What changed in this filing

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Item 1. Financial Statements

2026-10-15 compared with 2026-07-14 · 209 added, 93 removed, 366 unchanged (45% of the section changed)

1 unchanged sentence

Loop Industries, Inc.

Three Months Ended

Three and Six Months Ended August 31, 2026

Index to the Unaudited Interim Condensed Consolidated Financial Statements

Condensed consolidated balance sheets as at May 31, 2026 (Unaudited) and February 28, 2026

Condensed consolidated statements of operations and comprehensive loss for the three months ended May 31, 2026 and 2025 (Unaudited)

Condensed consolidated statements of changes in stockholders ' deficit for the three months ended May 31, 2026 and 2025 (Unaudited)

Condensed consolidated statements of cash flows for the three months ended May 31, 2026 and 2025 (Unaudited)

Condensed consolidated balance sheets as at August 31, 2026 (Unaudited) and February 28, 2026

Condensed consolidated statements of operations and comprehensive loss for the three and six months ended August 31, 2026 and 2025 (Unaudited)

Condensed consolidated statements of changes in stockholders ' deficit for the three and six months ended August 31, 2026 and 2025 (Unaudited)

Condensed consolidated statements of cash flows for the six months ended August 31, 2026 and 2025 (Unaudited)

Notes to the condensed consolidated financial statements (Unaudited)

5 unchanged sentences

Cash and cash equivalents

$ 1,063 $ 2,356

$ 836 $ 2,356 Accounts receivable and other (Note 3)

4 unchanged sentences

1,627 1,699 Intangible assets, net (Note 6)

1,710 1,776 Total assets

$ 6,373 $ 8,559

2 unchanged sentences

Accounts payable and accrued liabilities (Note 8)

$ 2,038 $ 1,916

$ 2,094 $ 1,916 Credit Facility (Note 11)

1,411 - Unearned revenue

3 unchanged sentences

936 900 Series B Convertible Preferred stock (Note 10)

12,429 12,054

12,804 12,054 Long-term debt (Note 11)

6 unchanged sentences

5 5 Additional paid-in capital

196,874 195,934

197,794 195,934 Accumulated deficit

( 207,710 ) ( 204,326 )

( 210,698 ) ( 204,326 ) Accumulated other comprehensive loss

( 1,187 ) ( 1,193 )

( 1,235 ) ( 1,193 ) Total stockholders’ deficit

( 12,018 ) ( 9,580 )

( 14,134 ) ( 9,580 ) Total liabilities and stockholders’ deficit

$ 6,703 $ 8,559

$ 6,373 $ 8,559 Going Concern (Note 1)

5 unchanged sentences

Three Months Ended

Six Months Ended

August 31, 2026

August 31, 2025

August 31, 2026

August 31, 2025

$ - $ - $ - $ 8 Services

117 - 296 244 Total revenues

1 unchanged sentence

Cost of services

113 - 292 114 Total cost of services

113 - 292 114 Expenses

Research and development (Note 13)

2 unchanged sentences

83 96 167 197 Total expenses

2,101 2,810 4,720 5,818 Other loss

Loss on equity accounted investments (Note 9)

3 unchanged sentences

6 2 21 ( 41 ) Total other loss

891 394 1,656 971 Net loss

( 2,988 ) ( 3,204 ) ( 6,372 ) ( 6,651 ) Other comprehensive loss

11 unchanged sentences

dollars, except for share data)

Three months ended May 31, 2026

Three months ended August 31, 2026

Preferred stock

3 unchanged sentences

Stockholders’

Balance, February 28, 2026

Balance, May 31, 2026

48,380,371 $ 5 1 $ - $ 196,875 $ - $ ( 207,710 ) $ ( 1,188 ) $ ( 12,018 ) Issuance of shares upon the vesting of restricted stock units (Note 15)

Issuance of shares upon the exercise of stock options (Note 15)

4,000 - - - - - - - - Issuance of common stock under ATM Equity Offering (Note 12)

428,203 466 466 Stock options issued for services (Note 15)

2 unchanged sentences

- - - - ( 14 ) - - - ( 14 ) Foreign currency translation

- - - - - - - ( 47 ) ( 47 ) Net loss

- - - - - - ( 2,988 ) - ( 2,988 ) Balance, August 31, 2026

48,812,574 $ 5 1 $ - $ 197,794 $ - $ ( 210,698 ) $ ( 1,235 ) $ ( 14,134 )

