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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.

 

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Loop Industries, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

See accompanying notes to the condensed consolidated financial statements.

Loop Industries, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

See accompanying notes to the condensed consolidated financial statements.

Loop Industries, Inc.

Condensed Consolidated Statement of Changes in Stockholders' Deficit

(Unaudited)

See accompanying notes to the condensed consolidated financial statements.

Loop Industries, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

See accompanying notes to the condensed consolidated financial statements.

Loop Industries, Inc.

Three Months Ended May 31, 2026 and 2025

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following information and any forward-looking statements should be read in conjunction with the unaudited financial information and the notes thereto included in this Quarterly Report on Form 10-Q, including those risks identified in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended February 28, 2026, filed with the SEC on May 27, 2026 (the “2026 Annual Report”).

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q of Loop Industries, Inc., a Nevada corporation (the “Company,” “Loop,” “we,” or “our”), contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and as defined in the United States Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative of such terms and other comparable terminology. These forward-looking statements include, without limitation, statements about our market opportunity, our strategies, ability to improve and expand our capabilities, competition, expected activities and expenditures as we pursue our business plan, the adequacy of our available cash resources, regulatory compliance, plans for future growth and future operations, the size of our addressable market, and market and industry trends. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Actual results may differ materially from the projections discussed in these forward-looking statements. The economic environment within which we operate could materially affect our actual results. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. These risks and other factors include, but are not limited to, those listed under “Risk Factors.” Additional factors that could materially affect these forward-looking statements and/or projections include, among other things: (i) our ability to commercialize our technology and products, (ii) the status of our relationships with our partners, (iii) development and protection of our intellectual property and products, (iv) industry competition, (v) our need for and ability to obtain additional funding relative to our current and future financial commitments, (vi) our ability to continue as a going concern, (vii) engineering, contracting, and building our manufacturing facilities, (viii) our ability to scale, manufacture, and sell our products and to license our technology in order to generate revenues, (ix) our proposed business model and our ability to execute it, (x) our ability to obtain the necessary approvals or satisfy any closing conditions in respect of any of our proposed partnerships, (xi) our joint venture projects and our ability to recover certain expenditures in connection with them, (xii) adverse effects on the Company's business and operations as a result of increased regulatory, media, or financial reporting scrutiny, practices, rumors, or otherwise, (xiii) public health issues, such as disease epidemics, which may lead to reduced access to capital markets, supply chain disruptions, and government-imposed business closures, (xiv) war, regional tensions, and economic or other conflicts including trade disputes and increasing protectionist measures that could impact market stability and our business; (xv) the effect of the continuing worldwide macroeconomic uncertainty and its impacts, including inflation, market volatility and fluctuations in foreign currency exchange and interest rates, (xvi) the outcome of any SEC investigations or class action litigation filed against us, (xvii) our ability to hire and/or retain qualified employees and consultants, (xviii) other events or circumstances over which we have little or no control, and (xix) other factors discussed in our subsequent filings with the Securities and Exchange Commission (the “SEC”).

Management has included projections and estimates in this Form 10-Q, which are based primarily on management's experience in the industry, assessments of our results of operations, discussions and negotiations with third parties, and a review of information filed by our competitors with the SEC or otherwise publicly available.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as at the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.

We caution readers not to place undue reliance on any such forward-looking statements, which speak only as at the date made. Except as required by law, we disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

General

As used in this Quarterly Report on Form 10-Q, the following terms are being provided so investors can better understand our business:

Depolymerization refers to the chemical process of breaking down a polymer molecule into its constituent monomers or smaller subunits. Depolymerization is the opposite of polymerization.

DMT is an acronym for dimethyl terephthalate, which is a monomer used in the production of polyethylene terephthalate (“PET”), as well as other products.

MEG is an acronym for monoethylene glycol, which is a monomer used in the production of PET, as well as other products.

Polymerization refers to a process of reacting monomer molecules together in a chemical reaction to form polymer chains or three-dimensional networks.

PET is an acronym for polyethylene terephthalate, which is a resin and a type of polyester showing excellent tensile and impact strength, chemical resistance, clarity, and processability, and reasonable thermal stability. PET is the material which is most commonly used for the production of polyester fiber and plastic packaging, including plastic bottles for water and carbonated soft drinks, containers for food and other consumer products; it is commonly identified by the number “1”, often inside an image of a triangle, on the packaging. PET is also used as a polyester fiber for a variety of applications including textiles, clothing and apparel.

rPET, rDMT and rMEG are acronyms for recycled PET, DMT and MEG.

