What changed in this filing

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Item 1. Financial Statements

2024-07-15 compared with 2024-01-16 · 161 added, 191 removed, 238 unchanged (60% of the section changed)

1 unchanged sentence

Loop Industries, Inc.

Three and Nine months ended November 30, 2023

Three months ended May 31, 2024

Index to the Unaudited Interim Condensed Consolidated Financial Statements

Condensed consolidated balance sheets as at November 30, 2023 (Unaudited) and February 28, 2023

Condensed consolidated statements of operations and comprehensive loss for the three and nine months ended November 30, 2023 and 2022 (Unaudited)

Condensed consolidated statements of changes in stockholders’ equity for the three and nine months ended November 30, 2023 and 2022 (Unaudited)

Condensed consolidated statements of cash flows for the nine months ended November 30, 2023 and 2022 (Unaudited)

Condensed consolidated balance sheets as at May 31, 2024 (Unaudited) and February 29, 2024

Condensed consolidated statements of operations and comprehensive loss for the three months ended May 31, 2024 and 2023 (Unaudited)

Condensed consolidated statements of changes in stockholders’ equity for the three months ended May 31, 2024 and 2023 (Unaudited)

Condensed consolidated statements of cash flows for the three months ended May 31, 2024 and 2023 (Unaudited)

Notes to the condensed consolidated financial statements (Unaudited)

5 unchanged sentences

Cash and cash equivalents

Restricted cash

Sales tax, tax credits and other receivables (Note 3)

Inventories (Note 4)

Deposits on equipment (Note 5)

Prepaid expenses and other deposits (Note 5)

6 unchanged sentences

Accounts payable and accrued liabilities (Note 9)

Customer deposits

Current portion of long-term debt (Note 10)

Total current liabilities

Due to customer

Long-term debt (Note 10)

13 unchanged sentences

Total liabilities and stockholders’ equity

Commitments (Note 18)

Subsequent event (Note 19)

Going Concern (Note 1)

See accompanying notes to the condensed consolidated financial statements .

4 unchanged sentences

Three Months Ended

Nine Months Ended

Revenue from contracts with customers

4 unchanged sentences

Other (income) loss :

Gain on disposition of assets (Note 6)

Interest and other financial expenses

1 unchanged sentence

Foreign exchange gain

Total other (income) loss

Other comprehensive income (loss) -

Total other income

Other comprehensive (loss) income -

Foreign currency translation adjustment

4 unchanged sentences

Basic and diluted

Going Concern (Note 1)

See accompanying notes to the condensed consolidated financial statements.

3 unchanged sentences

dollars, except for share data)

Three months ended November 30, 2023

Three months ended May 31, 2024

Preferred stock

par value $0.0001

Accumulated Deficit

Comprehensive Income (Loss)

Stockholders’ Equity

Balance, August 31, 2023

$ ( 167,634 )

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

Stock options issued for services (Note 15)

Restricted stock units issued for services (Note 15)

Foreign currency translation

Balance, November 30, 2023

$ ( 171,878 )

Three Months Ended November 30, 2022

Series A preferred stock

Accumulated Other

par value $0.0001

Accumulated Deficit

Comprehensive (Loss)

Stockholders' Equity

Balance, August 31, 2022

Comprehensive

Number of Shares

Capital – Warrants

Stockholders’

Balance, February 29, 2024

$ ( 176,970 )

Issuance of shares upon the vesting of restricted stock units (Note 14)

Expiration of warrants (Note 17)

Stock options issued for services (Note 14)

1 unchanged sentence

Foreign currency translation

Balance, November 30, 2022

$ ( 161,307 )

See accompanying notes to the condensed consolidated financial statements.

Loop Industries, Inc.