(in thousands of U.S.

dollars, except for share data)

Three months ended August 31, 2025

Preferred stock

par value $0.0001

Comprehensive

Stockholders’

Balance, May 31, 2025

47,718,350 $ 5 1 $ - $ 193,904 $ - $ ( 195,474 ) $ ( 1,159 ) $ ( 2,724 ) Issuance of shares upon the vesting of restricted stock units (Note 15)

28,770 - - - - - - - - Issuance of common stock under ATM Equity Offering (Note 12)

116,358 193 193 Stock options issued for services (Note 15)

- - - - 165 - - - 165 Restricted stock units issued for services (Note 15)

- - - - 115 - - - 115 Share issuance costs

- - - - ( 7 ) - - - ( 7 ) Foreign currency translation

- - - - - - - ( 6 ) ( 6 ) Net loss

- - - - - - ( 3,204 ) - ( 3,204 ) Balance, August 31, 2025

47,863,478 $ 5 1 $ - $ 194,370 $ - $ ( 198,678 ) $ ( 1,165 ) $ ( 5,468 ) Going Concern (Note 1)

See accompanying notes to the condensed consolidated financial statements.

Loop Industries, Inc.

Condensed Consolidated Statement of Changes in Stockholders' Deficit

(in thousands of U.S.

dollars, except for share data)

Three months ended May 31, 2025

Six months ended August 31, 2026

Preferred stock

5 unchanged sentences

48,337,555 $ 5 1 $ - $ 195,934 $ - $ ( 204,326 ) $ ( 1,194 ) $ ( 9,581 ) Issuance of shares upon the vesting of restricted stock units (Note 15)

46,816 - - - - - - - - Issuance of common stock under ATM Equity Offering (Note 12)

428,203 - - - 466 - - - 466 Stock options issued for services (Note 15)

- - - - 1,157 - - - 1,157 Restricted stock units issued for services (Note 15)

- - - - 251 - - - 251 Share issuance costs

- - - - ( 14 ) - - - ( 14 ) Foreign currency translation

Balance, May 31, 2025

- - - - - - - ( 41 ) ( 41 ) Net loss

- - - - - - ( 6,372 ) - ( 6,372 ) Balance, August 31, 2026

48,812,574 $ 5 1 $ - $ 197,794 $ - $ ( 210,698 ) $ ( 1,235 ) $ ( 14,134 ) Going Concern (Note 1)

(in thousands of U.S.

dollars, except for share data)

Six months ended August 31, 2025

Series A Preferred stock

par value $0.0001

Comprehensive

Stockholders’

Balance, February 28, 2025

47,620,263 $ 5 1 $ - $ 193,529 $ - $ ( 192,027 ) $ ( 1,140 ) $ 367 Issuance of shares upon the vesting of restricted stock units (Note 15)

126,857 - - - - - - - - Issuance of common stock under ATM Equity Offering (Note 12)

116,358 193 193 Stock options issued for services (Note 15)

- - - - 651 - - - 651 Restricted stock units issued for services (Note 15)

- - - - 4 - - - 4 Share issuance costs

( 7 ) ( 7 ) Foreign currency translation

- - - - - - - ( 25 ) ( 25 ) Net loss

- - - - - - ( 6,651 ) - ( 6,651 ) Balance, August 31, 2025

47,863,478 $ 5 1 $ - $ 194,370 $ - $ ( 198,678 ) $ ( 1,165 ) $ ( 5,468 )

See accompanying notes to the condensed consolidated financial statements.

2 unchanged sentences

(in thousands of U.S.

Three Months Ended May 31,

Six Months Ended August 31,

Cash Flows from Operating Activities

10 unchanged sentences

153 - Net cash used in operating activities

( 2,394 ) ( 5,604 )

Cash Flows from Investing Activities

Investment in joint venture (Note 9)

( 737 ) - Additions to intangible assets (Note 6)

( 82 ) ( 133 ) Net cash used in investing activities

( 819 ) ( 133 )

Cash Flows from Financing Activities

Proceeds from ATM equity offering, net of issuance costs (Note 12)

452 187 Borrowings under credit facility (Note 11)

1,411 - Repayment of long-term debt (Note 11)

4 unchanged sentences

2,356 12,973 Cash and cash equivalents, end of period

$ 836 $ 7,310

Supplemental Disclosure of Cash Flow Information:

5 unchanged sentences

Loop Industries, Inc.

