What changed in this filing

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Item 1. Financial Statements

2023-10-16 compared with 2023-07-12 · 162 added, 93 removed, 304 unchanged (46% of the section changed)

1 unchanged sentence

Loop Industries, Inc.

Three months ended May 31, 2023

Three and Six months ended August 31, 2023

Index to the Unaudited Interim Condensed Consolidated Financial Statements

Condensed consolidated balance sheets as at May 31, 2023 (Unaudited) and February 28, 2023

Condensed consolidated statements of operations and comprehensive loss for the three months ended May 31, 2023 and 2022 (Unaudited)

Condensed consolidated statements of changes in stockholders’ equity for the three months ended May 31, 2023 and 2022 (Unaudited)

Condensed consolidated statements of cash flows for the three months ended May 31, 2023 and 2022 (Unaudited)

Condensed consolidated balance sheets as at August 31, 2023 (Unaudited) and February 28, 2023

Condensed consolidated statements of operations and comprehensive loss for the three and six months ended August 31, 2023 and 2022 (Unaudited)

Condensed consolidated statements of changes in stockholders’ equity for the three and six months ended August 31, 2023 and 2022 (Unaudited)

Condensed consolidated statements of cash flows for the six months ended August 31, 2023 and 2022 (Unaudited)

Notes to the condensed consolidated financial statements (Unaudited)

3 unchanged sentences

dollars, except per share data)

August 31, 2023

February 28, 2023

4 unchanged sentences

Inventories (Note 4)

Deposits on machinery and equipment (Note 5)

Deposits on equipment (Note 5)

Prepaid expenses and other deposits (Note 5)

31 unchanged sentences

Three Months Ended

Six Months Ended

August 31, 2023

August 31, 2022

August 31, 2023

August 31, 2022

Revenue from contracts with customers

6 unchanged sentences

Interest income

Foreign exchange (gain) loss

Foreign exchange gain

Total other (income) loss

9 unchanged sentences

Condensed Consolidated Statement of Changes in Stockholders’ Equity

Three Months Ended August 31, 2022

Series A preferred stock

par value $0.0001

Comprehensive

Stockholders’

Balance, May 31, 2022

$ ( 152,589 )

Expiration of warrants (Note 17)

Stock options issued for services (Note 15)

Restricted stock units issued for services (Note 15)

Foreign currency translation

Balance, August 31, 2022

$ ( 160,294 )

(in thousands of U.S.

dollars, except for share data)

Three months ended May 31, 2022

Three months ended August 31, 2023

Preferred stock

1 unchanged sentence

par value $0.0001

Number of Shares

Capital – Warrants

Accumulated Deficit

Comprehensive Income (Loss)

Stockholders’ Equity

Comprehensive

Stockholders’

Income (Loss)

Balance, May 31, 2023

$ ( 162,884 )

Stock options issued for services (Note 15)

Restricted stock units issued for services (Note 15)

Foreign currency translation

Balance, August 31, 2023

$ ( 167,634 )

See accompanying notes to the condensed consolidated financial statements.

Loop Industries, Inc.

Condensed Consolidated Statement of Changes in Stockholders’ Equity

Six Months Ended August 31, 2022

Series A preferred stock

par value $0.0001

Comprehensive

Stockholders’

Balance, February 28, 2022

1 unchanged sentence

Issuance of shares upon the vesting of restricted stock units (Note 15)

Expiration of warrants (Note 17)

Stock options issued for services (Note 15)

1 unchanged sentence

Foreign currency translation

Balance, May 31, 2022

Balance, August 31, 2022

$ ( 160,294 )

1 unchanged sentence

dollars, except for share data)

Three months ended May 31, 2023

Six months ended August 31, 2023

Preferred stock

1 unchanged sentence

par value $0.0001

Number of Shares

Capital – Warrants

Accumulated Deficit

Comprehensive Income (Loss)

Stockholders’ Equity

Comprehensive

Stockholders’

Income (Loss)

Balance, February 28, 2023

4 unchanged sentences

Foreign currency translation

Balance, May 31, 2023

Balance, August 31, 2023

$ ( 167,634 )

3 unchanged sentences

(in thousands of U.S.

