the Company) as of February 28, 2026 and 2025, and the related consolidated statements of operations and comprehensive loss, of changes in stockholders’ (deficit) equity and of cash flows for the years then ended, including the related notes (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of February 28, 2026 and 2025, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt About the Company ’ s Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in note 1 to the consolidated financial statements, the Company has incurred net losses, negative cash flows from operating activities and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern.

Management's plans in regard to these matters are also described in note 1.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

This matter is also described in the Critical Audit Matters section of our report.

Basis for Opinion

15 unchanged sentences

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Liquidity risk assessment

As described in Note 1 and 2 to the consolidated financial statements, the Company’s consolidated financial statements have been prepared on a going concern basis, as management has assessed and determined that the Company will be able to realize its assets and discharge its liabilities in the normal course of business as they become due for at least twelve months from the issuance date of these consolidated financial statements.

For the year ended February 28, 2025, the Company incurred a net loss of $15.1 million and net cash used in operating activities was $2.1 million.

As of February 28, 2025, the accumulated deficit amounted to $192.0 million.

Going Concern Assessment

As described in note 1 to the consolidated financial statements, the Company’s consolidated financial statements have been prepared on a going concern basis.

For the year ended February 28, 2026, the Company incurred a net loss of $12.3 million and net cash flows used in operating activities was $10.1 million.

As of February 28, 2026, the Company’s available liquidity was $5.0 million, consisting of cash and cash equivalents of $2.4 million and an undrawn senior loan facility from a Canadian bank of $2.6 million.

Management estimates that the Company’s available liquidity will not be sufficient to fund the Company's ongoing operations, obligations and commitments for the next twelve months from the consolidated financial statements issuance date.

Management evaluates the Company’s liquidity to determine if there is substantial doubt about the Company’s ability to continue as a going concern.

In preparing this liquidity assessment, management applies significant judgment in estimating future cash flow requirements of the Company based on budgets and forecasts, which includes developing assumptions related to (i) the estimation of amount and timing of future cash outflows and cash inflows;

and (ii) determining what future expenditures are committed and what could be considered discretionary.

The principal considerations for our determination that performing procedures relating to the liquidity risk assessment is a critical audit matter are the significant judgments made by management in estimating the future cash flow requirements of the Company based on budgets and forecasts and in developing the related assumptions.

This in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence related to management’s liquidity risk assessment and the development of assumptions included in the estimated future cash flows.

Additionally, these procedures included evaluating the sufficiency of the Company’s liquidity risk disclosure.

In preparing this going concern assessment, management applies significant judgment in estimating future cash flows of the Company based on budgets and forecasts, which includes developing assumptions related to the estimation of amount and timing of future cash outflows and inflows.

This matter is also described in the Substantial Doubt About the Company’s Ability to Continue as a Going Concern section of our report.

The principal considerations for our determination that performing procedures relating to the going concern assessment is a critical audit matter are the significant judgment made by management in estimating the future cash flows of the Company based on budgets and forecasts, which includes developing assumptions related to the estimation of amount and timing of future cash outflows and inflows.

This in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence related to management’s estimation of amount and timing of future cash outflows and inflows.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included, among others, (i) evaluating management’s assessment of whether the Company has sufficient cash resources for at least twelve months from the issuance date of the consolidated financial statements;

(ii) testing the completeness and accuracy of the underlying data used in management’s estimation of future cash flow requirements;

(iii) evaluating the reasonableness of management’s assumptions related to the estimation of the amount and timing of future cash outflows and cash inflows;

and (iv) determining what future expenditures are committed and what could be considered discretionary.

These procedures included, among others, evaluating management’s assessment of whether the Company has sufficient liquidity for the next twelve months from the consolidated financial statements issuance date.

This included (i) testing the completeness and accuracy of the underlying data used in management’s going concern assessment;

and (ii) evaluating the reasonableness of management’s assumptions related to the estimation of the amount and timing of future cash outflows and inflows.

The evaluation of these assumptions considered (i) management’s historical accuracy in forecasting cash flows and setting budgets;

and (ii) whether these assumptions were consistent with evidence obtained in other areas of the audit.

Additionally, these procedures included evaluating the sufficiency of the Company’s going concern disclosure.

/s/ PricewaterhouseCoopers LLP

7 unchanged sentences

Cash and cash equivalents

$ 2,356 $ 12,973

Accounts receivable (Note 3)

2 unchanged sentences

Total current assets

Investments in joint ventures (Note 11)

Equity method investments (Note 11)

Property, plant and equipment, net (Note 6)

Intangible assets, net (Note 7)

Liabilities and Stockholders' Equity

$ 8,559 $ 18,578

Liabilities and Stockholders' (Deficit) Equity

Current liabilities

Accounts payable and accrued liabilities (Note 9)

$ 1,916 $ 3,545

Unearned revenue (Note 16)

3 unchanged sentences

Series B Convertible Preferred stock (Note 12)

12,054 10,647

Long-term debt (Note 13)

Total liabilities

Stockholders' Equity

Series A Preferred stock par value $ 0.0001 ;

25,000,000 shares authorized;

one share issued and outstanding (Note 15)

18,139 18,211

Stockholders' (Deficit) Equity

Common stock par value $ 0.0001 ;

2 unchanged sentences

Additional paid-in capital

Additional paid-in capital – Warrants (Note 21)

195,934 193,529

Accumulated deficit

( 204,326 ) ( 192,027 )

Accumulated other comprehensive loss

Total stockholders' equity

Total liabilities and stockholders' equity

( 1,193 ) ( 1,140 )

Total stockholders' (deficit) equity

( 9,580 ) 367

Total liabilities and stockholders' (deficit) equity

$ 8,559 $ 18,578

Going Concern (Note 1)

See accompanying notes to the consolidated financial statements .

3 unchanged sentences

dollars, except for share data)

Revenues (Note 16)

Technology licensing

Total revenues

Cost of Services

Total Cost of Services

Research and development (Note 17)

3 unchanged sentences

Total expenses

Other loss (income) :

Loss on equity accounted investment (Note 11)

10,261 24,858

Loss on equity method investment (Note 11)

Interest and other financial expenses (income) (Note 21)

Interest income

( 236 ) ( 238 )

Foreign exchange gain

Total other loss (income)

Other comprehensive income (loss) -

( 59 ) ( 197 )

Total other loss

( 12,299 ) ( 15,057 )

Other comprehensive loss

Foreign currency translation adjustment

( 53 ) ( 70 )

Comprehensive loss

$ ( 12,352 ) $ ( 15,127 )

Net loss per share

Basic and diluted

$ ( 0.26 ) $ ( 0.32 )

Weighted average common shares outstanding

Basic and diluted

47,960,970 47,587,038

Going Concern (Note 1)

See accompanying notes to the consolidated financial statements.