$ refers to U.S. dollars unless otherwise indicated.

Introduction

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 Industries owns patented and proprietary technology that depolymerizes no and low-value waste PET plastic and polyester fiber, including plastic bottles, packaging, and textiles such as carpets and clothing, into its base building block monomers, DMT and MEG. The monomers are separated, purified and polymerized to create virgin-quality Loop™ branded PET resin suitable for use in food-grade packaging and polyester fiber, thus enabling our customers to meet their sustainability objectives. Loop™ PET plastic and polyester fiber can be recycled infinitely without degradation of quality, helping to close the plastic loop. Loop Industries is committed to contributing to the global movement towards a circular economy by reducing plastic waste and recovering waste plastic for a sustainable future.

Loop plans to commercialize the Infinite Loop™ technology by developing facilities throughout the world which use its technology to produce rPET.  These facilities will be developed through a combination of direct investments with strategic partners and the licensing of its technology to companies with industry expertise.

As the initial phase of our plan for the commercialization of future Infinite Loop™ manufacturing facilities, we constructed and have successfully operated our Terrebonne, Québec depolymerization production facility (the “Terrebonne Facility”) for the past five years, demonstrating the effectiveness of our technology and supplying Loop PET resin and polyester fiber to customers. The facility has also been used for research and development activities.

Loop is currently executing on its commercialization strategy through two key strategic partnerships. The Company is advancing towards the construction of an Infinite Loop™ manufacturing facility in India through its 50/50 joint venture in India with Ester Industries Ltd. (“Ester”). The facility's planned production capacity is 70,000 tons per year of Loop branded PET resin and polyester fiber. In addition, the Company sold its first technology license to Reed Management SAS, ("Reed Societe Generale Group"), for one Infinite Loop™ manufacturing facility in Europe for an initial payment of $10.4 million (€10.0 million) with additional milestone payments to be received by Loop as the project advances. Infinite Loop Europe SAS (“Infinite Loop Europe”), an entity owned 10% by Loop and 90% by Reed Circular Economy (“RCE”), an affiliate of Reed Societe Generale Group, was formed with the purpose of developing Infinite Loop™ manufacturing facilities in Europe. These initiatives represent key steps in implementing the Company's plan to deploy its proprietary depolymerization technology in global markets.

Background

Industry Background and Competitive Landscape

PET resin is primarily derived from fossil fuel-based monomers and is referred to as “virgin PET” when used for packaging and “virgin polyester” when used for fibers. PET is widely used in packaging, especially for beverage bottles and food containers, due to its excellent barrier properties, durability, and food safety profile. Virgin polyester fiber is also the dominant synthetic fiber in the textile industry, valued for its strength, durability, wrinkle resistance, and versatility in apparel, home furnishings, and industrial applications.

Despite growing regulatory and consumer pressure for sustainable alternatives, most of the PET and polyester fiber used globally today is still comprised of fossil fuel-based monomers. In many applications, virgin material is still preferred or required, either alone or blended with recycled content, in order to meet quality specifications. As a result, the global markets for both PET packaging and polyester fiber remain heavily dependent on fossil fuels, underscoring the need for scalable, cost-effective recycling technologies that can produce high-quality PET and polyester fiber from waste plastic.

Mechanical recycling is the most common method for recycling PET waste. This multi-step physical process transforms waste PET into reusable materials. The process begins with the collection of waste PET bottles and packaging through various systems, such as curbside programs and deposit returns. The waste is sorted at materials recovery facilities to separate PET from other plastics or materials, then compressed into bales.

The bales are broken down and the waste PET shredded into flakes after removal of contaminants like stones, sand, metals, labels, and bottle caps. These flakes undergo rigorous washing and cleaning stages, often using hot water and detergents, to remove dirt, adhesives, and residues. Separation techniques like flotation and air classification are then used to eliminate remaining impurities, and the flakes are dried. Next, the flakes may go through optical color sorting to produce rPET for higher value uses such as clear beverage bottles. The cleaned flakes are then melted at high temperatures, extruded, and cut into uniform pellets. For applications like food-grade packaging, the rPET pellets typically undergo further processing to ensure compliance with safety and quality standards for direct food contact.

