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 August 31, 2023

☐	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.

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 October 13, 2023, there were 47,521,187 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 Six months ended August 31, 2023

Index to the Unaudited Interim Condensed Consolidated Financial Statements

Contents		Page(s)

Condensed consolidated balance sheets as at August 31, 2023 (Unaudited) and February 28, 2023		F‑2

Condensed consolidated statements of operations and comprehensive loss for the three and six months ended August 31, 2023 and 2022 (Unaudited)		F‑3

Condensed consolidated statements of changes in stockholders’ equity for the three and six months ended August 31, 2023 and 2022 (Unaudited)		F‑4

Condensed consolidated statements of cash flows for the six months ended August 31, 2023 and 2022 (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)

(in thousands of U.S. dollars, except per share data)	As at
	August 31, 2023			February 28, 2023

Assets
Current assets
Cash and cash equivalents	$	13,365		$	29,591
Restricted cash		1,000			1,000
Sales tax, tax credits and other receivables (Note 3)		1,195			1,075
Inventories (Note 4)		905			727
Deposits on equipment (Note 5)		8,460			3,395
Prepaid expenses and other deposits (Note 5)		115			636
Total current assets		25,040			36,424
Investment in joint venture		381			381
Property, plant and equipment, net (Note 6)		2,360			2,545
Intangible assets, net (Note 7)		1,375			1,210
Total assets	$	29,156		$	40,560

Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable and accrued liabilities (Note 9)	$	1,998		$	2,510
Customer deposits		1,000			1,012
Current portion of long-term debt (Note 10)		356			62
Total current liabilities		3,354			3,584
Long-term debt (Note 10)		2,970			3,240
Total liabilities		6,324			6,824

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; 47,521,187 shares issued and outstanding (February 28, 2023 – 47,469,224) (Note 12)		5			5
Additional paid-in capital		171,113			170,370
Additional paid-in capital – Warrants		20,385			20,385
Accumulated deficit		(167,634	)		(155,883	)
Accumulated other comprehensive loss		(1,037	)		(1,141	)
Total stockholders’ equity		22,832			33,736
Total liabilities and stockholders’ equity	$	29,156		$	40,560

Commitments (Note 18)

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						Six Months Ended
	August 31, 2023			August 31, 2022			August 31, 2023			August 31, 2022
Revenue from contracts with customers	$	54		$	135		$	81		$	135

Expenses :
Research and development (Note 13)		2,038			3,751			6,528			10,552
General and administrative (Note 14)		2,843			4,011			5,308			15,047
Depreciation and amortization (Notes 6 and 7)		136			138			268			277
Total expenses		5,017			7,900			12,104			25,876

Other (income) loss :
Interest and other financial expenses		44			43			98			84
Interest income		(219	)		(10	)		(318	)		(23	)
Foreign exchange gain		(38	)		(93	)		(52	)		(91	)
Total other (income) loss		(213	)		(60	)		(272	)		(30	)
Net loss		(4,750	)		(7,705	)		(11,751	)		(25,711	)

Other comprehensive loss -
Foreign currency translation adjustment		84			(412	)		104			(417	)
Comprehensive loss	$	(4,666	)	$	(8,117	)	$	(11,647	)	$	(26,128	)
Net loss per share
Basic and diluted	$	(0.10	)	$	(0.16	)	$	(0.25	)	$	(0.54	)
Weighted average common shares outstanding
Basic and diluted		47,521,187			47,400,709			47,518,645			47,400,640

See accompanying notes to the condensed consolidated financial statements.

F-3

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Loop Industries, Inc.

