What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-10-15 compared with 2026-07-14 · 114 added, 54 removed, 283 unchanged (37% of the section changed)

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(i) our ability to commercialize our technology and products, (ii) the status of our relationships with our partners, (iii) development and protection of our intellectual property and products, (iv) industry competition, (v) our need for and ability to obtain additional funding relative to our current and future financial commitments, (vi) our ability to continue as a going concern, (vii) engineering, contracting, and building our manufacturing facilities, (viii) our ability to scale, manufacture, and sell our products and to license our technology in order to generate revenues, (ix) our proposed business model and our ability to execute it, (x) our ability to obtain the necessary approvals or satisfy any closing conditions in respect of any of our proposed partnerships, (xi) our joint venture projects and our ability to recover certain expenditures in connection with them, (xii) adverse effects on the Company's business and operations as a result of increased regulatory, media, or financial reporting scrutiny, practices, rumors, or otherwise, (xiii) public health issues, such as disease epidemics, which may lead to reduced access to capital markets, supply chain disruptions, and government-imposed business closures, (xiv) war, regional tensions, and economic or other conflicts including trade disputes and increasing protectionist measures that could impact market stability and our business;

(xv) the effect of the continuing worldwide macroeconomic uncertainty and its impacts, including inflation, market volatility and fluctuations in foreign currency exchange and interest rates, (xvi) the outcome of any SEC investigations or class action litigation filed against us, (xvii) our ability to hire and/or retain qualified employees and consultants, (xviii) other events or circumstances over which we have little or no control, and (xix) other factors discussed in our subsequent filings with the Securities and Exchange Commission (the “SEC”).

(xv) the effect of the continuing worldwide macroeconomic uncertainty and its impacts, including inflation, market volatility and fluctuations in foreign currency exchange and interest rates, (xvi) the outcome of any SEC investigations or class action litigation filed against us, (xvii) our ability to hire and/or retain qualified employees and consultants, (xviii) our ability to regain and maintain compliance with the continued listing requirements of Nasdaq;

(xix) other events or circumstances over which we have little or no control, and (xx) other factors discussed in our subsequent filings with the Securities and Exchange Commission (the “SEC”).

Management has included projections and estimates in this Form 10-Q, which are based primarily on management's experience in the industry, assessments of our results of operations, discussions and negotiations with third parties, and a review of information filed by our competitors with the SEC or otherwise publicly available.

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

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

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

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

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The Company is advancing towards the construction of an Infinite Loop™ manufacturing facility in India through its 50/50 joint venture in India with Ester Industries Ltd.

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

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

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This closed-loop approach aims to offer a sustainable alternative for the textile industry, addressing the growing issue of textile waste while maintaining high quality and performance.

Loop has been operating its Terrebonne Facility for the past five years producing DMT and MEG.

Loop has been operating its Terrebonne Facility for over five years producing DMT and MEG.

The facility has been achieving consistent monomer recovery, demonstrating the effectiveness of our technology and supplying customers with virgin quality PET resin for packaging and polyester fiber for textiles.

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

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

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

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

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The agreement provides Infinite Loop Europe with priority rights to evaluate European project opportunities, establishes financing arrangements between the shareholders, grants Loop options to participate in up to 50% of project-level equity, and confirms that Loop retains ownership of its intellectual property while granting Infinite Loop Europe limited use rights.

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

Infinite Loop Europe is managed by a chief executive officer proposed by RCE, with governance provided by a four-member board of directors, of which one director has been nominated by Loop and the remaining three directors have been nominated by RCE.

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

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The purpose of the India JV is to build and operate an Infinite Loop™ manufacturing facility in India which will produce 100% recycled Loop™ PET resin, using the Infinite Loop™ Technology, in order to meet growing demand from leading global brands in different sectors, including strong demand for textile-to-textile polyester fiber to enable circular fashion for apparel brands, a trend we have observed and anticipate to continue.

Loop and Ester have a well-established working relationship, with Ester producing Loop™ PET using monomers produced at Loop's Terrebonne Facility for global brand companies over the last five years.

