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Item 1. Business

2025-05-29 compared with 2024-05-29 · 229 added, 262 removed, 80 unchanged (86% of the section changed)

Loop is a technology company whose mission is to accelerate the world’s shift towards sustainable PET plastic and polyester fiber and away from the dependence on fossil fuels.

Loop owns patented and proprietary technology that depolymerizes no and low-value waste PET plastic and polyester fiber (“Infinite Loop ™ Technology”), including plastic bottles and packaging, carpets and textiles of any color, transparency or condition and even ocean plastics that have been degraded by the sun and salt, to its base building blocks (monomers).

The monomers are filtered, purified and polymerized to create virgin-quality Loop ™ branded PET resin suitable for use in food-grade packaging and polyester fiber, thus enabling our customers to meet their sustainability objectives.

Loop is contributing to the global movement towards a circular economy by reducing and recovering plastic waste for a sustainable future.

We also intend to leverage the Infinite Loop ™ Technology to expand into specialty chemicals and polymers through a unique product offering of lower carbon footprint rDMT, rMEG and specialty polymers.

Loop intends to produce and sell rDMT, rMEG and other specialty polymers directly to chemical companies as a simple drop-in supplement and circular alternative.

We believe this expanded product portfolio will enable the Infinite Loop ™ Technology to reach new markets and cater to a broader range of customers across multiple industries including electronics, automotive, textile, cosmetics and packaging and other applications.

This recent expansion in Loop’s product offering is non-reliant on green premiums or carbon and plastic credits, and we believe it addresses a global shortage in supply of DMT and high demand for low carbon MEG, and lowers capital intensity for commercial projects with the removal of polymerization equipment.

The Company is presently in the planning stages of pursuing the construction of Infinite Loop ™ commercial scale facilities.

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 and discussions with our partners.

Industry Background

We believe Loop’s depolymerization technology offers a complementary solution to mechanical recycling by enabling the use of a wider variety of PET feedstock, including complex and degraded plastics as well as polyester fiber, to produce virgin quality rPET with no degradation through continued recycling.

Mechanically recycled PET plastic is produced principally through the conversion of bales of PET bottles.

The materials have been collected and transported to a materials recovery facility, where they are sorted from other materials, baled, and sent to specific PET recycling facilities.

The bales are broken and sorted to remove any non-PET materials.

The PET is then ground and put through a separation process which separates the PET from the bottle cap and label materials.

Clean PET flake is then further processed depending on its intended end market.

It may become more highly refined PET pellets for new bottles or extruded into PET sheet for clamshells, trays, and cups.

Recycled PET is also spun into fiber for carpet, clothing, fiber fill, or other materials.

We believe mechanically recycled PET faces a number of challenges in meeting the quality specifications and growing volume requirements implied by commitments from major brands, mainly due to the cost and variety of acceptable PET feedstock.

Some mechanical recycling processes involve remelting the PET flake which reduces the quality of the rPET output each time it is recycled relative to the specifications of virgin PET produced from fossil fuels.

Each time PET plastic is mechanically recycled, its quality and clarity are reduced.

Therefore, mechanically recycled PET may need to be mixed with virgin PET from fossil fuels to maintain quality.

Lower quality mechanically recycled PET is often downcycled to alternate uses such as polyester fibers which may be dyed and used in carpets or clothing.

Additionally, mechanically recycled PET manufactured for use in clear bottles or food containers requires predominantly clear and clean PET flakes separated from waste bales, and cannot accommodate colored or opaque PET flakes, lower quality fiber feedstock, or materially contaminated feedstock, which may be cheaper.

Depolymerization is a process in which plastics are broken down into their constituent molecules through chemical reactions, rather than being physically melted down and reprocessed as in mechanical recycling.

This approach, which we utilize, has several advantages over mechanical recycling, which can have limitations due to the complexity and diversity of plastics.

One of the main limitations of mechanical recycling is that it is difficult to recycle plastics that have been contaminated or degraded.

For example, if a plastic container has been exposed to heat or sunlight, it may become brittle and prone to breaking during the recycling process.

Another limitation of mechanical recycling is that it is difficult to recycle certain types of plastics, such as multi-layered or composite plastics.

These plastics are often used in food packaging or other products that require specialized properties like barrier protection or insulation.

Depolymerization, however, can break down these degraded or complex plastics into their constituent molecules, which can then be purified and used to create new products.

Loop’s depolymerization technology has the potential to create a closed-loop system for plastic waste, whereby plastics can be recycled an infinite number of times without degrading the quality of the material.

This is because the constituent molecules can be broken down and reassembled without losing their original properties, which can reduce the need for new plastics to be produced.

We believe Loop’s depolymerization technology offers a promising solution to the limitations of mechanical recycling by enabling the recirculation of more diverse and complex plastics, reducing waste and pollution, and creating a closed-loop system for plastic waste.

Our depolymerization technology breaks down waste PET into DMT and MEG.

The monomers are purified and then recombined into virgin quality PET plastic and polyester fiber.

We use low value PET plastic and polyester fiber waste as feedstock.

Our technology can process PET plastic bottles and packaging of any color, transparency or condition, carpet, clothing and other polyester textiles that may contain colors, dyes, or additives, and even PET plastics that have been recovered from the ocean and degraded by exposure to sun and salt.

We believe that our ability to use many materials that mechanical recyclers cannot process is an important advantage of Loop ™ PET resin and further expands the range of PET waste streams that may be recycled.

This also means we are creating a new market for materials that have persistently been leaking out of the waste management system and into shared rivers, oceans and natural areas.

Currently, the DMT market is largely dominated by few key players, leaving limited options for customers and high market concentration.

Additionally, the market is experiencing a global shortage of DMT, amplifying market challenges and creating a pressing need for alternative sources.

The introduction of Loop’s rDMT has the potential to shift the market dynamic by offering a sustainable alternative to traditional DMT produced from fossil fuels.

In parallel, low-carbon MEG is in high demand and customers are increasingly seeking alternative solutions, but market options are limited and costly.

As sustainability concerns intensify and regulatory pressures mount, the demand for low carbon MEG solutions is expected to continue to grow.

Loop’s rMEG has the potential to address a gap in the market and help fulfill customers’ needs by offering a lower carbon footprint recycled alternative to the current market options for MEG.

Strategic partnership with Ester Industries Ltd.

Loop Industries is a technology company whose mission is to accelerate the world’s shift toward sustainable PET plastic and polyester fiber and away from our dependence on fossil fuels.

Loop Industries owns patented and proprietary technology that depolymerizes no and low-value waste PET plastic and polyester fiber, including plastic bottles, packaging, and textiles such as carpets and clothing, into its base building block monomers, DMT and MEG.

The monomers are separated, purified and polymerized to create virgin-quality Loop™ branded PET resin suitable for use in food-grade packaging and polyester fiber, thus enabling our customers to meet their sustainability objectives.

Loop™ PET plastic and polyester fiber can be recycled infinitely without degradation of quality, helping to close the plastic loop.

Loop Industries is committed to contributing to the global movement towards a circular economy by reducing plastic waste and recovering waste plastic for a sustainable future.

Loop plans to commercialize the Infinite Loop™ technology through a combination of direct investments with strategic partners to own and operate commercial facilities and the licensing of its technology.

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

The facility is also used for research and development activities.

Loop is currently executing on its commercialization strategy through two key strategic partnerships.

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

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

In addition, the Company sold its first technology license to Reed Management SAS, known as Reed Societe Generale Group, for one Infinite Loop™ manufacturing facility in Europe for an initial down payment of €10 million with additional milestone payments to be received by Loop as the project advances.

Infinite Loop Europe, an entity to be owned 10% by Loop and 90% by Reed Societe Generale Group, was formed with the purpose of developing Infinite Loop™ manufacturing facilities in Europe.

