[10-Q] – Loop Industries, Inc. (LOOP) (CIK 0001504678)
Loop Industries reported Q2 FY2026 results showing minimal revenue and narrower losses. For the three months ended August 31, 2025, revenue was $0 (vs. $23 thousand a year ago) and net loss was $3.2 million (vs. $4.8 million). For the six months, revenue reached $252 thousand (vs. $29 thousand) while net loss improved to $6.7 million (vs. $10.0 million).
Cash and cash equivalents were $7.3 million as of August 31, 2025, with total available liquidity of $9.9 million including an undrawn $2.5 million Canadian credit facility. Operating cash outflow was $5.6 million for the six months. Stockholders’ equity moved to a deficit of $5.5 million, reflecting ongoing losses and a Series B Convertible Preferred Stock balance of $11.3 million, which accrued $681 thousand of PIK dividends year-to-date.
The company recorded $244 thousand of engineering services revenue tied to its India joint venture and recognized a $345 thousand loss from equity-accounted investments. The India facility is estimated at $176 million, with land arrangements in Gujarat advancing and groundbreaking targeted by fiscal year-end 2026. As of October 14, 2025, common shares outstanding were 48,043,068.
Loop Industries ha riportato i risultati del secondo trimestre dell'anno fiscale 2026, con entrate minime e perdite ridotte. Per i tre mesi terminati il 31 agosto 2025, le entrate sono state 0$ (rispetto a 23 mila $ dell'anno precedente) e la perdita netta è stata di 3,2 milioni di $, rispetto a 4,8 milioni. Per i sei mesi, le entrate hanno raggiunto 252 mila $ (rispetto a 29 mila $) mentre la perdita netta è migliorata a 6,7 milioni di $, rispetto a 10,0 milioni.
Disponibilità liquide e mezzi equivalenti erano 7,3 milioni di dollari al 31 agosto 2025, con una liquidità disponibile totale di 9,9 milioni di dollari, inclusa una linea di credito canadese non utilizzata di 2,5 milioni. L'uscita di cassa operativa è stata di 5,6 milioni per sei mesi. Il patrimonio netto dei azionisti è passato in negativo a 5,5 milioni, riflettendo perdite in corso e un saldo di azioni privilegiate convertibili di Serie B di 11,3 milioni, che hanno maturato 681 mila di dividendi PIK dall'inizio dell'anno.
L'azienda ha registrato 244 mila $ di entrate da servizi di ingegneria legati alla joint venture in India e ha riconosciuto una perdita di 345 mila $ da investimenti contabilizzati per partecipazione. L'impianto in India è stimato in 176 milioni di dollari, con accordi per terreni in Gujarat in avanzamento e l'inizio dei lavori mirato entro la fine dell'anno fiscale 2026. Al 14 ottobre 2025, le azioni ordinarie in circolazione erano 48.043.068.
Loop Industries informó resultados del 2T FY2026 con ingresos mínimos y pérdidas más reducidas. Para los tres meses terminados el 31 de agosto de 2025, los ingresos fueron de 0$ (frente a 23 mil$ el año anterior) y la pérdida neta fue de 3,2 millones de $. (frente a 4,8 millones). Para los seis meses, los ingresos alcanzaron 252 mil$ (frente a 29 mil$) mientras que la pérdida neta mejoró a 6,7 millones de $, frente a 10,0 millones.
Las disponibilidades en efectivo y equivalentes eran de 7,3 millones de dólares al 31 de agosto de 2025, con una liquidez total disponible de 9,9 millones de dólares, incluyendo una línea de crédito canadiense no utilizada de 2,5 millones. La salida de efectivo operativo fue de 5,6 millones durante los seis meses. El patrimonio de los accionistas se movió a un déficit de 5,5 millones, reflejando pérdidas continuas y un saldo de Acciones Preferentes Convertibles de Serie B de 11,3 millones, que acumuló 681 mil dólares en dividendos PIK en lo que va del año.
La compañía registró 244 mil$ de ingresos por servicios de ingeniería vinculados a su empresa conjunta en India y reconoció una pérdida de 345 mil$ por inversiones contabilizadas. La instalación en India se estima en 176 millones de dólares, con acuerdos de tierras en Gujarat en progreso y el inicio de obras previsto para el cierre del año fiscal 2026. Al 14 de octubre de 2025, las acciones comunes en circulación eran 48.043.068.
Loop Industries는 FY2026 회계연도 2분기 실적에서 매출이 최소이고 손실은 더 좁아졌음을 보고했습니다. 2025년 8월 31일로 종료된 3개월 동안 매출은 0달러(전년 동기 23천 달러 대비)였고 순손실은 320만 달러(전년 동기 480만 달러)였습니다. 6개월 동안 매출은 25만 2천 달러(전년 동기 29천 달러 대비)였고 순손실은 670만 달러로 개선되었습니다(전년 동기 1,000만 달러 대비).
현금 및 현금성자산은 2025년 8월 31일 기준 730만 달러였으며, 사용 가능한 유동성은 990만 달러로, 미사용 캐나다 신용 한도 250만 달러를 포함합니다. 영업 현금 유출은 6개월 동안 560만 달러였습니다. 주주지분은 550만 달러의 적자로 전환되었고, 시리즈 B 전환 보통주 잔액은 1130만 달러로, 연초 이후 PIK 배당이 68.1만 달러 누적되었습니다.
회사는 인도 합작법인에 연결된 엔지니어링 서비스 매출 24.4만 달러를 기록했고, 지분법으로 계상된 투자에서 34.5만 달러의 손실을 인식했습니다. 인도의 시설은 1억 7천 6백만 달러로 추정되며, 구자라트의 토지 계약이 진행 중이고 2026 회계연도 말까지 착공이 목표입니다. 2025년 10월 14일 기준으로 발행 주식 수는 4천8천0만 4천 68주였습니다.
Loop Industries a annoncé des résultats du 2e trimestre de l'exercice FY2026, avec des revenus minimes et des pertes plus restreintes. Pour les trois mois clos au 31 août 2025, les revenus étaient de 0$ (contre 23 milliers $ l'année dernière) et la perte nette était de 3,2 millions $, contre 4,8 millions $. Pour les six mois, les revenus se sont élevés à 252 milliers $ (contre 29 milliers $) et la perte nette s'est améliorée à 6,7 millions $, contre 10,0 millions $.
Les liquidités et équivalents de liquidités s'élevaient à 7,3 millions de dollars au 31 août 2025, avec une liquidité disponible totale de 9,9 millions de dollars, y compris une facilité de crédit canadienne non utilisée de 2,5 millions $. La sortie de trésorerie opérationnelle s'est élevée à 5,6 millions sur six mois. Les capitaux propres des actionnaires sont passés en déficit de 5,5 millions de dollars, reflétant des pertes en cours et un solde d’actions privilégiées convertibles de série B de 11,3 millions, qui ont accumulé 681 mille dollars de dividendes PIK à ce jour dans l'année.
L'entreprise a enregistré 244 mille dollars de revenus de services d'ingénierie liés à sa coentreprise en Inde et a constaté une perte de 345 mille dollars sur des investissements comptabilisés par mise en équivalence. L’installation en Inde est estimée à 176 millions de dollars, avec des dispositions foncières au Gujarat en cours et un démarrage des travaux visé d'ici la fin de l'exercice 2026. Au 14 octobre 2025, le nombre d’actions ordinaires en circulation était de 48 043 068.
Loop Industries meldete die Ergebnisse des 2. Quartals des FY2026 mit minimalem Umsatz und engeren Verlusten. Für das Dreimonatszeitfenster, das am 31. August 2025 endete, betrug der Umsatz 0$ (gegenüber 23 Tausend $ im Vorjahr) und der Nettverlust 3,2 Mio. $ (gegenüber 4,8 Mio. $). Für die sechs Monate betrug der Umsatz 252 Tausend $ (gegenüber 29 Tausend $) und der Nettverlust verbesserte sich auf 6,7 Mio. $ (gegenüber 10,0 Mio. $).
Kassenbestand und Kassenäquivalente beliefen sich zum 31. August 2025 auf 7,3 Mio. $, mit insgesamt verfügbarer Liquidität von 9,9 Mio. $, einschließlich einer ungenutzten kanadischen Kreditfazilität in Höhe von 2,5 Mio. $. Operative Cash-Outflow betrug 5,6 Mio. $ über die sechs Monate. Eigenkapital der Aktionäre entwickelte sich zu einem Defizit von 5,5 Mio. $, was laufende Verluste widerspiegelt, sowie ein Bestand an Series-B-Konvertiblen mit 11,3 Mio. $, der im bisherigen Jahr 681 Tsd. $ PIK-Dividenden ansammelte.
Das Unternehmen verbuchte 244 Tsd. $ Engineering-Dienstleistungsumsatz, der mit dem Indien-Joint-Venture verbunden war, und erkannte einen Verlust von 345 Tsd. $ aus den equity-accounted investments an. Die Indien-Einrichtung wird auf 176 Mio. $ geschätzt, Landvereinbarungen in Gujarat kommen voran, und eine Grundsteinlegung ist bis zum Geschäftsjahresende 2026 geplant. Zum 14. Oktober 2025 betrug die Anzahl der ausgegebenen Stammaktien 48.043.068.
أبلغت Loop Industries عن نتائج الربع الثاني من السنة المالية 2026 مع إيرادات ضئيلة وخسائر أضيق. للثلاثة أشهر المنتهية في 31 أغسطس 2025، بلغت الإيرادات 0$ (مقابل 23 ألف دولار في العام السابق) وكانت الخسارة الصافية 3.2 مليون دولار (مقابل 4.8 مليون دولار). للستة أشهر، بلغت الإيرادات 252 ألف دولار (مقابل 29 ألف دولار) بينما تحسن الخسارة الصافية إلى 6.7 مليون دولار (مقابل 10.0 مليون دولار).
كان النقد والنقد المعادل له 7.3 مليون دولار اعتباراً من 31 أغسطس 2025، مع سيولة متاحة إجمالية قدرها 9.9 مليون دولار بما في ذلك خط ائتمان كندي غير مستخدم بقيمة 2.5 مليون دولار. خرج نقدي تشغيلي قدره 5.6 مليون دولار للستة أشهر. تحولت حقوق المساهمين إلى عجز قدره 5.5 مليون دولار، عاكسة خسائر جارية ورصيد أسهم ممتازة قابلة للتحويل من النوع Serie B بقيمة 11.3 مليون دولار، which accrued 681 ألف دولار من توزيعات PIK حتى تاريخه.