Loop Industries, Inc.

Consolidated Statements of Changes in Stockholders’ Equity

Consolidated Statements of Changes in Stockholders ’ (Deficit) Equity

For the Years Ended February 28, 2026 and February 28, 2025

3 unchanged sentences

Year ended February 28, 2026

par value $0.0001

Preferred stock

par value $0.0001

Accumulated Other

Accumulated Deficit

Comprehensive Loss

Stockholders' Equity

par value $0.0001

Comprehensive

Stockholders'

(Deficit) Equity

Balance, February 28, 2025

1 unchanged sentence

Issuance of shares upon the settlement of restricted stock units (Notes 15 and 19)

Expiration of warrants (Note 21)

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 15)

510,435 - - - 917 - - - 917

Stock options issued for services (Note 19)

- - - - 1,159 - - - 1,159

Restricted stock units issued for services (Note 19)

- - - - 294 - - - 294

Share issuance costs

- - - - ( 29 ) - - - ( 29 )

Foreign currency translation

- - - - - - - ( 53 ) ( 53 )

- - - - - - ( 12,299 ) - ( 12,299 )

Balance, February 28, 2026

48,337,555 $ 5 1 $ - $ 195,934 $ - $ ( 204,326 ) $ ( 1,193 ) $ ( 9,580 )

Going Concern (Note 1)

See accompanying notes to the consolidated financial statements.

Loop Industries, Inc.

Consolidated Statements of Changes in Stockholders’ Equity

Consolidated Statements of Changes in Stockholders ’ (Deficit) Equity

For the Years Ended February 28, 2026 and February 28, 2025 (continued)

3 unchanged sentences

Year ended February 28, 2025

par value $0.0001

Preferred stock

par value $0.0001

Accumulated Other

Accumulated Deficit

Comprehensive Loss

Stockholders' Equity

par value $0.0001

Comprehensive

Stockholders'

(Deficit) Equity

Balance, February 29, 2024

1 unchanged sentence

Issuance of shares upon the settlement of restricted stock units (Notes 15 and 19)

Issuance of shares upon the exercise of stock options (Notes 15 and 19)

Stock options issued (Note 19)

Restricted stock units issued (Note 19)

91,355 - - - - - - - -

Expiration of warrants

- - - - 20,385 ( 20,385 ) - - -

Stock options issued for services (Note 19)

- - - - 555 - - - 555

Restricted stock units issued for services (Note 19)

- - - - 797 - - - 797

Foreign currency translation

- - - - - - - ( 70 ) ( 70 )

- - - - - - ( 15,057 ) - ( 15,057 )

Balance, February 28, 2025

47,620,263 $ 5 1 $ - $ 193,529 $ - $ ( 192,027 ) $ ( 1,140 ) $ 367

Going Concern (Note 1)

See accompanying notes to the consolidated financial statements.

3 unchanged sentences

(in thousands of U.S.

Cash Flows from Operating Activities

Cash Flows used in Operating Activities

$ ( 12,299 ) $ ( 15,057 )

Adjustments to reconcile net loss to net cash used in operating activities:

1 unchanged sentence

Stock-based compensation (Note 19)

Impairment of machinery & equipment (Note 6)

Write-down of inventory (Note 4)

Accrued interest and other financing costs (Note 21)

Impairment of equipment (Note 6)

Loss on equity accounted investment (Note 11)

Customer deposits

Loss on equity method investments (Note 11)

Changes in operating assets and liabilities:

Sales tax and tax credits receivable (Note 3)

Accounts receivable and other (Note 3)

( 78 ) ( 322 )

Inventories (Note 4)

1 unchanged sentence

Accounts payable and accrued liabilities (Note 9)

( 1,743 ) 1,350

Unearned revenue (Note 16)

Net cash used in operating activities

Cash Flows from Investing Activities

Investment in joint venture (Note 11)

( 10,110 ) ( 2,121 )

Cash Flows used in Investing Activities

Distribution from equity investment (Note 11)

Additions to property, plant and equipment (Note 6)

Contributions to equity method investments (Note 11)

( 960 ) ( 1,954 )

Additions to intangible assets (Note 7)

( 211 ) ( 450 )

Net cash used in investing activities

Cash Flows from Financing Activities

( 1,171 ) ( 2,036 )

Cash Flows used in Financing Activities

Proceeds from issuance of series B Convertible Preferred stock (Note 12)

Proceeds from exercise of stock options (Note 15)

Proceeds from ATM equity offering, net of issuance costs (Note 15)

Repayment of long-term debt (Note 13)

Net cash provided by (used in) financing activities

( 275 ) ( 77 )

Net cash provided by financing activities

Effect of exchange rate changes

( 14 ) ( 146 )

Net change in cash and cash equivalents

( 10,617 ) 6,015

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of year

$ 2,356 $ 12,973

Supplemental Disclosure of Cash Flow Information:

2 unchanged sentences

Interest received

Going Concern (Note 1)

See accompanying notes to the consolidated financial statements.

3 unchanged sentences

(in thousands of United States dollars except where otherwise indicated)

The Company and Basis of Presentation

The Company and Basis of Presentation and Going Concern

Loop Industries, Inc.

3 unchanged sentences

Basis of presentation

These consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“US GAAP”) and comprise the consolidated financial position and results of operations of Loop Industries, Inc.

These audited 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”) and comprise the consolidated financial position and results of operations of Loop Industries, Inc.

and its subsidiaries, Loop Innovations, LLC and Loop Canada Inc.

2 unchanged sentences

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, 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 consolidated financial statements of the Company have been prepared on a going concern basis, which contemplates the continuing of operations, the realization of assets and the settlement of liabilities in the normal course of business.

All monetary amounts in these notes to the consolidated financial statements are in thousands of U.S.

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.