Loop and Ester have a well-established working relationship, with Ester producing Loop™ PET using monomers produced at Loop's Terrebonne Facility for global brand companies for over five years.

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

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

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

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

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

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

In connection with the ongoing development of our commercial operations in India, we have updated the design and operational strategy for our first commercial facility in the region, adjusting its planned production capacity to 45,000 metric tons per year of Loop-branded PET resin and polyester fiber.

In connection with an ongoing front end engineering analysis by Toyo Engineering India Private Limited, this refined capacity is expected to reduce the estimated total investment cost and lower both our projected debt and equity financing requirements for construction.

Furthermore, the streamlined design is anticipated to enable a more efficient capital-raising process and an accelerated construction timeline, with the project currently targeted for completion by the end of 2028.

This facility is designed as the first of two total installations on the India site, with the subsequent facility expected to be larger and constructed following the successful startup of the first.

Strategically, we believe that the India joint venture offers attractive projected economic returns—without the need for substantial sustainability-linked premium pricing—driven by low operating costs that benefit from low-value feedstock, low-temperature operations requiring no added pressure, and competitive regional labor costs.

This optimized capital allocation policy is expected to allow us to scale our manufacturing footprint efficiently while maintaining strong project economics.

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

Ester and Loop are each contributing 50% of the equity capital of the I

As of May 31, 2026 Loop and Ester had each made total equity contributions of $2.9 million in cash to the India JV.

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

As of August 31, 2026, Loop and Ester had each made total equity contributions of $3.6 million in cash to the India JV.

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

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

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

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

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

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

It resulted in $0.2 million of revenue in the first quarter ended May 31, 2025.

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

This agreement has a value of $1.5 million, and the Company commenced performance under it in November 2025, resulting in Loop generating $0.4 million of engineering services revenue in the year ended February 28, 2026 and $0.2 million in the quarter ended May 31, 2026.

This agreement has a contractual revenue amount of $1.5 million, and the Company commenced performance under it in November 2025, resulting in Loop generating $0.4 million of engineering services revenue in the year ended February 28, 2026 and $0.3 million in the first two quarters ended August 31, 2026.

Engineering services revenue is currently recognized only to the extent of costs incurred, the associated revenue and cost of sales are recognized in equal amounts, yielding no gross profit margin during the period.

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

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

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

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

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

In May 2026, the India JV has signed a memorandum of understanding with the government of Gujarat providing formal alignment to support the development of Loop's first large-scale commercial manufacturing platform.

The agreement is expected to streamline permitting, infrastructure coordination, and administrative processes, reinforcing a clear path forward and enabling a phased expansion strategy at the site which is capable of supporting multiple facilities.

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

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

On August 13, 2026, the India JV entered into (i) a License Agreement, (ii) a Marketing Agreement, and (iii) a Services Agreement, effective as of February 4, 2026.

Under the License Agreement, Loop granted the India JV an exclusive (subject to certain exceptions), royalty-bearing license to use Loop’s proprietary depolymerization technology and related intellectual property rights in India and certain other agreed territories to manufacture licensed products and sell such products worldwide.

The India JV is required to pay royalties to Loop based on annual net sales of licensed products pursuant to a tiered royalty structure following the first commercial sale of a licensed product at the applicable facility.

Under the Marketing Agreement, the India JV appointed Loop as its exclusive sales, marketing and promotional representative for licensed products.

Loop is entitled to receive marketing service fees based on annual net sales of licensed products pursuant to a tiered fee structure.

Under the Services Agreement, Ester will provide the India JV with certain project management, operational and technical support services and will receive service fees based on annual net sales of licensed products pursuant to a tiered fee structure.

Commercialization Strategy

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We believe this approach allows for quick execution, speed to market, and lends itself well to modular construction.

The basic design package has a capacity of up to 70,000 tons of rDMT and 23,000 tons of rMEG, or 70,000 tons of Loop PET and polyester fiber output per year, subject to applicable site-specific permitting, site and regulatory considerations.

