What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-10-12 compared with 2022-07-13 · 113 added, 59 removed, 261 unchanged (40% of the section changed)

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These risks and other factors include, but are not limited to, those listed under “Risk Factors.” Additional factors that could materially affect these forward-looking statements and/or predictions include, among other things:

(i) commercialization of our technology and products, (ii) our status of relationship with 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) engineering, contracting and building our manufacturing facilities, (vii) our ability to scale, manufacture and sell our products in order to generate revenues, (viii) our proposed business model and our ability to execute thereon, (ix) adverse effects on the Company’s business and operations as a result of increased regulatory, media or financial reporting scrutiny, practices, rumors, or otherwise, (x) disease epidemics and health-related concerns, such as the current outbreak of additional variants of coronavirus (COVID-19), which could result in (and, in the case of the COVID-19 outbreak, has resulted in some of the following) reduced access to capital markets, supply chain disruptions and scrutiny or embargoing of goods produced in affected areas, government-imposed mandatory business closures and resulting furloughs of our employees, government employment subsidy programs, travel restrictions or the like to prevent the spread of disease, and market or other changes that could result in noncash impairments of our intangible assets, and property, plant and equipment, (xi) the outcome of the current SEC investigation or recent class action litigation filed against us, (xii) our ability to hire and/or retain qualified employees and consultants and (xiii) other factors discussed in our subsequent filings with the SEC.

(i) commercialization of our technology and products, (ii) our status of relationship with 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) engineering, contracting and building our manufacturing facilities, (vii) our ability to scale, manufacture and sell our products in order to generate revenues, (viii) our proposed business model and our ability to execute thereon, (ix) adverse effects on the Company’s business and operations as a result of increased regulatory, media or financial reporting scrutiny, practices, rumors, or otherwise, (x) disease epidemics and health-related concerns, such as the current outbreak of additional variants of coronavirus (COVID-19), which could result in (and, in the case of the COVID-19 outbreak, has resulted in some of the following) reduced access to capital markets, supply chain disruptions and scrutiny or embargoing of goods produced in affected areas, government-imposed mandatory business closures and resulting furloughs of our employees, government employment subsidy programs, travel restrictions or the like to prevent the spread of disease, and market or other changes that could result in noncash impairments of our intangible assets, and property, plant and equipment, (xi) the outcome of the current SEC investigation or class action litigation filed against us, (xii) our ability to hire and/or retain qualified employees and consultants and (xiii) other factors discussed in our subsequent filings with 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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Additionally, the Company has a joint venture to pursue the retrofitting of existing fossil fuel PET polymerization facilities with its recycling technology.

Loop is currently engaged in discussions to secure financing for its investments in the various planned manufacturing facilities and the sequencing of the manufacturing facilities will be determined in conjunction with the outcome of the company’s financing discussions.

Industry Background and Market Opportunity

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Internationally, this patent family has issued patents in Bangladesh and in Argentina, and pending applications in Canada, China, the Eurasian Patent Organization, Europe, the Gulf Cooperation Council, India, Japan, Mexico, South Korea, and various other countries, all expected to expire on or around September 2038, if granted, not including any patent term extensions.

An additional aspect of the GEN II technology, as claimed in an issued U.S.

patent, an allowed U.S.

application, and a pending U.S.

An additional aspect of the GEN II technology, as claimed in two issued U.S.

patents and a pending U.S.

application, all expected to expire on or around June 2039.

Internationally, this patent family includes issued or allowed patents in Morocco, Algeria, and Bangladesh, and pending applications in Canada, China, the Eurasian Patent Organization, Europe, the Gulf Cooperation Council, India, Japan, Mexico, South Korea, and various other countries, all expected to expire on or around June 2039, if granted, not including any patent term extensions.

Another aspect of the GEN II technology, which is the subject of a pending U.S.

Internationally, this patent family includes issued or allowed patents in Morocco, Argentina, and Bangladesh, and pending applications in Canada, China, the Eurasian Patent Organization, Europe, the Gulf Cooperation Council, India, Japan, Mexico, South Korea, and various other countries, all expected to expire on or around June 2039, if granted, not including any patent term extensions.

Another aspect of the GEN II technology, which is the subject of an allowed U.S.