Summary of Significant Accounting Policies

Liquidity risk assessment

Since its inception, the Company has been in the pre-commercialization stage with its ongoing operations and commercialization plans financed primarily by raising equity.

The Company has incurred net losses and negative cash flow from operating and investing activities since its inception and expects to incur additional net losses while it continues to advance its commercialization efforts.

As at February 28, 2025, the Company had cash and cash equivalents of $ 12,973 .

On December 23, 2024, the Company received cash proceeds of $ 20,790 from the closing of transactions with Reed Societe Generale Group consisting of the issuance of Series B Convertible Preferred Stock and its first technology licensing agreement (see Notes 12 and 16 for additional details).

Management continuously monitors the Company’s cash resources against its short-term cash commitments to ensure there is sufficient liquidity to fund its costs for at least twelve months from the financial statements issuance date.

It evaluates the Company’s liquidity to determine if there is substantial doubt about its ability to continue as a going concern.

(i) the estimation of amount and timing of future cash outflows and inflows, and (ii) determining what future expenditures are committed and what could be considered discretionary.

Based on this assessment, management has determined that current available liquidity will be sufficient to meet the Company’s obligations, commitments and budgeted expenditures for at least twelve months from the issuance date of these consolidated financial statements.

The Company’s ability to move to the next stage of its strategic development and construct manufacturing facilities is dependent on, among other factors, whether the Company can obtain the necessary financing through a combination of further technology licensing arrangements, government incentive programs, and/or the issuance of debt and/or equity.

Going Concern

These 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 consolidated 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 $ 2,356 , together with the $ 2,566 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 consolidated financial statements issuance date.

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.

In particular, the Company will require capital sufficient to fund its equity contributions to the India JV for the construction of the planned Infinite Loop™ facility in India, as well as its ongoing cash requirements until Loop begins receiving returns from the India JV.

There is no assurance that the Company will be successful in attracting additional funding.

Even if additional financing is available, it may not be available on terms favorable to the Company.

Failure to secure additional financing on favorable terms when it becomes required would have an adverse effect on the Company’s financial position and on its ability to execute its business plan.

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 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.

Summary of Significant Accounting Policies

Revenue recognition

22 unchanged sentences

Engineering fees are recognized over time, as services are performed.

When a reasonable estimate can be made, the Company measures progress toward complete satisfaction of the performance obligation using an input method based on the ratio of costs incurred to date to the total estimated costs to complete the engineering scope (a "cost-to-cost" measure of progress).

Costs incurred consist primarily of internal engineering labor (including related employee compensation), subcontracted external engineering costs where applicable, and directly attributable expenses.

Management believes that costs incurred faithfully depict the Company's performance in transferring control of the services to the customer.

If circumstances exist whereby the Company cannot reasonably determine its progress towards satisfaction of the performance obligation, revenue is recognized over time as the work is performed, but only to the extent of costs incurred if the Company expects to at least recover those costs.

Amounts invoiced in advance of performance are recorded as contract liabilities (presented as "Unearned revenue" on the Consolidated Balance Sheet), and amounts earned in advance of the right to invoice are recorded as contract assets.

Cost of services

Cost of services are costs that are directly related to providing the service that generates service revenue.

Costs include internal engineering labor (including related employee compensation), subcontracted external engineering costs where applicable, and directly attributable expenses required to deliver the service.

Use of estimates

1 unchanged sentence

Actual results could differ from those estimates.

Those estimates and assumptions include the going concern assessment, estimates for depreciable lives and recoverability of property, plant and equipment and intangible assets, assumptions made in the classification of convertible preferred securities, assumptions made in the revenue recognition for licensing contracts, 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.

Those estimates and assumptions include the going concern assessment, estimates for depreciable lives and recoverability of property, plant and equipment, intangible assets and equity method investments, assumptions made in the classification of convertible preferred securities, assumptions made in the revenue recognition for licensing and engineering service contracts, 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.

Joint Ventures

26 unchanged sentences

The valuation methodologies described above may produce a fair value calculation that may not be indicative of future net realizable value or reflective of future fair values.

The fair value of cash, cash equivalents, accounts receivable and accounts payable and accrued liabilities approximate their carrying values due to their short-term maturity.

The fair value of cash, cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their carrying values due to their short-term maturity.

Research and development expenses

Research and development costs are charged to expense as they are incurred.

Research and development expenses relate primarily to process development and design, customer trials and characterization studies, testing of pre-production samples, machinery and equipment expenditures for use in the production facility in Terrebonne, Québec (the “Terrebonne Facility”), compensation, and consulting and engineering fees.

Research and development expenses relate primarily to process development and design, customer trials and characterization studies, testing of pre-production samples, machinery and equipment expenditures for use in Terrebonne Facility, compensation, and consulting and engineering fees.

Research and development costs are presented net of related tax credits and government grants.

20 unchanged sentences

Income and expenses are translated at the average exchange rate of the period.

The resulting translation adjustments are included in other comprehensive income (loss) (“OCI”).

The resulting translation adjustments are included in other comprehensive loss (“OCI”).

The Company currently is not engaged in any currency hedging activities.

4 unchanged sentences

Property, plant and equipment are recorded at cost, net of accumulated amortization and impairment, and are amortized over their estimated useful lives at the time they are put to use, unless the useful life is indefinite, using the straight-line method over the following periods:

Office equipment and furniture

Building and land improvements

Building (years)

Office equipment and furniture (years)

Building and land improvements (years)

Costs related to repairs and maintenance of property, plant and equipment are expensed in the period in which they are incurred.

25 unchanged sentences

Intangible assets

Intangible assets are recorded at cost, net of accumulated amortization and impairment, and are amortized using the straight-line method over 7 years, unless the useful life is deemed to be indefinite.

The Company reviews the carrying value of intangible assets subject to amortization whenever events or changes in circumstances indicate that the carrying amount of an intangible asset or asset group might not be recoverable or a change in the remaining useful life of an intangible asset.

If the carrying value of an asset exceeds its undiscounted cash flows, the Company writes down the carrying value of the intangible asset to its fair value in the period identified.

If the carrying value of assets is determined not to be recoverable, the Company records an impairment loss equal to the excess of the carrying value over the fair value of the assets.

The Company’s estimate of fair value is based on the best information available, in the absence of quoted market prices.

The Company generally calculates fair value as the present value of estimated future cash flows that the Company expects to generate from the asset.