سجلت الشركة 244 ألف دولار من إيرادات خدمات الهندسة المرتبطة بمشروعها المشترك في الهند واعترفت بخسارة قدرها 345 ألف دولار من الاستثمارات المحسوبة بحقوق الملكية. منشأة الهند مقدر قيمتها بـ176 مليون دولار، مع تقدم ترتيبات الأرض في غوجارات واستهداف وضع الأساس بنهاية السنة المالية 2026. اعتباراً من 14 أكتوبر 2025، كانت عدد الأسهم العادية القائمة 48,043,068.
Loop Industries 公布了 2026 财年第二季度业绩，收入微薄，亏损缩窄。 截至 2025 年 8 月 31 日的三个月内，收入为 0 美元（比去年同期 2.3 万美元），净亏损为 320 万美元（去年同期 480 万美元）。六个月的收入为 25.2 万美元（去年 2.9 万美元），净亏损改善为 670 万美元（去年 1,000 万美元）。
截至 2025 年 8 月 31 日，现金及现金等价物为 730 万美元，可用的总流动性为 990 万美元，其中包括未动用的 250 万美元加拿大信贷额度。六个月的经营现金流出为 560 万美元。股东权益转为负 550 万美元，反映持续亏损，以及系列 B 可转换优先股余额 1130 万美元，年度迄今累计达到 PIK 红利 68.1 万美元。
公司确认与印度合资企业相关的工程服务收入 24.4 万美元，并确认以权益法入账的投资损失 34.5 万美元。印度的设施估值为 1.76 亿美元，古吉拉特邦土地安排在推进，计划在 2026 财年结束前实现开工。截至 2025 年 10 月 14 日，流通普通股为 48,043,068 股。
- None.
- None.
Insights
Losses narrowed, liquidity adequate near term; funding needs ahead.
Loop Industries posted a Q2 net loss of
The balance sheet shifted to a stockholders’ equity deficit of
Execution on the India JV continues, with
Loop Industries ha riportato i risultati del secondo trimestre dell'anno fiscale 2026, con entrate minime e perdite ridotte. Per i tre mesi terminati il 31 agosto 2025, le entrate sono state 0$ (rispetto a 23 mila $ dell'anno precedente) e la perdita netta è stata di 3,2 milioni di $, rispetto a 4,8 milioni. Per i sei mesi, le entrate hanno raggiunto 252 mila $ (rispetto a 29 mila $) mentre la perdita netta è migliorata a 6,7 milioni di $, rispetto a 10,0 milioni.
Disponibilità liquide e mezzi equivalenti erano 7,3 milioni di dollari al 31 agosto 2025, con una liquidità disponibile totale di 9,9 milioni di dollari, inclusa una linea di credito canadese non utilizzata di 2,5 milioni. L'uscita di cassa operativa è stata di 5,6 milioni per sei mesi. Il patrimonio netto dei azionisti è passato in negativo a 5,5 milioni, riflettendo perdite in corso e un saldo di azioni privilegiate convertibili di Serie B di 11,3 milioni, che hanno maturato 681 mila di dividendi PIK dall'inizio dell'anno.
L'azienda ha registrato 244 mila $ di entrate da servizi di ingegneria legati alla joint venture in India e ha riconosciuto una perdita di 345 mila $ da investimenti contabilizzati per partecipazione. L'impianto in India è stimato in 176 milioni di dollari, con accordi per terreni in Gujarat in avanzamento e l'inizio dei lavori mirato entro la fine dell'anno fiscale 2026. Al 14 ottobre 2025, le azioni ordinarie in circolazione erano 48.043.068.
Loop Industries informó resultados del 2T FY2026 con ingresos mínimos y pérdidas más reducidas. Para los tres meses terminados el 31 de agosto de 2025, los ingresos fueron de 0$ (frente a 23 mil$ el año anterior) y la pérdida neta fue de 3,2 millones de $. (frente a 4,8 millones). Para los seis meses, los ingresos alcanzaron 252 mil$ (frente a 29 mil$) mientras que la pérdida neta mejoró a 6,7 millones de $, frente a 10,0 millones.
Las disponibilidades en efectivo y equivalentes eran de 7,3 millones de dólares al 31 de agosto de 2025, con una liquidez total disponible de 9,9 millones de dólares, incluyendo una línea de crédito canadiense no utilizada de 2,5 millones. La salida de efectivo operativo fue de 5,6 millones durante los seis meses. El patrimonio de los accionistas se movió a un déficit de 5,5 millones, reflejando pérdidas continuas y un saldo de Acciones Preferentes Convertibles de Serie B de 11,3 millones, que acumuló 681 mil dólares en dividendos PIK en lo que va del año.
La compañía registró 244 mil$ de ingresos por servicios de ingeniería vinculados a su empresa conjunta en India y reconoció una pérdida de 345 mil$ por inversiones contabilizadas. La instalación en India se estima en 176 millones de dólares, con acuerdos de tierras en Gujarat en progreso y el inicio de obras previsto para el cierre del año fiscal 2026. Al 14 de octubre de 2025, las acciones comunes en circulación eran 48.043.068.
Loop Industries는 FY2026 회계연도 2분기 실적에서 매출이 최소이고 손실은 더 좁아졌음을 보고했습니다. 2025년 8월 31일로 종료된 3개월 동안 매출은 0달러(전년 동기 23천 달러 대비)였고 순손실은 320만 달러(전년 동기 480만 달러)였습니다. 6개월 동안 매출은 25만 2천 달러(전년 동기 29천 달러 대비)였고 순손실은 670만 달러로 개선되었습니다(전년 동기 1,000만 달러 대비).
현금 및 현금성자산은 2025년 8월 31일 기준 730만 달러였으며, 사용 가능한 유동성은 990만 달러로, 미사용 캐나다 신용 한도 250만 달러를 포함합니다. 영업 현금 유출은 6개월 동안 560만 달러였습니다. 주주지분은 550만 달러의 적자로 전환되었고, 시리즈 B 전환 보통주 잔액은 1130만 달러로, 연초 이후 PIK 배당이 68.1만 달러 누적되었습니다.
회사는 인도 합작법인에 연결된 엔지니어링 서비스 매출 24.4만 달러를 기록했고, 지분법으로 계상된 투자에서 34.5만 달러의 손실을 인식했습니다. 인도의 시설은 1억 7천 6백만 달러로 추정되며, 구자라트의 토지 계약이 진행 중이고 2026 회계연도 말까지 착공이 목표입니다. 2025년 10월 14일 기준으로 발행 주식 수는 4천8천0만 4천 68주였습니다.
Loop Industries a annoncé des résultats du 2e trimestre de l'exercice FY2026, avec des revenus minimes et des pertes plus restreintes. Pour les trois mois clos au 31 août 2025, les revenus étaient de 0$ (contre 23 milliers $ l'année dernière) et la perte nette était de 3,2 millions $, contre 4,8 millions $. Pour les six mois, les revenus se sont élevés à 252 milliers $ (contre 29 milliers $) et la perte nette s'est améliorée à 6,7 millions $, contre 10,0 millions $.
Les liquidités et équivalents de liquidités s'élevaient à 7,3 millions de dollars au 31 août 2025, avec une liquidité disponible totale de 9,9 millions de dollars, y compris une facilité de crédit canadienne non utilisée de 2,5 millions $. La sortie de trésorerie opérationnelle s'est élevée à 5,6 millions sur six mois. Les capitaux propres des actionnaires sont passés en déficit de 5,5 millions de dollars, reflétant des pertes en cours et un solde d’actions privilégiées convertibles de série B de 11,3 millions, qui ont accumulé 681 mille dollars de dividendes PIK à ce jour dans l'année.
L'entreprise a enregistré 244 mille dollars de revenus de services d'ingénierie liés à sa coentreprise en Inde et a constaté une perte de 345 mille dollars sur des investissements comptabilisés par mise en équivalence. L’installation en Inde est estimée à 176 millions de dollars, avec des dispositions foncières au Gujarat en cours et un démarrage des travaux visé d'ici la fin de l'exercice 2026. Au 14 octobre 2025, le nombre d’actions ordinaires en circulation était de 48 043 068.
Loop Industries meldete die Ergebnisse des 2. Quartals des FY2026 mit minimalem Umsatz und engeren Verlusten. Für das Dreimonatszeitfenster, das am 31. August 2025 endete, betrug der Umsatz 0$ (gegenüber 23 Tausend $ im Vorjahr) und der Nettverlust 3,2 Mio. $ (gegenüber 4,8 Mio. $). Für die sechs Monate betrug der Umsatz 252 Tausend $ (gegenüber 29 Tausend $) und der Nettverlust verbesserte sich auf 6,7 Mio. $ (gegenüber 10,0 Mio. $).
Kassenbestand und Kassenäquivalente beliefen sich zum 31. August 2025 auf 7,3 Mio. $, mit insgesamt verfügbarer Liquidität von 9,9 Mio. $, einschließlich einer ungenutzten kanadischen Kreditfazilität in Höhe von 2,5 Mio. $. Operative Cash-Outflow betrug 5,6 Mio. $ über die sechs Monate. Eigenkapital der Aktionäre entwickelte sich zu einem Defizit von 5,5 Mio. $, was laufende Verluste widerspiegelt, sowie ein Bestand an Series-B-Konvertiblen mit 11,3 Mio. $, der im bisherigen Jahr 681 Tsd. $ PIK-Dividenden ansammelte.
Das Unternehmen verbuchte 244 Tsd. $ Engineering-Dienstleistungsumsatz, der mit dem Indien-Joint-Venture verbunden war, und erkannte einen Verlust von 345 Tsd. $ aus den equity-accounted investments an. Die Indien-Einrichtung wird auf 176 Mio. $ geschätzt, Landvereinbarungen in Gujarat kommen voran, und eine Grundsteinlegung ist bis zum Geschäftsjahresende 2026 geplant. Zum 14. Oktober 2025 betrug die Anzahl der ausgegebenen Stammaktien 48.043.068.
Table of Contents
United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM
| | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the quarterly period ended |
or
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the transition period from ___________ to __________ |
Commission File No.
| Loop Industries, Inc. |
| (Exact name of Registrant as specified in its charter) |
| | | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices zip code)
Registrant's telephone number, including area code (
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| | | The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| | ☒ | Smaller reporting company | |
| Emerging growth company | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As at October 14, 2025, there were
LOOP INDUSTRIES, INC.
TABLE OF CONTENTS
| Page No. |
||
| PART I. Financial Information |
||
| Item 1. |
Financial Statements |
F-1 |
| Item 2. |
Management's Discussion and Analysis of Financial Condition and Results of Operations |
3 |
| Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
13 |
| Item 4. |
Controls and Procedures |
13 |
| PART II. Other Information |
||
| Item 1. |
Legal Proceedings |
14 |
| Item 1A. |
Risk Factors |
14 |
| Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
15 |
| Item 3. |
Defaults Upon Senior Securities |
15 |
| Item 4. |
Mine Safety Disclosures |
15 |
| Item 5. |
Other Information |
15 |
| Item 6. |
Exhibits |
16 |
| Signatures |
17 |
|
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Loop Industries, Inc.
