Loop Industries(LOOP) - 2019 Q4 - Annual Report

Financial Performance - Loop Industries reported a net loss of $7.5 million for the three-month period ended February 28, 2019, an increase of $3.9 million compared to a net loss of $3.6 million for the same period in 2018[138]. - The company incurred a net loss of $17.5 million for the year ended February 28, 2019, compared to a loss of $6.4 million in the previous year, indicating a significant increase in losses[154]. - Cash on hand as of February 28, 2019, was $5.8 million, with an additional $4.2 million raised through a registered direct offering on March 1, 2019[152]. - Net cash used in operating activities was $7.6 million for the year ended February 28, 2019, up from $6.4 million in the previous year, reflecting increased operating expenses[157]. - The accumulated deficit as of February 28, 2019, was $38.8 million, raising concerns about the company's ability to continue as a going concern[154]. Operating Expenses - Total operating expenses for the year ended February 28, 2019 were $17.5 million, an increase of $3.5 million from $14.0 million in 2018, primarily due to higher general and administrative expenses[146]. - General and administrative expenses for the year ended February 28, 2019 totaled $12.9 million, an increase of $6.0 million from $6.9 million in 2018, largely due to a legal settlement expense of $4.0 million[148]. - The increase in interest and other finance costs for the three-month period ended February 28, 2019 was $0.4 million, primarily due to expenses related to convertible notes issued during the year[142]. - Interest and other finance costs for the year ended February 28, 2019, totaled $0.5 million, a significant increase from a negligible amount in the previous year, primarily due to increased interest on long-term debt[150]. Research and Development - Research and development expenses decreased to $3.5 million for the year ended February 28, 2019, down from $6.7 million in 2018, representing a decrease of $3.2 million[147]. - The company plans to continue investing in its intellectual property portfolio and enhancing its Loop brand value through strategic relationships and R&D[135]. Joint Venture and Production - The joint venture with Indorama Ventures is expected to produce 20,700 metric tonnes of sustainable Loop™ PET plastic resin, with potential capacity expansion to 40,000 metric tonnes under evaluation[128]. - Loop Industries anticipates recording its first commercial revenues from the joint venture in the second half of the calendar year 2020[132]. - The company has committed $500,000 to the joint venture as part of its equity share for the construction of the facility[128]. - The Loop™ PET plastic resin and polyester fiber are made from 100% recycled materials, suitable for food-grade packaging, addressing consumer brands' sustainability challenges[134]. Capital Investments and Financing - Capital asset investments for the year ended February 28, 2019, totaled $2.1 million, primarily for the expansion of the pilot plant and development of the GEN II technology[158]. - The company raised $7.3 million through the issuance of convertible notes during the year ended February 28, 2019, compared to $15.7 million raised in the previous year[159]. - As of February 28, 2019, the company had a long-term debt obligation of CDN$1.4 million related to the purchase of land and building for its pilot plant[155]. Corporate Strategy - The company plans to continue executing its corporate strategy, focusing on raising sufficient funds, protecting intellectual property, and upgrading the pilot plant[166]. Currency and Financial Reporting - The company has not engaged in any currency hedging activities, which may expose it to foreign currency exchange fluctuations impacting operating expenses[185]. - The consolidated financial statements are presented in U.S. dollars, with foreign subsidiaries' assets and liabilities translated at the exchange rate as of the balance sheet date[183]. - The average period Canadian dollar to U.S. dollar exchange rate for 2019 was 0.76, consistent with the previous year[186].