If the estimate of an intangible asset’s remaining useful life is changed, the Company amortizes the remaining carrying value of the intangible asset prospectively over the revised remaining useful life.

The Company’s intangible assets consist primarily of patent rights, recorded at cost, net of accumulated amortization and impairment, and are amortized using the straight-line method over 7 years.

The Company evaluates finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an intangible asset group might not be recoverable.

The Company evaluates recoverability by comparing the carrying amount of the asset group to the estimated undiscounted future cash flows expected to be generated by the asset group.

If the carrying amount of the asset group exceeds the estimated undiscounted future cash flows, the Company measures an impairment loss as the amount by which the carrying amount exceeds the asset group’s estimated fair value.

The Company calculates its provision for income tax on the basis of the tax laws enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income, in accordance with FASB ASC 740, Income Taxes .

10 unchanged sentences

For the years ended February 28, 2026 and February 28, 2025 , the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an antidilutive effect.

As at February 28, 2025, the potentially dilutive securities consisted of 2,771,216 outstanding stock options (2024 – 2,772,000 ), 4,466,958 outstanding restricted stock units (2024 – 4,368,897 ), and nil outstanding warrants (2024 – 7,089,400 ).

As at February 28, 2026 , the potentially dilutive securities consisted of 6,243,138 outstanding stock options ( 2025 – 2,771,216 ), 4,261,512 outstanding restricted stock units ( 2025 – 4,466,958 ).

Reclassifications

Certain comparative figures have been reclassified to conform to the current year presentation, including the introduction of a cost of services line item within the Consolidated Statements of Operations and Comprehensive Loss causing reclassifications out of research and development employee compensation and external engineering expenses.

These reclassifications had no impact on the previously reported net loss and comprehensive loss.

Recently adopted accounting pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2023-07, Segment Reporting, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses.

The updated standard is effective for our annual period ending February 28, 2025.

The adoption of this accounting guidance for the year ended February 28, 2025 resulted in the inclusion of Note 24.

Segment Reporting in our 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 ):

1 unchanged sentence

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 updated standard 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 will be 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 annual financial statement disclosures.

The updated standard is effective for year ended February 28, 2026.

The adoption of this updated standard for the year ended February 28, 2026 has been reflected within Note 22.

In August 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No.

1 unchanged sentence

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.

Early adoption is permitted.

Management is currently evaluating the impact that the updated standard will have on our consolidated financial statements and related disclosures.

The updated standard is effective for year ended February 28, 2026.

The adoption of this updated standard for the year ended February 28, 2026 did not have an impact on the consolidated financial statements.

Recently issued accounting pronouncements not yet adopted

In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU No.

11 unchanged sentences

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.

The updated standard will be effective for the first quarter ending May 31, 2026.

The updated standard is potentially applicable to the future settlement or conversion of its Series B Convertible Preferred Stock (“Series B CPS”), which is classified as a liability and contains a substantive conversion feature (note 12 ).

The standard is not expected to have an impact on the consolidated financial statements until such a transaction, if any, occurs.

In January 2025, the Financial Accounting Standards Board (FASB) issued ASU 2025 - 01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220 - 40 ):

7 unchanged sentences

Accounts receivable from customers

Accounts receivable from services to the India JV

Research and development tax credits

Interest income receivable

Other receivables

14 unchanged sentences

The Company records refundable tax credits as a reduction of research and development expenses when the Company can reasonably estimate the amounts and it is more likely than not, they will be received.

During the year ended February 28, 2025, the Company recorded investment tax credits of $ 5 (2024 – $ 56 ) as a reduction of research and development expenses and received $ 5 (2024 – $ 522 ) from taxation authorities for investment tax credits.

During the year ended February 28, 2026 , the Company recorded investment tax credits of nil ( 2025 – $ 5 ) as a reduction of research and development expenses and received nil ( 2025 – $ 5 ) from taxation authorities for investment tax credits.

Inventories as at February 28, 2026 and February 28, 2025 were as follows:

3 unchanged sentences

Allowance for inventory write-down

( 868 ) ( 738 )

As at February 28, 2026 and February 28, 2025 , inventories included finished goods, work in process and raw materials.

3 unchanged sentences

Raw materials inventories consist of chemicals which are used as inputs in the PET depolymerization process.

As at February 28, 2025 and February 29, 2024, finished goods and work in process inventories were presented at their net realizable value, while raw materials were presented at average cost.

As at February 28, 2026 and February 28, 2025 , finished goods and work in process inventories were presented at lower of cost or net realizable value, while raw materials were presented at average cost.

As at February 28, 2026 , the Company recorded an allowance for inventory write-down of $ 868 ( 2025 – $ 738 ) on finished goods and work in process inventories related to inventory volumes not expected to be sold in the next twelve months.

7 unchanged sentences

Machinery and equipment – pre-construction

$ 8,460 $ ( 8,460 ) $ -

1,817 ( 490 ) 1,327

Building and Land Improvements

1,843 ( 1,780 ) 63

Office equipment and furniture

274 ( 190 ) 84

$ 12,619 $ ( 10,920 ) $ 1,699

As at February 28, 2025

3 unchanged sentences

Machinery and equipment – pre-construction

$ 8,460 $ ( 8,460 ) $ -

1,717 ( 406 ) 1,311

Building and Land Improvements

1,741 ( 1,616 ) 125

Office equipment and furniture

259 ( 170 ) 89

$ 12,389 $ ( 10,652 ) $ 1,737

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.

(“SKGC”) 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, the deployment plans for the use of this equipment are not fully developed at this time, therefore the recoverability of the carrying value of the equipment was tested for impairment, resulting in an impairment loss of $ 8,460 being recognized in the year ended February 28, 2025.

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.

Depreciation expense amounted to $ 137 for the year ended February 28, 2026 ( 2025 – $ 322 ).

3 unchanged sentences

Patents, at cost – beginning of year

$ 2,446 $ 1,996

Additions in the year – patents

1 unchanged sentence

Patents, accumulated depreciation – beginning of year

( 581 ) ( 379 )

Amortization of patents

( 247 ) ( 202 )

Patents, accumulated depreciation – end of year

( 828 ) ( 581 )

Foreign exchange effect

( 53 ) ( 157 )

Patents, net – end of year

$ 1,776 $ 1,708

On April 9, 2019, the first U.S.

patent was issued for the Infinite Loop™ technology.