These initiatives represent key steps in implementing the Company's plan to deploy its proprietary depolymerization technology in global markets.

Industry Background and Competitive Landscape

PET resin is primarily derived from fossil fuel-based monomers and is referred to as “virgin PET” when used for packaging and “virgin polyester” when used for fibers.

PET is widely used in packaging, especially for beverage bottles and food containers, due to its excellent barrier properties, durability, and food safety profile.

Virgin polyester fiber is also the dominant synthetic fiber in the textile industry, valued for its strength, durability, wrinkle resistance, and versatility in apparel, home furnishings, and industrial applications.

Despite growing regulatory and consumer pressure for sustainable alternatives, most of the PET and polyester fiber used globally today is still comprised of fossil fuel-based monomers.

In many applications, virgin material is still preferred or required, either alone or blended with recycled content, in order to meet quality specifications.

As a result, the global markets for both PET packaging and polyester fiber remain heavily dependent on fossil fuels, underscoring the need for scalable, cost-effective recycling technologies that can produce high-quality PET and polyester fiber from waste plastic.

Mechanical recycling is the most common method for recycling PET waste.

This multi-step physical process transforms waste PET into reusable materials.

The process begins with the collection of waste PET bottles and packaging through various systems, such as curbside programs and deposit returns.

The waste is sorted at materials recovery facilities to separate PET from other plastics or materials, then compressed into bales.

The bales are broken down and the waste PET shredded into flakes after removal of contaminants like stones, sand, metals, labels, and bottle caps.

These flakes undergo rigorous washing and cleaning stages, often using hot water and detergents, to remove dirt, adhesives, and residues.

Separation techniques like flotation and air classification are then used to eliminate remaining impurities, and the flakes are dried.

Next, the flakes may go through optical color sorting to produce rPET for higher value uses such as clear beverage bottles.

The cleaned flakes are then melted at high temperatures, extruded, and cut into uniform pellets.

For applications like food-grade packaging, the rPET pellets typically undergo further processing to ensure compliance with safety and quality standards for direct food contact.

We believe mechanically recycled PET faces significant challenges in meeting the quality specifications and increasing volume requirements driven by brand commitments and regulatory pressures.

Impurities like labels, adhesives, and other types of plastic contained in the waste feedstock compromise the purity of the rPET.

While sorting and cleaning technologies help, they are not always effective enough to produce consistently high-quality recycled material.

Feedstock limitations also exist because certain PET products, such as colored or multi-layered packaging, are challenging to process mechanically while maintaining quality and consistency, leading to them being sent to landfill or incineration.

A key challenge in mechanical recycling is the degradation of PET’s physical properties with each recycling cycle.

Processes like shredding, washing, and melting can break down polymer chains, reducing strength and clarity, often leading to “downcycling” where the rPET is limited to lower-value applications rather than being recycled back into bottles or food packaging.

Due to the progressive degradation of material properties and the accumulation of impurities, PET can typically only be mechanically recycled a limited number of times before its quality is too poor for further processing or valuable applications.

The quality of mechanically recycled PET can vary considerably and often require blending with virgin PET to meet performance standards.

This inconsistency poses difficulties for manufacturers aiming to incorporate rPET into products, particularly for demanding applications like food packaging.

Mechanical recycling does not effectively handle polyester fiber waste.

A substantial portion of polyester fiber waste consists of polyester blended with other fibers like cotton or spandex, which mechanical processes are largely ineffective at separating.

Additionally, waste polyester fiber often contains dyes, finishes, and other chemicals that cannot be removed through mechanical recycling.

Today, most recycled polyester on the market is produced from recycled PET bottles and packaging.

A significant portion of PET bottles collected for recycling is diverted into polyester fiber production for textile applications, rather than being recycled back into new bottles.

We believe these inherent limitations of mechanical recycling further re-enforce the need for depolymerization technologies capable of processing a wider range of PET and polyester fiber waste while yielding high-quality material.

Depolymerization is a process in which plastics are broken down into their base monomers through chemical reactions, rather than being physically melted down and reprocessed as in mechanical recycling.

Among existing depolymerization technologies, we believe that Loop’s process offers advantages in handling more contaminated feedstock and in its scalability, which differentiates it from other available methods.

This belief is supported by available technical information and due diligence on Loop’s technology carried out by multiple industry sources.

To our knowledge, other existing depolymerization technologies often require high temperatures and pressures, resulting in substantial energy consumption and potential unwanted chemical reactions which can reduce the yield and purity of the recovered monomers.

Infinite Loop™ Technology

Our depolymerization technology breaks down waste PET and polyester fiber into its base monomers DMT and MEG.

The monomers are purified and then recombined into virgin quality PET resin suitable for use in food-grade packaging and polyester fiber made from 100% recycled content.

Our depolymerization operates at low temperature with no added pressure which enables a wider range of PET and polyester fiber to be recycled.

Our technology can recycle a wide range of waste PET plastic bottles and packaging of any color, transparency or condition, as well as polyester textiles such as carpet and clothing that contain dyes, additives, or other textiles blended into the fabrics.

We believe that our ability to use contaminated feedstocks that other recycling methods cannot process is an important advantage of our technology.

Loop’s depolymerization technology has the potential to create a closed-loop system for PET plastic and polyester fiber waste, whereby they can be recycled an infinite number of times without degrading the quality of the material, unlike mechanical recycling.

This is because the DMT and MEG monomers are purified back to their original state prior to being repolymerized.

The Infinite Loop™ Technology is also designed to provide a solution for recycling polyester textile waste, regardless of color or contamination, into 100% recycled virgin-quality polyester.

Loop branded polyester fiber can be seamlessly integrated into existing supply chains and manufacturing processes.

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

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

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

Agreements with Reed Societe Generale Group

On December 12, 2024, the Company entered into an Amended and Restated Share Purchase Agreement (the “Amended Agreement”) with Reed Societe Generale Group, a European investment firm focused on high impact and technology-enabled infrastructure majority-owned by the bank Societe Generale.

The Amended Agreement amends the original Share Purchase Agreement dated May 30, 2024 previously reported by the Company in a current report on Form 8-K filed on June 4, 2024.

A joint entity, which under French Law is referred to as a simplified joint-stock company, was incorporated (“Infinite Loop Europe”), to be owned 90% by Reed Societe Generale Group and 10% by Loop, with the purpose of developing Infinite Loop™ manufacturing facilities in Europe.

Pursuant to the Amended Agreement, the Company will enter into a Securityholders Agreement with RCE to establish the framework for the governance, ownership, and operations of Infinite Loop Europe.

On December 23, 2024, the Company received total cash proceeds of $20.8 million (€20.0 million) upon closing of the financing and licensing transactions contemplated by the Amended Agreement.

The Company entered into a license agreement with RCE, acting on behalf of Infinite Loop Europe, granting a license to use Loop’s proprietary depolymerization technology for one facility within Europe.

Pursuant to the terms of the license agreement, the Company received an initial upfront royalty payment of $10.4 million (€10.0 million), with additional milestone-based payments from Reed Societe Generale Group to follow.

Additionally, the Company issued and sold 1,044,430 shares of Series B Convertible Preferred Stock (“Series B CPS”) at $10.00 per share to Reed Circular Economy (“RCE”), an affiliate of Reed Societe Generale Group for cash proceeds of $10.4 million (€10.0 million).

Key terms of the Series B CPS include:

13% PIK dividend rate

Convertible to Loop common stock at $4.75 per share or redeemable in cash

We believe the licensing and financing transactions mark a pivotal step in Loop’s commercialization strategy, enabling the deployment of its patented recycling technology across Europe and supporting capital investment in cost-effective manufacturing regions, including its joint venture in India with strategic partner Ester.

Proceeds from these transactions are being used to fund the India JV project and Loop’s operational cash flow needs.