Three and Six Months Ended August 31, 2025
Index to the Unaudited Interim Condensed Consolidated Financial Statements
| Contents |
Page(s) |
|
| Condensed consolidated balance sheets as at August 31, 2025 (Unaudited) and February 28, 2025 |
F-2 |
|
| Condensed consolidated statements of operations and comprehensive loss for the three and six months ended August 31, 2025 and 2024 (Unaudited) |
F-3 |
|
| Condensed consolidated statements of changes in stockholders' equity (deficit) for the three and six months ended August 31, 2025 and 2024 (Unaudited) |
F-4 |
|
| Condensed consolidated statements of cash flows for the six months ended August 31, 2025 and 2024 (Unaudited) |
F-6 |
|
| Notes to the condensed consolidated financial statements (Unaudited) |
F-7 |
Loop Industries, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
| (in thousands of U.S. dollars, except per share data) | As at | |||||||
| August 31, | February 28, | |||||||
| 2025 | 2025 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable and other (Note 3) | ||||||||
| Inventories | ||||||||
| Prepaid expenses (Note 4) | ||||||||
| Total current assets | ||||||||
| Investments in joint ventures | ||||||||
| Property, plant and equipment, net (Note 5) | ||||||||
| Intangible assets, net (Note 6) | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity (Deficit) | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities (Note 8) | $ | $ | ||||||
| Unearned revenue | ||||||||
| Current portion of long-term debt (Note 11) | ||||||||
| Total current liabilities | ||||||||
| Due to customer | ||||||||
| Series B Convertible Preferred stock (Note 10) | ||||||||
| Long-term debt (Note 11) | ||||||||
| Total liabilities | ||||||||
| Stockholders’ Equity (Deficit) | ||||||||
| Series A Preferred stock par value $; shares authorized; share issued and outstanding | ||||||||
| Common stock par value $; shares authorized; shares issued and outstanding (February 28, 2025 – ) (Note 12) | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total stockholders’ equity (deficit) | ( | ) | ||||||
| Total liabilities and stockholders’ equity (deficit) | $ | $ | ||||||
See accompanying notes to the condensed consolidated financial statements.
Loop Industries, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
| (in thousands of U.S. dollars, except per share data) | Three Months Ended | Six Months Ended | ||||||||||||||
| August 31, 2025 | August 31, 2024 | August 31, 2025 | August 31, 2024 | |||||||||||||
| Revenues (Note 13) | $ | $ | $ | $ | ||||||||||||
| Expenses: | ||||||||||||||||
| Research and development (Note 14) | ||||||||||||||||
| General and administrative (Note 15) | ||||||||||||||||
| Depreciation and amortization (Notes 5 and 6) | ||||||||||||||||
| Loss on equity accounted investments (Note 9) | ||||||||||||||||
| Total expenses | ||||||||||||||||
| Other loss (income): | ||||||||||||||||
| Interest and other financial expenses | ||||||||||||||||
| Interest income | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Foreign exchange loss (gain) | ( | ) | ||||||||||||||
| Total other loss | ||||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other comprehensive loss: | ||||||||||||||||
| Foreign currency translation adjustment | ( | ) | ( | ) | ( | ) | ||||||||||
| Comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per share | ||||||||||||||||
| Basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average common shares outstanding | ||||||||||||||||
| Basic and diluted | ||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
Loop Industries, Inc.
Condensed Consolidated Statement of Changes in Stockholders' Equity (Deficit)
(Unaudited)
| (in thousands of U.S. dollars, except for share data) | Three months ended August 31, 2025 | |||||||||||||||||||||||||||||||||||
| Common stock | Preferred stock | Additional | Accumulated | |||||||||||||||||||||||||||||||||
| par value $0.0001 | par value $0.0001 | Additional | Paid-in | Other | Total | |||||||||||||||||||||||||||||||
| Number of | Number of | Paid-in | Capital– | Accumulated | Comprehensive | Stockholders’ | ||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Warrants | Deficit | Income (Loss) | Equity (Deficit) | ||||||||||||||||||||||||||||
| Balance, May 31, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||
| Issuance of shares upon the vesting of restricted stock units (Note 16) | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Issuance of common stock under ATM Equity Offering (Note 12) | ||||||||||||||||||||||||||||||||||||
| Stock options issued for services (Note 16) | - | - | ||||||||||||||||||||||||||||||||||
| Restricted stock units issued for services (Note 16) | - | - | ||||||||||||||||||||||||||||||||||
| Share issuance costs | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Foreign currency translation | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balance, August 31, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||
| (in thousands of U.S. dollars, except for share data) | Three months ended August 31, 2024 | |||||||||||||||||||||||||||||||||||
| Common stock | Preferred stock | Additional | Accumulated | |||||||||||||||||||||||||||||||||
| par value $0.0001 | par value $0.0001 | Additional | Paid-in | Other | Total | |||||||||||||||||||||||||||||||
| Number of | Number of | Paid-in | Capital– | Accumulated | Comprehensive | Stockholders’ | ||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Warrants | Deficit | Income (Loss) | Equity | ||||||||||||||||||||||||||||
| Balance, May 31, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||
| Issuance of shares upon the vesting of restricted stock units (Note 16) | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Expiration of warrants | - | - | ( | ) | ||||||||||||||||||||||||||||||||
| Stock options issued for services (Note 16) | - | - | ||||||||||||||||||||||||||||||||||
| Restricted stock units issued for services (Note 16) | - | - | ||||||||||||||||||||||||||||||||||
| Foreign currency translation | - | - | ||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balance, August 31, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
Loop Industries, Inc.
Condensed Consolidated Statement of Changes in Stockholders' Equity (Deficit)
(Unaudited)
| (in thousands of U.S. dollars, except for share data) | Six months ended August 31, 2025 | |||||||||||||||||||||||||||||||||||
| Common stock | Preferred stock | Additional | Accumulated | |||||||||||||||||||||||||||||||||
| par value $0.0001 | par value $0.0001 | Additional | Paid-in | Other | Total | |||||||||||||||||||||||||||||||
| Number of | Number of | Paid-in | Capital– | Accumulated | Comprehensive | Stockholders’ | ||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Warrants | Deficit | Income (Loss) | Equity (Deficit) | ||||||||||||||||||||||||||||
| Balance, February 28, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||
| Issuance of shares upon the vesting of restricted stock units (Note 16) | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Issuance of common stock under ATM Equity Offering (Note 12) | ||||||||||||||||||||||||||||||||||||
| Stock options issued for services (Note 16) | - | - | ||||||||||||||||||||||||||||||||||
| Restricted stock units issued for services (Note 16) | - | - | ||||||||||||||||||||||||||||||||||
| Share issuance costs | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Foreign currency translation | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balance, August 31, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||
| (in thousands of U.S. dollars, except for share data) | Six months ended August 31, 2024 | |||||||||||||||||||||||||||||||||||
| Common stock | Series A Preferred stock | Additional | Accumulated | |||||||||||||||||||||||||||||||||
| par value $0.0001 | par value $0.0001 | Additional | Paid-in | Other | Total | |||||||||||||||||||||||||||||||
| Number of | Number of | Paid-in | Capital– | Accumulated | Comprehensive | Stockholders’ | ||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Warrants | Deficit | Income (Loss) | Equity | ||||||||||||||||||||||||||||
| Balance, February 29, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||
| Issuance of shares upon the vesting of restricted stock units (Note 16) | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Expiration of warrants | - | - | ( | ) | ||||||||||||||||||||||||||||||||
| Stock options issued for services (Note 16) | - | - | ||||||||||||||||||||||||||||||||||
| Restricted stock units issued for services (Note 16) | - | - | ||||||||||||||||||||||||||||||||||
| Foreign currency translation | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balance, August 31, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
Loop Industries, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| (in thousands of U.S. dollars) | Six Months Ended August 31, | |||||||
| 2025 | 2024 | |||||||
| Cash Flows from Operating Activities | ||||||||
| Net loss | ( | ) | $ | ( | ) | |||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization (Notes 5 and 6) | ||||||||
| Stock-based compensation expense (Note 16) | ||||||||
| Accrued interest and other financing costs (Note 11) | ||||||||
| Loss on equity accounted investments (Note 9) | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable and other (Note 3) | ( | ) | ( | ) | ||||
| Inventories | ||||||||
| Prepaid expenses (Note 4) | ( | ) | ||||||
| Accounts payable and accrued liabilities (Note 8) | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Investing Activities | ||||||||
| Additions to intangible assets (Note 6) | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash Flows from Financing Activities | ||||||||
| Proceeds from ATM equity offering, net of issuance costs (Note 12) | ||||||||
| Borrowings under credit facility (Note 11) | ||||||||
| Repayment of long-term debt (Note 11) | ( | ) | ( | ) | ||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rate changes | ||||||||
| Net decrease in cash | ( | ) | ( | ) | ||||
| Cash and cash equivalents, beginning of period | ||||||||
| Cash and cash equivalents, end of period | $ | $ | ||||||
| Supplemental Disclosure of Cash Flow Information: | ||||||||
| Income tax paid | $ | $ | ||||||
| Interest paid | $ | $ | ||||||
| Interest received | $ | $ | ||||||
See accompanying notes to the condensed consolidated financial statements.
Loop Industries, Inc.
Three and Six Months Ended August 31, 2025 and 2024
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
1. The Company, Basis of Presentation and Liquidity Risk Assessment
The Company
Loop Industries, Inc. (the “Company,” “Loop,” “we,” or “our”) is a technology company that owns patented and proprietary technology that depolymerizes no and low-value waste polyethylene terephthalate (“PET”) plastic and polyester fiber 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. The Company is currently in the pre-commercialization stage with limited revenues.
Basis of Presentation
These unaudited interim condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“US GAAP”) and applicable rules and regulations of the U.S. 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 28, 2025, filed with the SEC on May 29, 2025, as amended by the Amendment No. 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. and its subsidiaries, Loop Innovations, LLC and Loop Canada Inc. All subsidiaries are, either directly or indirectly, wholly owned subsidiaries of Loop Industries, Inc. (collectively, the “Company”). The Company owns, through Loop Innovations, LLC, a
Intercompany balances and transactions are eliminated on consolidation. The condensed consolidated balance sheet as of February 28, 2025, included herein, was derived from the audited financial statements as of that date, but does not include all disclosures including certain notes required by US GAAP on an annual reporting basis. 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 six-month periods ended August 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. dollars unless otherwise specified, except for per share data.