We believe mechanically recycled PET faces significant challenges in meeting the quality specifications and increasing volume requirements driven by brand commitments and regulatory pressures. Impurities like labels, adhesives, and other types of plastic contained in the waste feedstock compromise the purity of the rPET. While sorting and cleaning technologies help, they are not always effective enough to produce consistently high-quality recycled material. Feedstock limitations also exist because certain PET products, such as colored or multi-layered packaging, are challenging to process mechanically while maintaining quality and consistency, leading to them being sent to landfill or incineration.

A key challenge in mechanical recycling is the degradation of PET's physical properties with each recycling cycle. Processes like shredding, washing, and melting can break down polymer chains, reducing strength and clarity, often leading to “downcycling” where the rPET is limited to lower-value applications rather than being recycled back into bottles or food packaging. Due to the progressive degradation of material properties and the accumulation of impurities, PET can typically only be mechanically recycled a limited number of times before its quality is too poor for further processing or valuable applications. The quality of mechanically recycled PET can vary considerably and often requires blending with virgin PET to meet performance standards. This inconsistency poses difficulties for manufacturers aiming to incorporate rPET into products, particularly for demanding applications like food packaging.

Mechanical recycling does not effectively handle polyester fiber waste. A substantial portion of polyester fiber waste consists of polyester blended with other fibers like cotton or spandex, which mechanical processes are largely ineffective at separating. Additionally, waste polyester fiber often contains dyes, finishes, and other chemicals that cannot be removed through mechanical recycling. Today, most recycled polyester on the market is produced from recycled PET bottles and packaging. A significant portion of PET bottles collected for recycling is diverted into polyester fiber production for textile applications, rather than being recycled back into new bottles.

We believe these inherent limitations of mechanical recycling further re-enforce the need for depolymerization technologies capable of processing a wider range of PET and polyester fiber waste while yielding high-quality material. Depolymerization is a process in which plastics are broken down into their base monomers through chemical reactions, rather than being physically melted down and reprocessed as in mechanical recycling.

Among existing depolymerization technologies, we believe that Loop's process offers advantages in handling more contaminated feedstock and in its scalability, which differentiates it from other available methods. This belief is supported by available technical information and due diligence on Loop's technology carried out by multiple industry sources. To our knowledge, other existing depolymerization technologies often require high temperatures and pressures, resulting in substantial energy consumption and potential unwanted chemical reactions which can reduce the yield and purity of the recovered monomers.

Infinite Loop™ Technology

Our depolymerization technology breaks down waste PET and polyester fiber into its base monomers DMT and MEG. The monomers are purified and then recombined into virgin quality PET resin suitable for use in food-grade packaging and polyester fiber made from 100% recycled content. Our depolymerization operates at low temperature with no added pressure which enables a wider range of PET and polyester fiber to be recycled. Our technology can recycle a wide range of waste PET plastic bottles and packaging of any color, transparency or condition, as well as polyester textiles such as carpet and clothing that contain dyes, additives, or other textiles blended into the fabrics. We believe that our ability to use contaminated feedstocks that other recycling methods cannot process is an important advantage of our technology.

Loop’s depolymerization technology has the potential to create a closed-loop system for PET plastic and polyester fiber waste, whereby they can be recycled an infinite number of times without degrading the quality of the material, unlike mechanical recycling. This is because the DMT and MEG monomers are purified back to their original state prior to being repolymerized.

The Infinite Loop™ Technology is also designed to provide a solution for recycling polyester textile waste, regardless of color or contamination, into 100% recycled virgin-quality polyester. Loop branded polyester fiber can be seamlessly integrated into existing supply chains and manufacturing processes. This closed-loop approach aims to offer a sustainable alternative for the textile industry, addressing the growing issue of textile waste while maintaining high quality and performance.

Loop has been operating its Terrebonne Facility for the past five years producing DMT and MEG. The facility has been achieving consistent monomer recovery, demonstrating the effectiveness of our technology and supplying customers with virgin quality PET resin for packaging and polyester fiber for textiles.

Agreements with Reed Societe Generale Group

On December 12, 2024, the Company entered into an Amended and Restated Share Purchase Agreement (the “Amended Agreement”) with Reed Societe Generale Group, a European investment firm focused on high impact and technology-enabled infrastructure majority-owned by the bank Societe Generale. The Amended Agreement amends the original Share Purchase Agreement dated May 30, 2024 previously reported by the Company in a current report on Form 8-K filed on June 4, 2024. To facilitate the closing of the transactions contemplated by the Amended Agreement and to develop Infinite Loop™ manufacturing facilities in Europe, Infinite Loop Europe was incorporated under French law.