Internationally, this patent family includes pending applications in Canada, Europe, India, Singapore, Papua New Guinea, Brazil, and South Africa.

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

Loop also has pending applications in Canada, Indonesia, the U.S., and Vietnam.

Loop also has pending applications in Canada, the U.S., and Vietnam.

Supply Agreements with Global Consumer Brands

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Loop will also receive a recurring annual royalty fee as a percentage of revenue from each facility for the use of its technology.

As of the date of the filing on this Annual Report on Form 10-Q, final joint venture agreements have not been entered into.

As of the date of the filing on this Quarterly Report on Form 10-Q, final joint venture agreements have not been entered into.

In addition, on June 22, 2021, Loop and SKGC concluded a definitive agreement for SKGC to become a strategic investor in Loop.

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As reported on July 8, 2021 SKGC signed a memorandum of understanding (“MOU”) with the city of Ulsan, South Korea to develop an industrial complex which is planned to include the first Infinite Loop ™ manufacturing facility in Asia.

Discussions have been initiated regarding planning for the second facility in Asia as part of the objective of the two companies to build four Infinite Loop™ manufacturing facilities in Asia by 2030.

SKGC unveiled on August 31, 2021 its rebrand as SK geo centric, aligning with the company’s goal of transforming into a green company and focusing on eco-friendly products such as recyclable plastics.

These announcements further reinforce Loop’s alignment as an important strategic partner for SK geo centric, as we move to commercialize our technology in Asia.

Unveiling of New evian Loop Bottle

On September 20, 2021, Loop, in partnership with iconic global beverage brand evian, unveiled a new “evian Loop” prototype virgin-quality water bottle made from 100% recycled content.

The monomers used to produce the evian Loop bottles were made at the Terrebonne Facility.

We expect evian to begin selling water bottles made from Loop ™ PET initially in South Korea during the second half of 2022, and subsequently in other global markets.

The waste plastic used to produce these bottles include polyester fibers from carpets and clothing which are considered unrecyclable and destined for landfill and other natural environments.

This initiative reflects evian’s commitment to its stated 2025 goals for circularity and 100% recycled content.

Loop continues to work toward new brand and market introductions with additional consumer goods brand companies.

Technology Due Diligence Report

Loop's strategic partners, Suez and Danone, among others, collectively engaged an independent, globally recognized third-party engineering firm to execute a thorough due diligence and technology validation report.

We believe the final report, which was communicated in May 2022, validated and reinforced the quality, effectiveness, and scalability of Loop Industries’ technology.

Infinite Loop ™ Bécancour, Québec

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We are currently in the process of negotiating and entering into commercial contracts for the acquisition and fabrication of long lead item equipment to develop the project.

In December 2021, the Company entered into an agreement for the purchase of long lead machinery and equipment in connection with the construction of our Infinite Loop™ manufacturing facility in Bécancour, Québec for up to $8.55 million over the next 9 months, based on certain milestones subject to various terms and conditions, including securing financing for the Quebec Project.

In December 2021, the Company entered into an agreement for the purchase of long lead machinery and equipment in connection with the construction of our Infinite Loop™ manufacturing facility in Bécancour, Québec for up to $8.55 million, based on certain milestones subject to various terms and conditions, including securing financing for the Quebec Project.

We may enter into additional commitments to move the project ahead within our targeted final investment decision and construction timeframes.

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The site offers attractive logistics being located on the St-Lawrence river and access to rail.

The site size exceeds our project needs and we plan to sell a portion of the land to offset part of our project commitment.

The site size exceeds our project needs and the Company has been pursuing a sale of the excess land that will not be needed for the construction of its manufacturing facility.

On September 15, 2022, the Company sold a portion of the excess land for net proceeds of $8.69 million (CDN $11.4 million).

Infinite Loop ™ Europe

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The planned Infinite Loop™ facility is contemplated to offer a solution to consumer goods companies which have committed to goals for significantly increased use of recycled content in their products and/or packaging and help to meet the growing demand for recycled PET resin and polyester fiber.

The three companies are reevaluating the optimal location for the planned European Infinite Loop™ manufacturing facility.

The three companies are re-evaluating the optimal location for the planned European Infinite Loop™ manufacturing facility.

