What changed in this filing

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Item 1. Financial Statements

2025-07-15 compared with 2025-01-14 · 154 added, 244 removed, 259 unchanged (61% of the section changed)

1 unchanged sentence

Loop Industries, Inc.

Three and Nine months ended November 30, 2024

Three months ended May 31, 2025

Index to the Unaudited Interim Condensed Consolidated Financial Statements

Condensed consolidated balance sheets as at November 30, 2024 (Unaudited) and February 29, 2024

Condensed consolidated statements of operations and comprehensive loss for the three and nine months ended November 30, 2024 and 2023 (Unaudited)

Condensed consolidated statements of changes in stockholders’ equity for the three and nine months ended November 30, 2024 and 2023 (Unaudited)

Condensed consolidated statements of cash flows for the nine months ended November 30, 2024 and 2023 (Unaudited)

Condensed consolidated balance sheets as at May 31, 2025 (Unaudited) and February 28, 2025

Condensed consolidated statements of operations and comprehensive loss for the three months ended May 31, 2025 and 2024 (Unaudited)

Condensed consolidated statements of changes in stockholders’ equity for the three months ended May 31, 2025 and 2024 (Unaudited)

Condensed consolidated statements of cash flows for the three months ended May 31, 2025 and 2024 (Unaudited)

Notes to the condensed consolidated financial statements (Unaudited)

5 unchanged sentences

Cash and cash equivalents

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

Inventories (Note 4)

Accounts receivable (Note 3)

Prepaid expenses (Note 4)

Total current assets

Investment in joint venture

Investments in joint ventures (Note 9)

Property, plant and equipment, net (Note 5)

3 unchanged sentences

Accounts payable and accrued liabilities (Note 8)

Credit facility (Note 10)

Unearned revenue (Note 11)

Unearned revenue

Current portion of long-term debt (Note 11)

1 unchanged sentence

Due to customer

Series B Convertible Preferred stock (Note 10)

Long-term debt (Note 11)

8 unchanged sentences

Additional paid-in capital

Additional paid-in capital – Warrants

Accumulated deficit

8 unchanged sentences

Three Months Ended

Nine Months Ended

November 30, 2024

November 30, 2023

November 30, 2024

November 30, 2023

Revenue from contracts with customers

Revenues (Note 13)

Research and development (Note 14)

General and administrative (Note 15)

Impairment of machinery & equipment (Note 6)

Depreciation and amortization (Notes 5 and 6)

Loss on equity accounted investment (Note 9)

Total expenses

2 unchanged sentences

Interest income

Foreign exchange loss (gain)

Foreign exchange gain

Total other loss (income)

Other comprehensive loss -

Other comprehensive (loss) income :

Foreign currency translation adjustment

9 unchanged sentences

dollars, except for share data)

Three months ended November 30, 2024

Preferred stock

par value $0.0001

Three months ended May 31, 2025

par value $0.0001

Number of Shares

Comprehensive

Income (Loss)

Stockholders’

Balance, August 31, 2024

$ ( 186,998 )

Stock options issued for services (Note 16)

Restricted stock units issued for services (Note 16)

Foreign currency translation

Balance, November 30, 2024

$ ( 198,910 )

(in thousands of U.S.

dollars, except for share data)

Three months ended November 30, 2023

Preferred stock

par value $0.0001

Accumulated Other

Number of Shares

3 unchanged sentences

Stockholders’

Balance, August 31, 2023

Balance, February 28, 2025

$ ( 192,027 )

Issuance of shares upon the exercise of stock options (Note 16)

Issuance of shares upon the vesting of restricted stock units (Note 16)

Stock options issued for services (Note 16)

1 unchanged sentence

Foreign currency translation

Balance, November 30, 2023

Balance, May 31, 2025

$ ( 195,474 )

See accompanying notes to the condensed consolidated financial statements.

Loop Industries, Inc.