Condensed Consolidated Statement of Changes in Stockholders’ Equity

(Unaudited)

	Three Months Ended August 31, 2022
	Common stock				Series A 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)			Equity
Balance, May 31, 2022		47,400,709	$	5		1	$	-	$	158,863	$	30,272		$	(152,589	)	$	(101	)	$	36,450
Expiration of warrants (Note 17)		-		-		-		-		9,809		(9,809	)		-			-			-
Stock options issued for services (Note 15)		-		-		-		-		313		-			-			-			313
Restricted stock units issued for services (Note 15)		-		-		-		-		316		-			-			-			316
Foreign currency translation		-		-		-		-		-		-			-			(412	)		(412	)
Net loss		-		-		-		-		-		-			(7,705	)		-			(7,705	)
Balance, August 31, 2022		47,400,709	$	5		1	$	-	$	169,301	$	20,463		$	(160,294	)	$	(513	)	$	28,962

(in thousands of U.S. dollars, except for share data)	Three months ended August 31, 2023
	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			Income (Loss)			Equity
Balance, May 31, 2023		47,521,187	$	5		1	$	-	$	170,725	$	20,385	$	(162,884	)	$	(1,121	)	$	27,110
Stock options issued for services (Note 15)		-		-		-		-		172		-		-			-			172
Restricted stock units issued for services (Note 15)		-		-		-		-		216		-		-			-			216
Foreign currency translation		-		-		-		-		-		-		-			84			84
Net loss		-		-		-		-		-		-		(4,750	)		-			(4,750	)
Balance, August 31, 2023		47,521,187	$	5		1	$	-	$	171,113	$	20,385	$	(167,634	)	$	(1,037	)	$	22,832

See accompanying notes to the condensed consolidated financial statements.

F-4

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Loop Industries, Inc.

Condensed Consolidated Statement of Changes in Stockholders’ Equity

(Unaudited)

	Six Months Ended August 31, 2022
	Common stock				Series A 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)			Equity
Balance, February 28, 2022		47,388,056	$	5		1	$	-	$	150,397	$	30,272		$	(134,583	)	$	(96	)	$	45,995
Issuance of shares upon the vesting of restricted stock units (Note 15)		12,653		-		-		-		-		-			-			-			-
Expiration of warrants (Note 17)		-		-		-		-		9,809		(9,809	)		-			-			-
Stock options issued for services (Note 15)		-		-		-		-		630		-			-			-			630
Restricted stock units issued for services (Note 15)		-		-		-		-		8,465		-			-			-			8,465
Foreign currency translation		-		-		-		-		-		-			-			(417	)		(417	)
Net loss		-		-		-		-		-		-			(25,711	)		-			(25,711	)
Balance, August 31, 2022		47,400,709	$	5		1	$	-	$	169,301	$	20,463		$	(160,294	)	$	(513	)	$	28,962

(in thousands of U.S. dollars, except for share data)	Six months ended August 31, 2023
	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			Income (Loss)			Equity
Balance, February 28, 2023		47,469,224	$	5		1	$	-	$	170,370	$	20,385	$	(155,883	)	$	(1,141	)	$	33,736
Issuance of shares upon the vesting of restricted stock units (Note 15)		51,963		-		-		-		-		-		-			-			-
Stock options issued for services (Note 15)		-		-		-		-		333		-		-			-			333
Restricted stock units issued for services (Note 15)		-		-		-		-		410		-		-			-			410
Foreign currency translation		-		-		-		-		-		-		-			104			104
Net loss		-		-		-		-		-		-		(11,751	)		-			(11,751	)
Balance, August 31, 2023		47,521,187	$	5		1	$	-	$	171,113	$	20,385	$	(167,634	)	$	(1,037	)	$	22,832

See accompanying notes to the condensed consolidated financial statements.

F-5

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Loop Industries, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands of U.S. dollars)	Six Months Ended August 31,
	2023			2022
Cash Flows from Operating Activities
Net loss	$	(11,751	)	$	(25,711	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization (Notes 6 and 7)		268			277
Stock-based compensation expense (Note 15)		743			9,095
Accretion and accrued interest expenses (Note 10)		36			79
Changes in operating assets and liabilities:
Sales tax and tax credits receivable (Note 3)		(114	)		(143	)
Inventories (Note 4)		(175	)		(330	)
Prepaid expenses (Note 5)

SEC Form 10-Q filed by Loop Industries Inc.