Loop Industries(LOOP) - 2025 Q2 - Quarterly Report

Technology and Innovation - Loop Industries is in the planning stages for constructing commercial scale facilities utilizing its Infinite Loop™ Technology, with financing discussions ongoing [76]. - Loop's rDMT and rMEG are positioned to address a global shortage in DMT and high demand for low carbon MEG, providing sustainable alternatives to traditional fossil fuel-derived products [82]. - Loop's technology can process a wider variety of PET feedstock, including complex and degraded plastics, which mechanical recycling cannot handle [79]. - Loop's depolymerization technology allows for infinite recycling of plastics without degrading material quality, creating a closed-loop system [80]. - The Infinite Loop™ Technology allows for the production of rDMT and rMEG, with a capacity of up to 70,000 M/T of PET resin output per year [97]. Joint Ventures and Partnerships - The company has entered into a joint venture with Reed Management SAS for a €35 million investment to fund the global commercialization of its technology [83]. - The India joint venture with Ester Industries aims to produce 70,000 tonnes of rDMT and 23,000 tonnes of rMEG annually, leveraging both companies' strengths [86]. - The company has established a strong relationship with Ester, which has been producing Loop™ PET for global brands for the past four years [86]. - The India joint venture (JV) requires initial funding of $165 million, with Loop and Ester each contributing 50% [88]. Financial Performance - Revenue for the three-month period ended August 31, 2024, decreased by $31 to $23, compared to $54 for the same period in 2023 [107]. - Research and development expenses for the same period decreased by $93 to $1,945, primarily due to a $356 decrease in employee compensation [108]. - General and administrative expenses decreased by $248 to $2,595, mainly due to a $233 decrease in insurance expenses [109]. - The net loss for the three-month period ended August 31, 2024, increased by $88 to $4,839, compared to $4,750 for the same period in 2023 [109]. - Revenue for the six-month period ended August 31, 2024, decreased by $52 to $29, compared to $81 for the same period in 2023 [113]. - Research and development expenses for the same period decreased by $2,346 to $4,182, down from $6,528 in 2023 [114]. - General and administrative expenses increased by $198 to $5,506, compared to $5,308 in 2023 [114]. - The net loss for the six-month period ended August 31, 2024, decreased by $1,723 to $10,028, compared to $11,751 in 2023 [115]. Cash Flow and Liabilities - Cash and cash equivalents on hand were $1,395, with an undrawn senior loan facility of $1,008 as of August 31, 2024 [117]. - Net cash used in operating activities was $6,775 for the six months ended August 31, 2024, compared to $11,017 in 2023 [126]. - Net cash used in investing activities was $325 for the six months ended August 31, 2024, compared to $5,290 in 2023 [127]. - The company borrowed $1,587 under the Credit Facility during the six months ended August 31, 2024 [127]. - Current liabilities exceeded current assets by $2,510 as of August 31, 2024 [117]. - The company has a long-term debt obligation of up to $3,410 related to the Financing Facility for the Terrebonne Facility expansion [120]. Future Plans and Capacity - The company anticipates that the financing from Reed will be completed by November 2024, with an initial tranche of €10 million expected [84]. - The planned Infinite Loop™ facility in Ulsan, South Korea, is expected to have an annual capacity of 70,000 metric tons of Loop™ PET resin, with groundbreaking planned for the first half of 2024 [101]. - Construction of the India facility is expected to be completed by the end of 2026, with commercial operations commencing in early 2027 [99]. - The Infinite Loop™ Europe facility aims to supply up to 70,000 metric tons of recycled PET plastic and polyester fiber to the European market [92]. - The company is targeting multi-year take or pay offtake agreements for planned Infinite Loop™ production to enhance project economics [103].