We are working with our partners Suez and SKGC on acquiring the preferred project site, alignment of various levels of government support and additional steps for the project which include advancing permitting, site specific engineering, customer offtake contracts, feedstock and financing.

Technology Due Diligence Report

We believe the final report, which was communicated in May 2022, validated and reinforced the quality, effectiveness, and scalability of Loop Industries’ technology.

Unveiling of L’OCCITANE en Provence Almond Shower Oil Bottle

On October 11, 2022, Loop and L’OCCITANE en Provence (“L’OCCITANE”), a global manufacturer and retailer of sustainable beauty and wellness products, unveiled a new bottle for the brand’s Almond Shower Oil that was manufactured with 100% recycled Loop ™ PET resin produced using monomers from Loop’s Terrebonne Facility.

Loop has partnered with L’OCCITANE to help meet the brand’s sustainability goal of using 100% recycled PET in its bottles by 2025.

In partnership with the brand, a pilot project was executed where the bottle (excluding cap and label) was produced using 100% recycled Loop ™ PET resin and was successfully carried out on L’OCCITANE production lines.

This initiative marks a significant step forward in the partnership between the two companies and sets the pathway to implement Loop’s technology across other products in the brand’s assortment.

As part of this partnership with L’OCCITANE, Loop’s branding is featured prominently on the front of the packaging, with additional details speaking to Loop’s technology on the back label.

Unveiling of New evian Loop Bottle

On September 20, 2021, Loop, in partnership with iconic global beverage brand evian, unveiled a new “evian Loop” prototype virgin-quality water bottle made from 100% recycled content.

The monomers used to produce the evian Loop bottles were made at the Terrebonne Facility.

We expect evian to begin selling water bottles made from Loop ™ PET initially in South Korea during the second half of 2022, and subsequently in other global markets.

The waste plastic used to produce these bottles include polyester fibers from carpets and clothing which are considered unrecyclable and destined for landfill and other natural environments.

This initiative reflects evian’s commitment to its stated 2025 goals for circularity and 100% recycled content.

Loop continues to work toward new brand and market introductions with additional consumer goods brand companies.

Terrebonne Facility Delivery of Loop ™ PET

As part of our plan for the commercialization of future Infinite Loop ™ manufacturing facilities, we enhanced our Terrebonne, Québec pilot plant to become a small-scale PET depolymerization production facility.

In addition to our research and development activities, this facility is used to deliver initial production volumes to support co-branded market launch campaigns with partners and customers and will also be used to showcase the Infinite Loop ™ end-to-end technology and train operational teams in advance of the commissioning of the Infinite Loop ™ full-scale commercial facilities.

We have completed the planned upgrades at the Terrebonne Facility which have increased its production capacity, giving us the opportunity to further support product campaigns with customers, such as the evian Loop bottle.

In completing the upgrade of the Terrebonne facility to incorporate all key pieces of depolymerization equipment that will be used in the full-scale commercial facilities, we have achieved a key milestone in proving the effectiveness of our process.

In the quarter ended August 31, 2022 Loop reported first revenues of $0.14 million from the sale of Loop™ PET resin produced from monomers manufactured at the Terrebonne Facility to several global consumer brands, which included On AG.

We previously entered into an agreement with On AG to supply Loop ™ PET to be utilized in polyester fiber by the brand, pursuant to which Loop ™ PET resin was delivered in the quarter ended August 31, 2022.

In addition to supplying customers with initial volumes of Loop ™ PET, the Terrebonne Facility continues to support our customers and partners with R&D and analytical capabilities.

Joint Venture with Indorama for Retrofit

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Both joint venture partners currently remain committed to the project and we continue to discuss the project timetable.

Terrebonne Facility

We made purchases of $1.89 million in machinery and equipment for the facility in the quarter ended May 31, 2022.

We have completed the planned upgrades at the Terrebonne Facility which have increased its production capacity, giving us the opportunity to further support product campaigns with customers.

Materials for the marketing launch of the prototype evian Loop bottle to be introduced in the South Korean market in calendar 2022 were produced at the Terrebonne Facility.

Also, we have entered into an agreement with On AG to supply Loop ™ PET to be utilized in polyester fiber by the brand.