Three Months Ended May 31,

Six Months Ended August 31,

Cash Flows from Operating Activities

11 unchanged sentences

Cash Flows from Investing Activities

Deposits on machinery and equipment (Note 5)

Deposits on equipment (Note 5)

Additions to property, plant and equipment (Note 6)

Additions to intangible assets (Note 7)

13 unchanged sentences

Loop Industries, Inc.

Three Months Ended May 31, 2023 and 2022

Three and Six Months Ended August 31, 2023 and 2022

Notes to the Condensed Consolidated Financial Statements

16 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 months ended May 31, 2023 are not necessarily indicative of the results to be expected for any subsequent quarter, for the fiscal year ending February 29, 2024, or for any other period.

The results for the three- and six-month periods ended August 31, 2023 are not necessarily indicative of the results to be expected for any subsequent quarter, for the fiscal year ending February 29, 2024, or for any other period.

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

5 unchanged sentences

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

As at May 31, 2023, the Company’s available liquidity was $ 24,543 , consisting of cash and cash equivalents of $ 21,970 and an undrawn senior loan facility from a Canadian bank of $ 2,573 .

As at August 31, 2023, the Company’s available liquidity was $ 15,952 , consisting of cash and cash equivalents of $ 13,365 and an undrawn senior loan facility from a Canadian bank of $ 2,587 .

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.

7 unchanged sentences

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

The Company has committed $ 3,116 of its cash resources for certain long lead equipment during the current fiscal year and may enter into additional commitments to accelerate commercial projects within targeted construction timeframes.

Use of estimates

8 unchanged sentences

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

For the three-month periods ended May 31, 2023 and 2022, 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, 2023, the potentially dilutive securities consisted of 2,782,000 outstanding stock options (2022 – 1,570,000 ), 4,306,655 outstanding restricted stock units (2022 – 4,090,775 ), and 7,089,400 outstanding warrants (2022 – 11,659,418 ).

For the three- and six-month periods ended August 31, 2023 and 2022, 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, 2023, the potentially dilutive securities consisted of 2,782,000 outstanding stock options (2022 – 1,570,000 ), 4,417,688 outstanding restricted stock units (2022 – 4,128,718 ), and 7,089,400 outstanding warrants (2022 – 7,104,553 ).

Sales Tax, Tax Credits and Other Receivables

Sales tax, research and development tax credits and other receivables as at May 31, 2023 and February 28, 2023 were as follows:

Sales tax, research and development tax credits and other receivables as at August 31, 2023 and February 28, 2023 were as follows:

August 31, 2023

February 28, 2023

2 unchanged sentences

Other receivables

Inventories as at May 31, 2023 and February 28, 2023 were as follows:

Inventories as at August 31, 2023 and February 28, 2023 were as follows:

August 31, 2023

February 28, 2023

2 unchanged sentences

Raw materials

As at May 31 and February 28, 2023, inventories included finished goods, work in process and raw materials.

As at August 31 and February 28, 2023, inventories included finished goods, work in process and raw materials.

Finished goods inventories consist of bottle grade and fiber grade Loop ™ PET resin which is intended to be sold to customers.

3 unchanged sentences

Deposits and Prepaid Expenses

As at May 31, 2023, the Company had $ 5,430 (February 28, 2023 – $ 3,395 ) of non-refundable cash deposits on long-lead machinery and equipment that are intended to be used in the first planned Infinite Loop ™ manufacturing facility.

Prepaid expenses and other deposits as at May 31, 2023 and February 28, 2023 were as follows:

February 28, 2023

The deposit for insurance represents a pre-payment of the final three months of the Company’s directors’ and officers’ insurance annual premium.

As at August 31, 2023, the Company had $ 8,460 (February 28, 2023 – $ 3,395 ) of non-refundable cash deposits on long-lead equipment that are intended to be used in the first planned Infinite Loop ™ manufacturing facility.

Prepaid expenses and other deposits as at August 31, 2023 were $ 115 and $ 636 as at February 28, 2023.