Condensed Consolidated Statement of Changes in Stockholders’ Equity

(in thousands of U.S.

dollars, except for share data)

Nine months ended November 30, 2024

Preferred stock

Three months ended May 31, 2024

par value $0.0001

Preferred stock

par value $0.0001

Accumulated Other

Number of Shares

7 unchanged sentences

Issuance of shares upon the vesting of restricted stock units (Note 16)

Expiration of warrants (Note 18)

Stock options issued for services (Note 16)

1 unchanged sentence

Foreign currency translation

Balance, November 30, 2024

$ ( 198,910 )

Nine Months Ended November 30, 2023

Series A preferred stock

par value $0.0001

Number of Shares

Capital - Warrants

Comprehensive

Stockholders’

Balance, February 28, 2023

$ ( 155,883 )

Issuance of shares upon the vesting of restricted stock units (Note 16)

Issuance of shares upon the exercise of stock options (Note 16)

Stock options issued for services (Note 16)

Restricted stock units issued for services (Note 16)

Foreign currency translation

Balance, November 30, 2023

$ ( 171,878 )

Balance, May 31, 2024

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 16)

Impairment of machinery & equipment (Note 6)

Accretion expense (Note 12)

Accrued interest and other financing costs (Notes 10 and 11)

Loss on equity accounted investment (Note 9)

Changes in operating assets and liabilities:

Sales tax and tax credits receivable (Note 3)

Inventories (Note 4)

Accounts receivable (Note 3)

Prepaid expenses (Note 4)

Accounts payable and accrued liabilities (Note 8)

Customer deposits

Unearned revenue (Note 11)

Net cash used in operating activities

Cash Flows from Investing Activities

Deposits on equipment

Distribution from equity investment

Additions to property, plant and equipment (Note 6)

Additions to intangible assets (Note 6)

1 unchanged sentence

Cash Flows from Financing Activities

Borrowings under credit facility (Note 10)

Borrowings under credit facility

Repayment of long-term debt (Note 11)

2 unchanged sentences

Net decrease in cash

Cash, cash equivalents and restricted cash, beginning of period

Cash, cash equivalents and restricted cash, end of period

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

Supplemental Disclosure of Cash Flow Information:

4 unchanged sentences

Loop Industries, Inc.

Three and Nine Months Ended November 30, 2024 and 2023

Three Months Ended May 31, 2025 and 2024

Notes to the Condensed Consolidated Financial Statements

7 unchanged sentences

Securities and Exchange Commission (“SEC”) regarding interim financial reporting.

Certain information and note disclosures included in these unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 29, 2024, filed with the SEC on May 29, 2024.

1 on Form 10-K/A filed with the SEC on May 30, 2025.

The unaudited interim condensed consolidated financial statements comprise the consolidated financial position and results of operations of Loop Industries, Inc.

2 unchanged sentences

(collectively, the “Company”).

The Company also owns, through Loop Innovations, LLC, a 50 % interest in a joint venture, Indorama Loop Technologies, LLC, which is accounted for under the equity method.

The Company owns, through Loop Innovations, LLC, a 50 % interest in a joint venture, Indorama Loop Technologies, LLC, which is accounted for under the equity method.

The Company also owns a 50 % interest in a joint venture, Ester Loop Infinite Technologies Private Limited, which is accounted for under the equity method.

Intercompany balances and transactions are eliminated on consolidation.

1 unchanged sentence

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, 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.

The results for the three months ended May 31, 2025 are not necessarily indicative of the results to be expected for any subsequent quarter, for the fiscal year ending February 28, 2026, or for any other period.

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

2 unchanged sentences

Liquidity risk assessment

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.

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, 2024, the Company’s available liquidity was $ 450 , consisting of cash and cash equivalents of $ 323 and an undrawn amount on a senior credit facility from a Canadian bank of $ 127 .

Also, current liabilities exceeded current assets by $ 7,085 as at November 30, 2024.

On December 23, 2024, the Company received cash proceeds of $ 20,790 from the closing of transactions with Reed Management SAS (“Reed”), consisting of the issuance of Series B Convertible Preferred Stock and its first technology licensing agreement (see Note 20 for additional details).

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.

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

As at May 31, 2025, the Company had cash and cash equivalents of $ 9,748 .

It 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 this assessment and considering the $20,790 proceeds received on December 23, 2024, management is comfortable that current available liquidity will be sufficient to meet the Company’s obligations, commitments and budgeted expenditures for no less than twelve months from the issuance date 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, among other factors, whether the Company can obtain the necessary financing through a combination of further technology licensing arrangements, government incentive programs, and/or the issuance of debt and/or equity.

