Loop Industries首季收入僅17.9萬美元，現金大幅縮減至106.3萬美元，持續經營存重大疑問

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Table of Contents

 

United States 

Securities and Exchange Commission

Washington, D.C. 20549

 

FORM 10-Q

 

 ☒
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 

  

  For the quarterly period ended May 31, 2026
 

 

or

 

 ☐
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 

  

  For the transition period from ___________ to __________
 

 

Commission File No. 001-38301

 

 

 

 Loop Industries, Inc.
 

 (Exact name of Registrant as specified in its charter)
 

 

 

 Nevada
   27-2094706
 

 (State or other jurisdiction of incorporation or organization)
   (I.R.S. Employer Identification No.)
 

 

480 Fernand-Poitras Terrebonne, Québec, Canada J6Y 1Y4

(Address of principal executive offices zip code)

 

Registrant's telephone number, including area code (450) 951-8555

 

Securities registered pursuant to Section 12(b) of the Act:

 

 Title of each class
 Trading Symbol(s)
 Name of each exchange on which registered
 

 Common stock, par value $0.0001 per share
 LOOP
 The Nasdaq Stock Market LLC
 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒   No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files) Yes ☒   No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

 Large accelerated filer
 ☐
 Accelerated filer
 ☐
 

 Non-accelerated filer
 ☒
 Smaller reporting company
 ☒
 

   Emerging growth company
 ☐
 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐   No ☒

 

As at July 14, 2026, there were 48,380,371 shares of the Registrant's common stock, par value $0.0001 per share, outstanding.

 

 

 
 
 
  
 

 

 

 
 
 
 
 Table of Contents
 

 

 

 

 
  
 

 
 LOOP INDUSTRIES, INC.

  

 TABLE OF CONTENTS

  

 
 
 
  
  
 Page No.
 
 

 
 PART I. Financial Information
 
  
 

 
  
  
  
 

 
 Item 1.
 
 Financial Statements
 
 F-1
 
 

 
 Item 2.
 
 Management's Discussion and Analysis of Financial Condition and Results of Operations
 
 3
 
 

 
 Item 3.
 
 Quantitative and Qualitative Disclosures About Market Risk
 
 13
 
 

 
 Item 4.
 
 Controls and Procedures
 
 13
 
 

 
  
  
  
 

 
 PART II. Other Information
 
 

 
  
  
  
 

 
 Item 1.
 
 Legal Proceedings 
 
 14
 
 

 
 Item 1A.
 
 Risk Factors
 
 14
 
 

 
 Item 2.
 
 Unregistered Sales of Equity Securities and Use of Proceeds
 
 15
 
 

 
 Item 3.
 
 Defaults Upon Senior Securities
 
 15
 
 

 
 Item 4.
 
 Mine Safety Disclosures 
 
 15
 
 

 
 Item 5.
 
 Other Information
 
 15
 
 

 
 Item 6.
 
 Exhibits
 
 16
 
 

 
  
  
  
 

 
  
 Signatures
 
 17
 
 

 
 
 
  
 

  

 
 
 
 
 2
 

 

 

 
 
 
 
 Table of Contents
 

 

 

 

  

 
  
 

  

  

 PART I.  FINANCIAL INFORMATION

  

 ITEM 1. FINANCIAL STATEMENTS 

  

 Loop Industries, Inc.

 Three Months Ended

 Index to the Unaudited Interim Condensed Consolidated Financial Statements

  

 
 
 
 Contents 
 
  
 Page(s)
 
 

 
  
  
  
 

 
 Condensed consolidated balance sheets as at May 31, 2026 (Unaudited) and February 28, 2026
 
  
 F-2
 
 

 
  
  
  
 

 
 Condensed consolidated statements of operations and comprehensive loss for the three months ended May 31, 2026 and 2025 (Unaudited)
 
  
 F-3
 
 

 
  
  
  
 

 
 Condensed consolidated statements of changes in stockholders' deficit for the three months ended May 31, 2026 and 2025 (Unaudited) 
 
  
 F-4
 
 

 
  
  
  
 

 
 Condensed consolidated statements of cash flows for the three months ended May 31, 2026 and 2025 (Unaudited)
 
  
 F-5
 
 

 
  
  
  
 

 
 Notes to the condensed consolidated financial statements (Unaudited)
 
  
 F-6
 
 

 
 
 
  
 

  

 
 
 
 
 F-1
 

 

 

 
 
 
 
 Table of Contents
 

 

 

 

  

 

 
  
 

 Loop Industries, Inc.

