loop_10q.htm

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 November 30, 2022

☐	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. 000-54768

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: None

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	LOOP	Nasdaq Global Market

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 and post 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. (Check one):

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 January 11, 2023, there were 47,469,224 shares of the Registrant’s common stock, par value $0.0001 per share, outstanding.

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	17
Item 4.	Controls and Procedures	17

PART II. Other Information

Item 1.	Legal Proceedings	18
Item 1A.	Risk Factors	18
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	19
Item 3.	Defaults Upon Senior Securities	19
Item 4.	Mine Safety Disclosures	19
Item 5.	Other Information	19
Item 6.	Exhibits	20

	Signatures	21

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Loop Industries, Inc.

Three and Nine months ended November 30, 2022

Index to the Unaudited Interim Condensed Consolidated Financial Statements

Contents		Page(s)

Condensed consolidated balance sheets as at November 30, 2022 and February 28, 2022 (Unaudited)		F‑2

Condensed consolidated statements of operations and comprehensive loss for the three and nine months ended November 30, 2022 and 2021 (Unaudited)		F‑3

Condensed consolidated statement of changes in stockholders’ equity for the three and nine months ended November 30, 2022 and 2021 (Unaudited)		F‑4

Condensed consolidated statement of cash flows for the nine months ended November 30, 2022 and 2021 (Unaudited)		F‑6

Notes to the condensed consolidated financial statements (Unaudited)		F‑7

F-1

Table of Contents

Loop Industries, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

	As at
	November 30, 2022			February 28, 2022

Assets
Current assets
Cash and cash equivalents	$	21,524,993		$	44,061,427
Restricted cash (Note 21)		4,100,000			-
Sales tax, tax credits and other receivables (Note 3)		1,605,856			1,716,262
Inventories (Note 4)		426,278			-
Prepaid expenses and deposits (Note 5)		4,055,453			2,965,646
Assets held for sale (Note 6)		3,758,314			3,389,279
Total current assets		35,470,894			52,132,614
Investment in joint venture		380,922			380,922
Property, plant and equipment, net (Note 7)		2,677,982			5,692,862
Intangible assets, net (Note 8)		1,110,932			1,013,801
Total assets	$	39,640,730		$	59,220,199

Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable and accrued liabilities (Note 10)	$	6,968,219		$	9,846,815
Customer deposits (Note 11)		1,000,000			-
Current portion of long-term debt (Note 12)		46,891			-
Total current liabilities		8,015,110			9,846,815
Long-term debt (Note 12)		3,242,231			3,378,403
Total liabilities		11,257,341			13,225,218

Stockholders’ Equity
Series A Preferred stock par value $0.0001; 25,000,000 shares authorized; one share issued and outstanding		-			-
Common stock par value $0.0001; 250,000,000 shares authorized; 47,439,587 shares issued and outstanding (February 28, 2022 – 47,388,056) (Note 14)		4,745			4,740
Additional paid-in capital		170,174,884			150,396,704
Additional paid-in capital – Warrants (Note 19)		20,463,464			30,272,496
Accumulated deficit		(161,307,104	)		(134,582,926	)
Accumulated other comprehensive loss		(952,600	)		(96,033	)
Total stockholders’ equity		28,383,389			45,994,981
Total liabilities and stockholders’ equity	$	39,640,730		$	59,220,199

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)

	Three Months Ended November 30						Nine Months Ended November 30
	2022			2021			2022			2021

Revenue	$	24,924		$	-		$	160,352		$	-

Expenses
Research and development (Note 15)		4,581,552			6,835,304			15,133,191			20,757,937
General and administrative (Note 16)		3,182,927			3,091,255			18,230,255			9,368,052
Gain on disposition of assets (Note 6)		(6,703,558	)		-			(6,703,558	)		-
Depreciation and amortization (Notes 7 and 8)		133,902			135,035			410,544			407,806
Interest and other financial expenses (Note 20)		54,402			49,655			138,962			113,344
Interest income		(13,315	)		(23,654	)		(35,842	)		(41,828	)
Foreign exchange loss (gain)		(197,913	)		10,648			(289,022	)		42,712
Total expenses		1,037,997			10,098,243			26,884,530			30,648,023

Net Loss		(1,013,073	)		(10,098,243	)		(26,724,178	)		(30,648,023	)

Other comprehensive income (loss)
Foreign currency translation adjustment		(439,297	)		(13,473	)		(856,567	)		(160,371	)
Comprehensive income (loss)	$	(1,452,370	)	$	(10,111,716	)	$	(27,580,745	)	$	(30,808,394	)

Loss per share
Basic and Diluted	$	(0.02	)	$	(0.21	)	$	(0.56	)	$	(0.69	)

Weighted average common shares outstanding
Basic and Diluted		47,416,340			47,264,646			47,405,801			44,600,557

See accompanying notes to the condensed consolidated financial statements.