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

Under the agreed terms of the partnership with Reed Societe Generale Group, Loop retains the right to increase its equity stake in the European manufacturing facility, as well as potential future facilities, to a maximum of 50% for each facility.

As the license is to build one Infinite Loop™ manufacturing facility in Europe, future facilities under this partnership would require the purchase of additional technology licenses from Loop.

Loop and Reed Societe Generale Group are actively assessing opportunities for the first Infinite Loop™ facility in Europe.

Current activities include evaluating potential project locations, engaging with local and national governments to assess the availability of subsidies and incentives, and identifying potential strategic partners to support the execution of the project.

In parallel, Loop is in the process of implementing a modular construction strategy, including the development of a standardized facility design and pre-fabrication approach aimed at reducing construction costs and timelines, with the objective of improving scalability for future projects across Europe and other regions with high construction costs.

Joint Venture with Ester

On May 1, 2024, Loop entered into an agreement with Ester, one of India’s leading manufacturers of polyester films and specialty polymers, to form a 50/50 India joint venture (“India JV”).

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

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

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

The Infinite Loop ™ India facility is expected to produce 70,000 tonnes of rDMT and 23,000 tonnes of rMEG annually and Ester will toll convert the rDMT and rMEG into various grades of specialty polymers, offering chemical companies a simple drop-in supplement and circular alternative.

The rDMT and rMEG product offerings expected to be manufactured at the Infinite Loop ™ India facility represent a strategic product expansion in a low-cost manufacturing environment which we believe complements Loop's existing PET plastic and polyester fiber manufacturing business and will fuel growth by addressing the large and growing demand in the market.

We believe this expansion will enable the Infinite Loop ™ Technology to reach new markets and cater to a broader range of customers across multiple industries including electronics, automotive, textile, cosmetics and packaging.

The India facility will leverage the Infinite Loop ™ Technology and existing engineering package which should accelerate the lead-time towards groundbreaking, expected to occur by end of 2024.

Feedstock sourcing for the facility, in which there is abundant supply from textile waste in India, is well advanced and the partners have engaged an external firm to source and secure the land for the facility.

Construction is expected to be completed by the end of 2026, with commercial operations commencing in early 2027.

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

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

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

The India facility will leverage the Infinite Loop™ Technology and existing engineering package which should accelerate the lead-time towards groundbreaking.

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

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

Loop and Ester anticipate that initial funding required to finance the India JV for the purposes of construction, development and operationalization of the project along with initial working capital requirements for the business is expected to be $165 million.

Ester and Loop will each contribute 50% of the initial equity capital of the India JV.

Loop and Ester made the decision to incorporate a continuous polymerization line at the Infinite Loop™ India facility.

By integrating polymerization assets within the Infinite Loop™ India facility, we expect improved efficiency and lower operating costs with a minimal impact on overall project cost.

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

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

As of February 28, 2025, Loop and Ester had each made total equity contributions of $1.9 million in cash to the India JV.

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

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

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

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

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

Strategic Partnership with SK Geo Centric (“SKGC”)

In June 2021, Loop and SKGC concluded a definitive agreement for SKGC to become a strategic investor in Loop, with SKGC acquiring a 10% stake in Loop at $12.00 per share for a total of $56.5 million.

The transaction, which closed in July 2021, also included warrants for SKGC to purchase Loop common stock at $15.00 and $20.00 per share.

Concurrent with the strategic investment, Loop and SKGC entered into a memorandum of understanding (“MOU”) to form a joint venture with exclusivity to build sustainable PET plastic and polyester fiber manufacturing facilities throughout Asia.

In July 2021, in connection with the closing of the transaction, Loop entered into an Investor Rights Agreement with SK global chemical Co., Ltd.

(the “Purchaser”) and Daniel Solomita (the “Investor Rights Agreement”), which provides for, among other things, customary resale shelf registration rights for the Purchaser that require Loop to file with the SEC a registration statement on Form S-3 covering the resale of the Loop common stock held by the Purchaser within 90 days after the second anniversary of the closing of the transaction.

Loop intends to file such registration statement following the filing of this Annual Report on Form 10-K.

SKGC is a global chemical company and member of the SK Group, one of South Korea’s largest conglomerates.

SKGC is a general energy and chemical leader in the global market and is growing into a technology-based global chemical company through continuous research and development efforts.

SKGC aims to achieve its “Green for Better Life” vision by establishing a plastics based circular economy through collaboration with various partners and stakeholders, such as Loop.

Asia represents approximately 60% of the world’s population and 70% of global PET consumption and is the main hub for the polyester fiber supply chain for textiles.

The Asian market represents a prime opportunity for Loop’s growth and commercialization of its technology.

SKGC is well established with a deep understanding of the Asian market, and vast expertise in building and operating large-scale petrochemical facilities, making them a uniquely well-suited partner for Loop in helping to ensure the successful commercialization of Loop’s technology in this market.

On April 27, 2023, Loop and SKGC entered into a joint venture agreement (the “JV Agreement”) to deploy Loop’s depolymerization technology in the Asian market through multiple commercial manufacturing facilities.

Pursuant to the JV Agreement, Loop and SKGC agreed to form a new company (the “JV Company”), which will be headquartered in Singapore.

SKGC will contribute 51% and Loop will contribute 49% of the initial equity capital of the JV Company.

The JV Agreement outlines that the JV Company will have exclusive rights to commercialize Loop’s technology to produce rPET in the Asian market and Loop will receive an annual royalty fee for each of the commercial plants.

The planned Infinite Loop ™ commercial manufacturing facility in Ulsan, South Korea, is expected to have an annual capacity to supply up to 70,000 metric tons per year of Loop ™ PET resin for packaging and polyester fiber applications, and was planned to break ground in the first half of 2024.

The timing of the facility is currently under review by the partners while they evaluate opportunities to reduce capital costs and carry out discussions with the Korean government for subsidies related to the facility.

Loop and SKGC are also evaluating the opportunity to build a monomer facility in order to capitalize on the large and growing market and attractive economics for DMT and MEG, including lower capital investment requirements for such a facility.

In addition to Infinite Loop ™ Ulsan, the two partners have outlined plans which target a minimum of three additional commercial manufacturing facilities to be constructed throughout Asia by 2030.

Loop and SKGC have partnered with SK ecoengineering, a subsidiary of the SK Group that brings considerable experience and proficiency as an EPC contractor, for the engineering and construction of the manufacturing facilities.

The planned facility in Asia will be part of SKGC’s Ulsan Advanced Recycling Cluster (“Ulsan ARC”) in South Korea.

Daniel Solomita, Loop’s Founder and CEO, participated in the groundbreaking ceremony of the Ulsan ARC which took place on November 15, 2023 in South Korea.

Solomita presented the Company’s sustainable plastics technology and its Infinite Loop ™ manufacturing model at the event, which included attendees ranging from central and local government officials, industry officials, environmental institutions, academic experts, customers and media.

Infinite Loop ™ Europe

We announced on September 10, 2020 a strategic partnership with SUEZ Group (“Suez”), with the objective to build the first Infinite Loop ™ manufacturing facility in Europe.

On June 16, 2022, Loop, together with Suez and SKGC, announced that the three companies will become equal participants in the strategic partnership.

The expanded partnership intends to combine SKGC’s petrochemical manufacturing experience with Suez's resource management expertise and Loop’s breakthrough proprietary technology to supply up to 70,000 M/T of virgin quality, 100% recycled PET plastic and polyester fiber to the European market.

The planned Infinite Loop ™ facility will 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.

On February 16, 2023, the three companies announced that the Chemesis industrial platform in Saint-Avold, located in the Grand Est region of France, has been selected as the site for their planned manufacturing facility in Europe.

We are working with our partners Suez and SKGC on acquiring the 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.

In the quarter ended February 29, 2024, the company recorded expenses of $0.50 million in relation to preliminary project costs.