Property, Plant and Equipment

As at May 31, 2023

Accumulated depreciation,

write-down and impairment

As at August 31, 2023

depreciation, write-

down and impairment

Net book value

Building and Land Improvements

1 unchanged sentence

As at February 28, 2023

Accumulated depreciation,

write-down and impairment

depreciation, write-

down and impairment

Net book value

Building and Land Improvements

Office equipment and furniture

Depreciation expense amounted to $ 101 for the three-month period ended May 31, 2023 (2022 – $ 119 ).

Depreciation expense for the three- and six-month periods ended August 31, 2023 amounted to $ 101 and $ 201 , respectively (2022 – $ 117 and $ 237 ).

Intangible Assets

Intangible assets as at May 31, 2023 and February 28, 2023 were $ 1,278 and $ 1,210 , respectively.

During the three-month periods ended May 31, 2023 and 2022, we made additions relating to patent application costs to intangible assets of $ 99 and $ 69 , respectively.

Amortization expense for the three-month period ended May 31, 2023 amounted to $ 32 (2022 – $ 20 ).

Intangible assets as at August 31, 2023 and February 28, 2023 were $ 1,375 and $ 1,210 , respectively.

During the six-month periods ended August 31, 2023 and 2022, we made additions relating to patent application costs to intangible assets of $ 225 and $ 141 , respectively.

Amortization expense for the three- and six-month periods ended August 31, 2023 amounted to $ 35 and $ 67 , respectively (2022 – $ 21 and $ 40 ).

Fair Value of Financial Instruments

The following tables presents the fair value of the Company’s financial liabilities as at May 31, 2023 and February 28, 2023:

Fair Value as at May 31, 2023

Carrying Amount

Level in the hierarchy

The following tables presents the fair value of the Company’s financial liabilities as at August 31, 2023 and February 28, 2023:

Fair Value as at August 31, 2023

Financial liabilities measured at amortized cost:

1 unchanged sentence

Fair Value as at February 28, 2023

Carrying Amount

Level in the hierarchy

Financial liabilities measured at amortized cost:

2 unchanged sentences

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities as at May 31, 2023 and February 28, 2023 were as follows:

Accounts payable and accrued liabilities as at August 31, 2023 and February 28, 2023 were as follows:

August 31, 2023

February 28, 2023

Trade accounts payable

Accrued machinery and equipment expenses

Accrued employee compensation

Accrued professional fees

Accrued insurance premiums

Accrued engineering fees

Accrued director compensation

Other accrued liabilities

The accrued machinery and equipment expenses as at May 31, 2023 are related to machinery and equipment to be used at the Company’s Terrebonne Facility.

Long‑Term Debt

Long-term debt as of May 31, 2023 and February 28, 2023, was comprised of the following:

Long-term debt as of August 31, 2023 and February 28, 2023, was comprised of the following:

August 31, 2023

February 28, 2023

7 unchanged sentences

Investissement Québec financing facility

The Company recorded interest expense on the Investissement Québec loan for the three-month period ended May 31, 2023 in the amount of $ 21 (2022 – $ 22 ) and an accretion expense of $ 17 (2022 – $ 18 ).

During the three-month period ended May 31, 2023, the Company made repayments of $ 16 (2022 – nil) 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, 2023 in the amount of $ 22 and $ 43 , respectively (2022 – $ 22 and $ 44 ) and an accretion expense of $ 18 and $ 36 , respectively (2022 – $ 18 and $ 35 ).

During the six-month period ended August 31, 2023, the Company made repayments of $ 32 (2022 – nil) on the Investissement Québec loan.

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

7 unchanged sentences

The Credit Facility allows for borrowings of up to $ 2,587 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 with which the Company was in compliance as at May 31, 2023.

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

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

As at May 31, 2023, the $ 2,573 Credit Facility was available and undrawn.

As at August 31, 2023, the Credit Facility was available and undrawn.

Related Party Transactions

15 unchanged sentences

The closing price of the Company’s common stock on the Nasdaq on April 30, 2020 was $ 7.74 per share.

During the three-month period ended May 31, 2022, Mr.

During the six-month period ended August 31, 2022, Mr.