 Condensed Consolidated Balance Sheets

 (Unaudited)

  

 
 (in thousands of U.S. dollars, except per share data)
   As at
  

   May 31,
    February 28,
  

   2026
    2026
  

         

 Assets
         

 Current assets
         

 Cash and cash equivalents
  $1,063  $2,356 

 Accounts receivable and other (Note 3)
   699   755 

 Prepaid expenses (Note 4)
   395   495 

 Total current assets
   2,157   3,606 

 Equity method investments (Note 9)
   1,159   1,478 

 Property, plant and equipment, net (Note 5)
   1,657   1,699 

 Intangible assets, net (Note 6)
   1,730   1,776 

 Total assets
  $6,703  $8,559 

         

 Liabilities and Stockholders’ Deficit
         

 Current liabilities
         

 Accounts payable and accrued liabilities (Note 8)
  $2,038  $1,916 

 Unearned revenue
   323   234 

 Current portion of long-term debt (Note 11)
   807   605 

 Total current liabilities
   3,168   2,755 

 Due to customer
   918   900 

 Series B Convertible Preferred stock (Note 10)
   12,429   12,054 

 Long-term debt (Note 11)
   2,206   2,430 

 Total liabilities
   18,721   18,139 

         

 Stockholders’ Deficit
         

 Common stock par value $0.0001; 250,000,000 shares authorized; 48,380,371 shares issued and outstanding (February 28, 2026 – 48,337,555) (Note 12)
   5   5 

 Additional paid-in capital
   196,874   195,934 

 Accumulated deficit
   (207,710)  (204,326)

 Accumulated other comprehensive loss
   (1,187)  (1,193)

 Total stockholders’ deficit
   (12,018)  (9,580)

 Total liabilities and stockholders’ deficit
  $6,703  $8,559 

         

 Going Concern (Note 1)
         

 

  

 See accompanying notes to the condensed consolidated financial statements.

  

 
 
 
 
 F-2
 

 

 

 
 
 
 
 Table of Contents
 

 

 

 

  

 
  
 

 Loop Industries, Inc.

 Condensed Consolidated Statements of Operations and Comprehensive Loss

 (Unaudited)

  

 
 
 
 
 (in thousands of U.S. dollars, except per share data)
 
  
 Three Months Ended
 
  
 

 
  
  
 May 31, 2026
 
  
  
 May 31, 2025
 
  
 

 
 Revenues
 
  
  
  
  
  
  
  
  
 

 
 Products
 
  
 $
 -
  
  
 $
 8
  
 

 
 Services
 
  
  
 179
  
  
  
 244
  
 

 
 Total revenues
 
  
  
 179
  
  
  
 252
  
 

 
  
  
  
  
  
  
  
  
  
 

 
 Cost of services
 
  
  
  
  
  
  
  
  
 

 
 Cost of services
 
  
  
 179
  
  
  
 114
  
 

 
  
  
  
  
  
  
  
  
  
 

 
 Expenses
 
  
  
  
  
  
  
  
  
 

 
 Research and development (Note 13)
 
  
  
 962
  
  
  
 1,259
  
 

 
 General and administrative (Note 14)
 
  
  
 1,574
  
  
  
 1,649
  
 

 
 Depreciation and amortization (Notes 5 and 6)
 
  
  
 84
  
  
  
 100
  
 

 
 Total expenses
 
  
  
 2,620
  
  
  
 3,008
  
 

 
  
  
  
  
  
  
  
  
  
 

 
 Other loss
 
  
  
  
  
  
  
  
  
 

 
 Loss on equity accounted investments (Note 9)
 
  
  
 319
  
  
  
 302
  
 

 
 Interest and other financial expenses
 
  
  
 436
  
  
  
 419
  
 

 
 Interest income
 
  
  
 (5
 )
  
  
 (100
 )
 

 
 Foreign exchange loss (gain)
 
  
  
 15
  
  
  
 (45
 )
 

 
 Total other loss
 
  
  
 765
  
  
  
 576
  
 

 
 Net loss
 
  
  
 (3,385
 )
  
  
 (3,446
 )
 

 
  
  
  
  
  
  
  
  
  
 

 
 Other comprehensive loss
 
  
  
  
  
  
  
  
  
 

 
 Foreign currency translation adjustment
 
  
  
 6
  
  
  
 (19
 )
 

 
 Comprehensive loss
 
  
 $
 (3,379
 )
  
 $
 (3,465
 )
 

 
 Net loss per share
 
  
  
  
  
  
  
  
  
 

 
 Basic and diluted
 
  
 $
 (0.07
 )
  
 $
 (0.07
 )
 

 
 Weighted average common shares outstanding
 
  
  
  
  
  
  
  
  
 

 
 Basic and diluted
 
  
  
 48,363,463
  
  
  
 47,664,134
  
 

 
  
  
  
  
  
  
  
  
  
 

 
 Going Concern (Note 1)
 
  
  
  
  
  
  
  
  
 

 
 
 

  

  

 See accompanying notes to the condensed consolidated financial statements.

  

 
 
 
 
 F-3
 

 

 

 
 
 
 
 Table of Contents
 

 

 

 

  

 
  
 

 Loop Industries, Inc.