Memorandum of Understanding (“MOU”) with Reed Management SAS (“Reed”)

On January 16, 2024, Loop announced that it had signed a non-binding MOU with Reed, a newly-formed European investment firm focused on high impact and technology-enabled infrastructure.

Pursuant to the MOU, Loop and Reed intend to form a strategic long-term partnership through the establishment of a 50/50 joint venture to commercialize Loop’s technology in Europe and for Reed to provide financing which would be utilized to fund the global commercialization of the Infinite Loop™ Technology (the “Proposed Transaction”).

Since the signing of the MOU, Reed has invested significant resources in undertaking and completing extensive operational, technical, ESG, and legal due diligence.

Loop and Reed continue to negotiate binding agreements with respect to the Proposed Transaction, and each party continues to work towards obtaining financing to fulfill its funding obligations with respect to the Proposed Transaction.

The Company understands from Reed that its funding negotiations are progressing well and that it now expects to obtain its required funding via a transformative transaction, which by its nature has been a more extensive process than previously contemplated and which would also require regulatory approval.

While entry into binding agreements would remain subject to the satisfaction of certain closing conditions, Loop and Reed are hopeful that they will enter into such binding agreements imminently, and close the Proposed Transaction by the end of the second quarter of the fiscal year ending February 28, 2025.

Loop ™ Branded PET Resin Compliant for Pharmaceutical Industry Packaging Applications

On December 13, 2023, Loop announced that its Loop™ branded PET resin has been tested and is compliant for use in packaging applications in the pharmaceutical industry.

The rigorous requirements and standards outlined by the United States Pharmacopeia (USP <661.1>, Plastic Materials of Construction ) and the European Pharmacopeia (Ph.Eur.

3.1.15, Polyethylene Terephthalate for Containers for Preparations not for Parenteral Uses ) ensure that materials used in pharmaceutical packaging maintain the highest levels of integrity and do not compromise the safety and efficacy of the enclosed products.

Test results executed by a worldwide leader in laboratory testing services confirm that Loop's PET resin has successfully met these requirements, opening new possibilities for sustainable packaging solutions in the pharmaceutical industry.

The pharmaceutical industry is increasingly recognizing the importance of adopting sustainable practices and materials to reduce its environmental impact.

Loop's 100% recycled virgin quality PET can help support pharmaceutical companies with a sustainable packaging alternative and address the growing demand for environmentally responsible choices in the industry.

Supply Agreements with Global Consumer Brands

In the past years, we have seen major consumer brands make significant commitments to close the loop on their plastic use by transitioning their packaging to recyclable materials like PET, and by incorporating more recycled content into their packaging.

We believe Loop ™ PET resin provides the ideal solution for these brands because it is recyclable and is made from 100% recycled PET waste and polyester fiber, while being virgin-quality and suitable for use in food-grade packaging, packaging applications in the pharmaceutical industry, and polyester fiber.

Due to the commitments by large global consumer brands to incorporate more recycled content into their product packaging, the regulatory requirements for minimum recycled content in packaging imposed by governments, the virgin-quality of Loop ™ branded PET resin and its marketability to enhance the sustainability credentials of consumer brands that incorporate it, we believe we will be able to sell Loop ™ branded PET resin at a premium price relative to virgin and mechanically recycled PET resin.

We currently have agreements with some of the world’s leading brands to be supplied from our planned commercial facilities, including:

Multi-year supply agreement with Danone SA (“Danone”), one of the world’s leading global food and beverage companies, enabling Danone to purchase 100% sustainable and upcycled Loop ™ branded PET for use in brands across its portfolio including evian®, Danone’s iconic natural spring water;

Multi-year supply agreement with L’OCCITANE en Provence (“L’OCCITANE”) to supply 100% recycled and sustainable Loop ™ PET resin and incorporate Loop ™ PET resin into its product packaging;

Multi-year supply agreement with L’Oréal Group, the global leader in the beauty industry, enabling L’Oréal Group to purchase production capacity and incorporate Loop ™ PET resin into its product packaging.

We also have a signed letter of intent with On AG, a sportswear brand and subsidiary of On Holding AG, to secure volumes of Loop ™ PET resin from the planned Asian Infinite Loop ™ manufacturing facility in Ulsan, South Korea, which Loop is planning to construct with its strategic partner SKGC.

We are pursuing amended supply agreements with existing customers and new agreements with additional customers that are located in North America, Europe, and Asia to sell the production volumes of our planned Infinite Loop ™ commercial facilities.

Product activations with evian, L’Occitane, On AG, and Garnier

Loop has collaborated with multiple customers in recent and upcoming launches for products and product packaging incorporating Loop ™ PET manufactured from monomers produced at Loop’s small-scale production facility in Terrebonne, Québec (the “Terrebonne Facility”).

In 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.

Evian began selling water bottles made from Loop ™ PET in South Korea in October 2022.

The waste plastic used to produce these bottles includes 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 goal for circularity and 100% recycled content by 2025.

On October 11, 2022, Loop and 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.

On April 19, 2023, Loop and Garnier, one of the world’s largest mass market beauty brands, launched the brand’s first Micellar Cleansing Water All-In-1 bottle made of Loop ™ PET produced using monomers from Loop’s Terrebonne Facility (excluding cap and label).

The Loop logo, featured on the front of this packaging innovation, serves as an anchor to highlight Loop’s technology, the quality of materials and the bottle’s recyclability.

The inclusion of Loop branding on the packaging strongly supports Garnier’s sustainability goals by promoting the infinitely recyclable potential of the product and brings awareness to PET plastic circularity.

This packaging innovation will first be distributed in Garnier’s largest market, the US and the brand’s home market of France.

We also entered into an agreement in May 2022 with On AG, the Swiss sportswear brand, to supply Loop ™ PET to be utilized in polyester fiber by the brand, pursuant to which Loop ™ PET resin was delivered in the year ended February 28, 2023.

Loop and On AG collaborated to launch the Cloudeasy Cyclon shoe which was unveiled on May 21 st , 2024.

The upper of the Cloudeasy shoe is crafted with 100% recycled and infinitely recyclable yarn, using the Infinite Loop ™ Technology.

Ester and Loop are working in collaboration on all financing activities for the India JV pursuant to the terms of the agreement.

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

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

Loop has entered into an engineering services agreement with the India JV to provide engineering services and support the local engineering firm.

This has resulted in Loop generating engineering services revenue of $0.4 million in the quarter ended February 28, 2025.

The development of the Infinite Loop™ India facility continues to progress towards groundbreaking.

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

Additionally, feedstock sourcing for the facility, of which there is abundant supply from textile waste in India, is well advanced.

Two globally recognized firms are currently executing two key mandates for the India JV.

A leading global advisory firm is leading the debt syndication process, while a globally renowned engineering firm is performing the local engineering work, supported by Loop’s engineering team.

Based on the engineering study completed in May 2025, the estimated total investment cost for the facility, including continuous polymerization, financing costs during construction and initial working capital requirements, is expected to be approximately $176 million.

Groundbreaking for the Infinite Loop™ India facility is now expected to occur in the second half of calendar 2025, with commercial operations projected to commence in calendar 2027.

Recent Product Activations

Loop has collaborated with multiple customers and prospective customers in recent and upcoming launches for products and product packaging incorporating Loop ™ PET manufactured from monomers produced at the Terrebonne Facility.

Most recently:

On February 23, 2025, Loop, Hyosung TNC (“Hyosung”), a complete sustainable textile solutions provider, and Pleatsmama, a sustainable fashion brand, announced a three-way collaboration to produce 100% recycled drawn textured yarn used in limited-edition handbags using Loop’s virgin-quality polyester produced using the Infinite Loop™ technology.