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

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) the 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 has determined that current available liquidity will be sufficient to meet the Company’s obligations, commitments and budgeted expenditures for at least twelve months from the issuance date 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 facilities is dependent on, among other factors, whether the Company can obtain the necessary financing through a combination of further technology licensing arrangements, government incentive programs, and/or the issuance of debt and/or equity.

In particular, the Company will require capital sufficient to fund its equity contributions to the India JV (as defined under Note 9 below) for the construction of the planned Infinite Loop™ facility in India, as well as its ongoing cash requirements.

There is no assurance that the Company will be successful in attracting additional funding.

Even if additional financing is available, it may not be available on terms favorable to the Company.

3 unchanged sentences

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 property, plant and equipment, 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.

Unearned revenue

Unearned revenue represents obligations to our customers for which payment has been received in advance of the delivery of goods or performance of services.

Such revenue is recognized on the balance sheet as a contract liability until we fulfill our contractual obligations.

The timing of revenue recognition is based upon the transfer of control of the specified goods or services to the customer.

For goods, this typically occurs at the time of shipment or delivery, depending on the terms of the contract.

For services, revenue is recognized as the services are performed, either at a point in time or over a specified period.

Those estimates and assumptions include the going concern assessment, estimates for depreciable lives and recoverability of property, plant and equipment and intangible assets, assumptions made in the classification of convertible preferred securities, assumptions made in the revenue recognition for licensing contracts, 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, 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 November 30, 2024, the potentially dilutive securities consisted of 2,771,216 outstanding stock options (2023 – 2,772,000 ), 4,448,179 outstanding restricted stock units (2023 – 4,417,688 ), and 2,357,407 outstanding warrants (2023 – 7,089,400 ).

For the three-month periods ended May 31, 2025 and 2024, 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, 2025, the potentially dilutive securities consisted of 5,573,138 outstanding stock options (2024 – 2,971,216 ), 3,981,121 outstanding restricted stock units (2024 – 4,399,060 ), and nil outstanding warrants (2024 – 7,089,400 ).

Recently adopted accounting pronouncements

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

2023-05, Joint Venture Formations, which requires joint ventures to apply a new basis of accounting by measuring assets and liabilities at fair value upon formation.

The amendments address diversity in practice by establishing requirements for recognition and measurement of net assets and liabilities on the formation date.

The updated standard is effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years.

The adoption of this accounting guidance for the three-month period ended May 31, 2025 did not impact the disclosures in our interim condensed consolidated financial statements.

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):

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 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 period beginning after December 15, 2024, which for the Company will be the annual period ending February 28, 2026.

The updated standard is effective for our annual period beginning after December 15, 2024 and all joint ventures formed on or after January 1, 2025, which for the Company is the annual period ending February 28, 2026.

Early adoption is permitted.

Management is currently evaluating the impact that the updated standard will have on our financial statement disclosures.

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 period ending February 28, 2025.

Management is currently evaluating the impact that the updated standard will have on our financial statement disclosures.

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

2023-05, Joint Venture Formations, which requires joint ventures to apply a new basis of accounting by measuring assets and liabilities at fair value upon formation.

The amendments address diversity in practice by establishing requirements for recognition and measurement of net assets and liabilities on the formation date.

The updated standard is effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years.

Management is currently evaluating the impact that the updated standard will have on our consolidated financial statements and related disclosures.

In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses, which requires public business entities to disclose, in interim and annual reporting periods, additional information about certain expenses in the notes to financial statements.

The updated standard is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027.

Early adoption is permitted.

Management is currently evaluating the impact that the updated standard will have on our consolidated financial statements and related disclosures.

Sales Tax, Tax Credits and Other Receivables

Sales tax, research and development tax credits and other receivables as at November 30, 2024 and February 29, 2024 were as follows:

November 30, 2024

In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments, which clarifies the accounting for settlements of convertible debt instruments that occur on terms different from the original contractual conversion terms.

The amendments introduce a "preexisting contract approach," requiring that, to qualify for induced conversion accounting, the inducement offer must preserve the form of consideration and provide an amount of consideration that is no less than what was issuable under the original conversion privileges.