This initial volume is planned to be supplied in 2022 and manufactured using MEG and DMT monomers produced at the Terrebonne Facility.

The Terrebonne Facility continues to support our customers and partners with R&D and analytical capabilities.

We have also previously entered into an agreement to acquire PET polymerization equipment from Chemtex to manufacture Loop ™ branded PET resin from the recycled monomers produced at the Terrebonne Facility and deliver initial production volume of Loop ™ branded PET resin to customers.

In addition to the capital requirements for our commercialization, we continue to invest in strengthening our intellectual property portfolio, building a core competency in managing strategic relationships and continue enhancing our brand value with activities such as the co-branded marketing launch of an evian Loop bottle.

Our research and development innovation center in Terrebonne, Québec will continue to push forward the continuous improvement of our technology.

Human Capital

As of May 31, 2022, we had 99 employees of which 35 work in research and development and 46 in engineering and operations.

As of August 31, 2022, we had 92 employees of which 34 work in research and development, 41 in engineering and operations, and 17 in administrative functions.

Results of Operations

The following table summarizes our operating results for the three-month periods ended May 31, 2022 and 2021, in U.S.

Three months ended May 31,

The following table summarizes our operating results for the three-month periods ended August 31, 2022 and 2021, in U.S.

Three months ended August 31,

Research and development

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Stock-based compensation

Directors and officers insurance

Total general and administrative

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Interest income

Foreign exchange loss (gain)

Total expenses

$ (7,705,166 )

$ (8,392,416 )

Three Months Ended August 31, 2022 and 2021

First time revenues for the three-month period ended August 31, 2022 were $0.14 million compared to $0 for the same period in 2021.

The revenue resulted from the delivery of initial volumes to customers of Loop™ PET resin produced using monomers manufactured at the Terrebonne Facility.

Research and Development

Research and development expense for the three-month period ended August 31, 2022 decreased $1.53 million to $3.75 million, as compared to $5.28 million for the same period in 2021.

The decrease was primarily attributable to a $1.30 million decrease in purchases of machinery and equipment used at the Terrebonne facility, a $0.73 million increase in tax credits recorded as a reduction of research and development expenses, and a $0.12 million decrease in plant and laboratory operating expenses.

These decreases were partially offset by a $0.65 million increase in employee compensation expenses related to increased headcount in our in-house engineering and commercial project teams.

General and administrative expenses

General and administrative expenses for the three-month period ended August 31, 2022 increased $0.89 million to $4.01 million, as compared to $3.12 million for the same period in 2021.

The increase was primarily attributable to a $0.62 million in expenses for legal and professional fees due to costs principally associated with the SEC investigation and class action suits described in “Part II, Item 1.

Legal Proceedings” and the Company’s commercialization plans;

and a $0.17 million increase in employee compensation expenses.

The net loss for the three-month period ended August 31, 2022 decreased $0.69 million to $7.71 million, as compared to $8.39 million for the same period in 2021.

The decrease is primarily due to the decreased research and development expenses of $1.53 million, partially offset by the increased general and administrative expenses of $0.89 million.

Six Months Ended August 31, 2022 and 2021

The following table summarizes our operating results for the six-month periods ended August 31, 2022 and 2021, in U.S.

Six months ended August 31,

Research and development

Machinery and equipment expenditures

External engineering

Employee compensation

Stock-based compensation

Plant and laboratory operating expenses

Total research and development

General and administrative

Professional fees

Employee compensation

Stock-based compensation

Total general and administrative

Depreciation and amortization

Interest and other financial expenses

Interest income

Foreign exchange loss

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$ (5,161,325 )

First Quarter Ended May 31, 2022

The net loss for the three-month period ended May 31, 2022 increased $5.85 million to $18.01 million, as compared to the net loss for the three-month period ended May 31, 2021 which was $12.16 million.

The increase is primarily due to increased general and administrative expenses of $7.88 million, partially offset by lower research and development expenses of $1.84 million.

The $7.88 million increase in general and administrative expenses for the three-month period ended May 31, 2022 was primarily attributable to increased stock-based compensation expense of $8.45 million, of which $7.74 million was related to the achievement of a performance milestone for 1,000,000 RSUs following the execution of a supply agreement with a customer.