Under this collaboration, Loop supplied 100% recycled, virgin-quality polyester chips, Hyosung transformed the Loop polyester chips into high-performance drawn textured yarn, and Pleatsmama crafted stylish, eco-friendly handbags emphasizing circular design principles.

Loop and On AG, the Swiss sportswear brand, collaborated to launch the Cloudeasy Cyclon shoe which was unveiled on May 21 st , 2024.

The upper of the Cloudeasy shoe is crafted with 100% recycled and infinitely recyclable yarn, using monomers that were produced at our Terrebonne Facility with the Infinite Loop™ technology.

On AG is the first footwear company to launch a shoe using the Infinite Loop™ technology which enables fiber-to-fiber recycling.

The Cloudeasy Cyclon shoe is part of On AG’s monthly subscription service Cyclon™ where customers receive, wear, and then return Cylon™ products, which are then recycled.

Loop continues to pursue opportunities for new activations and marketing campaigns with additional consumer goods brand companies.

Terrebonne Facility

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, incorporating all key pieces of depolymerization equipment that will be used in the full-scale commercial facilities.

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 planned Infinite Loop ™ full-scale commercial facilities.

We believe that the Terrebonne Facility has achieved its primary purpose of demonstrating that Loop’s breakthrough depolymerization technology is scalable and producing commercial quantities of virgin quality PET resin and polyester fiber for global brands.

In the year ended February 29, 2024, Loop reported revenues of $0.15 million from the sale of Loop™ PET resin produced from monomers manufactured at the Terrebonne Facility to several global consumer brands, including those with whom Loop is collaborating on product launches.

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

Loop continues to pursue opportunities for new activations and marketing campaigns with additional consumer goods brand and apparel companies.

Termination of Partnership with SKGC

Effective January 14, 2025, Loop and SK Geo Centric (“SKGC”) have mutually agreed to terminate their joint venture agreement executed by the parties on April 27, 2023 to construct and operate an Infinite Loop™ manufacturing facility in Ulsan, South Korea.

This joint decision reflected Loop’s strategy to focus capital deployment in low-cost jurisdictions and prioritize a licensing and engineering services model in higher cost countries, as well as a strategic restructuring and re-orientation within the SK Group.

Although SKGC continues to have the right to nominate a director on Loop’s Board of Directors (the “Board”), Mr.

Jonghyuk Lee resigned from the Board on January 13, 2025 with immediate effect, due to a change in his role within the restructured SKGC organization.

Suspension of European partnership with Suez and SKGC

On September 10, 2020, we announced a strategic partnership with SUEZ Group (“Suez”), with the objective to build the first Infinite Loop™ manufacturing facility in Europe.

On June 16, 2022, Loop, together with Suez and SKGC, announced that the three companies would become equal participants in the strategic partnership.

The Company, Suez and SKGC have mutually agreed to suspend the project.

Loop currently plans to deploy its technology in Europe through its partnership with Reed Societe Generale Group as discussed above.

Market Opportunity

The estimated global annual market demand for PET plastic and polyester fiber was approximately $182 billion in 2023, and the DMT and MEG specialty chemicals global market size is estimated at $28 billion and forecasted to grow at a 3.7% CAGR through 2033.

In the past years, we have seen major consumer brands make significant commitments to close the loop on their plastic use by transitioning their packaging and textile applications to recyclable materials like PET, and by incorporating more recycled content into their products.

We believe Loop™ PET resin and polyester fiber provides the ideal solution for these brands because it is recyclable and is made from 100% recycled PET and polyester fiber waste, while being virgin-quality and suitable for use in food-grade packaging, packaging applications in the pharmaceutical industry and polyester fiber.

Due to the commitments by large global consumer brands to incorporate more recycled content into their product packaging, the regulatory requirements for minimum recycled content in packaging imposed by governments, the virgin quality of Loop™ branded PET resin and its marketability to enhance the sustainability credentials of consumer brands that incorporate it, we believe we will be able to sell Loop™ branded PET resin at a premium price relative to virgin and mechanically recycled PET resin.

In 2023, global production of PET plastic and polyester fiber totaled an estimated 101 million metric tons.

Supported by steady growth across the packaging and textile industries, total production volumes are expected to rise to approximately 135 million metric tons by 2032, reflecting a weighted average compound annual growth rate of 3.5%.

We believe plastic pollution and climate change continue to be the most persistently covered environmental issues by media and local and global environmental non-governmental organizations.

Some of the main concerns associated with PET are the greenhouse gas (“GHG”) emissions associated with its production from non-renewable hydrocarbons and the length of time it persists in landfills and the natural environment.

There is an increasing demand for action to address the global plastic crisis, as evidenced by the March 2022 endorsement by 175 nations of a historic resolution at the UN Environmental Assembly to end plastic pollution, which initiated the formation of the Intergovernmental Negotiating Committee (INC), tasked with crafting a legally binding global treaty addressing the full lifecycle of plastics from production and design to disposal.

In the last few years, governments in North America, Europe and Asia have been enacting and proposing laws and regulations mandating the use of minimum recycled content in packaging, which underlies the strength of this issue in the marketplace.

Consumer brands are seeking a solution to their plastic challenge, and they are taking action.

In recent years we have seen major brands make significant commitments to close the loop on their plastic packaging by transitioning their packaging to recyclable materials and by incorporating more recycled content into their packaging.

Consumer brands are actively addressing the challenges posed by plastic and polyester fiber waste.

In recent years, many have made substantial commitments to advancing circularity by transitioning to recyclable packaging and products, while significantly increasing the use of recycled content in both materials and supply chains.

Global consumer packaged goods companies (“CPG companies”), apparel manufacturers, and retail brands have announced significant public commitments and targets to make the transition to a circular plastic economy, for example:

Adidas Group aims to replace all virgin polyester with recycled polyester in all of its Adidas products by 2024;

Danone, the provider of evian® brand bottled water, committed to a goal of using 100% recycled content packaging by 2025;

Coca-Cola committed to an average recycled content of 50% across its packaging by 2030;

PepsiCo has set new goals to cut virgin plastic per serving by 50% across its global food & beverage portfolio by 2030 and plans to utilize 50% recycled content in its plastic packaging.

In the U.S., the company plans to increase its use of rPET in its bottled products in 2023, with an objective to roll out 100% rPET bottles in multiple U.S.

areas by 2030;

In 2020, L’OCCITANE committed to implementing 100% recycled content plastic in their bottles by 2025;

Nike has announced a 2025 target of diverting 100% of its waste from landfills, with at least 80% recycled back into its products and goods;

L’Oréal Group committed to using 100% recycled or biobased plastic in their packaging by 2030;

Ikea maintains its goal that, by 2030, all plastic used in its products will be based on renewable or recycled material;

H&M Group aims to incorporate 50% recycled materials by 2030, aiming for 100% of materials to be either recycled or sustainably sourced by the same year;

Ikea maintains its goal that, all plastics used in products to be from renewable or recycled sources by 2030;

By 2025, Lululemon aims to achieve at least 75% sustainable materials for their products, including fibers that are recycled, renewable, regenerative, sourced responsibly and are manufactured using low-resource processes;

Adidas Group aims to use 100% recycled polyester wherever technically possible by the end of 2024;

Evian aims to use 100% rPET in all bottles globally by 2025;

already achieved in the U.S.

market in 2024;

L’OCCITANE committed to implementing 100% recycled content plastic in their bottles by 2025;

L’Oréal Group committed to using 100% recycled or biobased plastic in their packaging by 2030;

PepsiCo has set new goals to cut virgin plastic per serving by 50% across its global food & beverage portfolio by 2030 and plans to utilize 50% recycled content in its plastic packaging.

In the U.S., the company plans to increase its use of rPET in its bottled products, with an objective to roll out 100% rPET bottles in multiple U.S.

areas by 2030.