During the year ending February 28, 2025, the Company continued to develop the Infinite Loop™ technology and filed various patents in jurisdictions around the world.

The Infinite Loop™ technology portfolio currently consists of four patent families for which the Company has 10 issued U.S.

patents and four pending U.S.

applications.

During the year ending February 28, 2026 , th e Company continued to develop the Infinite Loop™ technology and filed various patents in jurisdictions around the world.

The Infinite Loop™ technology portfolio currently includes six patent families for which the Company has 15 issued U.S.

patents and one pending U.S.

Internationally, the Company also has issued or allowed patents in various foreign jurisdictions.

5 unchanged sentences

Fair Value at February 28, 2026

Carrying Amount

Financial liabilities measured at amortized cost:

Series B Convertible Preferred Stock (Note 12)

$ 12,054 $ 11,770 Level 2

Long-term debt (Note 13)

$ 3,035 $ 2,873 Level 2

Due to customer (Note 10)

$ 900 $ 897 Level 2

Fair Value as at February 28, 2025

Carrying Amount

Financial liabilities measured at amortized cost:

Series B Convertible Preferred Stock (Note 12)

$ 10,647 $ 10,647 Level 2

Long-term debt (Note 13)

$ 3,085 $ 3,085 Level 2

Due to customer (Note 10)

$ 832 $ 832 Level 2

The fair value of cash and cash equivalents, accounts receivable, and accounts payable and accrued liabilities approximate their carrying values due to their short-term maturity.

15 unchanged sentences

Accounts payable

$ 729 $ 2,010

Accrued employee compensation

2 unchanged sentences

Other accrued liabilities

$ 1,916 $ 3,545

Due to Customer

6 unchanged sentences

The cause of the termination is related to the customer’s decision to abandon its plans to incorporate recycled PET in its products for technical reasons.

The Company reclassified the customer deposit as a due to customer and established its fair value at $ 762 based on a discount rate of 8.20 %, which reflected a discount of $ 238 .

In January 2024, the Company reclassified the customer deposit as a due to customer and established its fair value at $ 762 based on a discount rate of 8.20 %, which reflected a discount of $ 238 .

The discount rate used was based on the external financing from a Canadian bank.

1 unchanged sentence

During the year ended February 28, 2026 , the Company recorded an accretion expense of $ 68 ( 2025 – $ 62 ).

Investments in Joint Ventures

Joint venture with Indorama

On September 15, 2018, the Company, through its wholly-owned subsidiary Loop Innovations, LLC, a Delaware limited liability company, entered into a Joint Venture Agreement (the “Joint Venture Agreement”) with Indorama Ventures Holdings LP, USA (“Indorama”), an indirect subsidiary of Indorama Ventures Public Company Limited, to manufacture and commercialize sustainable polyester resin.

Each company has a 50/50 equity interest in Indorama Loop Technologies, LLC (“ILT”), which was specifically formed to operate and execute the joint venture.

ILT 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 in ILT.

As such, the Company uses the equity method of accounting to account for its share of the investment in ILT.

There were no operations in ILT from the date of inception of September 24, 2018 to February 28, 2025.

All contributions to ILT, which have been matched by Indorama Ventures, were used to fund engineering design costs which were capitalized in ILT.

During the year ended February 28, 2025, we made no contributions to ILT (2024 – nil).

As at February 29, 2024, the carrying value of the equity investment was $ 381 , which represented 50 % of the cash balance in ILT.

On October 9, 2024, ILT distributed a total of $ 735 in cash to the Company and Indorama, of which $ 368 was received by the Company.

The carrying value of the Company’s investment ILT was $ 13 after the distribution and as of February 28, 2025.

Equity Method Investments

Joint Venture with Ester

2 unchanged sentences

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 to form the India JV.

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

Ester and the Company are contracted to work in collaboration on all financing activities for the India JV pursuant to the terms of the agreement.

Pursuant to the terms of the relevant governing documents, Loop and Ester parties are required to obtain debt for a minimum of 60% of the total installed cost of the Infinite Loop™ manufacturing facility in India and will each contribute 50% of the initial equity capital of the India JV.

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 year ended February 28, 2025, Loop and Ester each contributed $ 1,954 (2024 – nil) to ELITe to fund preliminary project costs for the planned Infinite Loop™ facility in India, which are mainly engineering costs.

ELITe incurred losses of $ 1,374 (2024 – nil) during the year ended February 28, 2025, resulting in the Company recording a loss on equity accounted investment of $ 687 (2024 – nil) for the period.

As a result, the value of the carrying value of the Company’s investment in ELITe was $ 1,268 (2024 – nil) as at February 28, 2025.

Series B Preferred Stock

On December 23, 2024 (the “Issuance Date”), 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 (the “Holder”), an affiliate of Reed Societe Generale Group, for cash proceeds of $ 10,395 (€10,000).

During the year ended February 28, 2026 , Loop and Ester each contributed $ 960 ( 2025 – $ 1,954 ) to ELITe.

ELITe incurred losses of $ 1,526 , resulting in the Company recording its share of the loss on equity accounted investment of $ 763 ( 2025 – $ 687 ) for the respective periods.

As at February 28, 2026 the carrying value of the Company's investment in ELITe was $ 1,465 ( 2025 – $ 1,267 ).

The summarized financial information for ELITe is presented below, on a quarterly lag (in thousands).

December 31, 2025

Balance sheet

December 31, 2025

Results of Operations (1)

( 1 ) The summarized financial information presented above includes only the financial information of ELITe for the periods during which it was considered a significant equity method investee and accounted for under the equity method.

The summarized financial information has been prepared based on ELITe’s financial statements adjusted to conform with US GAAP.

The adjustments primarily related to the capitalization of development and pre-construction costs.

GAAP, such costs are expensed as incurred until a final investment decision is reached and construction of the related asset is probable.

ELITe’s fiscal year end differs from the Company’s fiscal year end.

The summarized financial information is based on ELITe’s most recent financial statements available and is presented on a consistent reporting lag.

Management considered whether any material events occurred between December 31, 2025 and February 28, 2026 and concluded that no material intervening events requiring adjustment or disclosure occurred.

Equity-Method Investment with Reed Circular Economy

On September 23, 2025, Loop entered into a formal agree ment with Reed Circular Economy ("RCE"), an affiliate of Reed Management SAS, to establish the fra mework 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.