 Condensed Consolidated Statement of Changes in Stockholders' Deficit

 (Unaudited)

  

 
 
 
 
 (in thousands of U.S. dollars, except for share data)
 
  
 Three months ended May 31, 2026
 
  
 

 
  
  
 Common stock
 
  
  
 Preferred stock
 
  
  
  
  
  
  
 Additional
 
  
  
  
  
  
  
 Accumulated
 
  
  
  
  
  
 

 
  
  
 par value $0.0001
 
  
  
 par value $0.0001
 
  
  
 Additional
 
  
  
 Paid-in
 
  
  
  
  
  
  
 Other
 
  
  
 Total
 
  
 

 
  
  
 Number of
 
  
  
  
  
  
  
 Number of
 
  
  
  
  
  
  
 Paid-in
 
  
  
 Capital–
 
  
  
 Accumulated
 
  
  
 Comprehensive
 
  
  
 Stockholders’
 
  
 

 
  
  
 Shares
 
  
  
 Amount
 
  
  
 Shares
 
  
  
 Amount
 
  
  
 Capital
 
  
  
 Warrants
 
  
  
 Deficit
 
  
  
 Loss
 
  
  
 Deficit
 
  
 

 
 Balance, February 28, 2026
 
  
  
 48,337,555
  
  
 $
 5
  
  
  
 1
  
  
 $
 -
  
  
 $
 195,934
  
  
 $
 -
  
  
 $
 (204,326
 )
  
 $
 (1,193
 )
  
 $
 (9,580
 )
 

 
 Issuance of shares upon the vesting of restricted stock units (Note 15)
 
  
  
 42,816
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
 

 
 Issuance of shares upon the exercise of stock options (Note 15)
 
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 
  
  
  
 -
  
  
  
 
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
 

 
 Stock options issued for services (Note 15)
 
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 813
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 813
  
 

 
 Restricted stock units issued for services (Note 15)
 
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 127
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 127
  
 

 
 Share issuance costs
 
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
 

 
 Foreign currency translation
 
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 6
  
  
  
 6
  
 

 
 Net loss
 
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 (3,385
 )
  
  
 -
  
  
  
 (3,385
 )
 

 
 Balance, May 31, 2026
 
  
  
 48,380,371
  
  
 $
 5
  
  
  
 1
  
  
 $
 -
  
  
 $
 196,874
  
  
 $
 -
  
  
 $
 (207,710
 )
  
 $
 (1,187
 )
  
 $
 (12,018
 )
 

 
 
 

  

  

 
 
 
 
 (in thousands of U.S. dollars, except for share data)
 
  
 Three months ended May 31, 2025
 
  
 

 
  
  
 Common stock
 
  
  
 Preferred stock
 
  
  
  
  
  
  
 Additional
 
  
  
  
  
  
  
 Accumulated
 
  
  
  
  
  
 

 
  
  
 par value $0.0001
 
  
  
 par value $0.0001
 
  
  
 Additional
 
  
  
 Paid-in
 
  
  
  
  
  
  
 Other
 
  
  
 Total
 
  
 

 
  
  
 Number of
 
  
  
  
  
  
  
 Number of
 
  
  
  
  
  
  
 Paid-in
 
  
  
 Capital–
 
  
  
 Accumulated
 
  
  
 Comprehensive
 
  
  
 Stockholders’
 
  
 

 
  
  
 Shares
 
  
  
 Amount
 
  
  
 Shares
 
  
  
 Amount
 
  
  
 Capital
 
  
  
 Warrants
 
  
  
 Deficit
 
  
  
 Loss
 
  
  
 Deficit
 
  
 

 
 Balance, February 28, 2025
 
  
  
 47,620,263
  
  
 $
 5
  
  
  
 1
  
  
 $
 -
  
  
 $
 193,529
  
  
 $
 -
  
  
 $
 (192,027
 )
  
 $
 (1,140
 )
  
 $
 367
  
 

 
 Issuance of shares upon the vesting of restricted stock units (Note 15)
 
  
  
 98,087
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
 

 
 Stock options issued for services (Note 15)
 
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 486
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 486
  
 

 
 Restricted stock units issued for services (Note 15)
 
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 (111
 )
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 (111
 )
 

 
 Foreign currency translation
 
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 (19
 )
  
  
 (19
 )
 

 
 Net loss
 
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 -
  
  
  
 (3,446
 )
  
  
 -
  
  
  
 (3,446
 )
 

 
 Balance, May 31, 2025
 
  
  
 47,718,350
  
  
 $
 5
  
  
  
 1
  
  
 $
 -
  
  
 $
 193,904
  
  
 $
 -
  
  
 $
 (195,473
 )
  
 $
 (1,159
 )
  
 $
 (2,723
 )
 

 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 

 
 Going Concern (Note 1)
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 

 
 
 

  

  

 See accompanying notes to the condensed consolidated financial statements.

  

 
 
 
 
 F-4
 

 

 

 
 
 
 
 Table of Contents
 

 

 

 

  

 
  
 

 Loop Industries, Inc.