Solomita met a performance milestone in relation to the signature of a supply agreement with a customer.

Accordingly, 1,000,000 performance incentive RSUs with a fair value of $ 7,740 were earned and issuable to Mr.

This amount was reflected as stock-based compensation expense during the three-month period ended May 31, 2022.

During the three-month period ended May 31, 2023, no outstanding performance milestones were probable of being achieved and, accordingly, the Company did not record any additional stock-based compensation expense.

This amount was reflected as stock-based compensation expense during the six-month period ended August 31, 2022.

During the six-month period ended August 31, 2023, no outstanding performance milestones were probable of being achieved and, accordingly, the Company did not record any additional stock-based compensation expense.

Stockholders’ Equity

For the period ended May 31, 2023

For the period ended August 31, 2023

Number of shares

1 unchanged sentence

Issuance of shares upon settlement of restricted stock units

Balance, May 31, 2023

For the period ended May 31, 2022

Balance, August 31, 2023

For the period ended August 31, 2022

Number of shares

1 unchanged sentence

Issuance of shares upon settlement of restricted stock units

Balance, May 31, 2022

During the three months ended May 31, 2023, the Company recorded the following common stock transaction:

Balance, August 31, 2022

During the six months ended August 31, 2023, the Company recorded the following common stock transaction:

The Company issued 51,963 shares of the common stock to settle restricted stock units that vested in the period.

During the three months ended May 31, 2022, the Company recorded the following common stock transaction:

During the six months ended August 31, 2022, the Company recorded the following common stock transaction:

The Company issued 12,653 shares of the common stock to settle restricted stock units that vested in the period.

Research and Development Expenses

Research and development expenses for the three-month periods ended May 31, 2023 and 2022 were as follows:

Research and development expenses for the three-month periods ended August 31, 2023 and 2022 were as follows:

August 31, 2023

August 31, 2022

Employee compensation

2 unchanged sentences

Plant and laboratory operating expenses

Research and development expenses for the six-month periods ended August 31, 2023 and 2022 were as follows:

August 31, 2023

August 31, 2022

Employee compensation

Machinery and equipment expenditures

External engineering

Plant and laboratory operating expenses

General and Administrative Expenses

General and administrative expenses for the three-month periods ended May 31, 2023 and 2022 were as follows:

General and administrative expenses for the three-month periods ended August 31, 2023 and 2022 were as follows:

August 31, 2023

August 31, 2022

Employee compensation

Professional fees

General and administrative expenses for the six-month periods ended August 31, 2023 and 2022 were as follows:

August 31, 2023

August 31, 2022

Employee compensation (1)

Professional fees

Includes stock-based compensation expense.

During the three-month period ended May 31, 2022, the Company recorded a stock-based compensation expense of $ 7,740 related to the achievement of a performance milestone for 1,000,000 RSUs (Note 11).

During the six-month period ended August 31, 2022, the Company recorded a stock-based compensation expense of $ 7,740 related to the achievement of a performance milestone for 1,000,000 RSUs (Note 11).

Share-based Payments

Stock Options

The following tables summarizes the continuity of the Company’s stock options during the three-month periods ended May 31, 2023 and 2022:

Number of stock options

Weighted average exercise price

Number of stock options

The following tables summarizes the continuity of the Company’s stock options during the three-month periods ended August 31, 2023 and 2022:

stock options

Weighted average

exercise price

stock options

Weighted average

exercise price

Outstanding, beginning of period

Outstanding, end of period

Exercisable, end of period

The following tables summarizes the continuity of the Company’s stock options during the six-month periods ended August 31, 2023 and 2022:

stock options

Weighted average

exercise price

stock options

Weighted average exercise price

4 unchanged sentences

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

There were no new issuances of stock options for the three-month period ended May 31, 2022.

The principal components of the pricing model for the stock options granted in the three-month period ended May 31, 2023 were as follows:

There were no new issuances of stock options for the three-month period ended August 31, 2022.