Condensed Consolidated Statement of Changes in Stockholders’ Equity

Balance, May 31, 2024

Going Concern (Note 1)

(in thousands of U.S.

dollars, except for share data)

Nine Months Ended November 30, 2023

Three months ended May 31, 2023

Preferred stock

par value $0.0001

Accumulated Deficit

Comprehensive Income (Loss)

Stockholders’ Equity

Balance, February 28, 2023

$ ( 155,883 )

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

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

Stock options issued for services (Note 15)

Restricted stock units issued for services (Note 15)

Foreign currency translation

Balance, November 30, 2023

$ ( 171,878 )

Nine Months Ended November 30, 2022

Series A preferred stock

Accumulated Other

par value $0.0001

Paid-in Capital

Accumulated Deficit

Comprehensive (Loss)

Stockholders' Equity

Comprehensive

Number of Shares

Capital – Warrants

Stockholders’

Balance, February 28, 2023

1 unchanged sentence

Issuance of shares upon the vesting of restricted stock units (Note 14)

Expiration of warrants (Note 17)

Stock options issued for services (Note 14)

1 unchanged sentence

Foreign currency translation

Balance, November 30, 2022

Balance, May 31, 2023

$ ( 162,884 )

Going Concern (Note 1)

See accompanying notes to the condensed consolidated financial statements.

2 unchanged sentences

(in thousands of U.S.

Nine Months Ended November 30,

Three Months Ended May 31,

Cash Flows from Operating Activities

2 unchanged sentences

Stock-based compensation expense (Note 14)

Gain on disposition of assets (Note 6)

Accretion and accrued interest expenses (Note 10)

Accretion expense (Note 10)

Changes in operating assets and liabilities:

6 unchanged sentences

Cash Flows from Investing Activities

Proceeds from disposition of assets (Note 6)

Deposits on equipment (Note 5)

Additions to property, plant and equipment (Note 6)

Deposits on machinery and equipment

Additions to intangible assets (Note 7)

1 unchanged sentence

Cash Flows from Financing Activities

Borrowings under credit facility (Note 10)

Repayment of long-term debt (Note 10)

8 unchanged sentences

Interest received

Going Concern (Note 1)

See accompanying notes to the condensed consolidated financial statements.

Loop Industries, Inc.

Three and Nine months Ended November 30, 2023 and 2022

Three Months Ended May 31, 2024 and 2023

Notes to the Condensed Consolidated Financial Statements

The Company and Basis of Presentation

The Company, Basis of Presentation and Going Concern

Loop Industries, Inc.

14 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- and nine-month periods ended November 30, 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.

The results for the three months ended May 31, 2024 are not necessarily indicative of the results to be expected for any subsequent quarter, for the fiscal year ending February 28, 2025, or for any other period.

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

dollars unless otherwise specified, except for per share data.

Summary of Significant Accounting Policies

Liquidity Risk Assessment

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

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

As at November 30, 2023, the Company’s available liquidity was $ 11,943 , consisting of cash and cash equivalents of $ 9,366 and an undrawn senior loan facility from a Canadian bank of $ 2,577 .

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.

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

In preparing this liquidity assessment, management applies significant judgment in estimating future cash flow requirements of the Company based on budgets and forecasts, which includes developing assumptions related to:

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

Based on this assessment, management believes that the Company will be able to realize its assets and discharge its liabilities in the normal course of operations as they become due for a period of no less than twelve months from the date of issuance of these unaudited interim condensed consolidated financial statements.

The Company’s ability to move to the next stage of its strategic development and construct manufacturing plants is dependent on whether the Company can obtain the necessary financing through a combination of the issuance of debt, equity, and/or joint ventures, and/or government incentive programs, and/or customers.

Going Concern

These unaudited interim condensed consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplate the realization of assets and settlement of liabilities in the normal course of business as they come due.

In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but not limited to, twelve months from the date of issuance of these consolidated financial statements.

Since its inception, the Company has been in the pre-commercialization stage with no material revenues from customers, and its ongoing operations and commercialization plans have been financed primarily by raising equity and debt.