 Condensed Consolidated Statements of Cash Flows

 (Unaudited)

  

 
 
 
 
 (in thousands of U.S. dollars)
 
 Three Months Ended May 31,
 
  
 

 
  
 2026
 
  
 2025
 
  
 

 
 Cash Flows from Operating Activities
 
  
  
  
  
  
  
 

 
 Net loss
 
 $
 (3,385
 )
 $
 (3,446
 )
 

 
 Adjustments to reconcile net loss to net cash used in operating activities:
 
  
  
  
  
  
  
 

 
 Depreciation and amortization (Notes 5 and 6)
 
  
 84
  
  
 100
  
 

 
 Stock-based compensation (Note 15)
 
  
 979
  
  
 375
  
 

 
 Accrued interest and other financing costs (Note 11)
 
  
 404
  
  
 369
  
 

 
 Loss on equity method investments (Note 9)
 
  
 319
  
  
 302
  
 

 
 Changes in operating assets and liabilities:
 
  
  
  
  
  
  
 

 
 Accounts receivable and other (Note 3)
 
  
 56
  
  
 (297
 )
 

 
 Prepaid expenses (Note 4)
 
  
 100
  
  
 (343
 )
 

 
 Accounts payable and accrued liabilities (Note 8)
 
  
 123
  
  
 (141
 )
 

 
 Unearned revenue 
 
  
 90
  
  
 -
  
 

 
 Net cash used in operating activities
 
  
 (1,229
 )
  
 (3,082
 )
 

 
  
  
  
  
  
  
  
 

 
 Cash Flows from Investing Activities
 
  
  
  
  
  
  
 

 
 Additions to intangible assets (Note 6)
 
  
 (35
 )
  
 (115
 )
 

 
 Net cash used in investing activities
 
  
 (35
 )
  
 (115
 )
 

 
  
  
  
  
  
  
  
 

 
 Cash Flows from Financing Activities
 
  
  
  
  
  
  
 

 
 Repayment of long-term debt (Note 11)
 
  
 -
  
  
 (55
 )
 

 
 Net cash provided by financing activities
 
  
 -
  
  
 (55
 )
 

 
  
  
  
  
  
  
  
 

 
 Effect of exchange rate changes
 
  
 (29
 )
  
 27
  
 

 
 Net decrease in cash and cash equivalents
 
  
 (1,293
 )
  
 (3,225
 )
 

 
 Cash and cash equivalents, beginning of period
 
  
 2,356
  
  
 12,973
  
 

 
 Cash and cash equivalents, end of period
 
 $
 1,063
  
 $
 9,748
  
 

 
  
  
  
  
  
  
  
 

 
 Supplemental Disclosure of Cash Flow Information:
 
  
  
  
  
  
  
 

 
 Income tax paid
 
 $
 -
  
 $
 -
  
 

 
 Interest paid
 
 $
 35
  
 $
 50
  
 

 
 Interest received
 
 $
 5
  
 $
 100
  
 

 
  
  
  
  
  
  
  
 

 
 Going Concern (Note 1)
 
  
  
  
  
  
  
 

 
 
 

  

 See accompanying notes to the condensed consolidated financial statements.

  

 
 
 
 
 F-5
 

 

 

 
 
 
 
 Table of Contents
 

 

 

 

  

 Loop Industries, Inc.

 Three Months Ended May 31, 2026 and 2025

 Notes to the Condensed Consolidated Financial Statements

 (Unaudited)

  

 
  
 

 
 1. The Company, Basis of Presentation and Going Concern

  

 The Company

  

 Loop Industries, Inc. (the “Company,” “Loop,” “we,” or “our”) is a technology company that owns patented and proprietary technology that depolymerizes no and low-value waste polyethylene terephthalate (“PET”) plastic and polyester fiber to its base building blocks (monomers).  The monomers are filtered, purified and polymerized to create virgin-quality Loop™ branded PET resin suitable for use in food-grade packaging and polyester fiber. The Company is currently in the pre-commercialization stage with limited revenues.

  

 Basis of Presentation

  

 These unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“US GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures included in these unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the fiscal year ended February 28, 2026, filed with the SEC on May 27, 2026. The unaudited interim condensed consolidated financial statements comprise the consolidated financial position and results of operations of Loop Industries, Inc. and its subsidiaries, Loop Innovations, LLC and Loop Canada Inc. All subsidiaries are, either directly or indirectly, wholly owned subsidiaries of Loop Industries, Inc. (collectively, the “Company”). The Company owns, through Loop Innovations, LLC, a 50% interest in a joint venture, Indorama Loop Technologies, LLC, which is accounted for under the equity method. The Company also owns a 50% interest in a joint venture, Ester Loop Infinite Technologies Private Limited ("India JV"), which is accounted for under the equity method. The Company owns a 10% equity interest in Infinite Loop Europe SAS ("Infinite Loop Europe"), accounted for under the equity method, over which it has significant influence but not joint control; the remaining 90% is owned by Reed Circular Economy ("RCE").

  

 Intercompany balances and transactions are eliminated on consolidation. The condensed consolidated balance sheet as of February 28, 2026, included herein, was derived from the audited financial statements as of that date, but does not include all disclosures including certain notes required by US GAAP on an annual reporting basis.  In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements present fairly the financial position, results of operations, comprehensive loss and cash flows for the interim periods. The results for the three month period ended May 31, 2026 are not necessarily indicative of the results to be expected for any subsequent quarter, for the fiscal year ending February 28, 2027, or for any other period.

  

 All monetary amounts in these notes to the condensed consolidated financial statements are in thousands of U.S. dollars unless otherwise specified, except for per share data.