Since its inception, the Company has been in the pre-commercialization stage with no recurring revenues, and its ongoing operations and commercialization plans have been financed primarily by raising equity and debt. The Company has recurring net losses, negative cash flow from operating activities since its inception, and has a net capital deficiency. As at August 31, 2025, the Company’s available liquidity was $
Management continuously monitors the Company's cash resources against its cash commitments to determine whether there is sufficient liquidity to fund its costs for at least twelve months from the financial statement issuance date. In preparing its going concern assessment in accordance with US GAAP, the Company included cash flows that meet the "probable" threshold under ASC 205-40 in its liquidity assessment and has excluded forecasted cash flows that lack substantive support or binding commitments. Based on this assessment, management has determined that current available liquidity will be sufficient to meet the Company’s obligations, commitments and budgeted operating 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 participate in the construction of manufacturing facilities through joint ventures is dependent on, among other factors, whether the Company can obtain the necessary funding through a combination of further technology licensing and engineering services arrangements, government incentive programs, and/or the issuance of debt and/or equity. Management is pursuing options to secure financing for Loop's equity contribution for the India JV and to cover ongoing cash requirements through to the start of commercial operations in India. 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. Inability to secure additional financing on favorable terms, or to obtain such financing at all when required, would have an adverse effect on the Company’s financial position and on its ability to execute its business plan.
2. Summary of Significant Accounting Policies
Use of estimates
The preparation of financial statements in conformity with US GAAP requires management to use its judgment to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. 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.
Net loss per share
The Company computes net loss per share in accordance with FASB ASC 260, Earnings Per Share. Basic loss per share is computed by dividing the net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the year. The Company includes common stock issuable in its calculation. Diluted loss per share is computed by dividing the net loss applicable to common stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential common shares are excluded from the computation if their effect is antidilutive.
For the three- and six-month periods ended August 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 August 31, 2025, the potentially dilutive securities consisted of
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 six-month period ended August 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 (“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 ASU 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 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.
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.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606, including those assets acquired in a business combination. The practical expedient permits an entity to assume that current conditions as of the balance sheet date do not change for the remaining life of the current accounts receivable and current contract assets. This guidance is effective for the Company for its fiscal year and all interim periods beginning February 1, 2026 on a prospective basis. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this guidance on its condensed consolidated financial statements.
3. Accounts Receivable and Other
Accounts Receivable and Other as at August 31, 2025 and February 28, 2025 are comprised of the following:
| August 31, 2025 |
February 28, 2025 |
|||||||
| Accounts receivable from customers |
$ | $ | ||||||
| Research and development tax credits |
||||||||
| Sales tax |
||||||||
| Other receivables |
||||||||
| $ | $ | |||||||
4. Prepaid Expenses
Prepaid expenses as at August 31, 2025 and February 28, 2025 were as follows:
| August 31, 2025 |
February 28, 2025 |
|||||||
| Insurance |
$ | $ | ||||||
| Utilities |
||||||||
| Software |
||||||||
| Other |
||||||||
| $ | $ | |||||||
5. Property, Plant and Equipment, Net
| As at August 31, 2025 | ||||||||||||
| Accumulated | ||||||||||||
| depreciation, | ||||||||||||
| write-down | ||||||||||||
| Cost | and impairment | Net book value | ||||||||||
| Machinery and equipment | $ | $ | ( | ) | $ | |||||||
| Building | ( | ) | ||||||||||
| Land | ||||||||||||
| Building and Land Improvements | ( | ) | ||||||||||
| Office equipment and furniture | ( | ) | ||||||||||
| $ | $ | ( | ) | $ | ||||||||
| As at February 28, 2025 | ||||||||||||
| Accumulated | ||||||||||||
| depreciation, | ||||||||||||
| write-down | ||||||||||||
| Cost | and impairment | Net book value | ||||||||||
| Machinery and equipment | $ | $ | ( | ) | $ | |||||||
| Building | ( | ) | ||||||||||
| Land | ||||||||||||
| Building and Land Improvements | ( | ) | ||||||||||
| Office equipment and furniture | ( | ) | ||||||||||
| $ | $ | ( | ) | $ | ||||||||
Depreciation expense for the three- and six-month periods ended August 31, 2025 amounted to $
6. Intangible Assets, Net
Intangible assets as at August 31, 2025 and February 28, 2025 were $
During the six-month periods ended August 31, 2025 and 2024, we made additions relating to patent application costs to intangible assets of $
Amortization expense for the three- and six-month periods ended August 31, 2025 amounted to $
7. Fair Value of Financial Instruments
The following tables presents the fair value of the Company's financial liabilities as at August 31, 2025 and February 28, 2025:
| Fair Value at August 31, 2025 |
|||||||||
| Carrying |
Level in the |
||||||||
| Amount |
Fair Value |
hierarchy |
|||||||
| Financial liabilities measured at amortized cost: |
|||||||||
| Series B Convertible Preferred stock (Note 10) |
$ | $ | Level 2 |
||||||
| Long-term debt (Note 11) |
$ | $ | Level 2 |
||||||
| Due to customer |
$ | $ | Level 2 |
||||||
| Fair Value at February 28, 2025 |
|||||||||
| Carrying |
Level in the |
||||||||
| Amount |
Fair Value |
hierarchy |
|||||||
| Financial liabilities measured at amortized cost: |
|||||||||
| Series B Convertible Preferred stock (Note 10) |
$ | $ | Level 2 |
||||||
| Long-term debt (Note 11) |
$ | $ | Level 2 |
||||||
| Due to customer |
$ | $ | Level 2 |
||||||
The fair value of cash, restricted cash, accounts receivable and other, and accounts payable and accrued liabilities approximate their carrying values due to their short-term maturity.
8. Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities as at August 31, 2025 and February 28, 2025 were as follows:
| August 31, 2025 |
February 28, 2025 |
|||||||
| Trade accounts payable |
$ | $ | ||||||
| Accrued employee compensation |
||||||||
| Accrued engineering fees |
||||||||
| Accrued professional fees |
||||||||
| Other accrued liabilities |
||||||||
| $ | $ | |||||||
9. 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 six-month period ended August 31, 2025, Loop and Ester made
10. Series B Convertible Preferred Stock
The balance of Series B Convertible Preferred Stock as at August 31, 2025 and February 28, 2025 was as follows:
| August 31, 2025 | February 28, 2025 | |||||||
| Stated value at issuance | $ | $ | ||||||
| Accrued PIK dividends | ||||||||
| Series B Convertible Preferred Stock | $ | $ | ||||||
During the three- and six-month periods ended August 31, 2025, the Company recorded PIK dividends of $
11. Long‑Term Debt
Long-term debt as of August 31, 2025 and February 28, 2025, was comprised of the following:
| August 31, 2025 | February 28, 2025 | |||||||
| Investissement Québec financing facility: | ||||||||
| Principal amount | $ | $ | ||||||
| Unamortized discount | ( | ) | ( | ) | ||||
| Accrued interest | ||||||||
| Total Investissement Québec financing facility | ||||||||
| Less: current portion of long-term debt | ( | ) | ( | ) | ||||
| Long-term debt, net of current portion | $ | $ | ||||||
Investissement Québec financing facility
The Company recorded interest expense on the Investissement Québec loan for the three- and six-month periods ended August 31, 2025 in the amount of $
Total repayments due on the Company's indebtedness over the next five years are as follows:
| Years ending | Amount | |||
| February 28, 2026 | ||||
| February 28, 2027 | ||||
| February 29, 2028 | ||||
| February 28, 2029 | ||||
| February 28, 2030 | ||||
| Thereafter | ||||
| Total | $ | |||
Credit facility from a Canadian bank
On July 26, 2022, Loop Canada, Inc., a wholly-owned subsidiary of the Company (the "Borrower"), entered into an Operating Credit Facility (the “Credit Facility”) with a Canadian bank. The Credit Facility allows for borrowings of up to $
On July 4, 2025, the Borrower, 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 $
On October 10, 2025, the Borrower, the Company and the Canadian bank executed an amendment to the Credit Facility, which removed the minimum equity covenant tested quarterly for the duration of the term of the Credit Facility.