Therefore, 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, 2024, the Company’s balance of cash and cash equivalents was $ 5,291 .

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

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

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

Based on its assessment, management estimates that current available liquidity and forecasted net cash flows will not be sufficient to meet the Company’s obligations, commitments and budgeted expenditures the next twelve months from the unaudited interim condensed consolidated financial statements issuance date.

These events and conditions are material uncertainties that raise substantial doubt upon the Company’s ability to continue as a going concern and accordingly, the appropriateness of the use of accounting principles applicable to a going concern.

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

However, there is no assurance that the Company will be successful in attracting additional funding.

1 unchanged sentence

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 is seeking to finalize the negotiation of previously announced financing initiatives on acceptable terms (see Note 16 for additional details), however, there is no assurance it will succeed.

These unaudited interim condensed consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and balance sheet classifications that would be necessary if the Company were unable to realize its assets and settle its liabilities as a going concern in the normal course of operations.

Such adjustments could be material.

Summary of Significant Accounting Policies

Use of estimates

1 unchanged sentence

Actual results could differ from those estimates.

Those estimates and assumptions include the going concern assessment, estimates for depreciable lives of property, plant and equipment and intangible assets, recoverability of tax credits receivable, assumptions made in calculating the fair value of stock-based compensation and other equity instruments, and the assessment of performance conditions for stock-based compensation awards.

Those estimates and assumptions include the going concern assessment, the net realizable value of inventories, estimates for depreciable lives of property, plant and equipment and intangible assets, recoverability of tax credits receivable, assumptions made in calculating the fair value of stock-based compensation and other equity instruments, and the assessment of performance conditions for stock-based compensation awards.

Net earnings (loss) per share

4 unchanged sentences

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

For the three- and nine-month periods ended November 30, 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 November 30, 2023, the potentially dilutive securities consisted of 2,772,000 outstanding stock options (2022 – 2,542,000 ), 4,417,688 outstanding restricted stock units (2022 – 4,036,803 ), and 7,089,400 outstanding warrants (2022 – 7,104,553 ).

For the three-month periods ended May 31, 2024 and 2023, 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, 2024, the potentially dilutive securities consisted of 2,971,216 outstanding stock options (2023 – 2,782,000 ), 4,399,060 outstanding restricted stock units (2023 – 4,306,655 ), and 7,089,400 outstanding warrants (2023 – 7,089,400 ).

Recently issued accounting pronouncements not yet adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2023-09—Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which enhances the transparency and decision usefulness of income tax disclosures.

The amendments in this Update address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information and includes certain other amendments to improve the effectiveness of income tax disclosures.

The updated standard is effective for our annual periods beginning after December 15, 2024.

Early adoption is permitted.

We are currently evaluating the impact that the updated standard will have on our financial statement disclosures.

The Company does not expect that the adoption of this guidance will have a material impact on its consolidated financial statements, other than additional disclosures in our notes to the consolidated financial statements.

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

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

The updated standard is effective for our annual periods beginning in fiscal 2025 and interim periods beginning in the first quarter of fiscal 2026.

Early adoption is permitted.

We are currently evaluating the impact that the updated standard will have on our financial statement disclosures.

Sales Tax, Tax Credits and Other Receivables

Sales tax, research and development tax credits and other receivables as at November 30, 2023 and February 28, 2023 were as follows:

Investment tax credits

Sales tax, research and development tax credits and other receivables as at May 31, 2024 and February 29, 2024 were as follows:

February 29, 2024

Research and development tax credits

Interest income receivable

Other receivables

Inventories as at November 30, 2023 and February 28, 2023 were as follows:

Inventories as at May 31, 2024 and February 29, 2024 were as follows:

February 29, 2024

Finished goods

1 unchanged sentence

Raw materials

As at November 30 and February 28, 2023, inventories included finished goods, work in process and raw materials.

Allowance for inventory write-down

As at May 31, 2024 and February 29, 2024, 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.