The increase in stock-based compensation for the three-month period ended May 31, 2022 was also attributable to RSU forfeitures for an amount of $0.94 million accounted for as a reversal of stock-based compensation in the three-month period ended May 31, 2021.

These increases were partially offset by decreased professional fees of $0.83 million.

The $1.84 million decrease in research and development expenses for the three-month period ended May 31, 2022 was primarily attributable to the following:

$1.31 million decrease in external engineering expenses for our basic design package for the Infinite Loop™ full-scale manufacturing facilities, which was completed in the three-month period ended May 31, 2022;

$0.73 million decrease in purchases of machinery and equipment used at the Terrebonne facility.

First time revenues for the six-month period ended August 31, 2022 were $0.14 million compared to $0 for the same period in 2021.

The revenue resulted from the delivery of initial volumes to customers of Loop™ PET resin produced using monomers manufactured at the Terrebonne Facility.

Research and Development

Research and development expense for the six-month period ended August 31, 2022 decreased $3.37 million to $10.55 million, as compared to $13.92 million for the same period in 2021.

The decrease was primarily attributable to a $2.03 million decrease in purchases of machinery and equipment used at the Terrebonne facility, a $1.25 million decrease in external engineering expenses for ongoing design work for our Infinite Loop ™ manufacturing process, and a $0.76 million increase in tax credits recorded as a reduction of research and development expenses.

These decreases were partially offset by a $0.85 million increase in employee compensation expenses related increased headcount in our in-house engineering and commercial project teams

General and administrative expenses

General and administrative expenses for the six-month period ended August 31, 2022 increased $8.77 to $15.05 million, as compared to $6.28 million for the same period in 2021.

The increase was primarily attributable to an increased stock-based compensation expense of $8.45 million, of which $7.74 million was related to the achievement of a performance milestone for 1,000,000 RSUs following the execution of a supply agreement with a customer and $0.94 million was attributable to RSU forfeitures in the same period in 2021 accounted for as a reversal of stock-based compensation, and a $0.25 million increase in insurance costs.

These increases were partially offset by decreased professional fees of $0.21 million, mainly related to legal fees principally associated with the SEC investigation and class action suits described in “Part II, Item 1.

Legal Proceedings” and the Company’s commercialization plans.

In the six-month period ended August 31, 2022, legal fees of $0.29 million were recorded as a reduction of the accrued loss contingency for legal settlement.

The net loss for the six-month period ended August 31, 2022 increased $5.16 million to $25.71 million, as compared to $20.55 million for the same period in 2021.

The increase is primarily due to the increased general and administrative expenses of $8.77 million, partially offset by the decreased research and development expenses of $3.37 million.

LIQUIDITY AND CAPITAL RESOURCES

From inception to May 31, 2022, the Company has been in the development stage with no revenues, with its ongoing operations and commercialization plans financed primarily by raising equity.

From inception to August 31, 2022, the Company has been in the development stage with limited revenues, with its ongoing operations and commercialization plans financed primarily by raising equity.

To date, we have been successful in raising capital to finance our ongoing operations.

Although our liquidity position consists of cash and cash equivalents on hand of $32.40 million at May 31, 2022, our liquidity position is subject to risks and uncertainties, including those discussed under “Cautionary Statements Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q and the Risk Factors section included in Part I, Item 1A of our 2022 Annual Report on Form 10-K.

Our liquidity position consists of cash and cash equivalents on hand of $23.00 million at August 31, 2022, an undrawn senior loan facility from a Canadian bank of $2.67 million and the net proceeds of sale of land held for sale of $8.69 million subsequent to August 31, 2022 as described in Note 21 to the attached financial statements.

Our liquidity position is subject to risks and uncertainties, including those discussed under “Cautionary Statements Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q and the Risk Factors section included in Part I, Item 1A of our 2022 Annual Report on Form 10-K.

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

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As the Company pursues its commercialization strategy and invests in the Bécancour, Québec project site and other projects, certain project site improvements and long lead capital commitments are being incurred and we expect to enter into additional commitments in the future, provided we obtain the required funding.