There is a growing regulatory and policy environment to encourage a reduction in the production of virgin fossil fuel-based plastic and for minimum recycled content in packaging imposed by various governments:

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Spain imposed a tax of €450 per ton on non-reusable plastic packaging, effective January 1, 2023.

Italy introduced a tax in January 2023 of €450 per ton on virgin plastic used in manufacture or importation of single use plastic.

Effective April 2022, a new £200/ton tax applies in the UK to plastic packaging produced or imported into the UK that does not contain at least 30% recycled plastic.

France maintains its goal of having 100% plastics recycled by 2025 and 77% of beverage bottles to be collected.

South Korea continues to target reduction of plastic waste by 20%, an increase in recycling rates from 54% to 70% by 2025, and utilization of 30% renewable plastic by 2030.

India has mandated consumer brands to include at least 30% recycled plastic in their packaging by 2025.

The growing regulatory environment combined with global consumer goods companies, apparel manufacturers, and retail brand commitments for 2025 and 2030 are expected to further increase the demand for rPET.

Closed-loop circularity and keeping materials within their own cycle (bottle-to-bottle and fiber-to-fiber) is gaining increasing attention as the focus on sustainability intensifies.

Japan has set national targets to reduce single-use plastic waste by 25% by 2030, achieve 60% reuse or recycling of plastic containers and packaging by 2030, and ensure 100% effective utilization of all plastic waste by 2035 through reuse, recycling, or energy recovery.

South Korea continues to target reduction of plastic waste by 20%, an increase in recycling rates from 54% to 70% by 2025, and utilization of 30% renewable plastic by 2030.

The growing regulatory environment combined with global consumer goods companies, apparel manufacturers, and retail brand commitments for 2025 and beyond are expected to further increase the demand for rPET.

Closed-loop circularity and keeping materials within their own cycle (bottle-to-bottle and textile-to-textile) is gaining increasing attention as the focus on sustainability intensifies.

Governments and regulators have considered or enacted heightened standards for recycled materials that discourage downcycling of bottles into polyester fiber.

Additionally, it is becoming increasingly difficult to secure inventory of post-consumer bottles due to the increased demand from the bottle industry as they strive to achieve their own sustainability goals.

A fiber-to-fiber recycling strategy addresses these problems and allows fashion brands and companies to secure volume and support the increasing demand of recycled polyester fiber in the textile industry.

We believe the commercialization plans of Loop ™ PET resin and polyester fiber may provide the ideal solution for global brands because Loop ™ PET resin and polyester fiber contains 100% recycled PET and polyester fiber content.

The Loop ™ PET resin and polyester fiber is virgin-quality and is suitable for use in food-grade packaging.

That means CPG companies will be able to market packaging made from a 100% recycled Loop ™ branded PET resin and polyester fiber.

A textile-to-textile recycling strategy addresses these problems and allows fashion brands and companies to secure volume and support the increasing demand of recycled polyester fiber in the textile industry.

The European Union is advancing a regulatory framework aimed at establishing a circular textile economy.

Key measures include a prohibition on the destruction of unsold textiles, which has been enforced in France since 2022 and under consideration for EU-wide adoption by 2025, and a mandate for all member states to implement separate textile waste collection systems starting January 1, 2025 under the Waste Framework Directive.

Extended Producer Responsibility (EPR) requirements are taking effect beginning in 2025, with full implementation anticipated by 2027.

Further, the Ecodesign for Sustainable Products Regulation (ESPR) will impose mandatory design standards focused on durability, recyclability, and minimum recycled content, alongside the introduction of Digital Product Passports for all textile products by 2030.

In alignment with these developments, leading global brands are increasingly seeking to adopt textile-to-textile recycling technologies, which offer a compliant, closed-loop solution superior to mechanical recycling in both quality retention and scalability.

Commercialization Strategy

Our objective is to achieve global expansion of the Infinite Loop ™ Technology through a mix of fully owned manufacturing facilities, strategic partnerships, and licensing agreements.

We believe that industrial companies, some of which today may not be in the business of manufacturing DMT, MEG, PET resin, polyester fiber or other specialty polymers, will view involvement with Infinite Loop ™ projects as a significant growth opportunity, which may offer attractive economic returns either as Loop manufacturing partners or as licensees of the technology.

The Infinite Loop ™ Technology is the key pillar of our commercialization blueprint.

We believe our technology is at the forefront of the global transition away from fossil fuels and petrochemicals and into the circular economy, where PET plastic and polyester fiber are produced by recycling waste plastic rather than depleting finite resources.

The Infinite Loop ™ Technology allows for waste PET plastic and polyester fiber to be broken down into its base building blocks, monomers DMT and MEG, using Loop’s patented technology.

Once the monomers are purified, they can be sold directly to chemical companies, used in the production of specialty polymers, or repolymerized into PET plastic or polyester fiber using INVISTA know how, which Loop licenses, and Chemtex Global Corporation’s engineering.

The INVISTA polymerization process and the associated designs are historically proven in the commercial production of PET resin and polyester fiber.

We have completed our basic design package for the Infinite Loop ™ full-scale manufacturing facilities.

The engineering philosophy we have adopted is “design one, build many.” This approach allows for the basic design package to be used as the base engineering platform for all future geographical expansion.

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

The basic design package has a capacity of up to 70,000 M/T of rDMT and 23,000 M/T of rMEG, or 70,000 M/T of PET resin output per year.

Permitting, site and regulatory considerations may impact plant capacity.

On May 1, 2024, we announced our strategic partnership with Ester to build and operate an Infinite Loop ™ manufacturing facility in India which will produce a unique product offering of lower carbon footprint rDMT, rMEG and specialty polymers, using the Infinite Loop ™ Technology.

Loop has a well-established working relationship with Ester, which has nearly 40 years of specialized polymer production, operational proficiency, and local expertise, including sourcing of PET plastic and polyester fiber waste feedstocks.

The India facility will leverage the Infinite Loop ™ Technology and existing engineering package which should accelerate the lead-time towards groundbreaking, expected to occur by end of 2024.

Construction is expected to be completed by the end of 2026, with commercial operations commencing in early 2027.

Loop will receive an annual technology license fee from the Infinite Loop ™ manufacturing facility in India.

We are also focused on our planned joint venture projects with SKGC in Asia and Europe to build and operate Infinite Loop ™ manufacturing facilities producing and selling Loop ™ PET resin and polyester fiber.

These projects leverage SKGC’s engineering and operational infrastructure.

In addition, the joint venture projects will provide Loop with an annual technology licensing fee.

SKGC is committed to commercializing Loop’s technology as the underpinning of its sustainable plastics strategy.

Loop is working collaboratively with SKGC to put in place a financing plan for the rollout of large-scale manufacturing in Asia and Europe, including the planned Asian manufacturing facility in Ulsan, South Korea.

The global expansion plan for our technology will allow our customers, mostly comprised of CPG brand companies, apparel companies, and chemical companies, to integrate Loop ™ PET resin, polyester fiber, rDMT and rMEG into their products and packaging.

As countries around the globe continue to increase sustainability targets and recycled content mandates, our customers are increasing the use of sustainably produced materials into their products.

Our market strategy is to assist global consumer goods brands in meeting their public sustainability commitments by offering co-branded packaging or polyester fibers that are made with Loop 100% recycled, virgin-quality MEG, DMT, PET or polyester fibers.

Our commercialization strategy to achieve global expansion of the Infinite Loop™ Technology is founded on a combination of direct investments with strategic partners to own and operate commercial facilities and the licensing of our technology.

The global expansion plan for our technology will allow our target customers, mostly comprised of apparel companies and CPG companies, to integrate Loop™ PET resin and polyester fiber into their products and packaging.

As countries around the globe continue to impose sustainability targets and recycled content mandates, we observe that companies are increasingly seeking to incorporate sustainably produced materials into their products.