On December 23, 2024, the Company closed the financing and licensing transactions contemplated by the Amended Agreement. The Company issued and sold 1,044,430 shares of Series B Convertible Preferred Stock at $10.00 per share to RCE. Additionally, the Company entered into a License Agreement with RCE, acting on behalf of Infinite Loop Europe, granting a non-transferable, royalty-bearing license to use Loop's proprietary depolymerization technology for one facility within Europe.

The Company received total cash proceeds of $20,790 (€20,000) on December 23, 2024.

Key terms of the Series B Convertible Preferred Stock include:

We believe the licensing and financing transactions marked an important step in Loop's commercialization strategy, enabling the deployment of its patented recycling technology across Europe and supporting capital investment in cost-effective manufacturing regions, including its joint venture in India with strategic partner Ester. Proceeds from these transactions have been used to fund the India JV project and Loop's operational cash flow needs.

We further believe the sale of our first license underscores the commercial readiness of Loop's technology, which has been validated by five years of operations at its Terrebonne facility.

On September 23, 2025, Loop entered into a formal agreement with RCE to establish the framework for the governance, ownership, and operations of Infinite Loop Europe, a European entity formed to pursue the non-exclusive development, financing, construction, ownership, operation, and commercialization of chemical upcycling plants and related products using Loop’s technology within Europe. Under this agreement, RCE and Loop hold equity interests in Infinite Loop Europe on a 90/10 basis. In September 2025, Loop purchased 250 shares of Infinite Loop Europe for $0.3 (€0.3) in consideration for its 10% ownership stake. The agreement provides Infinite Loop Europe with priority rights to evaluate European project opportunities, establishes financing arrangements between the shareholders, grants Loop options to participate in up to 50% of project-level equity, and confirms that Loop retains ownership of its intellectual property while granting Infinite Loop Europe limited use rights.

Infinite Loop Europe is managed by a chief executive officer proposed by RCE, with governance provided by a four-member board of directors, of which Loop is entitled to nominate one director and RCE nominates the remaining directors. Certain transactions that could risk the disclosure of Loop’s technology, as well as certain related-party transactions, require unanimous board approval. RCE has provided Infinite Loop Europe with a $10.4 million (€10.0 million) shareholder loan to fund the first royalty tranche under the license agreement, which accrues payment-in-kind interest at 11.9% per annum and matures on December 27, 2027.

On February 17, 2026, Loop announced that Infinite Loop Europe has selected BASF Industriepark Lausitz in Schwarzheide, Germany, as the site for its inaugural European manufacturing facility. The project will be the first under Loop’s licensed technology model. This selection marks a major step in Loop’s global commercialization strategy, with the site expected to be operational by 2030. The facility is designed to utilize Loop’s proprietary depolymerization technology to produce 70,000 metric tons per year of virgin-quality Loop™ PET made from 100% recycled content. By addressing a critical supply gap for food-grade and pharmaceutical applications in the European market, the project pairs technical reliability with a high-demand commercial opportunity. Integration within BASF’s Industriepark Lausitz provides access to world-class industrial infrastructure and operational expertise, while the partnership with Reed Societe Generale Group brings strong institutional capital support, reducing execution risk and accelerating commercialization. The facility is positioned to benefit from the European Commission’s 2025 pilot actions aimed at modernizing and strengthening the EU plastics recycling sector. Following site selection, the project moves into the engineering and permitting phase.

Joint Venture with Ester

On May 1, 2024, Loop entered into an agreement with Ester, one of India's leading manufacturers of polyester films and specialty polymers, to form a 50/50 India joint venture (“India JV”). The purpose of the India JV is to build and operate an Infinite Loop™ manufacturing facility in India which will produce 100% recycled Loop™ PET resin, using the Infinite Loop™ Technology, in order to meet growing demand from leading global brands in different sectors, including strong demand for textile-to-textile polyester fiber to enable circular fashion for apparel brands, a trend we have observed and anticipate to continue.