  

 
 Going Concern
 

 
  
 

 
 These unaudited interim condensed consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplate the realization of assets and settlement of liabilities in the normal course of business as they come due. In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but
 not limited to,
 twelve months from the date of issuance of the unaudited interim condensed consolidated financial statements.
 

 
  

 Since its inception, the Company has been in the pre-commercialization stage with no recurring revenues, and its ongoing operations and commercialization plans have been financed primarily by raising equity and debt. The Company has recurring net losses, negative cash flow from operating activities since its inception, and a net capital deficiency. Management continuously monitors the Company's cash resources against its cash commitments to determine whether there is sufficient liquidity to fund its costs for at least twelve months from the unaudited interim condensed consolidated financial statement issuance date. In preparing this going concern assessment in accordance with US GAAP, the Company included cash flows that meet the 'probable' threshold under ASC 205-40 in its going concern evaluation and has excluded forecasted cash flows that lack substantive support or binding commitments.

  

 Management has determined that current cash and cash equivalents on hand as of May 31, 2026 of  $1,063, together with the $2,537 available under its undrawn credit facility, will not be sufficient to fund the Company's ongoing operations, obligations and commitments for the next twelve months from the date of issuance of these unaudited interim condensed consolidated financial statements. These events and conditions are material uncertainties that raise substantial doubt upon the Company's ability to continue as a going concern and, accordingly, the appropriateness of the use of accounting principles applicable to a going concern.

  

 The Company’s ability to continue as a going concern and execute upon management's plans to move to the next stage of its strategic development is dependent on, among other factors, whether the Company can obtain the necessary financing through a combination of the issuance of debt and/or equity, technology licensing and engineering services arrangements, and/or financing from government incentive programs. In particular, the Company will require capital sufficient to fund its equity contributions to the India JV for the construction of the planned Infinite Loop™ facility in India, as well as its ongoing cash requirements until Loop begins receiving returns from the India JV. While the Company is actively engaged in financing discussions, there is no assurance that the Company will be successful in attracting additional funding on terms acceptable to the Company. Failure to secure additional financing on acceptable terms when it becomes required would have an adverse effect on the Company’s financial position and on its ability to execute its business plan.

  

 These unaudited interim condensed consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and balance sheet classifications that would be necessary if the Company were unable to realize its assets and settle its liabilities as a going concern in the normal course of operations. Such adjustments could be material.

 

  

 
 
 
 
 F-
 6
 

 

 

 
 
 
 
 Table of Contents
 

 

 

 
  
 
 
  
 

 
 2. Summary of Significant Accounting Policies

  

 
Use of estimates

  

 The preparation of financial statements in conformity with US GAAP requires management to use its judgment to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Those estimates and assumptions include the going concern assessment, estimates for depreciable lives of property, plant and equipment and intangible assets, recoverability of property, plant and equipment, recoverability of equity accounted investments, assumptions made in calculating the fair value of stock-based compensation and other equity instruments, and the assessment of performance conditions for stock-based compensation awards.

  

 
Net loss per share

  

 The Company computes net loss per share in accordance with FASB ASC 260, Earnings Per Share. Basic loss per share is computed by dividing the net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the year. The Company includes common stock issuable in its calculation. Diluted loss per share is computed by dividing the net loss applicable to common stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential common shares are excluded from the computation if their effect is antidilutive.

  

 For the three months ended May 31, 2026 and 2025, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an antidilutive effect. As at May 31, 2026, the potentially dilutive securities consisted of 7,325,317 outstanding stock options (2025 – 5,573,138), 4,218,696 outstanding restricted stock units (2025 – 3,981,121).

  

 
 
 
 
 F-
 7
 

 

 

 
 
 
 
 Table of Contents
 

 

 

 
  
 
Recently adopted accounting pronouncements

  

  

 
 
 
 In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments, which clarifies the accounting for settlements of convertible debt instruments that occur on terms different from the original contractual conversion terms. The amendments introduce a "preexisting contract approach," requiring that, to qualify for induced conversion accounting, the inducement offer must preserve the form of consideration and provide an amount of consideration that is no less than what was issuable under the original conversion privileges. This guidance applies to convertible debt instruments with cash conversion features and to instruments that are not currently convertible but had substantive conversion features at issuance and at the time the inducement offer is accepted. The updated standard is effective for annual reporting periods beginning after December 15, 2025, including interim periods within those fiscal years. Early adoption is permitted for entities that have adopted the amendments in ASU 2020-06. The updated standard will be effective for the first quarter ending May 31, 2026. The updated standard is potentially applicable to the future settlement or conversion of its Series B Convertible Preferred Stock (“Series B CPS”), which is classified as a liability and contains a substantive conversion feature (note 10). There has been no impact of adopting the standard in the condensed consolidated financial statements.
 

 

 

  

  

 Recently issued accounting pronouncements not yet adopted

  

  

 
 
 
 In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires public business entities to disclose, in interim and annual reporting periods, additional information about certain expenses in the notes to financial statements. The updated standard is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. Management is currently evaluating the impact that the updated standard will have on our financial statement disclosures.
 