Our market strategy is to assist global consumer goods and apparel companies in meeting these requirements as well as their own stated sustainability commitments by offering co-branded packaging or polyester fibers that are made with Loop 100% recycled, virgin-quality PET.

We believe that Loop™ recycled PET resin and polyester fiber could command premium pricing over virgin, petroleum-based PET resin and provide attractive economic returns.

We are targeting multi-year take or pay offtake agreements for planned Infinite Loop ™ production.

Factors under consideration in determining project economics include the feasibility design engineering and cost estimate work, timing and permitting of a facility, customer offtake demand, commitment terms, and feedstock sources, quality, availability, PET bale index pricing, logistics, and ramp up, among others.

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.

Recent developments

Strategic partnership with Ester

On May 1, 2024, Loop entered into an agreement with Ester, one of India's leading manufacturers of polyester films and specialty polymers, to form a 50/50 India joint venture ("India JV").

We believe this expansion will enable the Infinite Loop ™ Technology to reach new markets and cater to a broader range of customers across multiple industries including the electronics, automotive, textile, cosmetics and packaging industries.

The India facility will leverage the Infinite Loop ™ Technology and existing engineering package which should accelerate the lead-time towards groundbreaking, expected to occur by end of this year.

Construction is expected to be completed by the end of 2026, with commercial operations commencing in early 2027.

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

Ester and Loop will each contribute 50% of the initial equity capital of the India JV.

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

Cloudeasy Cyclon shoe launch with On

Loop and On collaborated to launch the Cloudeasy Cyclon shoe which was unveiled on May 21 st , 2024.

The upper of the Cloudeasy shoe is crafted with 100% recycled and infinitely recyclable yarn, using the Infinite Loop ™ Technology.

On is the first footwear company to launch a shoe using the Infinite Loop ™ Technology which enables fiber-to-fiber recycling.

The Cloudeasy Cyclon shoe is part of On’s monthly subscription service Cyclon ™ where customers receive, wear, and then return Cylon ™ products, which are then recycled.

The Infinite Loop™ Technology is the key pillar of our commercialization strategy.

We believe our technology is well positioned to respond to the global transition away from fossil fuels and petrochemicals and into the circular economy, where PET plastic and polyester fiber are produced by recycling waste polyester that would otherwise typically be destined for landfill or incineration, rather than relying on fossil-based resources.

We have completed our process design package for the Infinite Loop™ full-scale manufacturing facilities to be used as the base engineering platform for all future facilities.

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

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

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

By strategically selecting cost-efficient locations, we aim to optimize production costs and improve overall financial performance, while limiting our capital contributions.

This direct investment approach also includes leveraging partnerships to integrate Loop’s proprietary technology and sales and marketing expertise with the operational and construction capabilities of experienced partners.

We believe this combination of complementary skill sets allows for more efficient project execution, accelerated market adoption, and scalable growth.

We expect that revenue generation from direct investments in commercial facilities will be driven by two key streams:

(i) profits from the operation of commercial facilities, and (ii) royalties paid to Loop for licensing its technology and exclusive responsibility of sales and marketing.

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

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

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

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

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

We expect licensee-owned facilities to allow us to scale our technology efficiently, without requiring significant capital investment from Loop.

Revenue generation through technology licensing is expected to come from a combination of up-front and recurring royalties.

This approach focused on licensing is currently being deployed in our European partnership with Reed Societe Generale Group.

The Company sold its first technology license to Reed Societe Generale Group for one Infinite Loop™ manufacturing facility in Europe for an initial down payment of €10.0 million with additional milestone payments to be received by Loop as the project advances.

Infinite Loop Europe was formed with the purpose of developing Infinite Loop™ manufacturing facilities in Europe to be owned 10% by Loop and 90% by Reed Societe Generale Group.

Additionally, we aim to generate income by providing engineering services throughout all phases of project development, construction, and startup for all Infinite Loop™ commercial facilities, supporting efficient project execution and creating a steady revenue stream prior to the startup of the facility.

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

This has resulted in Loop generating engineering services revenue of $0.4 million in the quarter ended February 28, 2025.

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

This strategy envisages that we would manufacture plant modules in a low-cost country to be transported and assembled on site at global locations, and would potentially provide an additional income stream alongside returns from owned facilities and royalties.

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

Proprietary Technology and Intellectual Property

We believe the power of our technology lies in its ability to use post-industrial and post-consumer waste PET plastic and polyester fiber feedstocks, which could end up in landfills, rivers, oceans and natural areas, to create Loop ™ PET resin.

We believe the power of the Infinite Loop™ technology lies in its ability to use post-industrial and post-consumer waste PET plastic and polyester fiber feedstocks, which could end up in landfills, rivers, oceans and natural areas, to create Loop ™ PET resin.

We believe our technology can deliver high-purity profitable virgin-quality, 100% recycled PET resin suitable for use in food-grade packaging and polyester fiber.

Our Generation II technology (“GEN II”) is a methanolysis-based depolymerization technology that uses temperatures below 90 °C to depolymerize waste PET and polyester fiber.

The low temperature offers several key advantages which the Company believes will improve its ability to commercialize the GEN II technology, including;

The Infinite Loop™ technology is a methanolysis-based depolymerization technology that uses temperatures below 90 °C to depolymerize waste PET and polyester fiber.

The low temperature offers several key advantages which the Company believes will improve its ability to commercialize our technology, including;

Lower energy usage during depolymerization, and therefore reduced processing cost and lower GHG emissions relative to higher temperature processes;

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Allowing the depolymerization of less costly and low-quality feedstocks, which cannot be effectively recycled today, such as carpet fiber, clothing and mixed plastics, and upcycling them into high-quality PET that can be used in food contact use;

The GEN II technology uses only trace amounts of water, eliminates the need for a halogenated solvent and uses a catalyst at low concentration.

We believe that GEN II requires less energy and fewer resource inputs than conventional PET production processes.

The Infinite Loop™ technology uses only trace amounts of water and uses a catalyst at low concentration.

We believe that the Infinite Loop™ technology requires less energy and fewer resource inputs than conventional PET production processes.

We also believe it is an environmentally sustainable method for producing virgin-quality food-grade PET plastic by decoupling PET manufacturing from the fossil fuel industry.

To independently validate that our GEN II technology can produce DMT and MEG monomers at mini-pilot and pilot scale, we commissioned Kemitek, a College Centre for Technology Transfer specialized in the fields of green chemistry and chemical process scale-up.

Kemitek’s findings allowed them to confirm that our technology produces monomers that meet our purity specifications for the production of PET resin and polyester fiber.

The complete Kemitek report was filed with the SEC by the Company on December 14, 2020.

Additionally, 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 our technology.

Our technology was further validated in March 2023, when Loop and SKGC announced the successful completion of the technical due diligence conducted by SKGC.

Key parameters of Loop’s technology that were validated through SKGC’s comprehensive due diligence include the production yields, operational stability, quality of the output monomers and overall performance of Loop’s Terrebonne Facility.

The Infinite Loop™ technology has been the subject of multiple due diligence exercises performed by independent experts mandated by third parties such as customers and strategic partners, which have all yielded positive results.

Most recently, the Infinite Loop™ technology was validated by independent advisors hired by Reed Societe Generale Group, concurrent with their due diligence review performed in the context of the investment and technology licensing transactions closed in December 2024.

Also, our technology was validated in March 2023, when Loop and SKGC announced the successful completion of the technical due diligence conducted by SKGC.

Key parameters of the Infinite Loop™ technology that were validated through SKGC’s comprehensive due diligence include the production yields, operational stability, quality of the output monomers and overall performance of Loop’s Terrebonne Facility.

The technical due diligence validated that the PET resin and polyester fiber produced using Loop’s technology is of virgin quality.

Our Gen II technology was most recently validated by independent advisors hired by Reed concurrent with their due diligence review performed in the context of Reed’s investment through our European partnership.