12. Stockholders' Equity (Deficit)
Common Stock
| For the period ended August 31, 2025 | Number of shares | Amount | ||||||
| Balance, February 28, 2025 | $ | |||||||
| Issuance of shares upon settlement of restricted stock units | - | |||||||
| Issuance of shares for cash | - | |||||||
| Balance, August 31, 2025 | $ | |||||||
| For the period ended August 31, 2024 | Number of shares | Amount | ||||||
| Balance, February 29, 2024 | $ | |||||||
| Issuance of shares upon settlement of restricted stock units | - | |||||||
| Balance, August 31, 2024 | $ | |||||||
During the six months ended August 31, 2025, the Company recorded the following common stock transactions:
| (i) | The Company issued |
| (ii) | The Company issued |
During the six months ended August 31, 2024, the Company recorded the following common stock transaction:
| (i) | The Company issued |
13. Revenues
Revenue for the three-month periods ended August 31, 2025 and 2024 were as follows:
| August 31, 2025 |
August 31, 2024 |
|||||||
| Engineering services |
$ | $ | ||||||
| Sales of PET |
||||||||
| $ | $ | |||||||
Revenue for the six-month periods ended August 31, 2025 and 2024 were as follows:
| August 31, 2025 |
August 31, 2024 |
|||||||
| Engineering services |
$ | $ | ||||||
| Sales of PET |
||||||||
| $ | $ | |||||||
14. Research and Development Expenses
Research and development expenses for the three-month periods ended August 31, 2025 and 2024 were as follows:
| August 31, 2025 |
August 31, 2024 |
|||||||
| Employee compensation |
$ | $ | ||||||
| External engineering |
||||||||
| Plant and laboratory operating expenses |
||||||||
| Other |
||||||||
| $ | $ | |||||||
Research and development expenses for the six-month periods ended August 31, 2025 and 2024 were as follows:
| August 31, 2025 |
August 31, 2024 |
|||||||
| Employee compensation |
$ | $ | ||||||
| External engineering |
||||||||
| Plant and laboratory operating expenses |
||||||||
| Other |
||||||||
| $ | $ | |||||||
15. General and Administrative Expenses
General and administrative expenses for the three-month periods ended August 31, 2025 and 2024 were as follows:
| August 31, 2025 |
August 31, 2024 |
|||||||
| Employee compensation |
$ | $ | ||||||
| Insurance |
||||||||
| Professional fees |
||||||||
| Other |
||||||||
| $ | $ | |||||||
General and administrative expenses for the six-month periods ended August 31, 2025 and 2024 were as follows:
| August 31, 2025 |
August 31, 2024 |
|||||||
| Employee compensation |
$ | $ | ||||||
| Insurance |
||||||||
| Professional fees |
||||||||
| Other |
||||||||
| $ | $ | |||||||
16. Share-based Payments
Stock Options
The following table summarizes the continuity of the Company's stock options during the three-month periods ended August 31, 2025 and 2024:
| 2025 | 2024 | |||||||||||||||
| Number of | Weighted average | Number of | Weighted average | |||||||||||||
| stock options | exercise price | stock options | exercise price | |||||||||||||
| Outstanding, beginning of period | $ | $ | ||||||||||||||
| Granted | ||||||||||||||||
| Exercised | ||||||||||||||||
| Forfeited | ( | ) | ( | ) | ||||||||||||
| Expired | ||||||||||||||||
| Outstanding, end of period | $ | $ | ||||||||||||||
| Exercisable, end of period | $ | $ | ||||||||||||||
The following table summarizes the continuity of the Company's stock options during the six-month periods ended August 31, 2025 and 2024:
| 2025 | 2024 | |||||||||||||||
| Number of | Weighted average | Number of | Weighted average | |||||||||||||
| stock options | exercise price | stock options | exercise price | |||||||||||||
| Outstanding, beginning of period | $ | $ | ||||||||||||||
| Granted | ||||||||||||||||
| Exercised | ||||||||||||||||
| Forfeited | ( | ) | ( | ) | ||||||||||||
| Expired | ||||||||||||||||
| Outstanding, end of period | $ | $ | ||||||||||||||
| Exercisable, end of period | $ | $ | ||||||||||||||
The Company applies the fair value method of accounting for stock-based compensation awards granted. 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 six-month period ended August 31, 2025 and 2024 were as follows:
| 2025 | 2024 | |||||||
| Exercise price | $ | $ | ||||||
| Risk-free interest rate | 3.68% - 3.72% | % | ||||||
| Expected dividend yield | % | % | ||||||
| Expected volatility | 81%-82% | % | ||||||
| Expected life (years) | 3.5 - 5.0 years | |||||||
The weighted-average grant-date fair value of options granted during the six-month periods ended August 31, 2025 and 2024 was $
A summary of the Company’s nonvested shares as of August 31, 2025, and changes during the period ended August 31, 2025 were as follows:
| 2025 | ||||||||
| Number of | Weighted average | |||||||
| stock options | exercise price | |||||||
| Nonvested, beginning of period | $ | |||||||
| Granted | ||||||||
| Exercised | - | - | ||||||
| Forfeited | ( | ) | ||||||
| Vested | ( | ) | ||||||
| Nonvested, end of period | $ | |||||||
During the three-month periods ended August 31, 2025 and 2024, stock-based compensation expense attributable to stock options amounted to $
Restricted Stock Units
The following table summarizes the continuity of the restricted stock units during the three-month periods ended August 31, 2025 and 2024:
| 2025 | 2024 | |||||||||||||||
| Weighted average | Weighted average | |||||||||||||||
| Number of units | fair value price | Number of units | fair value price | |||||||||||||
| Outstanding, beginning of period | $ | $ | ||||||||||||||
| Granted | ||||||||||||||||
| Settled | ( | ) | ( | ) | ||||||||||||
| Forfeited | ( | ) | ||||||||||||||
| Outstanding, end of period | $ | $ | ||||||||||||||
| Outstanding vested, end of period | $ | $ | ||||||||||||||
The following table summarizes the continuity of the restricted stock units during the six-month periods ended August 31, 2025 and 2024:
| 2025 | 2024 | |||||||||||||||
| Weighted average | Weighted average | |||||||||||||||
| Number of units | fair value price | Number of units | fair value price | |||||||||||||
| Outstanding, beginning of period | $ | $ | ||||||||||||||
| Granted | ||||||||||||||||
| Settled | ( | ) | ( | ) | ||||||||||||
| Forfeited | ( | ) | ||||||||||||||
| Outstanding, end of period | $ | $ | ||||||||||||||
| Outstanding vested, end of period | $ | $ | ||||||||||||||
The Company applies the fair value method of accounting for awards granted through the issuance of restricted stock units. Fair value is calculated based on the intrinsic value at grant date multiplied by the number of restricted stock unit awards granted.
During the three-month periods ended August 31, 2025 and 2024, stock-based compensation attributable to RSUs amounted to $
Stock-Based Compensation Expense
During the three-month periods ended August 31, 2025 and 2024, stock-based compensation included in research and development expenses amounted to $
17. Equity Incentive Plan
On July 6, 2017, the Company adopted the 2017 Equity Incentive Plan (the “Plan”). The Plan permits the granting of warrants, stock options, stock appreciation rights and restricted stock units to employees, directors and consultants of the Company. A total of
The following table summarizes the continuity of the units that were authorized for issuance under the Plan as at and during the six-month periods ended August 31, 2025 and 2024:
| 2025 | 2024 | |||||||
| Number of units* | Number of units* | |||||||
| Authorized, beginning of period | ||||||||
| Automatic share reserve increase | ||||||||
| Units granted | ( | ) | ( | ) | ||||
| Units forfeited | ||||||||
| Units expired | ||||||||
| Authorized, end of period | ||||||||
*The use of the term “units” in the table above describes a combination of stock options and RSUs.
18. Subsequent Event
On September 23, 2025, Loop entered into a Securityholders Agreement with Reed Circular Economy ("RCE"), an affiliate of Reed Management SAS, to establish the framework for the governance, ownership, and operations of Infinite Loop Europe SAS ("Infinite Loop Europe"). Under this agreement, RCE and Loop hold their interests in Infinite Loop Europe on a 90/10 basis to pursue the non-exclusive development, financing, construction, ownership, operation, and commercialization of chemical upcycling plants and related products using Loop's technology within Europe. The Securityholders Agreement provides Infinite Loop Europe with priority rights to evaluate European project opportunities, establishes financing arrangements between the shareholders, grants Loop options to participate in project equity, and confirms that Loop retains ownership of its intellectual property while granting the Infinite Loop Europe limited use rights.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following information and any forward-looking statements should be read in conjunction with the unaudited financial information and the notes thereto included in this Quarterly Report on Form 10-Q, including those risks identified in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended February 28, 2025, filed with the SEC on May 29, 2025, as amended by the Amendment No. 1 on Form 10-K/A filed with the SEC on May 30, 2025 (the “2025 Annual Report”).
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q of Loop Industries, Inc., a Nevada corporation (the “Company,” “Loop,” “we,” or “our”), contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and as defined in the United States Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative of such terms and other comparable terminology. These forward-looking statements include, without limitation, statements about our market opportunity, our strategies, ability to improve and expand our capabilities, competition, expected activities and expenditures as we pursue our business plan, the adequacy of our available cash resources, regulatory compliance, plans for future growth and future operations, the size of our addressable market, and market and industry trends. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Actual results may differ materially from the projections discussed in these forward-looking statements. The economic environment within which we operate could materially affect our actual results. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. These risks and other factors include, but are not limited to, those listed under “Risk Factors.” Additional factors that could materially affect these forward-looking statements and/or projections include, among other things: (i) our ability to commercialize our technology and products, (ii) the status of our relationships with our partners, (iii) development and protection of our intellectual property and products, (iv) industry competition, (v) our need for and ability to obtain additional funding relative to our current and future financial commitments, (vi) our ability to continue as a going concern, (vii) engineering, contracting, and building our manufacturing facilities, (viii) our ability to scale, manufacture, and sell our products and to license our technology in order to generate revenues, (ix) our proposed business model and our ability to execute it, (x) our ability to obtain the necessary approvals or satisfy any closing conditions in respect of any of our proposed partnerships, (xi) our joint venture projects and our ability to recover certain expenditures in connection them, (xii) adverse effects on the Company's business and operations as a result of increased regulatory, media, or financial reporting scrutiny, practices, rumors, or otherwise, (xiii) public health issues, such as disease epidemics, which may lead to reduced access to capital markets, supply chain disruptions, and government-imposed business closures, (xiv) war, regional tensions, and economic or other conflicts including trade disputes and increasing protectionist measures that could impact market stability and our business; (xv) the effect of the continuing worldwide macroeconomic uncertainty and its impacts, including inflation, market volatility and fluctuations in foreign currency exchange and interest rates, (xvi) the outcome of any SEC investigations or class action litigation filed against us, (xvii) our ability to hire and/or retain qualified employees and consultants, (xviii) other events or circumstances over which we have little or no control, and (xix) other factors discussed in our subsequent filings with the Securities and Exchange Commission (the “SEC”).
Management has included projections and estimates in this Form 10-Q, which are based primarily on management's experience in the industry, assessments of our results of operations, discussions and negotiations with third parties, and a review of information filed by our competitors with the SEC or otherwise publicly available.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as at the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.
We caution readers not to place undue reliance on any such forward-looking statements, which speak only as at the date made. Except as required by law, we disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
General
As used in this Quarterly Report on Form 10-Q, the following terms are being provided so investors can better understand our business:
Depolymerization refers to the chemical process of breaking down a polymer molecule into its constituent monomers or smaller subunits. Depolymerization is the opposite of polymerization.
DMT is an acronym for dimethyl terephthalate, which is a monomer used in the production of polyethylene terephthalate (“PET”), as well as other products.
MEG is an acronym for monoethylene glycol, which is a monomer used in the production of PET, as well as other products.
Polymerization refers to a process of reacting monomer molecules together in a chemical reaction to form polymer chains or three-dimensional networks.
PET is an acronym for polyethylene terephthalate, which is a resin and a type of polyester showing excellent tensile and impact strength, chemical resistance, clarity, and processability, and reasonable thermal stability. PET is the material which is most commonly used for the production of polyester fiber and plastic packaging, including plastic bottles for water and carbonated soft drinks, containers for food and other consumer products; it is commonly identified by the number “1”, often inside an image of a triangle, on the packaging. PET is also used as a polyester fiber for a variety of applications including textiles, clothing and apparel.
rPET, rDMT and rMEG are acronyms for recycled PET, DMT and MEG.
$ refers to U.S. dollars unless otherwise indicated.
Introduction
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. (“Ester”). 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 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.
Background
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 Management SAS (“Reed”), 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. To facilitate the closing of the transactions contemplated by the Amended Agreement and to develop Infinite Loop™ manufacturing facilities in Europe, a simplified joint-stock company has been incorporated under French law (“Infinite Loop Europe”), owned 90% by Reed Circular Economy (“RCE”), an affiliate of 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 RCE. 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.
Key terms of the Series B Convertible Preferred Stock include:
| ● |
13% PIK dividend rate |
|
| ● |
5-year term |
|
| ● |
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.