 

 

  

  

  

 In January 2025, the Financial Accounting Standards Board (FASB) issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. This update clarifies the effective date of ASU 2024-03, which requires public business entities to provide disaggregated disclosures of certain income statement expenses. Specifically, ASU 2025-01 confirms that the guidance in ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and for interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. Management is currently evaluating the impact that the updated standard will have on our consolidated financial statement disclosures.

 
 
  
 

 
 3. Accounts Receivable and Other

  

 Accounts Receivable and Other as at May 31, 2026 and February 28, 2026 are comprised of the following:

  

 
    May 31, 2026
    February 28, 2026
  

 Accounts receivable from services to the India JV
  $359  $401 

 Research and development tax credits
   109   88 

 Sales tax
   63   66 

 Other receivables
   168   200 

  $699  $755 

 
  

 
 
 
 
 F-
 8
 

 

 

 
 
 
 
 Table of Contents
 

 

 

 
  
 
 
  
 

 
 4. Prepaid Expenses

  

 Prepaid expenses as at May 31, 2026 and February 28, 2026 were as follows:

  

 
    May 31, 2026
    February 28, 2026
  

 Insurance
  $213  $286 

 Utilities
   32   32 

 Software
   35   55 

 Other
   115   122 

  $395  $495 

 
  

 
 
  
 

 
 5. Property, Plant and Equipment, Net

  

 
    As at May 31, 2026
  

       Accumulated
      

       depreciation,
      

       write-down
      

   Cost
    and impairment
    Net book value
  

 Machinery and equipment
  $8,460  $(8,460) $- 

 Building
   1,797   (500)  1,297 

 Land
   222   -   222 

 Building and Land Improvements
   1,822   (1,766)  56 

 Office equipment and furniture
   271   (189)  82 

  $12,572  $(10,915) $1,657 

 
  

 
    As at February 28, 2026
  

       Accumulated
      

       depreciation,
      

       write-down
      

   Cost
    and impairment
    Net book value
  

 Machinery and equipment
  $8,460  $(8,460) $- 

 Building
   1,817   (490)  1,327 

 Land
   225   -   225 

 Building and Land Improvements
   1,843   (1,780)  63 

 Office equipment and furniture
   274   (190)  84 

  $12,619  $(10,920) $1,699 

 
  

 Depreciation expense for the three months ended May 31, 2026 amounted to $23, (2025 – $35).

  

 
 
 
 
 F-
 9
 

 

 

 
 
 
 
 Table of Contents
 

 

 

 
  
 
 
  
 

 
 6. Intangible Assets, Net

  

 Intangible assets as at May 31, 2026 and February 28, 2026 were $1,730 and $1,776, respectively.

  

 During the three month periods ended May 31, 2026 and 2025, we made additions relating to patent application costs to intangible assets of $35 and $115, respectively.

  

 Amortization expense for the three months ended May 31, 2026 amounted to $61, (2025 – $66).

 
  

 
  
 

 
 7. Fair Value of Financial Instruments

  

 The following tables disclose the estimated fair value of the Company's financial liabilities as at May 31, 2026 and February 28, 2026:

  

 
    Fair Value at May 31, 2026
 

   Carrying
       Level in the
 

   Amount
    Fair Value
   hierarchy
 

 Financial liabilities accounted for at amortized cost:
          

 Series B Convertible Preferred stock (Note 10)
  $12,429  $12,455  Level 2
 

 Long-term debt (Note 11)
  $3,012  $2,725  Level 2
 

 Due to customer
  $918  $915  Level 2
 

 
  

  

 
    Fair Value at February 28, 2026
 

   Carrying
       Level in the
 

   Amount
    Fair Value
   hierarchy
 

 Financial liabilities accounted for at amortized cost:
          

 Series B Convertible Preferred stock (Note 10)
  $12,054  $11,770  Level 2
 

 Long-term debt (Note 11)
  $3,035  $2,873  Level 2
 

 Due to customer
  $900  $897  Level 2
 

 
  

 The fair value of cash, accounts receivable and other, and accounts payable and accrued liabilities approximate their carrying values due to their short-term maturity.

 
  

 
  
 

 
 8. Accounts Payable and Accrued Liabilities

  

 Accounts payable and accrued liabilities as at May 31, 2026 and February 28, 2026 were as follows:

  

 
    May 31, 2026
    February 28, 2026
  

 Trade accounts payable
  $949  $729 

 Accrued employee compensation
   302   362 

 Accrued engineering fees
   527   460 

 Accrued professional fees
   133   250 

 Other accrued liabilities
   127   115 

  $2,038  $1,916 

 
  

 
 
 
 
 F-
 10
 

 

 

 
 
 
 
 Table of Contents
 

 

 

 
  
 
 
  
 

 
 9. Equity Method Investments

  

 Joint Venture with Ester

  

 On May 1, 2024, the Company entered into an agreement with Ester Industries Ltd. (“Ester”), a manufacturer of polyester films and specialty polymers in India, to form a 50/50 joint venture based in India (“India JV”). The purpose of the India JV is to build and operate an Infinite Loop™ manufacturing facility in India which will produce lower carbon footprint rDMT, rMEG and specialty polymers, using the Infinite Loop™ Technology. During the year ended February 28, 2025, Ester Loop Infinite Technologies Private Limited (“ELITe”) was incorporated as the India JV.