There were no monetary transactions between Loop and Infinite Europe in the year ended Feb 28, 2026.

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 ) ( 2025 – nil ).

Infinite Loop Europe has not yet commenced operations.

As at February 28, 2026, the carrying value of the Company's investment in Infinite Loop Europe was nominal.

Series B Convertible Preferred Stock

On December 23, 2024 ( the “Issuance Date”), the Company issued and sold 1,044,430 shares of Series B CPS at $ 10.00 per share t o Reed Circular Economy (the “Holder”), an affiliate of Reed Societe Generale Group, for cash proceeds of $ 10,395 ( €10,000 ).

The main features of the Series B CPS are as follows:

14 unchanged sentences

The balance of Series B CPS as at February 28, 2026 and February 28, 2025 was as follows:

Stated value at issuance

$ 11,439 $ 10,395

Accrued PIK dividends

Series B Convertible Preferred Stock

$ 12,054 $ 10,647

Long-Term Debt

1 unchanged sentence

Principal amount

$ 3,027 $ 3,099

Unamortized discount

( 101 ) ( 138 )

Accrued interest

1 unchanged sentence

current portion of long-term debt

( 605 ) ( 312 )

Long-term debt, net of current portion

$ 2,430 $ 2,773

Investissement Qu é bec financing facility

On February 21, 2020, the Company received $ 1,530 ( CDN$2,209 ) from Investissement Québec as the first disbursement of our financing facility, out of a maximum of $ 3,186 ( CDN$4,600 ) (the “Financing Facility”).

The loan’s interest rate was initially set at 2.36 % and there was a 36-month moratorium on both capital and interest repayments starting on the date of the first disbursement, after which capital and interest is repayable in 84 monthly installments.

The loan interest rate was initially set at 2.36 % and there was a 36 -month moratorium on both capital and interest repayments starting on the date of the first disbursement, after which capital and interest is repayable in 84 monthly installments.

The Company established the fair value of the loan for the first disbursement at $ 1,354 based on a discount rate of 5.45 %, which reflected a debt discount of $ 291 .

9 unchanged sentences

The Company recorded interest expense on the Investissement Québec loan for the year ended February 28, 2026 in the amount of $ 140 ( 2025 – $ 114 ) and an accretion expense of $ 45 ( 2025 – $ 45 ).

The Company also agreed to issue to Investissement Québec warrants to purchase shares of common stock of the Company in an amount equal to 10% of each disbursement up to a maximum aggregate amount of $ 319 (CDN$460).

The exercise price of the warrants is equal to the higher of (i) $ 11.00 per share and (ii) the ten-day weighted average closing price of Loop shares of common stock on the Nasdaq stock market for the 10 days prior to the issue of the warrants.

The warrants can be exercised immediately upon grant and have a term of three years from the date of issuance.

The loan can be repaid at any time by the Company without penalty.

In connection with the first disbursement of the Financing Facility, the Company issued a warrant (“First Disbursement Warrant”) to acquire 15,153 shares of common stock at a strike price of $ 11.00 per share to Investissement Québec.

The Company determined the fair value of the warrants using the Black-Scholes pricing formula.

The fair value of the First Disbursement Warrant was determined to be $ 78 and is included in “Additional paid-in capital – Warrants” in our Condensed Consolidated Balance Sheets.

In connection with the second disbursement of the Financing Facility, the Company issued a warrant (“Second Disbursement Warrant”) to acquire 17,180 shares of common stock at a strike price of $ 11.00 per share to Investissement Québec.

The Company determined the fair value of the warrants using the Black-Scholes pricing formula.

The fair value of the First Disbursement Warrant was determined to be $ 69 and is included in “Additional paid-in capital – Warrants” in our Condensed Consolidated Balance Sheets.

The First Disbursement Warrants expired in the year ended February 28, 2023 and the Second Disbursement Warrants expired in the year ended February 28, 2025.

On November 21, 2022, the Company and Investissement Québec entered into an agreement to amend the existing Financing Facility which modifies the repayments of the principal amount (the “Financing Facility Amendment”).

4 unchanged sentences

On February 5, 2025, the Company and Investissement Québec entered into an agreement to amend the existing Financing Facility which modifies the repayments of the principal amount (the “Third Financing Facility Amendment”).

As per the Second Financing Facility Amendment, total annual principal repayments in monthly installments are of $ 287 (CDN $414) for the fiscal year ending February 28, 2026 and $ 495 (CDN $714) for the fiscal year ending February 28, 2027, with the remainder of the principal amount being repayable in 36 monthly installments.

As per the Third Financing Facility Amendment, total annual principal repayments in monthly installments are of $ 287 (CDN $ 414 ) for the fiscal year ending February 28, 2026 and $ 495 (CDN $ 714 ) for the fiscal year ending February 28, 2027, with the remainder of the principal amount being repayable in 36 monthly installments.

Pursuant to the Third Financing Facility Amendment the interest rate of the Financing Facility was increased from 3.36 % to 4.36 %.

8 unchanged sentences

February 28, 2030

Credit facility from a Canadian bank

On July 26, 2022, Loop Canada, Inc., a wholly-owned subsidiary of the Company, entered into an Operating Credit Facility (the “Credit Facility”) with 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 CDN $ 3,500 in aggregate principal amount.

The Credit Facility is secured by the Company’s Terrebonne, Québec property and is subject to a minimum equity covenant, tested quarterly with which the Company was not in compliance as at February 28, 2025.

All borrowings under the Credit Facility will bear interest at an annual rate equal to the bank’s Canadian prime rate plus 1.0 %.

As at February 28, 2025, the $ 2,424 (CDN $3,500) Credit Facility was available and undrawn.

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 February 28, 2026, t he $ 2,566 (CDN $ 3,500 ) Credit Facility was available and undrawn.

As at February 28, 2025, the credit facility was available and undrawn.

Related Party Transactions

Employment Agreement

On June 29, 2015, the Company entered into an employment agreement with Mr.

On June 29, 2015, the Company entered into an employment agree ment with Mr.

Daniel Solomita, the Company’s President and Chief Executive Officer (“CEO”).

39 unchanged sentences

Solomita and the Company agreed to defer by one year the settlement of 1,000,000 RSUs that would have otherwise settled on October 15, 2024.