Loop and Ester have a well-established working relationship, with Ester producing Loop™ PET using monomers produced at Loop's Terrebonne Facility for global brand companies over the last five years. The India JV intends to leverage the complementary skill sets of each partner by combining Loop's innovative technology and global customer relationships with Ester's nearly 40 years of specialized polymer production, operational proficiency, and local expertise, including sourcing of PET plastic and polyester fiber waste feedstocks. The India facility will leverage the Infinite Loop™ Technology and Loop’s existing engineering package.

The planned production capacity of the Infinite Loop™ India facility is 70,000 tons per year of Loop branded PET resin and polyester fiber.  We believe the India JV offers attractive projected economic returns without the need for substantial sustainability-linked premium pricing.

The India JV will enter into (i) a technology license agreement with Loop (the “Loop Technology License Agreement”), (ii) a service agreement with Ester, and (iii) a sales and marketing agreement with Loop, each on terms mutually agreed upon by the parties. Pursuant to the Loop Technology License Agreement, the India JV will be granted an exclusive, subject to certain exceptions, license to exploit the Infinite Loop™ Technology in India at a royalty rate set forth in the Loop Technology License Agreement.

Loop has entered into two engineering services agreements with the India JV to provide engineering services, underscoring the role of engineering services in Loop's commercialization strategy as an important and growing source of revenue. The first engineering services agreement with the India JV had a value of $0.5 million and was fulfilled over fourth quarter of the fiscal year ended February 28, 2025 and the first quarter of the fiscal year ended February 28, 2026.  It resulted in $0.2 million of revenue in the first quarter ended May 31, 2026.  On June 22, 2025, Loop entered into its second engineering services agreement with the India JV to support it through construction as it moves towards breaking ground on the Infinite Loop™ India facility. This agreement has a value of $1.5 million, and the Company commenced performance under it in November 2025, resulting in Loop generating $0.4 million of engineering services revenue in the year ended February 28, 2026 and $0.2 million in the quarter ended May 31, 2026. Engineering services revenue is currently recognized only to the extent of costs incurred, the associated revenue and cost of sales are recognized in equal amounts, yielding no gross profit margin during the period.

On August 13, 2025, the India JV executed an agreement with a group of sellers for the acquisition of approximately 93 acres in Gujarat, India, for total consideration of approximately US $0.1 million (9.1 million Indian rupees) per acre. The sellers are obligated to consolidate the parcels, deliver marketable title with requisite governmental approvals, and construct access road infrastructure. The purchase price is payable through advance payments secured by equitable mortgages over designated parcels, with remaining consideration due upon title transfer. The agreement incorporates customary representations, warranties, and covenants, together with termination provisions permitting India JV to reject non-compliant parcels or terminate for material breach, including failure to deliver contiguous parcels, with full restitution of payments made.

Strategically located within the Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR), the site offers direct access to abundant polyester textile waste feedstock, a skilled petrochemical workforce, and a streamlined permitting process. Its proximity to a deep-water seaport will further support cost-efficient exports of the India JV’s products.

Feedstock sourcing for the facility, of which there is abundant supply from textile waste in India, is well advanced. Loop has signed a multi-year offtake agreement with Nike, Inc. ("Nike") which will serve as an anchor customer for the facility. Loop has also signed an offtake agreement with Taro Plast S.p.A. to supply 100% recycled, virgin-quality Loop™ DMT. Furthermore, the India JV has engaged a leading global advisory firm to manage the debt syndication process for financing the construction of the Infinite Loop™ India facility. The debt financing process is progressing, with term sheets having been received from international lenders who are moving into the technical due diligence stage of the process.

The front-end engineering design for the Infinite Loop™ India facility was completed by Tata Consulting Engineers. In December 2025, the India JV awarded the detailed engineering contract for the Infinite Loop™ India facility to Toyo Engineering India Private Limited, covering the full scope of detailed design, procurement engineering, and technical documentation. The net total investment cost for the facility, including continuous polymerization, financing costs during construction and initial working capital requirements, is budgeted to be approximately $165 to $170 million, including approximately $13 million of a GST tax which will be refunded to the India JV as it generates international sales.

In May 2026, the India JV has signed a memorandum of understanding with the government of Gujarat providing formal alignment to support the development of Loop's first large-scale commercial manufacturing platform. The agreement is expected to streamline permitting, infrastructure coordination, and administrative processes, reinforcing a clear path forward and enabling a phased expansion strategy at the site which is capable of supporting multiple facilities.  The Company expects the Infinite Loop™ India facility to be operational in calendar 2028.

