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8-K - CURRENT REPORT - Loop Industries, Inc. | lp_8k.htm |
Exhibit 99.1
LOOP
INDUSTRIES REPORTS SECOND QUARTER FISCAL 2021 CONSOLIDATED
FINANCIAL RESULTS AND PROVIDES CORPORATE UPDATE
COMPANY ACHIEVES KEY MILESTONES TOWARDS INFINITE LOOP™
COMMERCIALIZATION STRATEGY
MONTREAL, October 7, 2020 (ACCESSWIRE) - Loop Industries, Inc. (NASDAQ: LOOP)
(the “Company” or “Loop
Industries”), a leading sustainable
plastics technology innovator,
today announced its consolidated financial results for the second
quarter of the fiscal year ending February 28, 2021, and provided
an update on its continuing progress in implementing its business
plan.
Highlights
●
Entered into strategic partnership with Suez
Groupe to build first Infinite LoopTM facility in
Europe
●
Signed know-how and engineering agreement with
INVISTA/Chemtex, completing the technology package for the
first Infinite LoopTM
facilities
●
Strengthened
balance sheet through underwritten public offering for net proceeds
of $25.1 million
●
Sheila
Morin joins Loop Industries’ executive leadership team as
Chief Marketing Officer
Commercialization Progress
The
Infinite LoopTM
manufacturing technology is the key pillar of our commercialization
blueprint. We believe our technology is at the forefront of the
global transition away from fossil fuels and petrochemicals and
into the circular economy, where PET plastic and polyester fiber
are produced from 100% recycled content. The Infinite Loop™
technology is engineered to support the commitment of global
consumer brands to achieve a high level of recycled content in
packaging. Our technology allows for waste plastic currently not
able to be recycled to now become fully circular and upcycled into
the highest purity PET plastic and polyester fiber. Infinite
Loop™ facilities could be located near large urban centers
where more plastic is being consumed and therefore more waste
plastic feedstock is available.
Our
objective is to achieve global expansion of the technology through
a mix of fully owned facilities, partnerships, and licensing
agreements. We believe that industrial companies, which today are
not in the business of manufacturing PET and polyester fiber, will
view our Infinite Loop™ manufacturing technology as a growth
opportunity for the future, which offers attractive economic
returns either as Loop manufacturing partners or as licensees of
Loop technology.
In
September 2020, we made two key announcements regarding significant
advancements for the Infinite LoopTM
manufacturing technology. First, we completed a partnership with
Chemtex Global Corporation (“Chemtex”) to license the
PET plastic and polyester polymer for fiber manufacturing know-how
of INVISTA’s technology and licensing group, INVISTA
Performance Technologies (IPT) (“INVISTA”). Coupled
with Loop Industries’ depolymerization technology,
INVISTA’s leading depolymerization know-how make Infinite
Loop™ manufacturing facilities an end-to-end solution to meet
the global demand for Loop™ branded PET resin and polyester
fiber made from 100% recycled content.
Second,
we announced a strategic partnership with SUEZ GROUPE
(“SUEZ”), a world leader in environmental services,
with plans to build the first Infinite Loop™ manufacturing
facility in Europe. With the combination of the Infinite
LoopTM
technology package and the resource management expertise of SUEZ,
this partnership seeks to respond to growth in demand in Europe
from global beverage and consumer goods brand companies who we
believe are committed to aggressive targets for a high level of
recycled content in their products.
During
this quarter, we also accelerated the completion of our engineering
design together with Worley which is a key partner in the
deployment of Loop’s PET manufacturing facilities and plays a
key role in the integration of our depolymerization process with
INVISTA’s polymerization technology.
As
disclosed in our 10-Q for the period ended August 31, 2019, the
joint venture decided to double the capacity of the planned
Spartanburg plant due to customer demand to 40,000 metric tons per
year. Following that decision, we identified a number of
enhancements to the plant design to improve the operability
and optimize the total construction cost of the plant and expected
the commissioning of the plant to occur in the third quarter of
calendar 2021.