Work in process inventories consist of monomers (dimethyl terephthalate and monoethylene glycol), either purified or yet to be purified, resulting from the depolymerization of PET feedstock.

These monomers shall be polymerized into Loop ™ PET resin in the future.

Work in process inventories consist of recycled monomers (dimethyl terephthalate (“rDMT”) and monoethylene glycol (“rMEG”)), either purified or yet to be purified, resulting from the depolymerization of PET feedstock.

These monomers are intended be polymerized into Loop ™ PET resin in the future.

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

As at May 31, 2024 and February 29, 2024, finished goods and work in process inventories were presented at their net realizable value, while raw materials were presented at average cost.

As at May 31, 2024, the Company recorded an allowance for inventory write-down of $ 803 (February 29, 2024 – $ 817 ) on finished goods and work in process inventories related to inventory volumes not expected to be sold in the next twelve months.

Deposits and Prepaid Expenses

As at November 30, 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 November 30, 2023 were $ 470 and $ 636 as at February 28, 2023.

Prepaid expenses and other deposits as at May 31, 2024 and February 29, 2024 were as follows:

February 29, 2024

Property, Plant and Equipment

As at November 30, 2023

depreciation,

write-down and

As at May 31, 2024

Accumulated depreciation, write-down and impairment

Net book value

Machinery and equipment (1)

Building and Land Improvements

Office equipment and furniture

The equipment, which is being held in storage with the intention to be used in a commercial facility, is presented in machinery and equipment at cost and is currently not being amortized.

As at February 29, 2024

depreciation,

write-down and

Accumulated depreciation, write-down and impairment

Net book value

Machinery and equipment

Building and Land Improvements

Office equipment and furniture

Depreciation expense for the three- and nine-month periods ended November 30, 2023 amounted to $ 93 and $ 295 , respectively (2022 – $ 111 and $ 348 ).

On May 27, 2021, we acquired land in Bécancour, Québec for cash of $ 4,400 .

The Company sold approximately two thirds of the land held for sale in the three-month period ended November 30, 2022 for cash proceeds of $ 8,559 and a gain on disposition of the asset of $ 6,704 .

Depreciation expense amounted to $ 91 for the three-month period ended May 31, 2024 (2023 – $ 101 ).

Intangible Assets

Intangible assets as at November 30, 2023 and February 28, 2023 were $ 1,485 and $ 1,210 , respectively.

During the nine-month periods ended November 30, 2023 and 2022, we made additions relating to patent application costs to intangible assets of $ 378 and $ 225 , respectively.

Amortization expense for the three- and nine-month periods ended November 30, 2023 amounted to $ 38 and $ 105 , respectively (2022 – $ 23 and $ 63 ).

Intangible assets as at May 31, 2024 and February 29, 2024 were $ 1,671 and $ 1,548 , respectively.

During the three-month periods ended May 31, 2024 and 2023, we made additions relating to patent application costs to intangible assets of $ 176 and $ 99 , respectively.

Amortization expense for the three-month period ended May 31, 2024 amounted to $ 46 (2023 – $ 32 ).

Fair Value of Financial Instruments

The following tables presents the fair value of the Company’s financial liabilities as at November 30, 2023 and February 28, 2023:

Fair Value as at November 30, 2023

The following tables presents the fair value of the Company’s financial liabilities as at May 31, 2024 and February 29, 2024:

Fair Value at May 31, 2024

Carrying Amount

Level in the hierarchy

Financial liabilities measured at amortized cost:

Long-term debt

Fair Value as at February 28, 2023

Due to customer

Fair Value at February 29, 2024

Carrying Amount

Level in the hierarchy

Financial liabilities measured at amortized cost:

Long-term debt

The fair value of cash and cash equivalents, restricted cash, customer deposits, other receivables, and accounts payable and accrued liabilities approximate their carrying values due to their short-term maturity.

