Loop Industries(US:LOOP)2022-05-27 00:38Financial Performance - The net loss for the three-month period ended February 28, 2022, increased by $1.08 million to $14.27 million compared to the same period in 2021, primarily due to a contingency loss for legal settlement of $2.52 million and a loss from equity investment of $1.12 million [181]. - The net loss for the year ended February 28, 2022, was $44,920,956, compared to a net loss of $36,344,923 in the prior year, reflecting an increase in losses of approximately 23.6% [231]. - The company reported a net loss of $44.92 million for the year ended February 28, 2022, compared to a net loss of $36.34 million for the previous year, representing an increase in losses of approximately 23% [239]. - The company expects to incur additional net losses while developing and planning for commercialization, with no revenues reported to date [214]. - The company's loss before taxes increased to $44,920,956 in 2022, compared to $36,344,923 in 2021, with U.S. operations contributing a loss of $12,690,909 [354]. Expenses - Total expenses for the fiscal year ended February 28, 2022, were $44.92 million, an increase of $8.58 million compared to $36.34 million in the previous year, driven by increased research and development expenses of $9.05 million [191]. - Research and development expenses for the fiscal year ended February 28, 2022, totaled $27.74 million, an increase of $9.05 million from $18.69 million in the previous year [188]. - General and administrative expenses increased by $1.25 million for the year ended February 28, 2022, partially offset by a $1.73 million decrease in stock-based compensation expenses due to forfeitures of RSUs [193]. - General and administrative expenses rose to $12.79 million in 2022, compared to $11.54 million in 2021, reflecting an increase of 10.8% [341]. - Stock-based compensation expense for stock options amounted to $1.51 million in 2022, down from $2.21 million in 2021, indicating a decrease of 31.7% [343]. Cash Flow and Financing - Cash and cash equivalents on hand were $44.06 million as of February 28, 2022, with ongoing operations financed primarily by raising equity [197]. - Net cash used in operating activities was $42.98 million for the year ended February 28, 2022, compared to $22.49 million for the previous year, mainly due to increased operating expenses [206]. - The company raised $56.5 million through a private offering of common stock during the year ended February 28, 2022 [209]. - The company raised $56.05 million from the sale of common shares and exercise of warrants, net of share issuance costs, compared to $26.65 million in the previous year, marking a 110% increase in financing activities [239]. - The company is evaluating financing options to construct manufacturing plants in Canada, Europe, and Asia, which is critical for future revenue generation [246]. Investments and Assets - The company invested $4.82 million in property, plant, and equipment, primarily for the purchase of land in Bécancour, Québec, for the construction of its Infinite Loop™ manufacturing facility [207]. - Total assets rose to $59,220,199 as of February 28, 2022, compared to $43,403,513 as of February 28, 2021, marking an increase of about 36.3% [229]. - The accumulated deficit grew to $(134,582,926) as of February 28, 2022, compared to $(89,661,970) in the previous year, representing an increase of approximately 50% [229]. - The company has approximately 11,659,418 warrants outstanding as of February 28, 2022, with significant expirations in June 2022 and July 2024 [352]. Legal and Regulatory Matters - The company recorded a contingency loss for legal settlement of $2.52 million related to a class action lawsuit, which requires a total payment of $3.1 million to the plaintiff class [184]. - A contingency loss of $2,519,220 was recorded in 2022 related to the settlement of a class action lawsuit [368]. - The company agreed to pay $3.1 million to settle the Tremblay Class Action, with a total cash contribution of approximately $2.52 million from the company [371]. Research and Development - The company is pursuing the construction of Infinite Loop™ commercial scale facilities in Québec, Canada, and with strategic partners in Europe and South Korea, aiming for global expansion of its technology [175]. - The Infinite Loop manufacturing technology has a capacity of up to 70,000 M/T of PET resin output per year, with the basic design package completed in collaboration with leading engineering partners [179]. - Research and development expenses increased to $27.74 million for the year ended February 28, 2022, up from $18.69 million in 2021, representing a growth of 48.5% [340]. - Research and development expenses primarily include costs related to process development, testing of pre-production samples, and machinery expenditures at the Terrebonne Facility [266]. Strategic Plans - The company is targeting multi-year take or pay offtake agreements for planned Infinite Loop production, which may command premium pricing over virgin, petroleum-based PET resin [180]. - The company plans to continue driving the commercialization of its Infinite Loop™ solution, which is considered a key pillar for selling technology to commercial partners [221]. - The company is actively identifying and pursuing additional strategic partners and regions for new Infinite Loop™ projects to expand its market presence [221].