Three Months Ended May 31, 2026 and 2025

Three and Six Months Ended August 31, 2026 and 2025

Notes to the Condensed Consolidated Financial Statements

19 unchanged sentences

In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements present fairly the financial position, results of operations, comprehensive loss and cash flows for the interim periods.

The results for the three month period ended May 31, 2026 are not necessarily indicative of the results to be expected for any subsequent quarter, for the fiscal year ending February 28, 2027, or for any other period.

The results for the three - and six -month periods ended August 31, 2026 are not necessarily indicative of the results to be expected for any subsequent quarter, for the fiscal year ending February 28, 2027, or for any other period.

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

9 unchanged sentences

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 as of May 31, 2026 of $ 1,063 , together with the $ 2,537 available under its undrawn credit facility, will not be sufficient to fund the Company's ongoing operations, obligations and commitments for the next twelve months from the date of issuance of these unaudited interim condensed consolidated financial statements.

Management has determined that current cash and cash equivalents on hand as of August 31, 2026 of $836, together with the $1,113 available under its credit facility, will not be sufficient to fund the Company's ongoing operations, obligations and commitments for the next twelve months from the date of issuance of these unaudited interim condensed consolidated financial statements.

The Company's current cash and cash equivalents on hand as of October 13, 2026 is $ 757 , together with $ 629 available under its credit facility.

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.

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.

13 unchanged sentences

Potential common shares are excluded from the computation if their effect is antidilutive.

For the three months ended May 31, 2026 and 2025 , the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an antidilutive effect.

As at May 31, 2026 , the potentially dilutive securities consisted of 7 ,325,317 outstanding stock options ( 2025 – 5 ,573,138 ), 4,218,696 outstanding restricted stock units ( 2025 – 3 ,981,121 ).

For the three - and six -month periods ended August 31, 2026 and 2025 , the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an antidilutive effect.

As at August 31, 2026 , the potentially dilutive securities consisted of 8,330,317 outstanding stock options ( 2025 – 5,493,138 ), 4,781,268 outstanding restricted stock units ( 2025 – 4,256,532 ).

Recently adopted accounting pronouncements

6 unchanged sentences

Early adoption is permitted for entities that have adopted the amendments in ASU 2020 - 06.

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

The updated standard was 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 10 ).

14 unchanged sentences

Accounts Receivable and Other

Accounts Receivable and Other as at May 31, 2026 and February 28, 2026 are comprised of the following:

Accounts Receivable and Other as at August 31, 2026 and February 28, 2026 are comprised of the following:

August 31, 2026

February 28, 2026

1 unchanged sentence

$ 95 $ 401 Research and development tax credits

130 88 Sales tax

43 66 Other receivables

154 200 $ 422 $ 755

Prepaid Expenses

Prepaid expenses as at May 31, 2026 and February 28, 2026 were as follows:

Prepaid expenses as at August 31, 2026 and February 28, 2026 were as follows:

August 31, 2026

February 28, 2026

$ 103 $ 286 Utilities

30 32 Software

126 122 $ 313 $ 495

Property, Plant and Equipment, Net

As at May 31, 2026

As at August 31, 2026

depreciation,

2 unchanged sentences

Machinery and equipment

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

1,797 ( 500 ) 1,297

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

1,788 ( 512 ) 1,276 Land

221 - 221 Building and Land Improvements

1,822 ( 1,766 ) 56

1,813 ( 1,762 ) 51 Office equipment and furniture

269 ( 190 ) 79 $ 12,551 $ (10,924 ) $ 1,627

$ 12,572 $ ( 10,915 ) $ 1,657

As at February 28, 2026

3 unchanged sentences

Machinery and equipment

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

1,817 ( 490 ) 1,327

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

1,817 ( 490 ) 1,327 Land

225 - 225 Building and Land Improvements

1,843 ( 1,780 ) 63

1,843 ( 1,780 ) 63 Office equipment and furniture

274 ( 190 ) 84 $ 12,619 $ ( 10,920 ) $ 1,699

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

Depreciation expense for the three months ended May 31, 2026 amounted to $ 23 , ( 2025 – $ 35 ).

Depreciation expense for the three - and six -month periods ended August 31, 2026 amounted to $ 21 and $ 44 respectively, ( 2025 - $ 36 and $ 70 ) .

Intangible Assets, Net

Intangible assets as at May 31, 2026 and February 28, 2026 were $ 1,730 and $ 1,776 , respectively.

During the three month periods ended May 31, 2026 and 2025 , we made additions relating to patent application costs to intangible assets of $ 35 and $ 115 , respectively.

Amortization expense for the three months ended May 31, 2026 amo unted to $ 61 , ( 2025 – $ 66 ).

Intangible assets as at August 31, 2026 and February 28, 2026 were $ 1,710 and $ 1,776 , respectively.

During the six-month periods ended August 31, 2026 and 2025 , the Company made additions relating to patent application costs to intangible assets of $ 82 and $ 133 respectively.

Amortization expense for the three - and six -month periods ended August 31, 2026 amo unted to $ 62 and $ 123 respectively, ( 2025 - $ 60 and $ 127 ) .

Fair Value of Financial Instruments

The following tables disclose the estimated fair value of the Company's financial liabilities as at May 31, 2026 and February 28, 2026 :

Fair Value at May 31, 2026

The following tables disclose the estimated fair value of the Company's financial liabilities as at August 31, 2026 and February 28, 2026 :

Fair Value at August 31, 2026

Financial liabilities accounted for at amortized cost:

1 unchanged sentence

$ 12,804 $ 11,340 Level 2

Long-term debt (Note 11)

Credit Facility (note 11) $ 1,411 1,411 Level 2 Long-term debt (Note 11)

$ 2,876 $ 2,777 Level 2

11 unchanged sentences

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities as at May 31, 2026 and February 28, 2026 were as follows:

Accounts payable and accrued liabilities as at August 31, 2026 and February 28, 2026 were as follows:

August 31, 2026

February 28, 2026

13 unchanged sentences

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

During the three -month period ended May 31, 2026, Loop and Ester made no contribution ( 2025 – nil ) to ELITe.

During the three -months ended May 31, 2026, ELITe incurred losses of $ 639 ( 2025 – $ 604 ), resulting in the Company recording its share of the loss on equity accounted investment of $ 319 ( 2025 – $ 302 ).

As at May 31, 2026, and February 28, 2026 the carrying value of the Company's investment in ELITe was $ 1,145 and $ 1,465 , respectively.

During the six -month period ended August 31, 2026, Loop and Ester each made $ 737 contribution ( 2025 – nil ) to ELITe.

During the three and six -month periods ended August 31, 2026, ELITe incurred losses of $ 861 and $ 1,501 ( 2025 – $ 86 and $ 689 ), resulting in the Company recording its share of the loss on equity accounted investment of $ 431 and $ 750 ( 2025 – $ 43 and $ 345 ).

As at August 31, 2026, and February 28, 2026 the carrying value of the Company's investment in ELITe was $ 1,452 and $ 1,465 , respectively.

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

Balance sheet

March 31, 2026

June 30, 2026

$ 2,756 Liabilities

Results of Operations (1)

Three months ended March 31, 2026

Six months ended June 30, 2026

$ - Pre-tax loss

( 953 ) Net loss

Series B Convertible Preferred Stock

The balance of Series B Convertible Preferred Stock as at May 31, 2026 and February 28, 2026 was as follows:

The balance of Series B Convertible Preferred Stock as at August 31, 2026 and February 28, 2026 was as follows:

August 31, 2026

February 28, 2026

$ 11,439 $ 11,439

$ 11,439 $ 11,439 Accrued PIK dividends

1 unchanged sentence

$ 12,804 $ 12,054

During the three months ended May 31, 2026 , the Company recorded PIK dividends of $ 375 , ( 2025 – $ 340 ), which were recorded in “Interest and other financial expenses” in our Consolidated Statements of Operations and Comprehensive Loss.

During the three - and six -month periods ended August 31, 2026 , the Company recorded PIK dividends of $ 375 and $ 750 respectively, ( 2025 – $ 341 and $ 681 respectively), which were recorded in “Interest and other financial expenses” in our Consolidated Statements of Operations and Comprehensive Loss.

Long ‑ Term Debt

Long-term debt as of May 31, 2026 and February 28, 2026 , was comprised of the following:

Long-term debt as of August 31, 2026 and February 28, 2026 , was comprised of the following:

August 31, 2026

February 28, 2026

1 unchanged sentence

Principal amount

$ 2,994 $ 3,027

$ 2,864 $ 3,027 Unamortized discount

( 89 ) ( 101 )

( 78 ) ( 101 ) Accrued interest

90 109 Total Investissement Québec financing facility

2,876 3,035 Less:

current portion of long-term debt

( 807 ) ( 605 )

( 890 ) ( 605 ) Long-term debt, net of current portion

1 unchanged sentence

Investissement Qu é bec financing facility

The Company recorded interest expense on the Investissement Québec loan for the three months ended May 31, 2026 in the amount of $ 33 , respectively ( 2025 – $ 36 ) and an accretion expense of $ 11 , respectively ( 2025 – $ 11 ).

During the three month period ended May 31, 2026 , the Company made repayments of nil ( 2025 – $ 55 ) on the Investissement Québec loan.

The Company recorded interest expense on the Investissement Québec loan for the three - and six -month periods ended August 31, 2026 in the amount of $ 33 and $ 66 , respectively ( 2025 - $ 36 and $ 72 ) and an accretion expense of $ 11 and $ 22 , respectively ( 2025 - $ 11 and $ 23 ) .

During the six -month period ended August 31, 2026 , the Company made repayments of $ 132 ( 2025 - $ 136 ) on the Investissement Québec loan.

On July 17, 2026, the Company and Investissement Québec entered into an agreement to amend the existing Financing Facility which modifies the repayments of the principal amount (the “Fourth Financing Facility Amendment”).

As per the Fourth Financing Facility Amendment, total annual principal repayments in monthly installments is $ 338 for the fiscal year ending February 28, 2027, with the remainder of the principal amount being repayable in 36 monthly installments.

Total repayments due on the Company's indebtedness over the next five years are as follows:

11 unchanged sentences

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 May 31, 2026 , the $ 2,537 (CDN $ 3,500 ) Credit Facility was available and undrawn.

As at August 31, 2026 , the Company borrowed $ 1,411 (CDN $ 1,957 ) under the Credit Facility.

The Company recorded Interest expense on the Credit Facility for the three -and six -month periods ended August 31, 2026 in the amount of $ 26 and $ 26 , respectively ( 2025 - nil and nil ).

Stockholders' Deficit

For the period ended May 31, 2026

For the period ended August 31, 2026

Number of shares

Balance, February 28, 2026

48,337,555 $ 5

48,337,555 $ 5 Issuance of shares upon settlement of restricted stock units

Issuance of shares upon exercise of stock options

46,816 - Issuance of shares for cash

Balance, May 31, 2026

428,203 - Balance, August 31, 2026

48,812,574 $ 5

For the period ended May 31, 2025

For the period ended August 31, 2025

Number of shares

Balance, February 28, 2025

47,620,263 $ 5

47,620,263 $ 5 Issuance of shares upon settlement of restricted stock units

Balance, May 31, 2025

126,857 - Issuance of shares for cash

116,358 - Balance, August 31, 2025

47,863,478 $ 5

During the three months ended May 31, 2026 , the Company recorded the following common stock transactions:

During the six-months ended August 31, 2026 , the Company recorded the following common stock transactions:

(i) The Company issued 46,816 shares of common stock to settle restricted stock units that vested in the period.

During the three months ended May 31, 2025 , the Company recorded the following common stock transaction:

(ii) The Company issued 428,203 shares of common stock through its ATM Equity Offering program at an average offering price of $ 1.09 for gross proceed of $ 466 .

During the six-months ended August 31, 2025 , the Company recorded the following common stock transaction:

The Company issued 126,857 shares of common stock to settle restricted stock units that vested in the period.

(ii) The Company issued 116,358 shares of common stock through its ATM Equity Offering program at an average offering price of $ 1.66 for gross proceed of $ 193 .

Research and Development Expenses

Research and development expenses for the three month periods ended May 31, 2026 and 2025 were as follows:

Research and development expenses for the three -month periods ended August 31, 2026 and 2025 were as follows:

August 31, 2026

August 31, 2025

Employee compensation

1 unchanged sentence

$ 4 6 Plant and laboratory operating expenses

$ 117 149 Other

74 59 $ 540 $ 843

Research and development expenses for the six-month periods ended August 31, 2026 and 2025 were as follows:

August 31, 2026

August 31, 2025

Employee compensation

$ 1,052 $ 1,531 External engineering

13 61 Plant and laboratory operating expenses

298 383 Other

138 127 $ 1,501 $ 2,102

General and Administrative Expenses

General and administrative expenses for the three month periods ended May 31, 2026 and 2025 were as follows:

General and administrative expenses for the three -month periods ended August 31, 2026 and 2025 were as follows:

August 31, 2026

August 31, 2025

Employee compensation

$ 673 $ 671 Insurance

111 423 Professional fees

416 612 Other

278 165 $ 1,478 $ 1,871

General and administrative expenses for the six-month periods ended August 31, 2026 and 2025 were as follows:

August 31, 2026

August 31, 2025

Employee compensation

$ 1,582 $ 1,303 Insurance

266 876 Professional fees

659 973 Other

545 367 $ 3,052 $ 3,519

Share-based Payments

Stock Options

The following table summarizes the continuity of the Company's stock options during the three month periods ended May 31, 2026 and 2025 :

The following table summarizes the continuity of the Company's stock options during the three -month periods ended August 31, 2026 and 2025 :

Weighted average

5 unchanged sentences

Outstanding, beginning of period

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

1,082,179 1.44 2,801,922 1.16

7,325,317 $ 2.73 5,573,138 $ 3.19 Granted

1,005,000 1.44 - - Exercised

- - - - Forfeited

- - ( 80,000 ) 3.11 Expired

- - - - Outstanding, end of period

8,330,317 $ 2.58 5,493,138 $ 3.19 Exercisable, end of period

4,252,043 $ 3.74 2,711,727 $ 4.98

The following table summarizes the continuity of the Company's stock options during the six-month periods ended August 31, 2026 and 2025 :

Weighted average

stock options

exercise price

stock options

exercise price

Outstanding, beginning of period

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

2,087,179 1.44 2,801,922 1.16 Exercised

- - - - Forfeited

- - ( 80,000 ) 3.11 Expired

- - - - Outstanding, end of period

8,330,317 $ 2.58 5,493,138 $ 3.19 Exercisable, end of period

2 unchanged sentences

Fair value is calculated based on a Black-Scholes option pricing model.

The principal components of the pricing model for the stock options granted in the three month period ended May 31, 2026 and 2025 were as follows:

The principal components of the pricing model for the stock options granted in the six- month period ended August 31, 2026 and 2025 were as follows:

Exercise price

$ 1.44 $ 1.16

$ 0.85 - 1.44 $ 1.16 Risk-free interest rate

3.82% - 3.89% 3.68% - 3.72%

4.32% - 4.46% 3.68% - 3.72% Expected dividend yield

0 % 0 % Expected volatility

82.12% - 84.31% 81% - 82%

82% - 85% 81% - 82% Expected life (years)

3.5 - 5.0 years 3.5 - 5.0 years

The weighted-average grant-date fair value of options granted during the three month periods ended May 31, 2026 and 2025 was $ 0.94 and $ 0.63 respectively.

A summary of the Company’s nonvested shares as of May 31, 2026 , and changes during the three month period ended May 31, 2026 were as follows:

The weighted-average grant-date fair value of options granted during the six -month periods ended August 31, 2026 and 2025 was $ 0.73 and $ 0.62 respectively.

A summary of the Company’s nonvested shares as of August 31, 2026 , and changes during the six-month period ended August 31, 2026 were as follows:

Weighted average

2 unchanged sentences

Nonvested, beginning of period

3,461,411 $ 0.63

( 783,137 ) 0.75

3,461,411 $ 0.63 Granted

2,087,179 0.67 Exercised

- - Forfeited

( 1,470,316 ) 0.78 Nonvested, end of period

4,078,274 $ 0.76

During the three month periods ended May 31, 2026 and 2025 , stock-based compensation expense attributable to stock options amounted to $ 852 and $ 486 , respectively.

During the three -month periods ended August 31, 2026 and 2025 , stock-based compensation expense attributable to stock options amounted to $ 305 and $ 165 , respectively.