On October 14, 2025 Mr.

Solomita and the Company agreed to defer by one year the settlement of 1,200,000 RSU's that would have otherwise settled on October 15, 2025.

During the year ended February 28, 2026 , no outstanding milestones became probable of being met and, accordingly, no additional stock-based compensation expense was recorded.

Engineering Service Agreement with ELITe

The Company has entered into two Engineering Services Agreements with ELITe pursuant to which the Company provides engineering services to support the development and construction of the Infinite Loop™ India manufacturing facility.

Revenue under these agreements is recognized as services are performed.

During the year ended February 28, 2026, the Company recognized $ 506 in engineering services revenue from ELITe.

Stockholders ’ Equity

34 unchanged sentences

Balance, February 28, 2025

47,620,263 $ 5

Issuance of shares upon settlement of restricted stock units

Issuance of shares upon exercise of stock options

Issuance of shares for cash

Balance, February 28, 2026

48,337,555 $ 5

For the year ended February 28, 2025

1 unchanged sentence

Balance, February 29, 2024

47,528,908 $ 5

Issuance of shares upon settlement of restricted stock units

Issuance of shares upon the exercise of stock options

Balance, February 28, 2025

During the year ended February 28, 2025, the Company recorded the following common stock transactions:

The Company issued 91,355 shares of the common stock to settle restricted stock units.

47,620,263 $ 5

During the year ended February 28, 2026 , th e 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 year.

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 year ended February 28, 2025 , the Company recorded the following common stock transactions:

The Company issued 91,355 shares of the common stock to settle restricted stock units.

The Company issued 7,721 shares of the common stock to settle stock options exercised in the period.

Revenue for the years ended February 28, 2026 and February 28, 2025 were as follows:

1 unchanged sentence

Engineering services

During the year ended February 28, 2025, the Company recorded revenues of $ 10,395 (2024 – nil) for technology licensing fees, which were related to the sale of a license to Reed Societe Generale Group.

The Company entered into a license agreement with Reed Circular Economy (“RCE”), an affiliate of Reed Societe Generale Group, granting a non-transferable, royalty-bearing 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 upfront royalty payment of $ 10,395 (€10,000).

During the year ended February 28, 2025, the Company recorded revenues of $ 368 (2024 – nil) for engineering fees, which were related to an engineering services agreement between Loop and ELITe.

Pursuant to the agreement, Loop is providing engineering services and support the local engineering firm for the planned Infinite Loop™ facility in India.

$ 514 $ 10,889

During the year ended February 28, 2026 , the Company recorded revenues of $ 506 ( 2025 – $ 368 ) for engineering fees, which were related to engineering services agreement between Loop and ELITe.

Pursuant to the agreements, Loop is providing engineering services to support the development and construction of the Infinite Loop™ facility in India.

As at February 28, 2026, the aggregate amount of the transaction price allocated to delivering the service contract that is unsatisfied was approximately $ 1,281 .

The Company expects to recognize this remaining amount as engineering services are performed over the next 14 months.

During the year ended February 28, 2026 , the Company recorded revenues of $ 8 ( 2025 – 126 ) for sales of Loop™ PET resin.

As at February 28, 2025, unearned revenue was $ 102 (2023 – nil), comprised of a payment received from a customer while the Company has not yet fulfilled its obligation to deliver PET.

As at February 28, 2026 , unear ned revenue was $ 234 ( 2025 – $ 102 ), comprising of engineering services invoiced in advance $ 132 ( 2025 - nil ) and a payment received from a customer while the Company has not yet fulfilled its obligation to deliver PE T.

During the year ended February 28, 2025 , the Company recorded revenues of $ 10,395 for technology licensing fees, which were related to the sale of a license to Reed Societe Generale Group.

The Company entered into a license agreement with Reed Circular Economy (“RCE”), an affiliate of Reed Societe Generale Group, g ranting a non-transferable, royalty-bearing 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 upfront royalty payment of $ 10,395 ( €10,000 ).

Research and Development Expenses

Research and development expenses for the years ended February 28, 2026 and February 28, 2025 were as follows:

Employee compensation

Employee compensation including stock-based compensation

$ 2,367 $ 3,576

External engineering

1 unchanged sentence

Machinery and equipment expenditures

The amount for the year ended February 29, 2024 includes an inventory write-down of $ 817 on finished goods and work in process inventories related to inventory volumes not expected to be sold in the next twelve months (Note 4).

$ 3,472 $ 6,646

General and Administrative Expenses

General and administrative expenses for the years ended February 28, 2026 and February 28, 2025 were as follows:

Employee compensation

Employee compensation including stock-based compensation

$ 2,479 $ 2,823

Professional fees

$ 6,405 $ 9,228

Share-Based Payments

Stock Options

Stock Op tions

The following tables summarizes the continuity of the Company’s stock options during the years ended February 28, 2026 and February 28, 2025 :

stock options

Weighted average

stock options

exercise price

stock options

average exercise

exercise price

Outstanding, beginning of year

2,771,216 $ 5.25 2,772,000 $ 5.10

3,931,922 1.14 199,216 2.89

( 80,000 ) 0.80 - -

( 180,000 ) 2.03 ( 200,000 ) 0.80

( 200,000 ) 0.80 - -

Outstanding, end of year

6,243,138 $ 2.96 2,771,216 $ 5.25

Exercisable, end of year

Exercise price

stock options

Weighted average remaining

2,781,727 $ 5.00 2,040,000 $ 6.12

Weighted average

Number of stock

Weighted average

remaining life (years)

stock options

Exercise price

- - 280,000 0.75

1,000,000 6.85 - -

2,701,922 6.10 - -

130,000 6.63 - -

972,000 6.75 972,000 7.75

199,216 8.02 199,216 9.02

160,000 7.08 240,000 8.08

380,000 1.49 380,000 2.49

700,000 1.54 700,000 2.54

Outstanding, end of year

6,243,138 5.63 2,771,216 5.13

Exercisable, end of year

2,781,727 4.65 2,040,000 4.04

The Company applies the fair value method of accounting for stock-based compensation awards granted.