This guidance applies to convertible debt instruments with cash conversion features and to instruments that are not currently convertible but had substantive conversion features at issuance and at the time the inducement offer is accepted.

The updated standard is effective for annual reporting periods beginning after December 15, 2025, including interim periods within those fiscal years.

Early adoption is permitted for entities that have adopted the amendments in ASU 2020-06.

Management is currently evaluating the impact that the updated standard will have on our consolidated financial statements and related disclosures.

In January 2025, the Financial Accounting Standards Board (FASB) issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date.

This update clarifies the effective date of ASU 2024-03, which requires public business entities to provide disaggregated disclosures of certain income statement expenses.

Specifically, ASU 2025-01 confirms that the guidance in ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and for interim periods within annual reporting periods beginning after December 15, 2027.

Early adoption is permitted.

Management is currently evaluating the impact that the updated standard will have on our consolidated financial statements and related disclosures.

Accounts Receivable

Accounts receivable as at May 31, 2025 and February 28, 2025 were as follows:

February 28, 2025

Accounts receivable from customers

Research and development tax credits

Interest income receivable

Other receivables

Inventories as at November 30, 2024 and February 29, 2024 were as follows:

November 30, 2024

February 29, 2024

Finished goods

Work in process

Raw materials

Allowance for inventory write-down

As at November 30, 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.

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 can be polymerized into Loop ™ PET.

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

As at November 30, 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 November 30, 2024, the Company recorded an allowance for inventory write-down of $ 762 (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.

Prepaid Expenses

Prepaid expenses as at November 30, 2024 and February 29, 2024 were as follows:

November 30, 2024

Prepaid expenses as at May 31, 2025 and February 28, 2025 were as follows:

February 28, 2025

Property, Plant and Equipment, Net

As at November 30, 2024

As at May 31, 2025

Accumulated depreciation, write-down and impairment

6 unchanged sentences

Net book value

Machinery and equipment

Machinery and equipment – pre-construction

Building and Land Improvements

Office equipment and furniture

Depreciation expense for the three- and nine-month periods ended November 30, 2024 amounted to $ 79 and $ 249 , respectively (2023 – $ 93 and $ 295 ).

During the three-month period ended November 30, 2024 the Company recorded an impairment charge for machinery and equipment of $ 8,460 .

This impairment was due to the termination of the joint venture arrangement between the Company and SK Geo Centric Co.

(“SKGC”) under which they had intended to construct and operate an Infinite Loop™ manufacturing facility in Ulsan, South Korea (see note 20 for additional details).

The Company plans to utilize the equipment in a future commercial production facility.

However, the deployment plans for the use of this equipment are not fully developed at this time and therefore the carrying value of the equipment was considered to be impaired, resulting in an expense of $8,460 being recognized in the three-month period ended November 30, 2024.

Depreciation expense amounted to $ 35 for the three-month period ended May 31, 2025 (2024 – $ 91 ).

Intangible Assets, Net

Intangible assets as at November 30, 2024 and February 29, 2024 were $ 1,808 and $ 1,548 , respectively.

During the nine-month periods ended November 30, 2024 and 2023, we made additions relating to patent application costs to intangible assets of $ 454 and $ 378 , respectively.

Amortization expense for the three- and nine-month periods ended November 30, 2024 amounted to $ 53 and $ 149 , respectively (2023 – $ 38 and $ 105 ).

Intangible assets as at May 31, 2025 and February 28, 2025 were $ 1,840 and $ 1,708 respectively.

During the three-month periods ended May 31, 2025 and 2024, we capitalized additions relating to patent application costs to intangible assets of $ 115 and $ 176 , respectively.

Amortization expense for the three-month period ended May 31, 2025 amounted to $ 66 (2024 – $ 46 ).

