Loop Industries Reports Second Quarter Fiscal 2025 Results and Provides Update on Financing and Commercialization Plans

• Reed financing expected to be finalized in November 2024

• Continued progress towards groundbreaking of Infinite Loop^TM India manufacturing facility on schedule

Loop management to hold update call at 8:30 AM ET on October 16, 2024

MONTREAL, QC / ACCESSWIRE / October 15, 2024 / Loop Industries, Inc. (Nasdaq:LOOP) (the "Company," "Loop," "we," "us," or "our"), a clean technology company whose mission is to accelerate a circular plastics economy by manufacturing 100% recycled polyethylene terephthalate ("PET") plastic and polyester fiber, today reported its consolidated financial results for the second quarter for fiscal year 2025 and provided an update on its financing and commercialization activities.

Financing Update

On July 31, 2024, Reed Management SAS ("Reed") and Societe Generale announced that Societe Generale has agreed to acquire 75% of Reed and provide funding for Reed initially amounting to €250 million, which can be further increased to €350 million. This transaction, which is subject to customary closing conditions including regulatory approval, would secure Reed's funding for its planned investments, including the financing package for Loop. We are expecting that the remaining closing conditions will have been addressed, and that the financing will be completed, in November 2024. This is expected to provide the initial tranche of €10 million in a Convertible Preferred Security to be issued by Loop, bearing a 13% PIK dividend rate and 5-year term, with further amounts at future dates.

In order to ensure the Company's continuing liquidity in the event of unanticipated timing delays in closing the transaction with Reed, Loop's CEO and an independent director of the Company have committed to provide bridge financing of $2 million if required.

Infinite Loop™ India Update

Loop, in collaboration with its joint venture partner, Ester Industries Ltd. ("Ester"), is steadily advancing the upcoming Infinite Loop™ manufacturing facility in India.

The joint venture hired a leading international engineering firm to conduct a land study to find the optimal location in India for the manufacturing facility, based on several key requirements such as infrastructure, proximity to a seaport for exports, renewable energy for a reduction in CO₂ emissions and close proximity to waste PET and polyester feedstocks. Based on the analysis of the findings, the joint venture has selected the Gujarat province as the location for the facility. The province provides for excellent infrastructure and close proximity to the seaport, the ability to use 100% renewable energy as the primary energy source, and close proximity to the Surat region, which is the main hub for the polyester textile industry in India.

Today, branded apparel companies are in need of a solution to incorporate new materials made from textile-to-textile recycling into their supply chains and to be able to recycle the textile waste from their manufacturing facilities. The polyester textile industry in India will be supplying the Infinite Loop™ manufacturing facility with most of the waste polyester feedstocks required as its raw material input. Using textile waste as the primary feedstock source will allow for Loop to sell polyester resin made from 100% textile waste to the apparel companies. The ability to offer branded apparel companies a true textile-to-textile recycling solution for polyester will be the driving force for the future of our Indian expansion, as 66% of all PET sold globally goes into textiles in Asia.

The facility will also be producing bottle grade PET resin used in the beverage and packaging industries to our global customer base.

Financial Results and Expense Breakdown

The Company's financial results for the quarter ended August 31, 2024 include $4.9 million of total expenses, which includes significant and non-recurring legal expenses incurred for regulatory and other purposes, and project costs related to the deployment of Loop's technology. Excluding these items, and non-cash expenses, the remaining expenses amount to $2.9 million for the current quarter. The Company projects that the prospective run rate for cash expenses will be approximately $1.0 million per month for the balance of fiscal 2025, excluding project costs.

CEO Comment

Daniel Solomita, Founder and CEO of Loop, commented on the recent updates, saying: "We are excited about progressing towards the conclusion of our financing with Reed, which will be an excellent and fully aligned strategic and financial partner. This partnership will allow Loop to accelerate the deployment of our technology in Europe.

We have reached an important milestone in Loop's strategic development in India. The selection of the Gujarat province provides Loop with the ability to offer apparel companies with a textile-to-textile solution which is a critical consideration for branded apparel customers. Being in India, and specifically in the Gujarat province, will allow Loop to collaborate with the apparel companies on integrating Loop's material into their supply chains, which are mainly in Asia today. Low-cost manufacturing in India will also allow Loop to be very competitive on pricing at the same time as supplying brands with high quality PET resin and polyester fiber.

The partnership with Ester will also allow for Loop to implement its strategic plan of deploying capital into low-cost manufacturing countries such as India, and to move to more of a licensing model in higher cost manufacturing countries."

Corporate Update Call

Senior Management of Loop will host a corporate update call, followed by a question-and-answer session, which can be accessed via the dial-in numbers below. Slides supporting Senior Management's remarks will be available via the Investors section of Loop's website at http://loopindustries.com/en/investors/overview.

Date: Wednesday, October 16, 2024
Time: 8:30 am Eastern Time

Participant joining details (by Telephone):

Joining by Telephone:

United States (Local): +1 404 975 4839
United States (Toll-Free): +1 833 470 1428
Access Code: 377082

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Registration Link: https://www.netroadshow.com/events/login?show=777a392f&confId=72283

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Results of Operations

The following table summarizes our operating results for the three-month periods ended August 31, 2024 and 2023, in thousands of U.S. Dollars.

Second Quarter Ended August 31, 2024

Revenues

Revenues for the three-month period ended August 31, 2024 decreased $31 to $23, as compared to $54 for the same period in 2023. The revenues resulted from the delivery of initial volumes to customers of Loop^™ PET resin produced using monomers manufactured at the Terrebonne Facility.

Research and Development

Research and development expense for the three-month period ended August 31, 2024 decreased $93 to $1,945, as compared to $2,038 for the same period in 2023. The decrease was primarily attributable to a $356 decrease in employee compensation, and a $250 decrease in plant and laboratory expenses at our Terrebonne Facility. These decreases were partially offset by a $510 increase in external engineering costs for design work for our Infinite Loop^™ manufacturing process.

General and administrative expenses

General and administrative expenses for the three-month period ended August 31, 2024 decreased $248 to $2,595, as compared to $2,843 for the same period in 2023. The decrease was primarily attributable to a $233 decrease in insurance expenses which is mainly attributable to a favourable renewal of D&O insurance.

Net Loss

The net loss for the three-month period ended August 31, 2024 increased $88 to $4,839, as compared to $4,750 for the same period in 2023. The increase is primarily due to the $213 decrease in interest income and the $119 increase in foreign exchange, partially offset by the $248 decrease in general and administrative expenses.

Six Months Ended August 31, 2024

The following table summarizes our operating results for the six-month periods ended August 31, 2024 and 2023, in thousands of U.S. Dollars.