  

 ELITe meets the accounting definition of a joint venture where neither party has control of the joint venture entity and both parties have joint control over the decision-making process. As such, the Company uses the equity method of accounting to account for its share of the investment in ELITe.

  

 During the three-month period ended May 31, 2026, Loop and Ester made no contribution (2025 – nil) to ELITe. During the three-months ended May 31, 2026, ELITe incurred losses of $639 (2025 – $604), resulting in the Company recording its share of the loss on equity accounted investment of $319 (2025 – $302). As at May 31, 2026, and  February 28, 2026 the carrying value of the Company's investment in ELITe was $1,145 and $1,465, respectively.

  

 The summarized financial information for ELITe is presented below, on a quarterly lag (in thousands).

  

 
 Balance sheet
   March 31, 2026
  

 Asset
  $3,475 

 Liabilities
   887 

 Equity
  $2,588 

 
  

  

  

 
 Results of Operations 
   Three months ended March 31, 2026
  

 Revenues
  $- 

 Pre-tax loss
   (686)

 Net loss
   (686)

 
  

 
 
  
 

 
 10. Series B Convertible Preferred Stock

  

 The balance of Series B Convertible Preferred Stock as at  May 31, 2026 and  February 28, 2026 was as follows:

  

 
    May 31, 2026
    February 28, 2026
  

 Stated value
  $11,439  $11,439 

 Accrued PIK dividends
   990   615 

 Series B Convertible Preferred Stock
  $12,429  $12,054 

 
  

 During the three months ended May 31, 2026, the Company recorded PIK dividends of $375, (2025 – $340), which were recorded in “Interest and other financial expenses” in our Consolidated Statements of Operations and Comprehensive Loss. 

 
 
  
 

 
 11. Long‑Term Debt

  

 Long-term debt as of May 31, 2026 and February 28, 2026, was comprised of the following:

  

 
    May 31, 2026
    February 28, 2026
  

 Investissement Québec financing facility:
         

 Principal amount
  $2,994  $3,027 

 Unamortized discount
   (89)  (101)

 Accrued interest
   108   109 

 Total Investissement Québec financing facility
   3,013   3,035 

 Less: current portion of long-term debt
   (807)  (605)

 Long-term debt, net of current portion
  $2,206  $2,430 

 
  

 Investissement Québec financing facility

  

 The Company recorded interest expense on the Investissement Québec loan for the three months ended May 31, 2026 in the amount of $33, respectively (2025 – $36) and an accretion expense of $11, respectively (2025 – $11). During the three month period ended May 31, 2026, the Company made repayments of nil (2025 – $55) on the Investissement Québec loan.

  

 Total repayments due on the Company's indebtedness over the next five years are as follows:

 
 Years ending
   Amount
  

 February 28, 2027
   599 

 February 29, 2028
   834 

 February 28, 2029
   834 

 February 28, 2030
   834 

 Total
  $3,101 

 
  

 Credit facility from a Canadian bank

  

 On July 26, 2022, Loop Canada, Inc., a wholly-owned subsidiary of the Company (the "Borrower"), entered into an Operating Credit Facility (the “Credit Facility”) with a Canadian bank. The Credit Facility allows for borrowings of up to CDN $3,500 in aggregate principal amount. The Credit Facility is secured by the Company's Terrebonne, Québec property and was initially subject to a minimum equity covenant, tested quarterly.

  

 
 
 
 On July 4, 2025, the Borrower, the Company and the Canadian bank executed an amendment to the Credit Facility, modifying the minimum equity covenant to include the balance of Series B Convertible Preferred Stock as at February 28, 2026 of $12,054 in the calculation of stockholders' equity.
 

 
  
 

 

 

 
 
 
 On
 October 10, 2025, the Borrower, the Company and the Canadian bank executed an amendment to the Credit Facility, which removed the minimum equity covenant tested quarterly 
 for the duration of the term of the Credit Facility.
 

 

 

  

 All borrowings under the Credit Facility bear interest at an annual rate equal to the bank's Canadian prime rate plus 1.0%. As at May 31, 2026, the $2,537 (CDN $3,500) Credit Facility was available and undrawn. 

  

 
 
 
 
 F-
 11
 

 

 

 
 
 
 
 Table of Contents
 

 

 

 
  
 
 
  
 

 
 12. Stockholders' Deficit

  

 Common Stock

  

 
 For the period ended May 31, 2026
   Number of shares
    Amount
  

 Balance, February 28, 2026
   48,337,555  $5 

 Issuance of shares upon settlement of restricted stock units
   42,816   - 

 Issuance of shares upon exercise of stock options
   -   - 

 Issuance of shares for cash
   -   - 

 Balance, May 31, 2026
   48,380,371  $5 

 
  

  

 
 For the period ended May 31, 2025
   Number of shares
    Amount
  

 Balance, February 28, 2025
   47,620,263  $5 

 Issuance of shares upon settlement of restricted stock units
   98,087   - 

 Balance, May 31, 2025
   47,718,350  $5 

 
  

 During the three months ended May 31, 2026, the Company recorded the following common stock transactions:

  

 (i)The Company issued 42,816 shares of common stock to settle restricted stock units that vested in the period.