Due to customer

The fair value of cash, restricted cash, due to customer, other receivables, and accounts payable and accrued liabilities approximate their carrying values due to their short-term maturity.

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities as at November 30, 2023 and February 28, 2023 were as follows:

Accounts payable and accrued liabilities as at May 31, 2024 and February 29, 2024 were as follows:

February 29, 2024

Trade accounts payable

Accrued employee compensation

Accrued professional fees

Accrued insurance premiums

Accrued engineering fees

Accrued director compensation

Accrued professional fees

Other accrued liabilities

Long‑Term Debt

Long-term debt as of November 30, 2023 and February 28, 2023, was comprised of the following:

Long-term debt as of May 31, 2024 and February 29, 2024, was comprised of the following:

February 29, 2024

Investissement Québec financing facility:

4 unchanged sentences

current portion of long-term debt

Credit facility

Long-term debt, net of current portion

Investissement Québec financing facility

The Company recorded interest expense on the Investissement Québec loan for the three- and nine-month periods ended November 30, 2023 in the amount of $ 21 and $ 63 , respectively (2022 – $ 21 and $ 65 ) and an accretion expense of $ 18 and $ 53 , respectively (2022 – $ 17 and $5 2 ).

During the nine-month period ended November 30, 2023, the Company made repayments of $ 47 (2022 – nil) on the Investissement Québec loan.

The Company recorded interest expense on the Investissement Québec loan for the three-month period ended May 31, 2024 in the amount of $ 30 (2023 – $ 21 ) and an accretion expense of $ 14 (2023 – $ 17 ).

During the three-month period ended May 31, 2024, the Company made repayments of $ 25 (2023 – $ 16 ) on the Investissement Québec loan.

Credit facility from a Canadian bank

On July 26, 2022, Loop Canada, Inc., a wholly-owned subsidiary of the Company, entered into an Operating Credit Facility (the “Credit Facility”) with a Canadian bank.

The Credit Facility allows for borrowings of up to $ 2,567 in aggregate principal amount and provides for a two-year term on amounts drawn.

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, 2024.

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

As at May 31, 2024, the Company borrowed $ 2,517 under the Credit Facility.

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

4 unchanged sentences

February 28, 2029

Credit facility from a Canadian bank

On July 26, 2022, Loop Canada, Inc., a wholly-owned subsidiary of the Company, entered into an Operating Credit Facility (the “Credit Facility”) with a Canadian bank.

The Credit Facility allows for borrowings of up to $ 2,577 in aggregate principal amount and provides for a two-year term.

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 November 30, 2023, the Credit Facility was available and undrawn.

Related Party Transactions

Employment Agreement

During the nine-month period ended November 30, 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 nine-month period ended November 30, 2022.

During the nine-month period ended November 30, 2023, no outstanding performance milestones were probable of being achieved and, accordingly, the Company did not record any additional stock-based compensation expense.

On October 12, 2023, Mr.

Solomita and the Company agreed to defer by one year the settlement of 800,000 RSUs that were set to settle on October 15, 2023.

On October 14, 2022, Mr.

Solomita and the Company agreed to defer by one year the settlement of 400,000 RSUs that were set to settle on October 15, 2022.

Stockholders’ Equity

For the nine-month period ended November 30, 2023

For the period ended May 31, 2024

Number of shares

Balance, February 29, 2024

Issuance of shares upon settlement of restricted stock units

Issuance of shares upon the exercise of stock options

Balance, November 30, 2023

For the nine-month period ended November 30, 2022

Balance, May 31, 2024

For the period ended May 31, 2023

Number of shares

Balance, February 28, 2023

Issuance of shares upon settlement of restricted stock units

Balance, November 30, 2022

During the nine months ended November 30, 2023, the Company recorded the following common stock transaction:

Balance, May 31, 2023

During the three months ended May 31, 2024, the Company recorded the following common stock transaction:

The Company issued 9,837 shares of the common stock to settle restricted stock units that vested in the period.

