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, 2021

☐	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 10, 2022, there were 47,388,056 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		18
Item 4.	Controls and Procedures		19

PART II. Other Information

Item 1.	Legal Proceedings		20
Item 1A.	Risk Factors		21
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		21
Item 3.	Defaults Upon Senior Securities		21
Item 4.	Mine Safety Disclosures		21
Item 5.	Other Information		21
Item 6.	Exhibits		22

	Signatures		23

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Loop Industries, Inc.

Three and Nine months ended November 30, 2021

Index to the Unaudited Interim Condensed Consolidated Financial Statements

Contents		Page(s)

Condensed consolidated balance sheets as at November 30, 2021 and February 28, 2021 (Unaudited)		F‑2

Condensed consolidated statements of operations and comprehensive loss for the three and nine months ended November 30, 2021 and 2020 (Unaudited)		F‑3

Condensed consolidated statement of changes in stockholders’ equity for the three and nine months ended November 30, 2021 and 2020 (Unaudited)		F‑4

Condensed consolidated statement of cash flows for the nine months ended November 30, 2021 and 2020 (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)

	November 30, 2021			February 28, 2021

Assets
Current assets
Cash and cash equivalents	$	54,860,046		$	35,221,951
Sales tax, tax credits and other receivables (Note 3)		825,384			1,763,835
Prepaid expenses and deposits (Note 4)		1,989,970			609,782
Assets held for sale (Note 5)		3,364,374			-
Total current assets		61,039,774			37,595,568
Investment in joint venture (Note 10)		1,500,000			1,500,000
Property, plant and equipment, net (Note 6)		5,540,679			3,513,051
Intangible assets, net (Note 7)		1,081,447			794,894
Total assets	$	69,161,900		$	43,403,513

Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued liabilities (Note 9)	$	5,422,386		$	8,124,865
Current portion of long-term debt (Note 11)		889,228			938,116
Total current liabilities		6,311,614			9,062,981
Long-term debt (Note 11)		3,315,345			1,516,008
Total liabilities		9,626,959			10,578,989

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; 47,388,056 shares issued and outstanding (February 28, 2021 – 42,413,691) (Note 13)		4,740			4,242
Additional paid-in capital		149,734,659			113,662,677
Additional paid-in capital – Warrants (Note 18)		30,272,496			8,826,165
Accumulated deficit		(120,309,993	)		(89,661,970	)
Accumulated other comprehensive loss		(166,961	)		(6,590	)
Total stockholders' equity		59,534,941			32,824,524
Total liabilities and stockholders' equity	$	69,161,900		$	43,403,513

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
	2021			2020			2021			2020

Revenue	$	-		$	-		$	-		$	-

Expenses
Research and development (Note 14)		6,835,304			6,274,283			20,757,937			10,504,093
General and administrative (Note 15)		3,091,255			2,724,016			9,368,052			6,726,339
Write-down and impairment of property, plant and equipment		-			5,034,606			-			5,043,120
Depreciation and amortization (Notes 6 and 7)		135,035			104,307			407,806			654,354
Interest expense and other financial (income) expenses (Note 19)		49,655			(41,855	)		113,344			26,016
Interest income		(23,654	)		(20,008	)		(41,828	)		(78,394	)
Foreign exchange loss (gain)		10,648			95,644			42,712			275,903
Total expenses		10,098,243			14,170,993			30,648,023			23,151,431

Net Loss		(10,098,243	)		(14,170,993	)		(30,648,023	)		(23,151,431	)

Other comprehensive income (loss)
Foreign currency translation adjustment		(13,473	)		66,170			(160,371	)		298,570
Comprehensive loss	$	(10,111,716	)	$	(14,104,823	)	$	(30,808,394	)	$	(22,852,861	)

Loss per share
Basic and Diluted	$	(0.21	)	$	(0.34	)	$	(0.69	)	$	(0.57	)

Weighted average common shares outstanding
Basic and Diluted		47,264,646			41,715,806			44,600,557			40,515,885

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, 2020
	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, 2020		39,935,210	$	3,994		1	$	-	$	84,172,723		$	9,870,241		$	(62,297,485	)	$	(156,049	)	$	31,593,424
Issuance of common shares for cash, net of share issuance costs (Note 13)		2,087,000		209		-		-		24,996,419			-			-			-			24,996,628
Issuance of shares upon exercise of warrants (Note 18)		190,529		19		-		-		2,046,854			(394,245	)		-			-			1,652,628
Issuance of shares upon the vesting of restricted stock units (Note 16)		200,000		20		-		-		(20	)		-			-			-			-
Stock options granted for services (Note 16)		-		-		-		-		551,720			-			-			-			551,720
Restricted stock units issued for services (Note 16)		-		-		-		-		345,274			-			-			-			345,274
Foreign currency translation		-		-		-		-		-			-			-			66,170			66,170
Net loss		-		-		-		-		-			-			(14,170,993	)		-			(14,170,993	)
Balance, November 30, 2020		42,412,739	$	4,242		1	$	-	$	112,112,970		$	9,475,996		$	(76,468,478	)	$	(89,879	)	$	45,034,851

	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 16)		200,000		20		-		-		(20	)		-			-			-			-
Issuance of shares upon exercise of warrants (Note 18)		11,666		1		-		-		84,441			(84,442	)		-			-			-
Issuance of shares upon exercise of options (Note 16)		16,226		2		-		-		(2	)		-			-			-			-
Stock options issued for services (Note 16)		-		-		-		-		311,004

SEC Form 10-Q filed by Loop Industries, Inc.