On September 23, 2025, Loop entered into a Securityholders Agreement with RCE to establish the framework for the governance, ownership, and operations of the European joint venture, Infinite Loop Europe SAS (the "Europe JV"). Under this agreement, RCE and Loop hold their interests in the Europe JV on a 90/10 basis to pursue the non-exclusive development, financing, construction, ownership, operation, and commercialization of chemical upcycling plants and related products using Loop's technology within Europe. The Securityholders Agreement provides the Europe JV with priority rights to evaluate European project opportunities, establishes financing arrangements between the shareholders, grants Loop options to participate in project equity, and confirms that Loop retains ownership of its intellectual property while granting the Europe JV limited use rights.
The Europe JV is managed by a CEO proposed by RCE, with governance provided by a four-member Board of Directors where Loop is entitled to nominate one director and RCE nominates the remainder. Certain transactions that could risk disclosure of Loop's technology and certain related party transactions require unanimous Board approval. RCE has provided the Europe JV with a €10 million shareholder loan to fund the first royalty tranche under the License Agreement, with the loan accruing payment-in-kind interest at 11.9% per annum and maturing on December 27, 2027.
Loop and RCE 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.
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 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 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 August 31, 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 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 $0.2 million in the six-month period ended August 31, 2025. On June 22, 2025, Loop executed a $1.5 million engineering services agreement with the India JV to support it through construction as it moves towards breaking ground on the Infinite Loop™ India facility. This new engineering services agreement builds on the initial engineering services agreement with the India JV which was fulfilled over Q4 of fiscal 2025 and Q1 of fiscal 2026, underscoring the role of engineering services in Loop's commercialization strategy as an important and growing source of revenue.
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 state of Gujarat, India's synthetic textile capital 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.
On August 13, 2025, the India JV executed an agreement with a group of sellers for the acquisition of approximately 93 acres in Gujarat, India, for total consideration of 9,072,000 Indian rupees (approximately US $103,720) per acre. The sellers are obligated to consolidate the parcels, deliver marketable title with requisite governmental approvals, and construct bituminous access road infrastructure, with completion required within five months of execution, subject to extension at India JV's sole discretion. The purchase price is payable through advance payments secured by equitable mortgages over designated parcels, with remaining consideration due upon title transfer. The agreement incorporates customary representations, warranties, and covenants, together with termination provisions permitting India JV to reject non-compliant parcels or terminate for material breach, including failure to deliver contiguous parcels, with full restitution of payments made.
Strategically located within the Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR), the site offers direct access to abundant polyester textile waste feedstock, a skilled petrochemical workforce, and a streamlined permitting process. Its proximity to a deep-water seaport will further support cost-efficient exports of the India JV’s products.
Feedstock sourcing for the facility, of which there is abundant supply from textile waste in India, is well advanced. Furthermore, the India JV has engaged a leading global advisory firm to manage the debt syndication process for financing the construction of the Infinite Loop™ India facility.
Based on an engineering study completed by an engineering firm 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 by end of fiscal year 2026, with commercial operations projected to commence in calendar 2027.
Commercialization Strategy
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.
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. 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. 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 RCE. Loop has the right to increase its ownership in each project developed through Infinite Loop Europe up to 50% subject to a binding commitment.
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 $0.2 million in the six-month period ended August 31, 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.
Recent Developments
Offtake Agreement with Leading Sports Apparel Company
In September 2025, we entered into a multi-year offtake agreement with a subsidiary of a leading branded sports apparel company responsible for its global sourcing. Under the terms of this agreement, we will supply agreed minimum volumes of "Twist," our circular polyester resin made entirely from textile waste, at an agreed upon price once our planned Infinite Loop™ India facility becomes operational. This agreement represents a significant commitment from a major global brand to incorporate our textile-to-textile recycled materials into their supply chain.
Offtake Agreement with Taro Plast
In September 2025, we entered into an offtake agreement with Taro Plast S.p.A. ("Taro Plast"), an Italy-based manufacturer of engineering plastics and compounds. Under this agreement, we will supply Taro Plast with agreed volumes of our 100% recycled, virgin-quality Loop™ DMT produced using our proprietary depolymerization technology at our planned Infinite Loop™ facility in India, once the facility becomes operational. This agreement expands our product offering beyond bottle-grade and fiber-grade PET resin into the specialty polymers market, where Loop™ DMT can be used for automotive and specialty polymer applications. Taro Plast has conducted independent testing confirming the high purity and performance of Loop™ DMT, and is expected to be the first company to integrate Loop™ DMT into their product portfolio.
Strategic Alliance with Shinkong
In August 2025, we announced a strategic alliance with Shinkong Synthetic Fibers Corporation ("Shinkong"), a leader in Taiwan's polyester industry and global leader in sustainable polyester yarn solutions. This partnership combines our textile-to-textile manufacturing technology with Shinkong's polyester fiber spinning capabilities and distribution network. Under this alliance, Shinkong will convert our Twist™ polyester resin into high-performance yarns for their network of over 100 customers worldwide, while we can now offer high-quality circular polyester yarns to customers. This collaboration supports our planned Infinite Loop™ India project by providing additional distribution channels and supply chain options for apparel and textile brands across Asian, European, and North American markets.
Strategic Alliance with Hyosung TNC
In September 2025, we announced a strategic alliance with Hyosung TNC, a complete sustainable textile solutions provider and the world's largest manufacturer of spandex by market share. This alliance combines our Infinite Loop™ depolymerization technology with Hyosung TNC's expertise in advanced textile materials to expand access to circular polyester through textile-to-textile supply chains. Hyosung TNC will convert our Twist™ polyester resin into performance yarns under its regen™ brand portfolio, trusted by leading brands across fashion, activewear, and other textile markets. The relationship has been established for products from our Terrebonne facility and will be significantly expanded once our planned India Infinite Loop™ facility is operational.
Launch of Twist™
During the quarter ended August 31, 2025, the Company announced the launch of Twist™, a new branded circular polyester resin made entirely from textile waste. This product represents a strategic evolution of the Company's fiber-grade PET resin offering, now repositioned to serve the growing textile-to-textile recycling market. Twist™ utilizes the Company's patented depolymerization technology to break down polyester textile waste into base monomers, which are then purified and polymerized into virgin-quality resin that is chemically identical to traditional polyester while providing complete traceability from feedstock to final product. The Company is advancing discussions with apparel brands for offtake agreements from its planned India joint venture facility, where Twist™ will be produced alongside the Company's existing Loop™ branded products.
At-The-Market Offering
On July 3, 2025, the Company entered into an At the Market Offering Agreement (the “Sales Agreement”) with Roth Capital Partners, LLC (“Sales Agent”), pursuant to which the Company may offer and sell, from time to time, shares of its common stock, par value $0.0001 per share having an aggregate offering price of up to $15 million through the Sales Agent, acting as its agent, or directly to the Sales Agent, acting as principal (the “ATM Equity Offering”).
As of August 31, 2025, the Company had sold 116,358 shares of common stock under the Sales Agreement for aggregate gross proceeds of approximately $192,882 and net proceeds of approximately $186,557, after deducting sales agent commissions and other offering expenses. As of August 31, 2025, the Company had approximately $14.8 million of capacity remaining under the ATM Equity Offering.
Human Capital
As of August 31, 2025, we had 42 employees of which 18 work in research and development, 15 in engineering and operations, and 9 in administrative functions.
Results of Operations
All monetary amounts are in thousands of U.S. dollars unless otherwise specified.
The following table summarizes our operating results for the three-month periods ended August 31, 2025 and 2024, in thousands of U.S. Dollars.
| Three months ended August 31, |
||||||||||||
| Change |
||||||||||||
| 2025 |
2024 |
favorable / (unfavorable) |
||||||||||
| Revenues |
$ | - | $ | 23 | $ | (23 | ) | |||||
| Expenses |
||||||||||||
| Research and development |
||||||||||||
| Employee compensation |
597 | 862 | 265 | |||||||||
| Stock-based compensation |
32 | 131 | 99 | |||||||||
| Plant and laboratory operating expenses |
148 | 197 | 49 | |||||||||
| External engineering |
9 | 651 | 642 | |||||||||
| Other |
57 | 104 | 47 | |||||||||
| Total research and development |
843 | 1,945 | 1,102 | |||||||||
| General and administrative |
||||||||||||
| Employee compensation |
423 | 585 | 162 | |||||||||
| Stock-based compensation |
248 | 231 | (17 | ) | ||||||||
| Professional fees |
612 | 1,007 | 395 | |||||||||
| Insurance |
423 | 476 | 53 | |||||||||
| Other |
165 | 296 | 131 | |||||||||
| Total general and administrative |
1,871 | 2,595 | 724 | |||||||||
| Loss on equity accounted investment |
43 | - | (43 | ) | ||||||||
| Depreciation and amortization |
96 | 129 | 33 | |||||||||
| Interest and other financial expenses |
419 | 119 | (300 | ) | ||||||||
| Interest income |
(70 | ) | (6 | ) | 64 | |||||||
| Foreign exchange loss (gain) |
2 | 80 | 78 | |||||||||
| Total expenses |
3,204 | 4,862 | 1,658 | |||||||||
| Net loss |
$ | (3,204 | ) | $ | (4,839 | ) | $ | 1,635 | ||||
Second Quarter Ended August 31, 2025
Revenues
Revenues for the three-month period ended August 31, 2025, decreased $23 to $0, as compared to $23 for the same period in 2024. The revenues of $23 for the three-month period ended August 31, 2024 resulted from sales of Loop™ PET resin.
Research and Development
Research and development expense for the three-month period ended August 31, 2025, decreased $1,102 to $843, as compared to $1,945 for the same period in 2024. The decrease was primarily attributable to a $642 decrease in external engineering expenses for design work for our Infinite Loop™ manufacturing process, and a $265 decrease in employee compensation expenses.
General and administrative expenses
General and administrative expenses for the three-month period ended August 31, 2025, decreased $724 to $1,871, as compared to $2,595 for the same period in 2024. The decrease was primarily attributable to a $395 decrease in professional fees, which was mainly attributable to legal costs related to our partnerships with Reed Societe Generale Group and Ester incurred in the three-month period ended August 31, 2024, and a $162 decrease in employee compensation.
Interest and other financial expenses
Interest and other financial expenses increased by $300 for the three-month period ended August 31, 2025. This increase is mainly attributable to the accrued PIK dividend on the Series B Convertible Preferred Stock issued to RCE recorded as an interest expense for $341 in the three-month period ended August 31, 2025 (2024 – nil).
Net Loss
The net loss for the three-month period ended August 31, 2025, decreased $1,635 to $3,204, as compared to $4,839 for the same period in 2024. This decrease was primarily due to the decrease of $1,102 in research and development expenses and the decrease of $724 in general and administrative expenses, which were partially offset by the $300 increase in interest and other financial expenses.