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

During the nine months ended November 30, 2022, the Company recorded the following common stock transaction:

During the three months ended May 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.

Research and Development Expenses

Research and development expenses for the three-month periods ended November 30, 2023 and 2022 were as follows:

Employee compensation

Machinery and equipment expenditures

External engineering

Plant and laboratory operating expenses

Research and development expenses for the nine-month periods ended November 30, 2023 and 2022 were as follows:

Research and development expenses for the three-month periods ended May 31, 2024 and 2023 were as follows:

Employee compensation

3 unchanged sentences

General and Administrative Expenses

General and administrative expenses for the three-month periods ended November 30, 2023 and 2022 were as follows:

Employee compensation

Professional fees

General and administrative expenses for the nine-month periods ended November 30, 2023 and 2022 were as follows:

General and administrative expenses for the three-month periods ended May 31, 2024 and 2023 were as follows:

Employee compensation

Professional fees

Includes stock-based compensation expense.

During the nine-month period ended November 30, 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 November 30, 2023 and 2022:

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 nine-month periods ended November 30, 2023 and 2022:

The following table summarizes the continuity of the Company’s stock options during the three-month periods ended May 31, 2024 and 2023:

Number of stock options

Weighted average exercise price

Number of stock options

Weighted average exercise price

Outstanding, beginning of period

3 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 November 30, 2022.

The principal components of the pricing model for the stock options granted in the nine-month period ended November 30, 2023 were as follows:

The principal components of the pricing model for the stock options granted in the three-month period ended May 31, 2024 and 2023 were as follows:

Exercise price

3 unchanged sentences

Expected life

During the three-month periods ended November 30, 2023 and 2022, stock-based compensation expense attributable to stock options amounted to $ 168 and $ 551 , respectively.

During the nine-month periods ended November 30, 2023 and 2022, stock-based compensation expense attributable to stock options amounted to $ 501 and $ 1,181 , respectively.

During the three-month periods ended May 31, 2024 and 2023, stock-based compensation expense attributable to stock options amounted to $ 146 and $ 162 , respectively.

Restricted Stock Units

The following table summarizes the continuity of the restricted stock units during the three-month periods ended November 30, 2023 and 2022:

Outstanding, beginning of period

Outstanding, end of period

Outstanding vested, end of period

The following table summarizes the continuity of the restricted stock units during the nine-month periods ended November 30, 2023 and 2022:

The following table summarizes the continuity of the restricted stock units during the three-month periods ended May 31, 2024 and 2023:

Number of units

Weighted average fair value price

Number of units

Weighted average fair value price

Outstanding, beginning of period

3 unchanged sentences

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

During the three-month periods ended November 30, 2023 and 2022, stock-based compensation attributable to RSUs amounted to $ 229 and $ 323 , respectively.

During the nine-month periods ended November 30, 2023 and 2022, stock-based compensation attributable to RSUs amounted to $ 639 and $ 8,788 , respectively.

During the three-month periods ended May 31, 2024 and 2023, stock-based compensation attributable to RSUs amounted to $ 224 and $ 193 , respectively.

Stock-Based Compensation Expense

During the three-month periods ended November 30, 2023 and 2022, stock-based compensation included in research and development expenses amounted to $ 161 and $ 455 , respectively, and in general and administrative expenses amounted to $ 236 and $ 419 , respectively.

During the nine-month periods ended November 30, 2023 and 2022, stock-based compensation included in research and development expenses amounted to $ 476 and $ 1,170 , respectively, and in general and administrative expenses amounted to $ 664 and $ 8,799 , respectively.

The amount recorded in general and administrative expenses for the nine-month period ended November 30, 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 May 31, 2024 and 2023, stock-based compensation included in research and development expenses amounted to $ 129 and $ 159 , respectively, and in general and administrative expenses amounted to $ 241 and $ 196 , respectively.