We have currently contracted for the sale of the initial 20,700
metric tons expected output of the Spartanburg facility and we
continue discussions to contract the additional volume up to its
planned increased capacity of 40,000 metric tons. As part of
the Joint Venture Agreement to establish the facility to produce
40,000 metric tons, we are committed to contribute our equity share
for the costs under the joint venture agreement to construct the
facility. During the six-month period ended August 31, 2020 we made
a contribution of $650,000 and as at August 31, 2020, we have
contributed a total of $1,500,000 to the joint
venture.
On
March 25, 2020, due to the COVID-19 pandemic, the Québec
provincial government issued an order that all non-essential
business and commercial activity in the province shut down. The
order provided exemptions that allowed us to continue reduced
operations at our pilot plant and we continued working remotely to
support the engineering activities with our joint venture partner,
Indorama, and our engineering partner, for the Spartanburg joint
venture facility and pursue our plans for the commercialization of
our technology. On May 11, the government announced that we could
re-start complete operations. We have implemented all the necessary
measures required by the Québec provincial government to
ensure a safe work environment for our employees and we are
operating at full capacity.
In
order to move forward more expeditiously with the Spartanburg
facility and its overall commercialization plans, and in light of
the continuing improvements which have been achieved, we have
expressed our desire to and are exploring joint venture structures
and financing alternatives with Indorama to increase our equity
participation in the project. Indorama has reiterated to the joint
venture its commitment to maintaining an investment in the
Spartanburg project, which is strategically important to support
the sustainability objectives of its customers. Discussions on the
joint venture structure and financing are on-going.
In our 10-K which was filed on May 5, 2020 and amended on May 6,
2020 and September 21, 2020 we indicated that we were monitoring
the COVID-19 pandemic and the possible impacts it could have on the
expected commissioning date. The continued border closures and
quarantine requirements between Canada and the US continued to
cause disruptions in our timetable. As a result, we continue to
expect a delay in the anticipated commissioning date of the
facility. The revised commissioning date will be established once
the COVID- 19 situation subsides and the border
re-opens.
We are
investing in building a strong management team to integrate best in
class processes and practices while maintaining our entrepreneurial
culture. On March 9, 2020, we hired Mr. Stephen Champagne as Chief
Technology Officer. Mr. Champagne has over 25 years of industrial
experience having participated in all project phases from laboratory development through
engineering, procurement, and construction, all the way to plant
commissioning. On
September 21, 2020, we hired Ms. Sheila Morin as Chief Marketing
Officer. Ms. Morin has more than 20 years of experience in sales
and marketing and has worked for large global consumer packaged
goods companies such as L’Oréal, Danone and Proctor
& Gamble. Immediately
prior to joining Loop Industries, she held the position of
Executive Vice-President & CMO, Brands and Consumer Experience
at Cirque du Soleil Group.
Results of Operations
The
following table summarizes our operating results for the
three-month periods ended August 31, 2020 and 2019, in U.S.
Dollars.
|
Three Months
Ended August 31
|
||
|
2020
|
2019
|
$
Change
|
Revenues
|
$-
|
$-
|
$-
|
|
|
|
|
Operating
expenses
|
|
|
|
Research and
development
|
|
|
|
Stock-based
compensation
|
352,282
|
317,353
|
34,929
|
Other
research and development
|
2,396,940
|
652,860
|
1,744,080
|
Total
research and development
|
2,749,222
|
970,213
|
1,779,009
|
|
|
|
|
General and
administrative
|
|
|
|
Stock-based
compensation
|
513,648
|
485,975
|
27,673
|
Other
general and administrative
|
1,535,593
|
1,232,638
|
302,955
|
Total
general and administrative
|
2,049,241
|
1,718,613
|
330,628
|
|
|
|
|
Depreciation and
amortization
|
302,587
|
201,403
|
101,184
|
Interest and other
financial
|
(58,905)
|
622,183
|
(681,088)
|
Interest
income
|
(18,039)
|
(192,259)
|
174,220
|
Foreign exchange
loss
|
103,618
|
21,890
|
81,728
|
Total
operating expenses
|
5,127,724
|
3,342,043
|
1,785,681
|
Net
loss
|
$(5,127,724)
|
$(3,342,043)
|
$(1,785,681)
|
Second Quarter Ended August 31, 2020
The net
loss for the three-month period ended August 31, 2020 increased
$1.79 million to $5.13 million, as compared to the net loss for the
three-month period ended August 31, 2019 which was $3.34
million. The increase of $1.79 million is primarily
attributable to higher research and development expenses of $1.78
million, higher general and administrative expenses of $0.33
million, higher depreciation and amortization expenses, a decrease
in interest income of $0.17 million and an increase in foreign
exchange loss, offset by lower interest and other financial
expenses of $0.68 million.