Commercialization Strategy

Our commercialization strategy to achieve global expansion of the Infinite Loop™ Technology is founded on a combination of direct investments with strategic partners to own and operate commercial facilities and the licensing of our technology.

The global expansion plan for our technology will allow our target customers, mostly comprised of apparel companies and CPG companies, to integrate Loop™ PET resin and polyester fiber into their products and packaging. As countries around the globe continue to impose sustainability targets and recycled content mandates, we observe that companies are increasingly seeking to incorporate sustainably produced materials into their products. Our market strategy is to assist global consumer goods and apparel companies in meeting these requirements as well as their own stated sustainability commitments by offering co-branded packaging or polyester fibers that are made with Loop 100% recycled, virgin-quality PET. We believe that Loop™ recycled PET resin and polyester fiber could command premium pricing over virgin, petroleum-based PET resin and provide attractive economic returns.

The Infinite Loop™ Technology is the key pillar of our commercialization strategy. We believe our technology is well positioned to respond to the global transition away from fossil fuels and petrochemicals and into the circular economy, where PET plastic and polyester fiber are produced by recycling waste polyester that would otherwise typically be destined for landfill or incineration, rather than relying on fossil-based resources.

We have completed our process design package for the Infinite Loop™ full-scale manufacturing facilities to be used as the base engineering platform for all future facilities. We believe this approach allows for quick execution, speed to market, and lends itself well to modular construction. The basic design package has a capacity of up to 70,000 tons of rDMT and 23,000 tons of rMEG, or 70,000 tons of Loop PET and polyester fiber output per year, subject to applicable site-specific permitting, site and regulatory considerations.

We are focused on direct investments in Infinite Loop™ commercial facilities located in low-cost manufacturing regions. By strategically selecting cost-efficient locations, we aim to optimize production costs and improve overall financial performance, while limiting our capital contributions.

This direct investment approach also includes leveraging partnerships to integrate Loop's proprietary technology and sales and marketing expertise with the operational and construction capabilities of experienced partners. We believe this combination of complementary skill sets allows for more efficient project execution, accelerated market adoption, and scalable growth.

We expect that revenue generation from direct investments in commercial facilities will be driven by two key streams: (i) profits from the operation of commercial facilities, and (ii) royalties paid to Loop for licensing its technology and exclusive responsibility for sales and marketing. We believe these income sources will support long-term financial sustainability and growth.

This approach is currently being deployed through the Company's 50/50 joint venture in India with Ester, which is advancing towards the construction of an Infinite Loop™ manufacturing facility. The facility's planned production capacity is 70,000 tons per year of Loop branded PET resin and polyester fiber. The India JV intends to leverage the complementary skill sets of each partner by combining Loop's innovative technology and global customer relationships with Ester's nearly 40 years of specialized polymer production, operational proficiency, and local expertise, including sourcing of PET plastic and polyester fiber waste feedstocks. Loop will grant a royalty-bearing license to the India JV and will be the exclusive seller and marketing agent of the India JV's products.

We also aim to accelerate the roll-out of the Infinite Loop™ technology through the sale of technology licenses for commercial facilities in which Loop may take limited or no ownership. We expect licensee-owned facilities to allow us to scale our technology efficiently, without requiring significant capital investment from Loop. Revenue generation through technology licensing is expected to come from a combination of up-front and recurring royalties.

This approach focused on licensing is currently being deployed in our European partnership with Reed Societe Generale Group. The Company sold its first technology license to Reed Societe Generale Group for one Infinite Loop™ manufacturing facility in Europe for an initial down payment of $10.4 million (€10.0 million) with additional milestone payments to be received by Loop as the project advances. Infinite Loop Europe was formed with the purpose of developing Infinite Loop™ manufacturing facilities in Europe to be owned 10% by Loop and 90% by RCE. Loop has the right to increase its ownership in each project developed through Infinite Loop Europe up to 50% subject to a binding funding commitment.

Additionally, we aim to generate income by providing engineering services throughout all phases of project development, construction, and startup for all Infinite Loop™ commercial facilities, supporting efficient project execution and creating a steady revenue stream prior to the startup of the facility.

Loop has entered into an engineering services agreement with the India JV to provide engineering services and support the completion of the engineering for the planned Infinite Loop™ manufacturing facility in India. This has resulted in Loop generating engineering services revenue of $0.2 million in the three month period ended May 31, 2026.

We are also in the process of implementing a modular construction strategy, in order to reduce overall capital expenditures and operating expenses, while improving project timelines and ensuring standardized design and quality.  This strategy consists of the manufacture of plant modules in a low-cost country which can then be transported and assembled on site at global locations.  This would provide a more economical scalable approach for global expansion and would potentially provide an additional income stream for Loop as it coordinates the process.

The Company’s ability to move to the next stage of its strategic development, including the construction of manufacturing plants and the commercialization of its technology and products at scale, is dependent on, among other factors, its ability to obtain the necessary financing through a combination of the issuance of equity, project debt, and/or government incentive programs.

Market Development and Strategic Relationships

Letter of Intend with global apparel company

In June 2026, Loop executed a letter of intent for an initial multi-year offtake agreement with a major global apparel company. This letter of intend forms the framework for an ongoing collaboration targeting up to 15,000 metric tons annually of Loop’s proprietary PET fiber-grade resin.

Offtake Agreement with Nike

In September 2025, we entered into a multi-year offtake agreement with Nike, a global leader in athletic footwear and apparel. Under this agreement and subject to its terms, we will supply agreed minimum volumes of Twist™, our virgin-quality circular polyester resin made exclusively from textile waste, once the Company's planned Infinite Loop™ India Facility becomes operational.

Offtake Agreement with Taro Plast

In September 2025, we entered into an offtake agreement with Taro Plast S.p.A. ("Taro Plast"), an Italy-based manufacturer of engineering plastics and compounds. Under this agreement and subject to its terms, we will supply Taro Plast with agreed volumes of our 100% recycled, virgin-quality Loop™ DMT produced using our proprietary depolymerization technology at our planned Infinite Loop™ facility in India, once the facility becomes operational. This agreement will expand our product offering beyond bottle-grade and fiber-grade PET resin into the specialty polymers market, where Loop™ DMT can be used for automotive and specialty polymer applications. Taro Plast has conducted independent testing confirming the high purity and performance of Loop™ DMT, and is expected to be the first company to integrate Loop™ DMT into their product portfolio.

Strategic Alliance with Shinkong

In August 2025, we announced a strategic alliance with Shinkong Synthetic Fibers Corporation ("Shinkong"), a leader in Taiwan's polyester industry and global leader in sustainable polyester yarn solutions. This partnership combines our textile-to-textile manufacturing technology with Shinkong's polyester fiber spinning capabilities and distribution network. Under this alliance, Shinkong can convert our Twist™ polyester resin into high-performance yarns for their network of over 100 customers worldwide, while we can now offer high-quality circular polyester yarns to customers. This collaboration supports our planned Infinite Loop™ India project by providing additional distribution channels and supply chain options for apparel and textile brands across Asian, European, and North American markets.

Strategic Alliance with Hyosung TNC

In September 2025, we announced a strategic alliance with Hyosung TNC, a complete sustainable textile solutions provider and the world's largest manufacturer of spandex by market share. This alliance combines our Infinite Loop™ depolymerization technology with Hyosung TNC's expertise in advanced textile materials to expand access to circular polyester through textile-to-textile supply chains. Hyosung TNC will convert our Twist™ polyester resin into performance yarns under its regen™ brand portfolio, trusted by leading brands across fashion, activewear, and other textile markets. The relationship has been established for products from our Terrebonne facility and will be significantly expanded once our planned India Infinite Loop™ facility is operational.

Launch of Twist™

During the quarter ended August 31, 2025, the Company announced the launch of Twist™, a new branded circular polyester resin made entirely from textile waste. This product represents a strategic evolution of the Company's fiber-grade PET resin offering, now repositioned to serve the growing textile-to-textile recycling market. Twist™ utilizes the Company's patented depolymerization technology to break down polyester textile waste into base monomers, which are then purified and polymerized into virgin-quality resin that is chemically identical to traditional polyester while providing complete traceability from feedstock to final product. The Company is advancing discussions with apparel brands for offtake agreements from its planned India joint venture facility, where Twist™ will be produced alongside the Company's existing Loop™ branded products.

Human Capital

As of May 31, 2026, we had 38 employees of which 17 work in research and development, 13 in engineering and operations, and 8 in administrative functions.

Results of Operations

All monetary amounts are in thousands of U.S. dollars unless otherwise specified.

The following table summarizes our operating results for the three-month periods ended May 31, 2026 and 2025, in thousands of U.S. Dollars.