The principal components of the pricing model for the stock options granted in the six-month period ended August 31, 2023 were as follows:

Exercise price

3 unchanged sentences

Expected life

During the three-month periods ended May 31, 2023 and 2022, stock-based compensation expense attributable to stock options amounted to $ 162 and $ 317 , respectively.

During the three-month periods ended August 31, 2023 and 2022, stock-based compensation expense attributable to stock options amounted to $ 172 and $ 313 , respectively.

During the six-month periods ended August 31, 2023 and 2022, stock-based compensation expense attributable to stock options amounted to $ 333 and $ 630 , respectively.

Restricted Stock Units

The following table summarizes the continuity of the restricted stock units during the three-month periods ended May 31, 2023 and 2022:

Number of units

Weighted average fair value price

Number of units

Weighted average fair value price

The following table summarizes the continuity of the restricted stock units during the three-month periods ended August 31, 2023 and 2022:

Weighted average

fair value price

Weighted average

fair value price

Outstanding, beginning of period

1 unchanged sentence

Outstanding vested, end of period

The following table summarizes the continuity of the restricted stock units during the six-month periods ended August 31, 2023 and 2022:

Weighted average

fair value price

Weighted average

fair value price

Outstanding, beginning of period

Outstanding, end of period

Outstanding vested, end of period

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

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, 2023 and 2022, stock-based compensation attributable to RSUs amounted to $ 193 and $ 8,149 , respectively.

During the three-month periods ended August 31, 2023 and 2022, stock-based compensation attributable to RSUs amounted to $ 216 and $ 316 , respectively.

During the six-month periods ended August 31, 2023 and 2022, stock-based compensation attributable to RSUs amounted to $ 410 and $ 8,465 , respectively.

Stock-Based Compensation Expense

During the three-month periods ended May 31, 2023 and 2022, stock-based compensation included in research and development expenses amounted to $ 159 and $ 396 , respectively, and in general and administrative expenses amounted to $ 196 and $ 8,070 , respectively.

The amount recorded in general and administrative expenses for the three-month period ended May 31, 2022 includes $ 7,740 related to the achievement of a performance milestone for 1,000,000 RSUs (Note 11).

During the three-month periods ended August 31, 2023 and 2022, stock-based compensation included in research and development expenses amounted to $ 155 and $ 319 , respectively, and in general and administrative expenses amounted to $ 233 and $ 310 , respectively.

During the six-month periods ended August 31, 2023 and 2022, stock-based compensation included in research and development expenses amounted to $ 315 and $ 716 , respectively, and in general and administrative expenses amounted to $ 428 and $ 8,379 , respectively.

The amount recorded in general and administrative expenses for the six-month period ended August 31, 2022 includes $ 7,740 related to the achievement of a performance milestone for 1,000,000 RSUs (Note 11).

Equity Incentive Plan

7 unchanged sentences

However, where a participant, at the time of the grant, owns stock representing more than 10 % of the voting power of the Company, the life of the options shall not exceed 5 years.

The following table summarizes the continuity of the Company’s Equity Incentive Plan units that were authorized for issuance as at and during the three-month periods ended May 31, 2023 and 2022:

The following table summarizes the continuity of the Company’s Equity Incentive Plan units that were authorized for issuance as at and during the six-month periods ended August 31, 2023 and 2022:

Number of units*

7 unchanged sentences

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

Agreement to purchase of machinery and equipment

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 first Infinite Loop ™ manufacturing facility for up to $ 8,546 , subject to various terms and conditions, including fabrication timelines and equipment inspection.

During the six-month period ended August 31, 2022, warrants to purchase 4,554,865 shares of our common stock in aggregate with an exercise price of $ 11.00 expired.

Agreement for purchase of equipment

In December 2021, the Company entered into an agreement for the purchase of long-lead equipment in connection with the construction of our first Infinite Loop ™ manufacturing facility for up to $ 8,546 , subject to various terms and conditions, including fabrication timelines and equipment inspection.

Pursuant to the agreement, the Company has paid cash deposits of $ 8,460 (Note 5).

5 unchanged sentences

The Company’s investment in the new entity will be accounted for under the equity method and initially recognized at cost.

To date, no amounts have been contributed by the Company to the new entity.

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