Loop Industries(LOOP) - 2025 Q3 - Quarterly Report

Sustainability and Technology - Loop Industries is focused on accelerating the shift towards sustainable PET plastic and polyester fiber, utilizing its patented Infinite Loop™ Technology to depolymerize waste PET into virgin-quality resin [86]. - Loop's depolymerization technology can process a wider variety of PET feedstock, including complex and degraded plastics, which mechanical recycling cannot handle effectively [89][96]. - The global market for DMT is experiencing a shortage, and Loop's rDMT offers a sustainable alternative to traditional DMT produced from fossil fuels [96]. - There is a high demand for low-carbon MEG, and Loop's rMEG aims to fulfill this market need by providing a lower carbon footprint recycled alternative [98]. - The Infinite Loop™ Technology is positioned as a key driver for the company's global expansion strategy, focusing on sustainable production of PET and specialty polymers [120]. Financial Performance - Revenue for the three-month period ended November 30, 2024, increased to $52,000 from$26,000 in the same period in 2023, reflecting initial deliveries of Loop™ PET resin [131]. - Revenue for the nine-month period ended November 30, 2024, decreased by $27 to$81 million, compared to $108 million for the same period in 2023 [138]. - Net loss for the three-month period ended November 30, 2024, increased to$11,912,000 from $4,244,000 in 2023, primarily due to an impairment charge of$8,460,000 related to machinery and equipment [135]. - Net loss for the nine-month period increased by $5,945 to$21,940 million, primarily due to the impairment of equipment [142]. - Cash and cash equivalents on hand were $323 million, with current liabilities exceeding current assets by$7,085 million as of November 30, 2024 [143]. Expenses and Cost Management - Research and development expenses decreased to $1,377,000 for the three-month period ended November 30, 2024, down from$1,833,000 in 2023, primarily due to reduced employee compensation and external engineering costs [132]. - General and administrative expenses decreased to $2,148,000 for the three-month period ended November 30, 2024, compared to$2,458,000 in 2023, mainly due to lower insurance costs [133]. - Research and development expenses decreased by $2,802 to$5,559 million, primarily due to a $1,196 decrease in machinery and equipment purchases and a$1,073 decrease in employee compensation [139]. - General and administrative expenses decreased by $113 to$7,654 million, mainly due to a $637 reduction in insurance expenses [140]. - Impairment of assets increased by$8,460 million, reflecting an impairment charge for machinery and equipment due to the termination of a joint venture [141]. Partnerships and Joint Ventures - The partnership with Reed Management SAS allows Loop to retain a maximum equity stake of 50% in future European manufacturing facilities [102]. - Loop entered into a strategic partnership with Ester Industries to form a 50/50 joint venture in India, aiming to produce 70,000 tonnes of rDMT and 23,000 tonnes of rMEG annually using Infinite Loop™ Technology [104][107]. - The initial funding required for the India joint venture is projected to be $165 million, with Loop and Ester each contributing 50$10.00 per share, raising total cash proceeds of $20,790 [101]. - The company received proceeds of$20,790 million from transactions with Reed, which included the issuance of Series B Convertible Preferred Stock [144]. - Net cash used in operating activities was $8,635 million, a decrease from$14,762 million in the same period in 2023 [156]. - Net cash used in investing activities was $86 million, significantly lower than$5,453 million in the same period in 2023 [157]. - The company borrowed $2,372 million under the Credit Facility during the nine months ended November 30, 2024 [158]. Strategic Goals - The company aims to expand its technology licensing and engineering services to address global demand while focusing internal resources on direct equity investments [103]. - Loop's strategy includes leveraging its technology to enter new markets and cater to a broader range of customers across multiple industries [87]. - Loop aims to assist global consumer goods brands in meeting sustainability commitments through co-branded packaging and recycled materials, potentially commanding premium pricing over virgin materials [125]. - The company plans to utilize the impaired equipment from the terminated joint venture with SKGC in future commercial production facilities [134].