In December 2021, the Company entered into an agreement for the purchase of long lead machinery and equipment in connection with the planned construction of our Infinite Loop™ manufacturing facility in Bécancour, Québec for up to $8.55 million over the next 9 months, based on certain milestones subject to various terms and conditions, including securing financing for our Infinite Loop™ manufacturing facility in Bécancour, Québec.

In December 2021, the Company entered into an agreement for the purchase of long lead machinery and equipment in connection with the planned construction of our Infinite Loop™ manufacturing facility in Bécancour, Québec for up to $8.55 million, based on certain milestones subject to various terms and conditions, including fabrication timelines, equipment inspection and securing financing for our Infinite Loop™ manufacturing facility in Bécancour, Québec.

Pursuant to the agreement, the Company has paid a cash deposit of $3.41 million.

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There is no remaining amount available under the financing facility after the second disbursement.

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.

The Credit Facility allows for borrowings of up to $2,669,514 (CDN $3,500,000) in aggregate principal amount and provides for a two-year term.

The Credit Facility is secured by the Company’s Terrebonne, Québec property and is subject to a minimum equity covenant, tested quarterly.

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

The Company is subject to a guarantee of the liabilities of Loop Canada Inc.

As at August 31, 2022 the Credit Facility was undrawn.

Flow of Funds

Summary of Cash Flows

A summary of cash flows for the three months ended May 31, 2022 and 2021 was as follows:

Three Months Ended May 31,

A summary of cash flows for the six months ended August 31, 2022 and 2021 was as follows:

Six Months Ended August 31,

Net cash used in operating activities

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Net cash used in investing activities

Net cash used by financing activities

Net cash from (used by) financing activities

Effect of exchange rate changes on cash

1 unchanged sentence

$ (21,061,036 )

$ (17,184,889 )

Net Cash Used in Operating Activities

During the three-month period ended May 31, 2022, we used $11.58 million in operations compared to $12.41 million during the three-month period ended May 31, 2021.

During the six-month period ended August 31, 2022, we used $20.67 million in operations compared to $22.40 million during the six-month period ended August 31, 2021.

The year-over-year decrease is mainly due to decreased operating expenses as we have completed the upgrade of the Terrebonne Facility and our basic design package for the Infinite Loop™ full-scale manufacturing facilities.

Net Cash Used in Investing Activities

During the three months ended May 31, 2022, we made investments in intangible assets of $0.07 million, particularly in our patent technology in the United States and around the world.

During the three months ended May 31, 2021, we made investments of $4.92 million in property, plant and equipment, primarily in connection with the purchase for $4.90 million of a parcel of Land in Bécancour, Québec for the construction of our first Infinite Loop™ manufacturing facility.

During the three months ended May 31, 2021, we made investments in intangible assets of $0.05 million, particularly in its patent technology in the United States and around the world.

During the six-month period ended August 31, 2022, the Company made investments of $0.06 million in property, plant and equipment as compared to $5.01 million for the six-month period ended August 31, 2021.

The amount of $5.01 was primarily in connection with the purchase for $4.82 million of a parcel of Land in Bécancour, Québec for the construction of our first Infinite Loop™ manufacturing facility.

The size of this parcel of land exceeds that needed for the construction of the Infinite Loop™ manufacturing facility and the excess land was classified as available for sale.

For additional information on the land held for sale, please refer to Note 6 of the attached condensed consolidated financial statements.

During the six-month period ended August 31, 2022, the Company made investments in intangible assets of $0.14 million as compared to $0.09 million for the six-month period ended August 31, 2021, particularly in its patent technology in the United States and around the world.

Net Cash (Used) Provided by Financing Activities

During the three months ended May 31, 2021, we repaid $0.01 million of long-term debt.

During the six-month period ended August 31, 2021, we raised $56.5 million through a private offering of common stock, together with warrants, in the net amount of $56.1 million.

We also made payments totaling $0.03 million against our long-term debt, representing the loan agreement we entered into during the year ended February 28, 2018 to purchase the land and building of our small-scale production facility, research and development center and executive offices.

On August 26, 2021, we received $1,894,877 (CDN$2,390,766) in connection with the credit facility from Investissement Québec to finance capital expenses incurred for the expansion of the Terrebonne Facility.

There is a moratorium on both capital and interest repayments until February 2023.

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