  

 During the three months ended May 31, 2025, the Company recorded the following common stock transaction:

  

 (i)
 The Company issued 98,087 shares of common stock to settle restricted stock units that vested in the period.
 

 
 
  
 

  

 
 13. Research and Development Expenses

  

 Research and development expenses for the three month periods ended May 31, 2026 and 2025 were as follows:

  

 
    May 31, 2026
    May 31, 2025
  

 Employee compensation
  $706  $901 

 External engineering
  $9   3 

 Plant and laboratory operating expenses
  $182   231 

 Other
   65   124 

  $962  $1,259 

 
  

  

 
 
 
 
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 12
 

 

 

 
 
 
 
 Table of Contents
 

 

 

 
  
 
 
  
 

 
 14. General and Administrative Expenses

  

 General and administrative expenses for the three month periods ended May 31, 2026 and 2025 were as follows:

  

 
    May 31, 2026
    May 31, 2025
  

 Employee compensation
  $909  $632 

 Insurance
   155   453 

 Professional fees
   244   361 

 Other
   266   203 

  $1,574  $1,649 

 
  

  

 
 
  
 

 
 15. Share-based Payments

  

 Stock Options

  

 The following table summarizes the continuity of the Company's stock options during the three month periods ended May 31, 2026 and 2025:

  

 
    2026
    2025
  

   Number of
    Weighted average
    Number of
    Weighted average
  

   stock options
    exercise price
    stock options
    exercise price
  

 Outstanding, beginning of period
   6,243,138  $2.96   2,771,216  $5.25 

 Granted
   1,082,179   1.44   2,801,922   1.16 

 Exercised
   -   -   -   - 

 Forfeited
   -   -   -   - 

 Expired
   -   -   -   - 

 Outstanding, end of period
   7,325,317  $5.59   5,573,138  $3.19 

 Exercisable, end of period
   4,247,043  $3.74   2,711,727  $4.98 

 
  

 
 
 
 
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 13
 

 

 

 
 
 
 
 Table of Contents
 

 

 

 
  
 The Company applies the fair value method of accounting for stock-based compensation awards granted. Fair value is calculated based on a Black-Scholes option pricing model. The principal components of the pricing model for the stock options granted in the three month period ended May 31, 2026 and 2025 were as follows:

  

 
    2026
    2025
  

 Exercise price
  $1.44  $1.16 

 Risk-free interest rate
   3.82%-3.89%    3.68% - 3.72% 

 Expected dividend yield
   0%  0%

 Expected volatility
   82.12%-84.31%   81%-82% 

 Expected life (years)
   3.5 - 5.0 years   3.5 - 5.0 years 

 
  

 The weighted-average grant-date fair value of options granted during the three month periods ended May 31, 2026 and 2025 was $0.94 and $0.63 respectively.

  

 A summary of the Company’s nonvested shares as of May 31, 2026, and changes during the three month period ended  May 31, 2026 were as follows:

  

 
    2026
  

   Number of
    Weighted average
  

   stock options
    exercise price
  

 Nonvested, beginning of period
   3,461,411  $0.63 

 Granted
   400,000   0.94 

 Exercised
   -   - 

 Forfeited
   -   - 

 Vested
   (783,137)  0.75 

 Nonvested, end of period
   3,078,274  $0.83 

 
  

 During the three month periods ended  May 31, 2026 and 2025, stock-based compensation expense attributable to stock options amounted to $852 and $486, respectively. 

  

 Restricted Stock Units

  

 The following table summarizes the continuity of the restricted stock units during the three month periods ended May 31, 2026 and 2025:

  

 
    2026
    2025
  

       Weighted average
        Weighted average
  

   Number of units
    fair value price
    Number of units
    fair value price
  

 Outstanding, beginning of period
   4,261,512  $6.35   4,466,958  $6.32 

 Granted
   -   -   -   - 

 Settled
   (42,816)  8.06   (98,087)  3.41 

 Forfeited
   -   -   (387,750)  2.87 

 Outstanding, end of period
   4,218,696  $6.35   3,981,121  $6.73 

 Outstanding vested, end of period
   1,833,531  $5.71   1,689,255  $6.02 

 
  

 The Company applies the fair value method of accounting for awards granted through the issuance of restricted stock units. Fair value is calculated based on the intrinsic value at grant date multiplied by the number of restricted stock unit awards granted.

  

 During the three month periods ended May 31, 2026 and 2025, stock-based compensation attributable to RSUs amounted to $127 and $(111), respectively.

  

 
 
 
 
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 Table of Contents
 

 

 

 
  
 Stock-Based Compensation Expense

  

 During the three month periods ended May 31, 2026 and 2025, stock-based compensation included in research and development expenses amounted to $458 and $312, respectively, and in general and administrative expenses amounted to $521