Six Months Ended August 31, 2025
The following table summarizes our operating results for the six-month periods ended August 31, 2025 and 2024, in thousands of U.S. Dollars.
| Six months ended August 31, |
||||||||||||
| 2025 |
2024 |
Change |
||||||||||
| Revenues |
$ | 252 | $ | 29 | $ | 223 | ||||||
| Expenses |
||||||||||||
| Research and development |
||||||||||||
| Employee compensation |
1,299 | 1,877 | 578 | |||||||||
| Stock-based compensation |
344 | 261 | (83 | ) | ||||||||
| Plant and laboratory operating expenses |
379 | 467 | 88 | |||||||||
| External engineering |
14 | 1,279 | 1,265 | |||||||||
| Other |
181 | 298 | 117 | |||||||||
| Total research and development |
2,217 | 4,182 | 1,965 | |||||||||
| General and administrative |
||||||||||||
| Professional fees |
973 | 2,262 | 1,289 | |||||||||
| Employee compensation |
992 | 1,221 | 229 | |||||||||
| Stock-based compensation |
311 | 471 | 160 | |||||||||
| Insurance |
876 | 968 | 92 | |||||||||
| Other |
367 | 584 | 217 | |||||||||
| Total general and administrative |
3,519 | 5,506 | 1,987 | |||||||||
| Loss on equity accounted investment |
345 | - | (345 | ) | ||||||||
| Depreciation and amortization |
197 | 266 | 69 | |||||||||
| Interest and other financial expenses |
837 | 179 | (658 | ) | ||||||||
| Interest income |
(170 | ) | (132 | ) | 38 | |||||||
| Foreign exchange loss (gain) |
(42 | ) | 56 | 98 | ||||||||
| Total expenses |
6,903 | 10,057 | 3,154 | |||||||||
| Net loss |
$ | (6,651 | ) | $ | (10,028 | ) | $ | 3,377 | ||||
Revenues
Revenues for the six-month period ended August 31, 2025, increased $223 to $252, as compared to $29 for the same period in 2024. The revenues for the six-month period ended August 31, 2025 resulted from $244 in engineering fees and $8 from sales of Loop™ PET resin produced using monomers manufactured at the Terrebonne Facility. The revenues of $29 for the six-month period ended August 31, 2024 resulted from sales of Loop™ PET resin.
Research and Development
Research and development expense for the six-month period ended August 31, 2025, decreased $1,965 to $2,217, as compared to $4,182 for the same period in 2024. The decrease was primarily attributable to a $1,265 decrease in external engineering expenses for design work for our Infinite Loop™ manufacturing process, and a $578 decrease in employee compensation expenses, partially offset by a $83 increase in stock-based compensation expenses.
General and administrative expenses
General and administrative expenses for the six-month period ended August 31, 2025, decreased $1,987 to $3,519, as compared to $5,506 for the same period in 2024. The decrease was primarily attributable to a $1,289 decrease in professional fees, which was mainly due to legal costs related to our partnerships with Reed Societe Generale Group and Ester incurred in the six-month period ended August 31, 2024, a decrease of $229 in employee compensation expenses and a $160 decrease in stock-based compensation expense.
Loss on equity accounted investment
Loss on equity accounted investment increased by $345 for the six-month period ended August 31, 2025. This loss relates to the Company's 50% portion of the loss incurred by the India JV for the six-month period ended August 31, 2025, during which the India JV incurred preliminary project costs for the planned Infinite Loop™ facility in India, which are mainly engineering fees.
Interest and other financial expenses
Interest and other financial expenses increased by $658 for the six-month period ended August 31, 2025. This increase is mainly attributable to the accrued PIK dividend on the Series B Convertible Preferred Stock issued to RCE recorded as an interest expense for $681 in the six-month period ended August 31, 2025 (2024 – nil).
Net Loss
The net loss for the six-month period ended August 31, 2025, decreased $3,377 to $6,651, as compared to $10,028 for the same period in 2024. This decrease was primarily due to the decrease of $1,987 in general and administrative expenses and the decrease of $1,965 in research and development expenses, which were partially offset by the $658 increase in interest and other financial expenses and the increase of $345 in loss on equity accounted investment.
LIQUIDITY AND CAPITAL RESOURCES
All monetary amounts are in thousands of U.S. dollars unless otherwise specified.
Liquidity
Management continuously monitors the Company's cash resources against its cash commitments to determine whether there is sufficient liquidity to fund its costs for at least twelve months from the financial statement issuance date. In preparing its going concern assessment in accordance with US GAAP, the Company included cash flows that meet the "probable" threshold under ASC 205-40 in its liquidity assessment and has excluded forecasted cash flows that lack substantive support or binding commitments. Based on this assessment, management has determined that current available liquidity will be sufficient to meet the Company’s obligations, commitments and budgeted operating 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 participate in the construction of manufacturing facilities through joint ventures is dependent on, among other factors, whether the Company can obtain the necessary funding through a combination of further technology licensing and engineering services arrangements, government incentive programs, and/or the issuance of debt and/or equity. Management is pursuing options to secure financing for Loop's equity contribution for the India JV and to cover ongoing cash requirements through to the start of commercial operations in India. 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. Inability to secure additional financing on favorable terms, or to obtain such financing at all when required, would have an adverse effect on the Company’s financial position and on its ability to execute its business plan.
Sale and issuance of Series B CPS
On December 23, 2024 (the “Issuance Date”), the Company issued and sold 1,044,430 shares of Series B CPS at $10.00 per share to Reed Circular Economy (the “Holder”), an affiliate of Reed Societe Generale Group, for cash proceeds of $10,395 (€10,000). The main features of the Series B CPS are as follows:
| ● |
Automatic conversion of the stated value ($10,395 on the Issuance Date) on the fifth anniversary of the Issuance Date into shares of the Company's common stock at a conversion price of $4.75 per share; |
| ● |
Accrues a cumulative fixed annual PIK dividend at a rate of 13% of the stated value, which is added to the stated value of the Series B CPS on September 30 of each year; |
| ● |
Redeemable in cash at any time, starting after the third anniversary of the Issuance Date by the Company (issuer call option); |
| ● |
Redeemable in cash on the fifth anniversary of the Issuance Date at the option of the Holder (put feature); and |
| ● |
Voting rights equal to the number of whole shares of the Company's common stock (rounded to the nearest whole share) into which the stated value of Series B CPS would be convertible on a given date; and separate class voting rights on certain matters such as amendments to the Certificate of Designation or Articles of Incorporation that adversely affect the rights of the Series B CPS, as long as at least 50,000 shares of Series B CPS are outstanding. |
The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the full text of the Certificate of Designation, which was filed as Exhibit 3.1 to our Current Report on Form 8-K filed with the SEC on December 26, 2025.
Investissement Québec financing facility
We have a long-term debt obligation to Investissement Québec in connection with a financing facility (the “Financing Facility”) for the expansion of the Terrebonne Facility up to a maximum of $3,347. We received the first disbursement in the amount of $1,608 on February 21, 2020 and the second disbursement in the amount of $1,740 on August 26, 2021. The loan can be repaid at any time by us without penalty. The loan's interest rate was initially set at 2.36% and there was a 36-month moratorium on both capital and interest repayments as of the first disbursement date. Under the original terms of the Financing Facility, at the end of the 36-month moratorium, capital and interest was repayable in 84 monthly installments. There is no remaining amount available under the Financing Facility after the second disbursement.
On November 21, 2022, the Company and Investissement Québec entered into an agreement to amend the existing Financing Facility which modifies the repayments of the principal amount (the “Financing Facility Amendment”). As per the Financing Facility Amendment, a total of $36 of the principal amount was repayable in monthly installments in the fiscal year ended February 29, 2024, with the remainder of the principal amount being repayable in 72 monthly installments.
On February 28, 2024, the Company and Investissement Québec entered into an agreement to amend the existing Financing Facility which modifies the repayments of the principal amount (the “Second Financing Facility Amendment”). As per the Second Financing Facility Amendment, a total of $73 of the principal amount was repayable in monthly installments in the fiscal year ended February 28, 2025, with the remainder of the principal amount being repayable in 60 monthly installments. Pursuant to the Second Financing Facility Amendment the interest rate of the Financing Facility was increased from 2.36% to 3.36%.
On February 5, 2025, the Company and Investissement Québec entered into an agreement to amend the existing Financing Facility which modifies the repayments of the principal amount (the “Third Financing Facility Amendment”). As per the Third Financing Facility Amendment, total annual principal repayments in monthly installments are of $301 for the fiscal year ending February 28, 2026 and $519 for the fiscal year ending February 28, 2027, with the remainder of the principal amount being repayable in 36 monthly installments. Pursuant to the Third Financing Facility Amendment the interest rate of the Financing Facility was increased from 3.36% to 4.36%.
Under the original terms of the Financing Facility, the principal amount was repayable in 84 monthly installments beginning in March of 2023. The amendments do not modify the repayment terms of accrued interest or any of the other terms of the Financing Facility that are not mentioned above. The amendments did not meet the criteria of ASC 470, Debt for an extinguishment of debt as the amendments did not substantially modify the terms of the Financing Facility. The Company therefore applied modification accounting and no immediate gain or loss was recognized related to the amendments.
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 $2,547 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 in compliance as at August 31, 2025. All borrowings under the Credit Facility will bear interest at an annual rate equal to the bank's Canadian prime rate plus 1.0%. As at August 31, 2025, the $2,547 Credit Facility was available and undrawn.
On July 4, 2025, the Borrower, 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.
On October 10, 2025, the Borrower, the Company and the Canadian bank executed an amendment to the Credit Facility, which removed the minimum equity covenant tested quarterly for the duration of the term of the Credit Facility.
At-the-Market Offering
During the three months ended August 31, 2025, the Company issued and sold an aggregate of 116,358 shares of its common stock pursuant to its ATM Equity Offering program for aggregate gross proceeds of approximately $193. After deducting sales agent commissions and other offering expenses totaling approximately $6, the Company received net proceeds of approximately $187 from such sales. The shares were sold at prevailing market prices at the time of sale, with an average selling price of $1.66 per share. The net proceeds from these equity transactions were used for general corporate purposes and to strengthen the Company's working capital position. The Company may, from time to time, continue to utilize its ATM Equity Offering program to raise additional capital, subject to market conditions and the Company's capital needs, though there can be no assurance as to if or when any additional sales may occur under the program.
Flow of Funds
Summary of Cash Flows
A summary of cash flows for the six months ended August 31, 2025 and 2024 was as follows, in thousands of U.S. Dollars:
| Six Months Ended August 31, |
||||||||
| 2025 |
2024 |
|||||||
| Net cash used in operating activities |
$ | (5,604 | ) | $ | (6,775 | ) | ||
| Net cash used in investing activities |
(133 | ) | (325 | ) | ||||
| Net cash provided by (used in) financing activities |
51 | 1,537 | ||||||
| Effect of exchange rate changes on cash |
23 | - | ||||||
| Net decrease in cash |
$ | (5,663 | ) | $ | (5,563 | ) | ||
Net Cash Used in Operating Activities
During the six-month period ended August 31, 2025, we used $5,604 in operations compared to $6,775 during the six-month period ended August 31, 2024. As discussed above in the Results of Operations, the year-over-year decrease is mainly due to decreased operating expenses as we have completed the upgrade of the Terrebonne Facility and our basic design package for the Infinite Loop™ full-scale manufacturing facilities, and lower legal costs related to forming our partnerships with Reed Societe Generale Group and Ester.
Net Cash Used in Investing Activities
During the six months ended August 31, 2025, we used $133 in investing activities compared to $325 during the six-month period ended August 31, 2024. During the six-month period ended August 31, 2024 During the six-month period ended August 31, 2025, we made investments in intangible assets of $133, as compared to $325 for the same period in 2024, particularly to file patents for the Infinite Loop™ technology in the United States and around the world.
Net Cash Provided by (Used in) Financing Activities
During the six months ended August 31, 2025, we repaid $136 of long-term debt and received net proceeds from our ATM Equity Offering of $187. During the six months ended August 31, 2024, we borrowed $1,587 under the Credit Facility and we repaid $50 of long-term debt.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).
ITEM 4. CONTROLS AND PROCEDURES
Management's Evaluation of our Disclosure Controls and Procedures
A. Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in our reports that we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
As of the end of the period covered by this Quarterly Report, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Interim Chief Financial Officer, of the effectiveness of the design and operation of the Company's “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act), pursuant to Rule 13a-15(b) of the Exchange Act. Based upon that evaluation, the Chief Executive Officer and Interim Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of August 31, 2025.
B. Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended August 31, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
SEC Investigation
As previously disclosed, we received a subpoena from the SEC in October 2020 requesting certain information from us, including information regarding testing, testing results and details of results from our GEN I and GEN II technologies, and certain of our partnerships and agreements. In March 2022, we received a second subpoena requesting additional information, including information concerning our reverse-merger in 2015, and communications with certain individuals and entities. There have been no additional information requests from the SEC relating to the Company's business or technology.
The SEC informed us that its investigation does not mean that the SEC has concluded that anyone has violated the law and that the investigation does not mean that the SEC has a negative opinion of us. We cannot predict when this matter will be resolved or what, if any, action the SEC may take following the conclusion of the investigation.
On September 30, 2022, the SEC filed a complaint (the “SEC complaint”) against several named defendants (“Defendants”), and also identified as a relief defendant Daniel Solomita, our Chief Executive Officer. The SEC complaint does not allege wrongdoing by the Company or Mr. Solomita. The SEC complaint identifies Mr. Solomita and an entity he owns as relief defendants because they purportedly received monies from the Defendants in 2015 that the SEC alleges were derived from the Defendants' fraud. The SEC complaint does not allege that Mr. Solomita was aware of the alleged wrongdoing by the Defendants and does not allege that he was aware that any alleged monies received were derived from fraud.
Litigation
From time to time, we may become involved in various lawsuits and legal proceedings or investigations which arise in the ordinary course of business. Except as noted above, we are not presently a party to any legal proceedings, government actions, administrative actions, investigations or claims that are pending against us or involve us that, in the opinion of our management, could reasonably be expected to have a material adverse effect on our business, financial condition or operating results. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.
It is possible that we may expend financial and managerial resources in the defense of our intellectual property rights in the future if we believe that our rights have been violated. It is also possible that we may expend financial and managerial resources to defend against claims that our products and services infringe upon the intellectual property rights of third parties.
ITEM 1A. RISK FACTORS
We are subject to various risks and uncertainties in the course of our business. Risk factors relating to us are set forth under “Risk Factors” in our 2025 Annual Report. No material changes to such risk factors have occurred during the three months ended August 31, 2025. An additional risk factor is included below in connection with the recent launch of our ATM Equity Offering.
The sale or issuance of our common stock in an at-the-market offering, pursuant to an At the Market Offering Agreement (“Sales Agreement”) with Roth Capital Partners, LLC, may cause dilution and the sale of the shares of common stock sold pursuant to the Sales Agreement, or the perception that such sales may occur, could cause the price of our common stock to fall.
On July 3, 2025, the Company entered into an At the Market Offering Agreement with Roth Capital Partners, LLC (“Sales Agent”), under which we may offer and sell shares of our common stock having an aggregate offering price of up to $15 million from time to time through or to the Sales Agent, acting as our sales agent or principal
Under the Sales Agreement, we will set the parameters for the sale of shares, including the number of shares to be issued, the time period during which sales are requested to be made, limitation on the number of shares that may be sold in any one trading day and any minimum price below which sales may not be made. Subject to the terms and conditions of the Sales Agreement, the Sales Agent may sell the shares by methods deemed to be an “at-the-market” offering as defined in Rule 415 promulgated under the Securities Act, including sales made directly on or through The Nasdaq Global Market, the existing trading market for the Company's common stock, sales made to or through a market maker other than on an exchange or otherwise, directly to the Sales Agent as principal, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices, and/or in any other method permitted by law. The Sales Agreement provides that the Sales Agent will be entitled to compensation for its services in an amount equal to 3.0% of the gross proceeds from the sale of shares sold under the Sales Agreement.
Depending on market liquidity at the time, sales of shares under the Sales Agreement may cause the trading price of our common stock to fall. Additionally, further sales of our common stock, if any, under the Sales Agreement will depend upon market conditions and other factors to be determined by us. We ultimately may sell all, some or none of the shares of our common stock that may be sold pursuant to the Sales Agreement and, after such shares have been sold, the purchasers may sell all, some or none of those shares. Therefore, sales under the Sales Agreement could result in substantial dilution to the interests of other holders of our common stock. Additionally, the sale of a substantial number of shares of our common stock under the Sales Agreement, or the anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect such sales.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
a) The information set forth below is included herein for the purpose of providing the disclosure required under “Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.” of Form 8-K.
On October 9, 2025, Nicolas Lafond notified the Company of his resignation as Interim Chief Financial Officer of the Company, effective October 17, 2025, in order to accept an opportunity to advance his career in a senior financial role outside of the Company. Mike De Notaris (49), currently Vice President, Corporate Development, is appointed as Interim Chief Financial Officer effective as of the same date. In this position, Mr. De Notaris will assume the responsibilities of Principal Financial Officer and Principal Accounting Officer of the Company.
Mr. De Notaris has served as Vice President, Corporate Development for the Company since September 2021. Prior to joining the Company, he served as Head, Business Risk Division, Wholesale Banking at Abu Dhabi Commercial Bank. Mr. De Notaris brings a strong background in finance developed through 25 years in diverse roles in credit and private equity at various financial institutions including Abu Dhabi Commercial Bank, Bank of Montreal and Istithmar Capital. Mr. De Notaris holds a Bachelor of Commerce from Concordia University and is a CFA Charterholder.
There are no family relationships between Mr. De Notaris and any director or executive officer of the Company, and there are no transactions between Mr. Lafond and the Company that would be required to be reported under Item 404(a) of Regulation S-K.
b) The information set forth below is included herein for the purpose of providing the disclosure required under “Item 1.01 Entry into a Material Definitive Agreement.” of Form 8-K.
On October 10, 2025, Loop Canada Inc. (the “Borrower”), a wholly-owned subsidiary of the Company, and the Company entered into Amendment No. 3 (the “Amendment”) to the Credit Agreement dated June 30, 2022 (as previously amended, the “Credit Agreement”) with the Canadian Imperial Bank of Commerce (“CIBC”).
The Amendment removed the minimum equity covenant of $2.55 million (CDN $3.50 million), which had been tested quarterly, and clarified that the Company’s convertible preferred share instrument in the amount of $10.65 million will be included in the equity calculation.
A copy of the Amendment will be filed as an exhibit to the Company’s next periodic report under the Exchange Act.
c) Insider trading arrangements
During the three months ended August 31, 2025, director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.
ITEM 6. EXHIBITS
The following Exhibits, as required by Item 601 of Regulation SK, are attached or incorporated by reference, as stated below.
Exhibit Index
| Incorporated by Reference |
||||||||||
| Number |
Description |
Form |
File No. |
Filing Date |
Exhibit No. |
|||||
| 3.1 |
Articles of Incorporation, as amended to date |
10-K |
001-38301 |
May 29, 2024 |
3.1 |
|||||
| 3.2 |
Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock. | 8-K |
001-38301 |
December 26, 2024 | 3.1 |
|||||
| 3.3 | By-laws, as amended to date | 8-K | 001-38301 | April 10, 2018 | 3.1 | |||||
| 10.1 | At the Market Offering Agreement, dated July 3, 2025, between the Company and Roth Capital Partners, LLC. | 8-K | 001-38301 | July 3, 2025 | 10.1 | |||||
| 10.2 | Amendment #2 to the Credit Agreement dated June 30th, 2022 between Canadian Imperial Bank of Commerce and Loop Canada Inc. | Filed herewith | ||||||||
| 31.1 |
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
Filed herewith |
||||||||
| 31.2 |
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
Filed herewith |
||||||||
| 32.1 |
Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
Furnished herewith |
||||||||
| 32.2 |
Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
Furnished herewith |
||||||||
| 101.INS |
Inline XBRL Instance Document |
Filed herewith |
||||||||
| 101.SCH |
Inline XBRL Taxonomy Extension Schema Document |
Filed herewith |
||||||||
| 101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
Filed herewith |
||||||||
| 101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document |
Filed herewith |
||||||||
| 101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase Document |
Filed herewith |
||||||||
| 101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
Filed herewith |
||||||||
| 104 |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
Filed herewith |
||||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Date: October 15, 2025 |
By: |
/s/ Daniel Solomita |
|
| Name: |
Daniel Solomita |
||
| Title: |
President and Chief Executive Officer, and Director (Principal Executive Officer) |
||
| Date: October 15, 2025 |
By: |
/s/ Nicolas Lafond |
|
| Name: |
Nicolas Lafond |
||
| Title: |
Interim Chief Financial Officer (Principal financial officer and principal accounting officer) |
FAQ
How did LOOP perform in Q2 FY2026?
What is Loop Industries' liquidity position?
What changed in LOOP’s capital structure this quarter?
What revenue did LOOP record from its India JV?
What are the plans for the India facility?
Were there any notable financing or covenant changes?
How many LOOP shares are outstanding?