As part of our intellectual property and commercialization strategy, we aim to expand the global deployment of the Infinite Loop™ technology through royalty-bearing licensing arrangements, allowing partners to establish and operate manufacturing facilities using our proprietary technology, while we retain full ownership of the underlying intellectual property, including any improvements.

As demonstrated by the licensing agreement we entered into in December 2024 for our European joint venture with Reed Societe Generale Group, we plan to structure these arrangements to generate revenue through a combination of upfront fees and potential ongoing royalties, with licensees typically being granted a non-transferable, facility-specific license, and sublicensing permitted only under defined conditions and subject to our oversight.

However, specific terms of each arrangement may vary depending on the negotiations in each transaction.

This licensing model is a key component of our strategy to scale our technology efficiently and with limited capital investment, as further described under “Commercialization Strategy” in Item 1.

To protect our technology and intellectual property rights, we rely on a combination of patents, trademarks, trade secrets, confidentiality agreements and provisions as well as other contractual provisions to protect our proprietary rights, which are primarily our patents, brand names, product designs and marks.

The GEN II technology portfolio currently consists of four patent families:

One family has three issued U.S.

patents, and two pending U.S.

applications, the last of which is expected to expire on or around September 2037, not including any patent term extensions.

Internationally, this patent family has twelve issued or allowed patents in foreign jurisdictions, including China, Bangladesh, Argentina, Eurasian Patent Organization, South Korea, Taiwan, and Brazil, and pending applications in Canada, China, the Eurasian Patent Organization, Europe, the Gulf Cooperation Council, India, Japan, Mexico, Taiwan, 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 two issued U.S.

patents and a pending U.S.

The Infinite Loop™ technology portfolio currently consists of four patent families:

One family has four issued U.S.

patents, and one pending U.S.

application, the last of which is expected to expire on or around September 2037, not including any patent term extensions.

Internationally, this patent family has twenty-one issued or allowed patents in various foreign jurisdictions, which are expected to expire on or around September 2038, and pending applications in various foreign jurisdictions.

Any patents that issue from these pending applications would be expected to expire on or around September 2038.

An additional aspect of the Infinite Loop™ technology, as claimed in three issued U.S.

patents and one pending U.S.

application, all expected to expire on or around June 2039, not including any patent term extensions.

Internationally, this patent family includes ten issued or allowed patents in foreign jurisdictions, including China, Morocco, Algeria, Indonesia and Bangladesh, Brazil, Japan, and Taiwan 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 issued U.S.

patent and a pending U.S.

application, both expected to expire on or around March 2040, not including any patent term extensions.

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

Another aspect of the GEN II technology, which is the subject of two issued U.S.

patents and a pending U.S.

Internationally, this patent family includes twenty issued or allowed patents in various foreign jurisdictions, which are expected to expire on or around June 2039, and pending applications in various foreign jurisdictions.

Any patents that issue from these pending applications would be expected to expire on or around June 2039.

Another aspect of the Infinite Loop™ technology, which is the subject of one issued U.S.

patent and one pending U.S.

application, both expected to expire on or around March 2040, not including any patent term extensions.

Internationally, this patent family includes eight issued or allowed patents in foreign jurisdictions, including Europe, Chile, Bangladesh, India, Indonesia, Singapore, and South Africa, and pending applications in Canada, China, South Korea, the Eurasian Patent Organization, the Gulf Cooperation Council, Japan, Mexico, and various other countries, all expected to expire on or around March 2040, if granted, not including any patent term extensions.

We have also filed a U.S.

provisional application directed to another aspect of the GEN II technology.

Internationally, this patent family includes one allowed patent in Brazil, which is expected to expire on or around March 2040, and pending applications in various foreign jurisdictions.

Any patents that issue from these pending applications would be expected to expire on or around March 2040.

Another aspect of the Infinite Loop™ technology, which is the subject of two issued U.S.

patents and one pending U.S.

application, all expected to expire on or around March 2040, not including any patent term extensions.

Internationally, this patent family includes twenty-three issued or allowed patents in various foreign jurisdictions, which are expected to expire on or around March 2040, and pending applications in various foreign jurisdictions.

Any patents that issue from these pending applications would be expected to expire on or around March 2040.

We have also filed one international PCT application directed to another aspect of the Infinite Loop™ technology.

Any patents that ultimately issue from this application are expected to expire on or around September 2044, not including any patent term adjustment or extensions.

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

Loop also has pending applications in Canada, China, South Korea, and the U.S.

Loop also has pending applications in South Korea and the U.S.

Government Regulation and Approvals

As we seek to further develop and commercialize our technology, we will be subject to extensive and frequently developing federal, state, provincial and local laws and regulations.

Compliance with current and future regulations, including food packaging regulations, could increase our operational costs.

As we seek to further develop and commercialize our technology, we will be subject to extensive and frequently developing federal, state, provincial and local laws and regulations in the jurisdictions we operate or plan to operate.

Compliance with current and future regulations, including those relating to chemical handling, environmental protection, and health and safety standards applicable to the operation of our Terrebonne Facility, as well as food packaging regulations applicable to our products, could increase our operational costs.

As we continue to enter into joint venture, licensing, financing, and service or product provision agreements with partners globally, currently focused primarily in the European Union and Asia, we will be subject to additional jurisdiction-specific requirements that may affect our existing and planned construction, manufacturing, licensing, and commercialization activities.

Our operations require various governmental permits and approvals.

We are in the process of obtaining all necessary permits and approvals for the operation of our business;

We need to maintain existing permits and obtain new ones required to support the operation and expansion of our business;

however, any of these permits or approvals may be subject to denial, revocation or modification under various circumstances.

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See “Risk Factors” below for additional information.

We believe that if we are successful in addressing food packaging regulations in various countries and economic regions, that the regulatory environment may provide Loop ™ PET resin a competitive advantage relative to mechanically recycled alternative resins and virgin PET.

We believe that if we are successful in addressing food packaging regulations in various countries and economic regions, the regulatory environment may provide Loop ™ PET resin a competitive advantage relative to mechanically recycled alternative resins and virgin PET.

Below is a summary of the certifications and regulatory confirmations we have obtained.

Loop’s PET resin was subjected to independent testing by an external and certified laboratory, which confirmed the PET complies with FDA Regulation 21 CFR § 177.1630 on August 26, 2021, as well as EU Commission Regulation No 10/2011 on July 27, 2021.

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Demonstration of compliance with food-contact requirements follows the No Objection Letter (“NOL”) from the FDA previously granted to Loop in March 2021.

The NOL confirms that Loop’s monomers can produce rPET of a purity suitable for food-contact use, provided it meets the applicable requirements of Title 21 of the Code of Federal Regulations.

The NOL confirms that Loop’s monomers can produce PET of a purity suitable for food-contact use, provided it meets the applicable requirements of Title 21 of the Code of Federal Regulations.

The monomers used in the PET resin submitted for testing were produced at the Terrebonne Facility.

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To attract and retain highly capable and innovative employees, we have developed competitive compensation packages and benefits programs.

Our compensation packages include market-competitive pay, healthcare benefits, paid time off and family leave and flexible work schedules.

Our compensation packages include market-competitive pay, healthcare benefits, paid time off and family leave.

We also offer equity awards with multi-year vesting provisions to incentivize and reward certain employees for long-term corporate performance and promote retention throughout the vesting period.

13 unchanged sentences

Available Information

Our website is www.loopindustries.com , and our investor relations web page can be found at http://www.loopindustries.com/en/investors/overview .

Our website is www.loopindustries.com , and our investor relations web page can be found at https://loopindustries.com/investors/overview/ .

Copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are available, free of charge, on our investor relations website as soon as reasonably practicable after we file such material electronically with or furnish it to the SEC.

3 unchanged sentences

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

What changed 10-K

Item 1. Business