Fair Value of Financial Instruments

The following tables presents the fair value of the Company’s financial liabilities as at November 30, 2024 and February 29, 2024:

Fair Value at November 30, 2024

The following tables presents the fair value of the Company’s financial liabilities as at May 31, 2025 and February 28, 2025:

Fair Value at May 31, 2025

Carrying Amount

1 unchanged sentence

Financial liabilities measured at amortized cost:

Long-term debt

Long-term debt (Note 11)

Due to customer

3 unchanged sentences

Financial liabilities measured at amortized cost:

Long-term debt

Long-term debt (Note 11)

Due to customer

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

The fair value of cash and cash equivalents, accounts receivable, 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, 2024 and February 29, 2024 were as follows:

November 30, 2024

Accounts payable and accrued liabilities as at May 31, 2025 and February 28, 2025 were as follows:

February 28, 2025

Trade accounts payable

Accounts payable

Accrued employee compensation

2 unchanged sentences

Other accrued liabilities

Credit Facility

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 $ 2,498 (CDN $3,500) in aggregate principal amount and provides for a two-year term on amounts drawn.

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

The Credit Facility is collateralized by the Company’s Terrebonne, Québec property and is subject to a minimum equity covenant, tested quarterly, with which the Company was not in compliance as at November 30, 2024.

On December 12, 2024, the Company received a waiver from the bank, confirming they have no intention of demanding payment, provided that the Company receives capital injections for at least CDN $10,000 by December 31, 2024 and CDN $10,000 by January 31, 2025 .

The Company received $20,790 from Reed on December 23, 2024 which meets the requirements set forth in the waiver (see Note 20 for additional details).

As at November 30, 2024, the Company borrowed $ 2,372 under the Credit Facility.

The Company recorded interest expense on the Credit Facility for the three- and nine-month periods ended November 30, 2024 in the amount of $ 41 and $ 86 , respectively (2023 – nil and nil).

Unearned revenue

As at November 30, 2024, unearned revenue was $ 102 (2023 – nil), comprised of a payment received from a customer while the Company has not yet fulfilled its obligation to deliver rPET.

Investments in Joint Ventures

Joint Venture with Ester

On May 1, 2024, the Company entered into an agreement with Ester Industries Ltd.

(“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.

During the year ended February 28, 2025, Ester Loop Infinite Technologies Private Limited (“ELITe”) was incorporated as the India JV.

ELITe meets the accounting definition of a joint venture where neither party has control of the joint venture entity and both parties have joint control over the decision-making process.

As such, the Company uses the equity method of accounting to account for its share of the investment in ELITe.

During the three-month period ended May 31, 2025, Loop and Ester made no contributions (2024 – nil) to ELITe.

During the three-month period ended May 31, 2025, ELITe incurred losses of $ 604 (2024 – nil), resulting in the Company recording its share of the loss on equity accounted investment of $ 302 (2024 – nil) for the period.

As at May 31, 2025, the carrying value of the Company’s investment in ELITe was $ 979 (2024 – nil).

Series B Convertible Preferred Stock

The balance of Series B Convertible Preferred Stock as at May 31, 2025 and February 28, 2025 was as follows:

February 28, 2025

Stated value at issuance

Accrued PIK dividends

Series B Convertible Preferred Stock

During the three-month period ended May 31, 2025, the company recorded PIK dividends of $ 340 (2024 – nil), which were recorded in “Interest and other financial expenses” in our Consolidated Statements of Operations and Comprehensive Loss.

Long‑Term Debt

Long-term debt as of November 30, 2024 and February 29, 2024, was comprised of the following:

November 30, 2024

Long-term debt as of May 31, 2025 and February 28, 2025, was comprised of the following:

February 28, 2025

7 unchanged sentences

Investissement Québec financing facility

The Company recorded interest expense on the Investissement Québec loan for the three- and nine-month periods ended November 30, 2024 in the amount of $ 29 and $ 87 , respectively (2023 – $ 21 and $ 63 ) and an accretion expense of $ 13 and $ 41 , respectively (2023 – $ 18 and $ 53 ).

During the nine-month period ended November 30, 2024, the Company made repayments of $ 60 (2023 – $ 47 ) on the Investissement Québec loan.

The Company recorded interest expense on the Investissement Québec loan for the three-month period ended May 31, 2025 in the amount of $ 36 (2024 – $ 30 ) and an accretion expense of $ 11 (2024 – $ 14 ).

During the three-month period ended May 31, 2025, the Company made repayments of $ 55 (2024 – $ 25 ) on the Investissement Québec loan.