We are focused on direct investments in Infinite Loop™ commercial facilities located in low-cost manufacturing regions.

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

This approach is currently being deployed through the Company's 50/50 joint venture in India with Ester, which is advancing towards the construction of an Infinite Loop™ manufacturing facility.

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

This approach is currently being deployed through the Company's 50/50 joint venture in India with Ester, which is advancing towards the construction of the first of its two planned Infinite Loop™ manufacturing facility in Gujarat, India.

The first facility's planned production capacity is 45,000 metric tons per year of Loop branded PET resin and polyester fiber.

The second facility is expected to be at least 100,000 metric tons per year.

Loop will grant a royalty-bearing license to the India JV and will be the exclusive seller and marketing agent of the India JV's products.

Loop has granted a royalty-bearing license to the India JV and is the exclusive seller and marketing agent of the India JV's products.

We also aim to accelerate the roll-out of the Infinite Loop™ technology through the sale of technology licenses for commercial facilities in which Loop may take limited or no ownership.

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

This has resulted in Loop generating engineering services revenue of $0.2 million in the three month period ended May 31, 2026 .

This has resulted in Loop generating engineering services revenue of $0.3 million in the six month period ended August 31, 2026.

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

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

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

Market Development and Strategic Relationships

Letter of Intend with global apparel company

Letter of Intent with global apparel company

In June 2026, Loop executed a letter of intent for an initial multi-year offtake agreement with a major global apparel company.

This letter of intend forms the framework for an ongoing collaboration targeting up to 15,000 metric tons annually of Loop’s proprietary PET fiber-grade resin.

This letter of intent forms the framework for an ongoing collaboration targeting up to 15,000 metric tons annually of Loop’s proprietary PET fiber-grade resin.

Offtake Agreement with Nike

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Human Capital

As of May 31, 2026 , we had 38 employees of which 17 work in research and development, 13 in engineering and operations, and 8 in administrative functions.

As of August 31, 2026 , we had 37 employees of which 17 work in research and development, 12 in engineering and operations, and 8 in administrative functions.

Results of Operations

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dollars unless otherwise specified.

The following table summarizes our operating results for the three-month periods ended May 31, 2026 and 2025, in thousands of U.S.

Three months ended May 31,

The following table summarizes our operating results for the three-month periods ended August 31, 2026 and 2025, in thousands of U.S.

Three months ended August 31,

favorable / (unfavorable)

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Cost of services

Total cost of services

Research and development

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Total expenses

First Quarter Ended May 31, 2026

Revenues for the three month period ended May 31, 2026 , decreased $73 to $179 , as compared to $252 for the same period in 2025 .

The revenues of $179 for the three month period ended May 31, 2026 resulted from engineering services provided to the India JV.

The revenues of $8 for the three month period ended May 31, 2025 resulted from engineering services provided to the India JV for $244 and sales of Loop™ PET resin for $8.

Second Quarter Ended August 31, 2026

Revenues for the three-month period ended August 31, 2026 , increased $117 to $117 , as compared to $0 for the same period in 2025 .

The revenues of $117 for the three-month period ended August 31, 2026 resulted from engineering services provided to the India JV.

Cost of Services

Cost of Services for the three month period ended May 31, 2026 increased $65 to $179 compared to $114 for the same period in 2026.

Cost of Services for the three-month period ended August 31, 2026 increased $113 to $113 compared to $0 for the same period in 2025.

Research and Development

Research and development expense for the three month period ended May 31, 2026 , decreased $297 to $962 , as compared to $1,259 for the same period in 2025 .

The decrease was primarily attributable to a $341 decrease in employee compensation expenses, a $63 decrease in other, mainly legal fees, a $49 decrease in plant and laboratory expenses, partially offset by a $146 increase in stock compensation.

Research and development expense for the three-month period ended August 31, 2026 , decreased $303 to $540 , as compared to $843 for the same period in 2025 .

The decrease was primarily attributable to a $350 decrease in employee compensation expenses, a $32 decrease in plant and laboratory expenses, partially offset by a $66 increase in stock compensation.