Research
and development expenses for the three-month period ended August
31, 2020 amounted to $2.75 million compared to $0.97 million for
the three-month period ended August 31, 2019, representing an
increase of $1.78 million, or representing an increase of $1.74
million excluding stock-based compensation. The increase of $1.74
million was primarily attributable to higher engineering fees of
$0.93 million due to investment in the engineering design of our
depolymerization process, higher plant and laboratory consumables
and maintenance expenses of $0.31 million, higher employee
compensation expenses of $0.26 million and by lower research and
development tax credits of $0.10 million. During the three-month
period ended August 31, 2020, the Company recorded a COVID-19
related government wage subsidy of $0.07 million in research and
development expenses. The increase in non-cash stock-based
compensation expense of $0.03 million is mainly attributable to the
timing of stock awards provided to certain employees.
General
and administrative expenses for the three-month period ended August
31, 2020 amounted to $2.04 million compared to $1.72 million for
the three-month period ended August 31, 2019, representing an
increase of $0.33 million, or an increase of $0.30 million
excluding stock-based compensation. The increase of $0.30 million
was mainly attributable to higher insurance expenses of $0.36 and
higher legal and professional fees of $0.23 million offset by lower
employee compensation costs of $0.23 million. During the
three-month period ended August 31, 2020, the Company recorded a
COVID-19 related government wage subsidy of $0.02 million in
general and administrative expenses. Stock-based compensation
expense for the three-month period ended August 31, 2020 amounted
to $0.51 million compared to $0.49 million for the three-month
period ended August 31, 2019, representing an increase of $0.03
million, which was mainly attributable lower stock awards provided
to executives.
Depreciation
and amortization expenses for the three-month period ended August
31, 2020 totaled $0.30 million compared to $0.20 million for the
three-month period ended August 31, 2019, representing an increase
of $0.10 million. This increase is mainly attributable to the
addition of fixed assets at the Company’s pilot plant and
corporate offices.
Interest
and other financial expenses for the three-month period ended
August 31, 2020 totaled $(0.06) million compared to $0.62 million
the three-month period ended August 31, 2019, representing a
decrease of $0.68 million. The decrease is mainly attributable to a
decrease in accretion expense of $0.48 million, a decrease in
interest expense on convertible notes of $0.10 million and by an
increase in gain on revaluation of foreign exchange contracts of
$0.09 million.
Six Months Ended August 31, 2020
The
following table summarizes our operating results for the six-month
periods ended August 31, 2020 and 2019, in U.S.
Dollars.
|
Six Months Ended
August 31
|
||
|
2020
|
2019
|
$
Change
|
Revenues
|
$-
|
$-
|
$-
|
|
|
|
|
Operating
expenses
|
|
|
|
Research and
development
|
|
|
|
Stock-based
compensation
|
704,289
|
629,788
|
74,501
|
Other
research and development
|
3,525,521
|
1,338,286
|
2,187,235
|
Total
research and development
|
4,229,810
|
1,968,074
|
2,261,736
|
|
|||
General and
administrative
|
|
|
|
Stock-based
compensation
|
1,173,465
|
1,104,230
|
69,235
|
Other
general and administrative
|
2,828,858
|
2,517,013
|
311,845
|
Total
general and administrative
|
4,002,323
|
3,621,243
|
381,080
|
|
|||
Depreciation and
amortization
|
558,561
|
365,739
|
192,822
|
Interest and other
financial
|
67,871
|
1,124,064
|
(1,056,193)
|
Interest
income
|
(58,386)
|
(192,291)
|
133,905
|
Foreign exchange
(gain) loss
|
180,259
|
9,764
|
170,495
|
Total
operating expenses
|
8,980,438
|
6,896,593
|
2,083,845
|
Net
loss
|
$(8,980,438)
|
$(6,896,593)
|
$(2,083,845)
|
The net
loss for the six-month period ended August 31, 2020 increased by
$2.08 million to $8.98 million, as compared to the net loss for the
six-month period ended August 31, 2019 which was to $6.90
million. The increase of $2.08 million is primarily due to
higher research and development expenses of $2.26 million, higher
general and administrative expenses of $0.38 million, higher
depreciation and amortization expenses, a higher foreign exchange
loss and lower interest income of $0.13 million, offset by an
decrease in interest and other financial expenses of $1.06
million.
Research
and development expenses for the six-month period ended August 31,
2020 amounted to $4.23 million compared to $1.97 million for the
six-month period ended August 31, 2019, representing an increase of
$2.26 million, or representing an increase of $2.19 million
excluding stock-based compensation. The increase of $2.19 million
was primarily attributable to higher engineering fees of $0.97
million, partly due to investment in the engineering design of our
depolymerization process, higher plant and laboratory consumables
and maintenance expenses of $0.37 million, higher employee
compensation expenses of $0.33 million and by lower research and
development tax credits of $0.38 million. During the six-month
period ended August 31, 2020, the Company recorded a decrease in
refundable research and development tax credits receivable,
increasing research and development expenses by $0.27 million which
was partially offset by a COVID-19 related government wage subsidy
of $0.19 million The decrease in non-cash stock-based compensation
expense of $0.07 million is mainly attributable to the timing of
stock awards provided to certain employees.
General
and administrative expenses for the six-month period ended August
31, 2020 amounted to $4.00 million compared to $3.62 million for
the six-month period ended August 31, 2019, representing an
increase of $0.38 million, or an increase of $0.31 million
excluding stock-based compensation. The increase of $0.31 million
was mainly attributable to higher insurance expenses of $0.73
offset by lower employee compensation costs of $0.32 million.
During the six-month period ended August 31, 2020, the Company
recorded a COVID-19 related government wage subsidy of $0.06
million in general and administrative expenses. Stock-based
compensation expense for the six-month period ended August 31, 2020
amounted to $1.17 million compared to $1.10 million for the
six-month period ended August 31, 2019, representing a decrease of
$0.07 million, which was mainly attributable lower stock awards
provided to executives.
Depreciation
and amortization expenses for the six-month period ended August 31,
2020 totaled $0.59 million compared to $0.37 million for the
six-month period ended August 31, 2019, representing an increase of
$0.19 million. This increase is mainly attributable to the addition
of fixed assets at the Company’s pilot plant and corporate
offices.
Interest
and other finance costs for the six-month period ended August 31,
2020 totaled $0.07 million compared to $1.13 million the six-month
period ended August 31, 2019, representing a decrease of $1.06
million. The decrease is mainly attributable to a decrease in
accretion expense of $1.02 million and a decrease in interest
expense on convertible notes of $0.22 million offset by a decrease
in gain on conversion of convertible notes of $0.23
million.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity
We are a development stage company with no revenues, and our
ongoing operations and commercialization plans are being financed
by raising new equity and debt capital. To date, we have been
successful in raising capital to finance our ongoing operations,
reflecting the potential for commercializing our branded resin and
the progress made to date in implementing our business plans. As at
August 31, 2020, we had cash and cash equivalents on hand of $23.13
million.
Management continues to be positive about our growth strategy and
is evaluating our financing plans to continue to raise capital to
finance the start-up of commercial operations and continue to fund
the further development of our ongoing operations. Although we
continue to be in a good liquidity position with cash and cash
equivalents on hand of $23.13 million, in light of the current
global COVID-19 pandemic and its impacts on the global capital
markets, our liquidity position may change, including the inability
to raise new equity and debt, disruption in completing repayments
or disbursements to our creditors.
On
September 21, 2020, we entered into an underwriting agreement (the
“Underwriting Agreement”) with Roth Capital Partners,
LLC, as underwriter (the “Underwriter”), relating to
the sale and issuance of an aggregate of 1,880,000 shares (the
“Shares”) of the Company’s common stock. The
offering price to the public of the Shares was $12.75 per share,
and the Underwriters have agreed to purchase the Shares from the
Company pursuant to the Underwriting Agreement at a price of
$12.1125 per share. Under the terms of the Underwriting Agreement,
the Company also granted the Underwriters an option, exercisable
for 30 days, to purchase up to an additional 282,000 shares of
Common Stock at the same price per share as the Shares which was
exercised for 207,000 shares. The estimated net proceeds from the
offering, including net proceeds received in connection with the
Underwriter’s option to purchase additional shares, were
$25.09 million.
As reflected in the accompanying interim unaudited condensed
consolidated financial statements, we are a development stage
company, we have not yet begun commercial operations and we do not
have any sources of revenue. Management believes that the Company
has sufficient financial resources to fund planned operating and
capital expenditures and other working capital needs for at least,
but not limited to, the 12-month period from the date of issuance
of the August 31, 2020 interim condensed consolidated financial
statements. There can be no assurance that any future financing
will be available or, if available, that it will be on terms that
are satisfactory to us.
As at August 31, 2020, we have a long-term debt obligation to a
Canadian bank in connection with the purchase, in the year ended
February 28, 2018, of the land and building where our pilot plant
and corporate offices are located at 480 Fernand-Poitras,
Terrebonne, Québec, Canada J6Y 1Y4. On January 24, 2018, the
Company obtained a $1,073,455 (CDN$1,400,000) 20-year term
instalment loan (the “Loan”), from a Canadian bank. The
Loan bears interest at the bank’s Canadian prime rate plus
1.5%. By agreement, the Loan is repayable in monthly payments of
$4,472 (CDN$5,833) plus interest, until January 2021, at which time
it will be subject to renewal. It includes an option allowing for
the prepayment of the Loan without penalty.
We also have a long-term debt obligation to Investissement
Québec in connection with a financing facility equal to 63.45%
of all eligible expenses incurred for the expansion of its Pilot
Plant up to a maximum of $3,527,066 (CDN$4,600,000). We received
the first disbursement in the amount of $1,693,938 (CDN$2,209,234)
on February 21, 2020. There is a 36-month moratorium on both
capital and interest repayments as of the first disbursement date.
At the end of the 36-month moratorium, capital and interest will be
repayable in 84 monthly installments. The loan bears interest at
2.36%. We have also agreed to issue to Investissement Québec
warrants to purchase shares of our common stock in an amount equal
to 10% of each disbursement up to a maximum aggregate amount of
$352,707 (CDN$460,000). The warrants will be issued at a price per
share equal to the higher of (i) $11.00 per share and (ii) the
ten-day weighted average closing price of Loop Industries shares of
common stock on the Nasdaq stock market for the 10 days prior to
the issue of the warrants. The warrants can be exercised
immediately upon grant and will have a term of three years from the
date of issuance. The loan can be repaid at any time by us without
penalty. On February 21, 2020, upon the receipt of the first
disbursement under this facility, we issued a warrant to purchase
15,153 shares of common stock at a price of $11.00 to
Investissement Québec.
Flow of Funds
Summary of Cash Flows
A
summary of cash flows for the six-month period ended August 31,
2020 and 2019 was as follows:
|
Six Months Ended
August 31
|
|
|
2020
|
2019
|
Net cash used in
operating activities
|
$(7,455,787)
|
$(5,235,429)
|
Net cash used in
investing activities
|
(3,232,238)
|
(1,785,198)
|
Net cash provided
(used) by financing activities
|
(26,836)
|
39,141,055
|
Effect of exchange
rate changes on cash and cash equivalents
|
125,433
|
(22,778)
|
Net increase
(decrease) in cash and cash equivalents
|
$(10,589,428)
|
$32,097,650
|
Net Cash Used in Operating Activities
During
the six months ended August 31, 2020, we used $7,46 million in
operations compared to $5.24 million during the six months ended
August 31, 2019. The increase in cash used in operations of $2.22
million is mainly attributable to the prepayment of annual
directors’ and officers’ insurance premium and other
prepayments of $0.8 million and increased research and development
expenses. The variation in the amount of prepaid directors and
officers insurance is due to an increase of $1.30 million of the
annual premium as well as a change in the payment structure wherein
a full up-front payment was made in the current year compared to
monthly payments being made in the prior year. The Company
continued to invest in research and development on its existing
technologies and new technologies, particularly on the evolution of
its GEN II technology as the Company moves to the next phase of
commercialization.
Net Cash Used in Investing Activities
During
the six months ended August 31, 2020, the Company made investments
of $1.12 million in property, plant and equipment as compared to
$1.20 million for the six months ended August 31, 2019, primarily
in connection with the upgrade of its GEN II industrial pilot
plant. Additionally, the Company has made deposits on equipment of
$1.04 million as at August 31, 2020 compared to nil at August 31,
2019.
During
the six months ended August 31, 2020, the Company made investments
in intangible assets of $0.16 million as compared to $0.08 million
for the six months ended August 31, 2019, particularly in its GEN
II patent technology in the United States and around the
world.
During
the six months ended August 31, 2020, the Company also made a
contribution of $0.65 million
to Indorama Loop Technologies, LLC, the joint venture with
Indorama Ventures Holdings LP, USA compared to $0.50 million for
the six months ended August 31, 2019.
Net Cash Provided from (Used in) Financing
Activities
During
the six months ended August 31, 2020, we repaid $0.03 million of
long-term debt.
Condensed Consolidated Statements of Operations and Comprehensive
Loss
(Unaudited)
|
Three
Months Ended August 31
|
Six Months
Ended August 31
|
||
|
2020
|
2019
|
2020
|
2019
|
|
|
|
|
|
Revenue
|
$-
|
$-
|
$-
|
$-
|
|
|
|
|
|
Expenses
|
|
|
|
|
Research and
development
|
2,749,222
|
970,213
|
4,229,810
|
1,968,074
|
General and
administrative
|
2,049,241
|
1,718,613
|
4,002,323
|
3,621,243
|
Depreciation and
amortization
|
302,587
|
201,403
|
558,561
|
365,739
|
Interest and other
financial
|
(58,905)
|
622,183
|
67,871
|
1,124,064
|
Interest
income
|
(18,039)
|
(192,259)
|
(58,386)
|
(192,291)
|
Foreign exchange
loss
|
103,618
|
21,890
|
180,259
|
9,764
|
Total
expenses
|
5,127,724
|
3,342,043
|
8,980,438
|
6,896,593
|
|
|
|
|
|
Net
Loss
|
(5,127,724)
|
(3,342,043)
|
(8,980,438)
|
(6,896,593)
|
|
|
|
|
|
Other comprehensive
income (loss)
|
|
|
|
|
Foreign currency
translation adjustment
|
402,812
|
102,457
|
232,400
|
(37,685)
|
Comprehensive
income (loss)
|
$(4,724,912)
|
$(3,239,586)
|
$(8,748,038)
|
$(6,934,278)
|
|
|
|
|
|
Loss per
share
|
|
|
|
|
Basic and
Diluted
|
$(0.13)
|
$(0.09)
|
$(0.22)
|
$(0.19)
|
|
|
|
|
|
Weighted average
common shares outstanding
|
|
|
|
|
Basic and
Diluted
|
39,928,047
|
38,383,156
|
39,922,443
|
36,548,832
|
Loop Industries, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
|
August 31,
2020
|
February 29,
2020
|
|
|
|
Assets
|
|
|
Current
assets
|
|
|
Cash
and cash equivalents
|
$23,128,243
|
$33,717,671
|
Sales
tax, tax credits and other receivables
|
511,156
|
664,544
|
Prepaid
expenses and deposits
|
2,293,283
|
141,226
|
Total
current assets
|
25,932,682
|
34,523,441
|
Investment
in joint venture
|
1,500,000
|
850,000
|
Property,
plant and equipment, net
|
8,287,408
|
7,260,254
|
Intangible assets,
net
|
342,930
|
202,863
|
Total
assets
|
$36,063,020
|
$42,836,558
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
Current
liabilities
|
|
|
Accounts
payable and accrued liabilities
|
$2,099,515
|
$2,082,698
|
Current
portion of long-term debt
|
53,673
|
52,126
|
Total
current liabilities
|
2,153,188
|
2,134,824
|
Long-term
debt
|
2,316,408
|
2,238,026
|
Total
liabilities
|
4,469,596
|
4,372,850
|
|
|
|
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; 39,935,210 shares issued and outstanding
(February 29, 2020 – 39,910,774)
|
3,994
|
3,992
|
Additional
paid-in capital
|
84,172,723
|
82,379,413
|
Additional paid-in
capital – Warrants
|
9,870,241
|
9,785,799
|
Accumulated
deficit
|
(62,297,485)
|
(53,317,047)
|
Accumulated
other comprehensive loss
|
(156,049)
|
(388,449)
|
Total
stockholders' equity
|
31,593,424
|
38,463,708
|
Total
liabilities and stockholders' equity
|
$36,063,020
|
$42,836,558
|
Loop Industries, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
Six Months Ended August 31
|
|
|
2020
|
2019
|
Cash Flows from Operating Activities
|
|
|
Net
loss
|
$(8,980,438)
|
$(6,896,593)
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|
|
Depreciation
and amortization
|
558,561
|
365,739
|
Stock-based
compensation expense
|
1,877,754
|
1,734,018
|
Accrued
interest
|
19,291
|
215,433
|
Loss
on revaluation of warrant
|
-
|
8,483
|
Debt
accretion
|
17,658
|
1,035,888
|
Deferred
financing costs
|
-
|
66,327
|
Loss
(gain) on conversion of convertible notes
|
-
|
(232,565)
|
Loss
on revaluation of foreign exchange contracts
|
11,482
|
-
|
Changes
in operating assets and liabilities:
|
|
|
Sales
tax, tax credits and other receivable
|
169,018
|
(123,194)
|
Prepaid
expense
|
(824,675)
|
(22,987)
|
Accounts
payable and accrued liabilities
|
(304,438)
|
(1,385,978)
|
Net
cash used in operating activities
|
(7,455,787)
|
(5,235,429)
|
|
|
|
Cash Flows from Investing Activities
|
|
|
Investment
in joint venture
|
(650,000)
|
(500,000)
|
Deposits
on machinery and equipment
|
(1,305,010)
|
-
|
Additions
to property, plant and equipment
|
(1,116,744)
|
(1,202,766)
|
Additions
to intangible assets
|
(160,484)
|
(82,432)
|
Net
cash used in investing activities
|
(3,232,238)
|
(1,785,198)
|
|
|
|
Cash Flows from Financing Activities
|
|
|
Proceeds
from sale of common shares
|
-
|
40,273,751
|
Share
issuance costs
|
-
|
(1,106,370)
|
Repayment
of long-term debt
|
(26,836)
|
(26,326)
|
Net
cash provided from (used in) financing activities
|
(26,836)
|
39,141,055
|
|
|
|
Effect
of exchange rate changes
|
125,433
|
(22,778)
|
Net
change in cash and cash equivalents
|
(10,589,428)
|
32,097,650
|
Cash
and cash equivalents, beginning of period
|
33,717,671
|
5,833,390
|
Cash
and cash equivalents, end of period
|
$23,128,243
|
$37,931,040
|
|
|
|
Supplemental Disclosure of Cash Flow Information:
|
|
|
Income
tax paid
|
$-
|
$-
|
Interest
paid
|
$19,441
|
$30,497
|
Interest
received
|
$30,497
|
$192,291
|
About Loop Industries
Loop Industries is a technology company whose mission is to
accelerate the world's shift toward sustainable PET plastic and
polyester fiber and away from our dependence on fossil fuels. Loop
owns patented and proprietary low-energy technology that
depolymerizes no and low-value waste PET plastic and polyester
fiber, including plastic bottles and packaging, carpets and
textiles of any color, transparency or condition and even ocean
plastics that have been degraded by the sun and saltwater, into its
base building blocks (monomers). The monomers are filtered,
purified and polymerized to create virgin-quality Loop™
branded PET resin and polyester fiber suitable for use in
food-grade packaging, thus enabling our customers to meet their
sustainability objectives. Loop Industries is contributing to the
global movement toward a circular economy by preventing plastic
waste and recovering waste plastic for a more sustainable future
for all.
Common
shares of the Company are listed on the Nasdaq Global Market under
the symbol “LOOP.”
For
more information, please visit www.loopindustries.com.
Follow us on Twitter: @loopindustries,
Instagram: loopindustries,
Facebook: Loop Industries
and LinkedIn: Loop
Industries
Forward-Looking Statements
This
news release contains "forward-looking statements" as defined in
the U.S. Private Securities Litigation Reform Act of 1995. Such
statements may be preceded by the words "intends", "may", "will",
"plans", "expects", "anticipates", "should", "could", "projects",
"predicts", "estimates", "aims", "believes", "hopes", "potential"
or similar words. Forward-looking statements are not guarantees of
future performance, are based on certain assumptions and are
subject to various known and unknown risks and uncertainties, many
of which are beyond Loop's control, and cannot be predicted or
quantified and consequently, actual results may differ materially
from those expressed or implied by such forward-looking statements.
Such risks and uncertainties include, without limitation, risks and
uncertainties associated with among other things: (i)
commercialization of our technology and products, (ii) our status
of relationship with partners, (iii) development and protection of
our intellectual property and products, (iv) industry competition,
(v) our need for and ability to obtain additional funding, (vi)
building our manufacturing facility, (vii) our ability to sell our
products in order to generate revenues, (viii) our proposed
business model and our ability to execute thereon, (ix) adverse
effects on the Company's business and operations as a result of
increased regulatory, media or financial reporting issues and
practices, rumors or otherwise, (x) disease epidemics and health
related concerns, such as the current outbreak of a novel strain of
coronavirus (COVID-19), which could result in (and, in the case of
the COVID-19 outbreak, has resulted in some of the following)
reduced access to capital markets, supply chain disruptions and
scrutiny or embargoing of goods produced in affected areas,
government-imposed mandatory business closures and resulting
furloughs of our employees, travel restrictions or the like to
prevent the spread of disease, and market or other changes that
could result in noncash impairments of our intangible assets, and
property, plant and equipment, and (xi) other factors discussed in
our subsequent filings with the SEC. More detailed information
about Loop and the risk factors that may affect the realization of
forward-looking statements is set forth in our filings with the
Securities and Exchange Commission ("SEC"). Investors and security
holders are urged to read these documents free of charge on the
SEC's web site at http://www.sec.gov. Loop assumes no obligation to
publicly update or revise its forward-looking statements as a
result of new information, future events or otherwise.
For More Information:
Media Inquiries:
Stephanie Corrente
Loop Industries, Inc.
+1 (450) 951-8555 ext. 226
scorrente@loopindustries.com
Investor Inquiries:
Greg
Falesnik
MZ
Group - MZ North America
+1
949-259-4987
LOOP@mzgroup.us
www.mzgroup.us