During the six-month periods ended August 31, 2026 and 2025 , stock-based compensation expense attributable to stock options amounted to $ 1,157 and $ 651 , respectively.

Restricted Stock Units

The following table summarizes the continuity of the restricted stock units during the three month periods ended May 31, 2026 and 2025 :

The following table summarizes the continuity of the restricted stock units during the three -month periods ended August 31, 2026 and 2025 :

Weighted average

5 unchanged sentences

Outstanding, beginning of period

4,261,512 $ 6.35 4,466,958 $ 6.32

( 42,816 ) 8.06 ( 98,087 ) 3.41

- - ( 387,750 ) 2.87

4,218,696 $ 6.35 3,981,121 $ 6.73 Granted

566,572 0.86 310,770 1.31 Settled

( 4,000 ) 2.81 ( 28,770 ) 1.13 Forfeited

- - ( 6,589 ) 5.32 Outstanding, end of period

4,781,268 $ 5.70 4,256,532 $ 6.38 Outstanding vested, end of period

2,197,038 $ 5.08 1,833,531 $ 5.71

The following table summarizes the continuity of the restricted stock units during the six- month periods ended August 31, 2026 and 2025 :

Weighted average

Number of units

fair value price

Number of units

fair value price

Outstanding, beginning of period

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

566,572 0.86 310,770 1.31 Settled

( 46,816 ) 7.62 ( 126,857 ) 2.90 Forfeited

- - ( 394,339 ) 2.91 Outstanding, end of period

4,781,268 $ 5.70 4,256,532 $ 6.38 Outstanding vested, end of period

2 unchanged sentences

Fair value is calculated based on the intrinsic value at grant date multiplied by the number of restricted stock unit awards granted.

During the three month periods ended May 31, 2026 and 2025 , stock-based compensation attributable to RSUs amounted to $ 127 and $( 111 ), respectively.

During the three -month periods ended August 31, 2026 and 2025 , stock-based compensation attributable to RSUs amounted to $ 124 and $ 115 , respectively.

During the six-month periods ended August 31, 2026 , stock-based compensation attributable to RSUs amounted to $ 251 (comparatively August 31, 2025 the stock-based compensation was $ 4 , which included $ 291 for forfeitures).

Stock-Based Compensation Expense

During the three month periods ended May 31, 2026 and 2025 , stock-based compensation included in research and development expenses amounted to $ 458 and $ 312 , respectively, and in general and administrative expenses amounted to $ 521 and $ 63 , respectively.

During the three -month periods ended August 31, 2026 and 2025 , stock-based compensation included in research and development expenses amounted to $ 86 and $ 32 , respectively, and in general and administrative expenses amounted to $ 343 and $ 248 , respectively.

During the six-month periods ended August 31, 2026 and 2025 , stock-based compensation included in research and development expenses amounted to $ 544 and $ 344 respectively, and in general and administrative expenses amounted to $ 864 and $ 311 , respectively.

Equity Incentive Plan

3 unchanged sentences

On March 1, 2026, the share reserve was increased by 1,500,000 shares ( 2025 – 1,500,000 ).

On July 23, 2026, the Company’s stockholders approved an amendment to the Plan providing for a one -time increase of 1,000,000 shares reserved for issuance under the Plan.

The Plan is administered by the Board of Directors who designates eligible participants to be included under the Plan, the number of awards g ranted, the share price pursuant to the awards and the vesting conditions and period.

The awards, when granted, will have an exercise price of no less than the estimated fair value of shares at the date of grant and a life not exceeding 10 years from the grant date.

The following table summarizes the continuity of the units that were authorized for issuance under the Plan as at and during the three month periods ended May 31, 2026 and 2025 :

The following table summarizes the continuity of the units that were authorized for issuance under the Plan as at and during the six -month periods ended August 31, 2026 and 2025 :

Number of units*

1 unchanged sentence

Authorized, beginning of period

186,279 2,159,612

186,279 2,159,612 Automatic share reserve increase

1,500,000 1,500,000

1,500,000 1,500,000 Additional Share reserve increase

1,000,000 - Units granted

( 1,082,179 ) ( 2,801,922 )

( 2,653,751 ) ( 3,112,692 ) Units forfeited

4 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-Q

Item 1. Financial Statements