General and administrative expenses

General and administrative expenses for the three month period ended May 31, 2026 , decreased $75 to $1,574 , as compared to $1,649 for the same period in 2025 .

The decrease was primarily attributable to a $298 decrease in insurance expenses, a $181 decrease in employee compensation, a $117 decrease in professional fees, partially offset by a $458 in crease in employee compensation and $63 increase in other.

General and administrative expenses for the three-month period ended August 31, 2026 , decreased $393 to $1,478 , as compared to $1,871 for the same period in 2025 .

The decrease was primarily attributable to a $312 decrease in insurance expenses, a $196 decrease in professional fees, partially offset by a $113 increase in other miscellaneous expenses and $83 increase in stock compensation.

Interest and other financial expenses

Interest and other financial expenses increased by $17 for the three-month period ended May 31, 2026 .

The net loss for the three month period ended May 31, 2026 , decreased $61 to $3,385 , as compared to $3,446 for the same period in 2025 .

Interest and other financial expenses increased by $41 for the three-month period ended August 31, 2026 .

The net loss for the three-month period ended August 31, 2026 , decreased $216 to $2,988 , as compared to $3,204 for the same period in 2025 .

This decrease was primarily due to the decrease of $303 in research and development expenses, a decrease of $393 in general and administrative expenses .

These decreases were partially offset by the decrease of $95 in interest income, increase of $65 in cost of services, $17 increase in interest and other financial expenses.

These decreases were partially offset by the increase of $388 in equity investment, decrease of $64 in interest income and increase of $41 in interest and other financial expenses.

Six Months Ended August 31, 2026

The following table summarizes our operating results for the six-month periods ended August 31, 2026 and 2025, in thousands of U.S.

Six months ended August 31,

Total revenues

Cost of services

Total cost of services

Research and development

Employee compensation

Stock-based compensation

Plant and laboratory operating expenses

External engineering

Total research and development

General and administrative

Employee compensation

Stock-based compensation

Professional fees

Total general and administrative

Loss on equity accounted investment

Depreciation and amortization

Interest and other financial expenses

Interest income

Foreign exchange loss (gain)

Total expenses

Revenues for the six- month period ended August 31, 2026 , increased $44 to $296, as compared to $252 for the same period in 2025 .

The revenues of $296 for the six- month period ended August 31, 2026 resulted from engineering services provided to the India JV.

The revenues of $252 for the six- month period ended August 31, 2025 resulted from engineering services provided to the India JV for $244 and sales of Loop™ PET resin for $8.

Cost of Services

Cost of Services for the six-month period ended August 31, 2026 increased $178 to $292 compared to $114 for the same period in 2025.

Research and Development

Research and development expense for the six- month period ended August 31, 2026 , decreased $601 to $1,501 , as compared to $2,102 for the same period in 2025 .

The decrease was primarily attributable to a $691 decrease in employee compensation expenses, a $48 decrease in external engineering expenses, a $85 decrease in plant and laboratory expenses, partially offset by a $212 increase in stock compensation.

General and administrative expenses

General and administrative expenses for the six- month period ended August 31, 2026 , decreased $467 to $3,052 , as compared to $3,519 for the same period in 2025 .

The decrease was primarily attributable to a $610 decrease in insurance expenses, a $315 decrease in professional fees, a $262 decrease in employee compensation, partially offset by a $541 increase in stock compensation and a $179 increase in other miscellaneous expenses.

Interest and other financial expenses

Interest and other financial expenses increased by $60 for the six -month period ended August 31, 2026 .

The net loss for the six- month period ended August 31, 2026 , decreased $279 to $6,372 , as compared to $6,651 for the same period in 2025 .

This decrease was primarily due to the decrease of $601 in research and development expenses, a decrease of $467 in general and administrative expenses .

These decreases were partially offset by the decrease of $158 in interest income, increase of $405 in equity investment, increase of $178 in cost of services and increase of $60 in interest and other financial expenses.

Recent Developments

On September 17, 2026, our Board of Directors formed a Strategic Alternatives Committee to evaluate our capital needs and strategic and financial alternatives.