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

4 unchanged sentences

February 28, 2030

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 $ 2,544 in aggregate principal amount.

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 not in compliance as at May 31, 2025.

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, 2025, the $ 2,544 Credit Facility was available and undrawn.

As at May 31, 2024, the Company had borrowings of $ 2,517 under the Credit Facility.

On July 4, 2025, the Company and the Canadian Bank executed an amendment to the Credit Facility, modifying the minimum equity covenant to include the balance of Series B Convertible Preferred Stock as at February 28, 2025 of $ 10,647 in the calculation of stockholders’ equity.

The Company was in compliance with the minimum equity covenant following this amendment.

Stockholders’ Equity

For the period ended November 30, 2024

For the period ended May 31, 2025

Number of shares

1 unchanged sentence

Issuance of shares upon settlement of restricted stock units

Balance, November 30, 2024

For the period ended November 30, 2023

Balance, May 31, 2025

For the period ended May 31, 2024

Number of shares

1 unchanged sentence

Issuance of shares upon settlement of restricted stock units

Issuance of shares upon the exercise of stock options

Balance, November 30, 2023

During the nine months ended November 30, 2024, the Company recorded the following common stock transaction:

Balance, May 31, 2024

During the three months ended May 31, 2025, the Company recorded the following common stock transactions:

The Company issued 98,087 shares of the common stock to settle restricted stock units that vested in the period.

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

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

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.

Revenue for the three-month periods ended May 31, 2025 and 2024 were as follows:

Engineering services

During the three-month period ended May 31, 2025, the Company recorded revenues of $ 244 (2024 – nil) for engineering fees, which were related to an engineering services agreement between Loop and ELITe.

Pursuant to the agreement, Loop provides engineering services for the planned Infinite Loop™ facility in India.

During the three-month period ended May 31, 2025, the Company recorded revenues of $ 8 (2024 – $ 6 ) for sales of Loop™ PET resin.

As at May 31, 2025, unearned revenue was $ 102 (2024 – nil), comprised of a payment received from a customer while the Company has not yet fulfilled its obligation to deliver PET.

Research and Development Expenses

Research and development expenses for the three-month periods ended November 30, 2024 and 2023 were as follows:

November 30, 2024

November 30, 2023

Employee compensation

Machinery and equipment expenditures

External engineering

Plant and laboratory operating expenses

Patent legal fees

Research and development expenses for the nine-month periods ended November 30, 2024 and 2023 were as follows:

November 30, 2024

November 30, 2023

Research and development expenses for the three-month periods ended May 31, 2025 and 2024 were as follows:

Employee compensation

Machinery and equipment expenditures

External engineering

Plant and laboratory operating expenses

Patent legal fees

General and Administrative Expenses

General and administrative expenses for the three-month periods ended November 30, 2024 and 2023 were as follows:

November 30, 2024

November 30, 2023

Employee compensation

Professional fees

General and administrative expenses for the nine-month periods ended November 30, 2024 and 2023 were as follows:

November 30, 2024

November 30, 2023

General and administrative expenses for the three-month periods ended May 31, 2025 and 2024 were as follows:

Employee compensation

2 unchanged sentences

Stock Options

The following table summarizes the continuity of the Company’s stock options during the three-month periods ended November 30, 2024 and 2023:

stock options

The following table summarizes the continuity of the Company’s stock options during the three-month periods ended May 31, 2025 and 2024:

Number of stock options

Weighted average exercise price

stock options

exercise price

Outstanding, beginning of period

Outstanding, end of period

Exercisable, end of period

The following tables summarizes the continuity of the Company’s stock options during the nine-month periods ended November 30, 2024 and 2023:

stock options

Number of stock options

Weighted average exercise price

stock options

exercise price

Outstanding, beginning of period

3 unchanged sentences

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

The principal components of the pricing model for the stock options granted in the nine-month period ended November 30, 2024 and 2023 were as follows:

The principal components of the pricing model for the stock options granted in the three-month period ended May 31, 2025 and 2024 were as follows:

Exercise price

Risk-free interest rate

3.68 % – 3.72 %

Expected dividend yield

1 unchanged sentence

Expected life

During the three-month periods ended November 30, 2024 and 2023, stock-based compensation expense attributable to stock options amounted to $ 146 and $ 168 , respectively.