F-3

Table of Contents

Loop Industries, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited)

	Three Months Ended November 30, 2021
	Common stock				Series A preferred stock
	par value $0.0001				par value $0.0001
	Number of Shares		Amount		Number of Shares		Amount		Additional Paid-in Capital			Additional Paid-in Capital - Warrants			Accumulated Deficit			Accumulated Other Comprehensive (Loss)			Total Stockholders’ Equity
Balance, August 31, 2021		47,160,164	$	4,717		1	$	-	$	149,008,231		$	30,356,938		$	(110,211,750	)	$	(153,488	)	$	69,004,648
Issuance of shares upon the vesting of restricted stock units (Note 17)		200,000		20		-		-		(20	)		-			-			-			-
Issuance of shares upon exercise of warrants (Note 19)		11,666		1		-		-		84,441			(84,442	)		-			-			-
Issuance of shares upon exercise of options (Note 17)		16,226		2		-		-		(2	)		-			-			-			-
Stock options issued for services (Note 17)		-		-		-		-		311,004			-			-			-			311,004
Restricted stock units issued for services (Note 17)		-		-		-		-		331,005			-			-			-			331,005
Foreign currency translation		-		-		-		-		-			-			-			(13,473	)		(13,473	)
Net loss		-		-		-		-		-			-			(10,098,243	)		-			(10,098,243	)
Balance, November 30, 2021		47,388,056	$	4,740		1	$	-	$	149,734,659		$	30,272,496		$	(120,309,993	)	$	(166,961	)	$	59,534,941

	Three Months Ended November 30, 2022
	Common stock				Series A preferred stock
	par value $0.0001				par value $0.0001
	Number of Shares		Amount		Number of Shares		Amount		Additional Paid-in Capital			Additional Paid-in Capital - Warrants		Accumulated Deficit			Accumulated Other Comprehensive (Loss)			Total Stockholders’ Equity
Balance, August 31, 2022		47,400,709	$	4,741		1	$	-	$	169,300,723		$	20,463,464	$	(160,294,031	)	$	(513,303	)	$	28,961,594
Issuance of shares upon the vesting of restricted stock units (Note 17)		38,878		4		-		-		(4	)		-		-			-			-
Stock options issued for services (Note 17)		-		-		-		-		551,363			-		-			-			551,363
Restricted stock units issued for services (Note 17)		-		-		-		-		322,802			-		-			-			322,802
Foreign currency translation		-		-		-		-		-			-		-			(439,297	)		(439,297	)
Net loss		-		-		-		-		-			-		(1,013,073	)		-			(1,013,073	)
Balance, November 30, 2022		47,439,587	$	4,745		1		-	$	170,174,884		$	20,463,464	$	(161,307,104	)	$	(952,600	)	$	28,383,389

See accompanying notes to the condensed consolidated financial statements.

F-4

Table of Contents

Loop Industries, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited)

	Nine Months Ended November 30, 2021
	Common stock				Series A preferred stock
	par value $0.0001				par value $0.0001
	Number of Shares		Amount		Number of Shares		Amount		Additional Paid-in Capital			Additional Paid-in Capital - Warrants			Accumulated Deficit			Accumulated Other Comprehensive (Loss)			Total Stockholders’ Equity
Balance, February 28, 2021		42,413,691	$	4,242		1	$	-	$	113,662,677		$	8,826,165		$	(89,661,970	)	$	(6,590	)	$	32,824,524
Issuance of common shares and warrants for cash, net of share issuance costs (Note 14)		4,714,813		471		-		-		34,625,823			21,461,450			-			-			56,087,744
Issuance of warrants for financing facility (Note 19)		-		-		-		-		-			69,323			-			-			69,323
Issuance of shares upon the vesting of restricted stock units (Note 17)		231,660		24		-		-		(24	)		-			-			-			-
Issuance of shares upon exercise of warrants (Note 17)		11,666		1		-		-		84,441			(84,442	)		-			-			-
Issuance of shares upon exercise of options (Note 17)		16,226		2		-		-		(2	)		-			-			-			-
Stock options issued for services (Note 17)		-		-		-		-		1,203,975			-			-			-			1,203,975
Restricted stock units issued for services (Note 17)		-		-		-		-		157,769			-			-			-			157,769
Foreign currency translation		-		-		-		-		-			-			-			(160,371	)		(160,371	)
Net loss		-		-		-		-		-			-			(30,648,023	)

SEC Form 10-Q filed by Loop Industries Inc.