The Committee’s immediate priority is to support management in securing our required capital contribution and the broader project financing for the planned India joint venture.

The Committee will also evaluate other alternatives, including strategic investments, licensing and commercial partnerships, regional joint ventures, business combinations, corporate-structure alternatives, a potential sale, merger or going-private transaction, and other initiatives to enhance shareholder value.

We have not made any decision regarding any specific alternative, no timetable has been established for completing the review, and there can be no assurance that the review will result in any transaction or other outcome.

LIQUIDITY AND CAPITAL RESOURCES

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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 o n hand as of May 31, 2026 of $1,063 , together with the $2,537 a vailable 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 issuance date of these unaudited interim condensed consolidated financial statements.

Management has determined that current cash and cash equivalents o n hand as of August 31, 2026 of $836 , together with the $1,113 a vailable 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 issuance date 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.

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The Company therefore applied modification accounting and no immediate gain or loss was recognized related to the amendments.

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.

Credit facility from a Canadian bank

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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 May 31, 2026 , the $2,537 Credit Facility was available and undrawn.

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

At-the-Market Offering

During the three months ended August 31, 2026, the Company issued and sold an aggregate of 428,203 shares of its common stock pursuant to its ATM Equity Offering program for aggregate gross proceeds of approximately $466.

After deducting sales agent commissions and other offering expenses totaling approximately $14, the Company received net proceeds of $452 from such sales.

The shares were sold at prevailing market prices at the time of sale, with an average selling price of $1.09 per share.

The net proceeds from these equity transactions were used for general corporate purposes and to strengthen the Company's working capital position.

The Company may, from time to time, continue to utilize its ATM Equity Offering program to raise additional capital, subject to market conditions and the Company's capital needs, though there can be no assurance as to if or when any additional sales may occur under the program.

Flow of Funds

Summary of Cash Flows

A summary of cash flows for the three months ended May 31, 2026 and 2025 was as follows, in thousands of U.S.

Three Months Ended May 31,

A summary of cash flows for the six-month ended August 31, 2026 and 2025 was as follows, in thousands of U.S.

Six Months Ended August 31,

Net cash used in operating activities

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Net Cash Used in Operating Activities

During the three -month period ended May 31, 2026 , we used $1,229 in operations compared to $3,082 during the three month period ended May 31, 2025 .

As discussed above in the Results of Operations, the decrease was mainly due to a decrease in operating expenses in addition to decreased general and administrative expenses and revenues.

During the six -month period ended August 31, 2026 , we used $2,394 in operations compared to $5,604 during the six- month period ended August 31, 2025 .

As discussed above in the Results of Operations, the decrease was mainly due to a decrease in operating expenses in addition to decreased general and administrative expenses.

Net Cash Used in Investing Activities

During the three months ended May 31, 2026 , we used $35 in investing activities compared to $115 during the three month period ended May 31, 2025 .

During the three -month period ended May 31, 2026 , we made investments in intangible assets of $35 , as compared to $115 for the same period in 2025 , particularly to file patents for the Infinite Loop™ technology in the United States and around the world.

During the six- month ended August 31, 2026 , we used $819 in investing activities compared to $133 during the six- month period ended August 31, 2025 .

During the six -month period ended August 31, 2026 , we made investments in joint venture of $737, as compared to nil for the same period in 2025 and investment in intangible assets of $82 , as compared to $133 for the same period in 2025 , particularly to file patents for the Infinite Loop™ technology in the United States and around the world.

Net Cash Provided by (Used in) Financing Activities

During the three months ended May 31, 2026 , we repaid $0 of long-term debt.

During the three months ended May 31, 2025 , we repaid $55 of long-term debt.

During the six- month ended August 31, 2026 , we borrowed $1,411 under Credit Facility, we repaid $132 of long-term debt and received net proceeds from our ATM Equity Offering of $452.

During the six- month ended August 31, 2025 , we repaid $136 of long-term debt and received net proceeds from our ATM Equity Offering of $187.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis