Loop Industries(LOOP) - 2025 Q1 - Quarterly Report

Business Expansion and Joint Ventures - Loop Industries aims to construct commercial scale facilities for its Infinite Loop™ Technology, with financing discussions currently underway [80]. - The India joint venture with Ester Industries is expected to produce 70,000 tonnes of rDMT and 23,000 tonnes of rMEG annually [93]. - Initial funding required for the India JV is projected at $165 million, with both Loop and Ester contributing 50% of the equity capital [96]. - The Infinite Loop™ India facility is anticipated to commence commercial operations in early 2027 [95]. - The India JV will leverage local expertise in sourcing PET plastic and polyester fiber waste feedstocks [92]. - The company is pursuing joint ventures with SKGC in Asia and Europe to build and operate Infinite Loop™ manufacturing facilities [115]. Technology and Sustainability - Loop's rDMT and rMEG are positioned to address a global shortage in DMT and high demand for low carbon MEG, providing sustainable alternatives [89][90]. - The company’s technology allows for the recycling of a wider variety of PET feedstock, including complex and degraded plastics [81]. - Loop's depolymerization technology enables the production of virgin-quality PET resin suitable for food-grade packaging [78]. - Loop's technology offers a closed-loop system for plastic waste, allowing for infinite recycling without degrading material quality [86]. - The Infinite Loop™ Technology aims to transition from fossil fuels to a circular economy by recycling waste plastic into PET plastic and polyester fiber [111]. Financial Performance - Revenue for the three-month period ended May 31, 2024, decreased by$ 21 to $6, compared to$ 27 for the same period in 2023, resulting from initial deliveries of Loop™ PET resin [126]. - Research and development expenses for the same period decreased by $2,253 to$ 2,237, primarily due to a $1,233 decrease in machinery and equipment purchases and a$ 527 decrease in external engineering costs [127]. - General and administrative expenses increased by $446 to$ 2,911, mainly due to a $636 increase in professional fees related to partnerships with Reed and Ester [128]. - The net loss for the three-month period ended May 31, 2024, decreased by$ 1,812 to $5,189, compared to$ 7,001 for the same period in 2023 [130]. - The company’s liquidity position consists of cash and cash equivalents of $5,291 as of May 31, 2024 [131]. - The Company estimates that current available liquidity and forecasted net cash flows will not be sufficient to meet its obligations and budgeted expenditures for the next twelve months [132]. Cash Flow and Financing - During the three months ended May 31, 2024, the Company used$ 3,915 in operating activities, a decrease from $5,504 in the same period in 2023, primarily due to reduced operating expenses [142]. - The Company used$ 176 in investing activities during the three months ended May 31, 2024, compared to $2,122 in the same period in 2023, with investments focused on patent technology [143]. - The Company borrowed$ 2,517 under the Credit Facility during the three months ended May 31, 2024, while repaying $25 of long-term debt [144]. - The interest rate on the Financing Facility was increased from 2.36% to 3.36% as per the Second Financing Facility Amendment [137]. - The Company has a long-term debt obligation of up to$ 3,390 related to the Financing Facility, with disbursements totaling $3,390 received to date [135]. - A total of$ 37 of the principal amount was repaid in monthly installments in the fiscal year ended February 29, 2024, with the remainder repayable in 72 monthly installments [136]. - The Company is seeking additional financing through various means, including debt and equity issuance, but there is no assurance of success [133]. - The Company is in compliance with the minimum equity covenant of the Credit Facility as of May 31, 2024 [139]. - The net decrease in cash for the three months ended May 31, 2024, was $1,667, compared to a decrease of$ 7,621 in the same period in 2023 [140].