During the nine-month periods ended November 30, 2024 and 2023, stock-based compensation expense attributable to stock options amounted to $ 441 and $ 501 , respectively.

3.5 – 5.0 years

The weighted-average grant-date fair value of options granted during the periods ended May 31, 2025 and 2024 was $ 0.62 and $ 2.03 , respectively.

A summary of the Company’s nonvested shares as of May 31, 2025, and changes during the period ended May 31, 2025 were as follows:

Number of stock options

Weighted-average grant-date fair value

Nonvested, beginning of period

Nonvested, end of period

During the three-month periods ended May 31, 2025 and 2024, stock-based compensation expense attributable to stock options amounted to $ 486 and $ 146 , respectively.

Restricted Stock Units

The following table summarizes the continuity of the restricted stock units during the three-month periods ended November 30, 2024 and 2023:

Number of units

Weighted average fair value price

Number of units

Weighted average fair value price

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, 2024 and 2023:

The following table summarizes the continuity of the restricted stock units during the three-month periods ended May 31, 2025 and 2024:

Number of units

7 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, 2024 and 2023, stock-based compensation attributable to RSUs amounted to $ 184 and $ 229 , respectively.

During the nine-month periods ended November 30, 2024 and 2023, stock-based compensation attributable to RSUs amounted to $ 621 and $ 639 , respectively.

During the three-month periods ended May 31, 2025 and 2024, stock-based compensation attributable to RSUs amounted to $( 111 ), which includes $( 268 ) for forfeitures recorded in the period, and $ 224 , respectively.

Stock-Based Compensation Expense

During the three-month periods ended November 30, 2024 and 2023, stock-based compensation included in research and development expenses amounted to $ 106 and $ 161 , respectively, and in general and administrative expenses amounted to $ 224 and $ 236 , respectively.

During the nine-month periods ended November 30, 2024 and 2023, stock-based compensation included in research and development expenses amounted to $ 367 and $ 476 , respectively, and in general and administrative expenses amounted to $ 695 and $ 664 , respectively.

During the three-month periods ended May 31, 2025 and 2024, stock-based compensation included in research and development expenses amounted to $ 312 and $ 129 , respectively, and in general and administrative expenses amounted to $ 63 and $ 241 , respectively.

Equity Incentive Plan

6 unchanged sentences

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

The following table summarizes the continuity of the Company’s Equity Incentive Plan units that were authorized for issuance as at and during the nine-month periods ended November 30, 2024 and 2023:

The following table summarizes the continuity of the units that were authorized for issuance under the Plan as at and during the three-month periods ended May 31, 2025 and 2024:

Number of units*

3 unchanged sentences

Units granted

( 2,801,922 )

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, 2024, warrants for the purchase of 4,714,813 shares of our common stock, each with an exercise price of $ 15.00 , expired, and warrants for the purchase of 17,180 shares of our common stock, each with an exercise price of $ 11.00 also expired.

Contractual agreements

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 are contacted to 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 are required 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 .

Subsequent events

Amended Agreement with Reed Management SAS (“Reed”)

On December 12, 2024, the Company entered into an Amended and Restated Share Purchase Agreement (the “Amended Agreement”) with Reed Management SAS (“Reed”), which amends the original Share Purchase Agreement dated May 30, 2024.

To facilitate the closing of the transactions contemplated by the Amended Agreement, a simplified joint-stock company is in the process of being incorporated under French law (“Infinite Loop Europe”), to be owned 90 % by Reed and 10 % by Loop.

On December 23, 2024, the Company closed the financing and licensing transactions contemplated by the Amended Agreement.

The Company issued and sold 1,044,430 shares of Series B Convertible Preferred Stock at $ 10.00 per share to Reed Circular Economy (“RCE”), an affiliate of Reed.

Additionally, the Company entered into a License Agreement with RCE, acting on behalf of Infinite Loop Europe, granting a non-transferable, royalty-bearing license to use Loop’s proprietary depolymerization technology for one facility within Europe.

The Company received total cash proceeds of $ 20,790 (€20,000) on December 23, 2024.

Terminated Agreement with SKGC

Effective January 14, 2025, Loop and 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.

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