2 unchanged sentences

Exercise price

$ 1.14 $ 2.89

Risk-free interest rate

3.56% - 4.11% 4.09 %

Expected dividend yield

Expected volatility

Expected life

81% - 86% 73 %

Expected life (years)

3.5 - 5.5 years 7

During the year ended February 28, 2026 , stock-based compensation expense attributable to stock options amounted to $ 1,159 ( 2025 – $ 555 ).

2 unchanged sentences

Weighted average

fair value price

Weighted average

fair value price

Outstanding, beginning of year

4,466,958 $ 6.32 4,368,897 $ 6.53

328,081 1.33 213,046 2.10

( 126,857 ) 2.90 ( 91,355 ) 6.74

( 406,670 ) 2.97 ( 23,630 ) 4.88

Outstanding, end of year

4,261,512 $ 6.36 4,466,958 $ 6.32

Outstanding vested, end of year

1,846,828 $ 5.72 1,761,421 $ 5.86

The Company applies the fair value method of accounting for awards granted through the issuance of restricted stock units.

2 unchanged sentences

Stock-Based Compensation Expense

During the year ended February 28, 2025, stock-based compensation included in research and development expenses amounted to $ 471 (2024 – $ 542 ), and in general and administrative expenses amounted to $ 881 (2024 – $ 880 ).

During the year ended February 28, 2026 , stock-based compensation included in research and devel opment expenses amounted to $ 490 ( 2025 – $ 471 ), and in general and administrative expenses amounted to $ 963 ( 2025 – $ 881 ).

Equity Incentive Plan

2 unchanged sentences

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, 2023 and 2024, the share reserve was increased by 1,500,000 shares.

On March 1, 2023, 2024 and 2025, th e share reserve was increased by 1,500,000 shares.

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.

5 unchanged sentences

Authorized, beginning of period

2,159,612 848,244

Automatic share reserve increase

1,500,000 1,500,000

Units granted

( 4,260,003 ) ( 412,262 )

Units forfeited

586,670 223,630

Units expired

Authorized, end of period

*The use of the term “units” in the table above describes a combination of stock options and RSUs.

The following table summarizes the continuity of warrants during the years ended February 28, 2025 and February 29, 2024:

Weighted average

exercise price

Weighted average

exercise price

Outstanding, beginning of year

186,279 2,159,612

Outstanding, end of year

*The use of the term “units” in the table above describes a combination of stock options and RSUs.

Interest and Other Financial Expenses

1 unchanged sentence

Accrued dividends on convertible securities (Note 12)

$ 1,408 $ 252

Interest on long-term debt (Note 13)

1 unchanged sentence

Accretion expense (Notes 10 and 13)

Discount on due to customer (Note 10)

$ 1,703 $ 618

The components of the Company’s loss before taxes are summarized below:

$ ( 5,500 ) $ ( 6,049 )

Foreign operations

( 6,799 ) ( 9,008 )

Loss before taxes

$ ( 12,299 ) $ ( 15,057 )

A reconciliation from the statutory U.S.

income tax rate and the Company’s effective income tax rate, as computed on loss before taxes, is as follows:

Statutory Federal rate

Federal income tax at statutory rate

Effect of foreign jurisdiction

Non-deductible expenses

Tax credits related to research and development expenditures

Change in valuation allowance and other items

% $ (2,583) % $ (3,162 )

Effect of Canadian foreign jurisdiction taxed at a different rate

2 (294) 3 ( 410 )

Non-deductible expenses - Accretion expenses and other

Non-deductible expenses - Stock-based compensation

(2 ) 216 (1) 207

Non-deductible expenses - Imputed interest income from intercompany loan

(9 ) 1,130 (9) 1,357

Non-deductible expenses - Loss pick-up from equity method investments

( 1 ) 160 - -

Tax credits related to research and development expenditures - Current year

2 (216) 2 ( 255 )

Tax credits related to research and development expenditures - True up prior year

- (39) 1 (85)

Non-Cash dividend related to the Series B CPS

( 2 ) 296 - -

Effect of prior year true-up

( 2 ) 261 - 45

Change in valuation allowance

(8 ) 1,041 (15) 2,226

Effective income tax expense

% - $ - % - $ -

Current % - $ - % - $ -

% - $ - % - $ -

The state and local taxes are not included within the rate reconciliation or the current and deferred breakdown above as the amounts relating to the year ended February 28, 2026 are nil ( 2025 - nil ).

The Company has net operating loss carry forwards of approximately $ 32,689 ( 2025 – $ 36,285 ) for U.S.

10 unchanged sentences

Canada net operating loss carry forward

$ 22,974 $ 20,703

net operating loss carry forward

4 unchanged sentences

Deferred tax assets

42,158 40,294

Deferred tax liabilities

( 469 ) ( 453 )

Deferred tax liabilities

$ ( 469 ) $ ( 453 )

Deferred tax assets, net

41,689 39,841

Valuation allowance

( 41,689 ) ( 39,841 )

Deferred tax assets, net

5 unchanged sentences

Management does not believe that it is more likely than not that future taxable income will be sufficient to allow it to recover substantially all of the value assigned to its deferred tax assets.

Accordingly, the Company has provided for a valuation allowance of the Company's deferred tax assets.

The tax years subject to examination by major tax jurisdiction include the years ended February 28, 2019 and forward by the U.S.

Internal Revenue Service and most state jurisdictions, and the years ended February 28, 2019 and forward for the Canadian jurisdiction.

Accordingly, the Company has provided for a valuation allowance of the Company's deferred tax asset.

The income taxes paid for federal, state, and Canadian foreign jurisdiction for the year ended February 28, 2026 were nil ( 2025:nil ).

The tax years subject to examination by major tax jurisdiction include the years ending 2021 and forward by the U.S.

Internal Revenue Service and most state jurisdictions, and the years 2021 and forward for the Canadian jurisdiction.

Segment Reporting

1 unchanged sentence

The accounting policies of the single reportable segment are the same as those described in the summary of significant accounting policies.

The chief operating decision maker, or “CODM,” assesses performance decides whether to allocate resources for the Company’s single reportable segment based on consolidated net loss.

The chief operating decision maker, Daniel Solomita, President and Chief Executive Officer, or “CODM,” assesses performance and decides whether to allocate resources for the Company’s single reportable segment based on consolidated net loss.

The CODM uses net loss to regularly monitor budget versus actual results which are used in assessing performance and in establishing management’s compensation.

6 unchanged sentences

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 8. Financial Statements and Supplementary Data