Equity Incentive Plan

1 unchanged sentence

The Plan permits the granting of warrants, stock options, stock appreciation rights and restricted stock units to employees, directors and consultants of the Company.

A total of 3,000,000 shares of common stock were initially reserved for issuance under the Plan at July 6, 2017, with annual automatic share reserve increases, as defined in the Plan, amounting to the lessor of (i) 1,500,000 shares, (ii) 5 % of the outstanding shares on the last day of the immediately preceding fiscal year, or (iii) or such number of shares determined by the Administrator of the Plan, effective March 1, 2018.

A total of 3,000,000 shares of common stock were initially reserved for issuance under the Plan at July 6, 2017, with annual automatic share reserve increases, as defined in the Plan, amounting to the lessor of (i) 1,500,000 shares, (ii) 5 % of the outstanding shares on the last day of the immediately preceding fiscal year, or (iii) such number of shares determined by the Administrator of the Plan, effective March 1, 2018.

On March 1, 2024, the share reserve was increased by 1,500,000 shares (2023 – 1,500,000 ).

On March 1, 2022, the Board of Directors opted to waive the annual share reserve increase.

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

1 unchanged sentence

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 nine-month periods ended November 30, 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 three-month periods ended May 31, 2024 and 2023:

Number of units*

Authorized, beginning of period

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Units granted

( 1,123,605 )

Units forfeited

2 unchanged sentences

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

During the nine-month period ended November 30, 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).

The remaining balance is expected to be paid by the end of this fiscal year.

Contractual agreements

Agreement with Reed Management SAS (“Reed”)

On May 30, 2024, the Company and Reed, a European investment firm focused on high impact and technology-enabled infrastructure, entered into definitive binding agreements, subject to certain closing conditions, for an investment of € 35 million from Reed to fund the global commercialization of the Infinite Loop™ Technology and have agreed to form a 50/50 joint venture for the European deployment of Loop’s technology.

Under the terms of the agreement, which has been signed following the completion by Reed of extensive operational, technical, ESG, and legal due diligence, Reed will provide capital as follows:

€ 10 M investment in a Convertible Preferred Security to be issued by Loop, which contains a 13 % PIK dividend rate and 5 -year term;

€25M loan to Loop in two equal tranches – first tranche to support global deployment opportunities paid at closing and second tranche to support European deployment opportunities paid in the following 12 months with both tranches having a 13% PIK interest rate and 3-year term ;

The closing of the transaction is subject to the fulfillment of certain closing conditions, principally the conditions that (i) Reed shall have successfully completed its first capital raising for its fund;

and (ii) Loop shall have received a binding financing commitment from a governmental agency.

Strategic partnership with Ester Industries Ltd.

On May 1, 2024, the Company entered into an agreement with Ester, a manufacturer of polyester films and specialty polymers in India, to form a 50/50 joint venture based in India ("India JV").

The purpose of the India JV is to build and operate an Infinite Loop ™ manufacturing facility in India which will produce lower carbon footprint rDMT, rMEG and specialty polymers, using the Infinite Loop ™ Technology.

To date, no amounts have been contributed by the Company to the India JV.

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

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

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

Agreement with SK Geo Centric Co.

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Pursuant to the agreement, the Company and SKGC agreed to form a new entity, which will be headquartered in Singapore.

SKGC will contribute 51 % and Loop will contribute the remaining 49 % of the initial equity capital of the new entity.

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.

Subsequent Event

On January 16 th , Loop announced that the Company signed a non-binding memorandum of understanding with Reed Management, a European investment firm, for $ 66 million in non-dilutive financing as part of a joint venture to roll-out Loop’s technology in the European market.

Of this amount, $ 33 million is to be provided to Loop as non-dilutive capital to fund Loop’s technology commercialization globally.

The remaining $ 33 million is to be invested in the European joint venture.

The non-binding memorandum of understanding is subject to customary due diligence and the fulfillment of certain pre-closing conditions.

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