INFINITE LOOP™ BÉCANCOUR: CAPITAL SPENDING INITIATED AND ENGINEERING DESIGN PROGRESSING IN LINE WITH CONSTRUCTION SCHEDULE
CEO DANIEL SOLOMITA TO HOLD CORPORATE UPDATE CALL AT 1:00 PM ET ON JANUARY 12, 2022
MONTREAL, QC / ACCESSWIRE / January 11, 2022 / Loop Industries, Inc. (NASDAQ:LOOP) (the 'Company' or 'Loop'), a clean technology company on a mission to accelerate a circular plastics economy by manufacturing 100% recycled polyethylene terephthalate ('PET') plastic and polyester fiber, today provided an update on its activities and reported its consolidated financial results for the third quarter of fiscal year 2022.
Infinite Loop™ Québec: Site Preparation Work & Long-Lead Equipment Ordered
In November 2021, site preparation work was initiated for Loop's flagship Canadian facility project in Bécancour, Québec, including building access roads, gravel pads, drainage and landscaping. This initial work has been completed and readies the site for subsequent construction phases.
Additionally, in December 2021, Loop signed a contract for long lead equipment for the Infinite Loop™ Québec facility. Timing for expected delivery of this equipment is in line with the facility's target construction plan. The Company is focused on advancing customer contract negotiations for committed volume allocations for the Québec facility.
The Company believes the Infinite Loop™ Québec project is aligned with the Government of Canada's '2030 zero plastic waste action plan', which includes goals and initiatives such as:
- requiring all plastic packaging in Canada contain at least 50 % recycled content by 2030;
- working with provinces to implement and enforce an ambitious recycling target of 90% for plastic beverage containers;
- introducing labelling rules that prohibit the use of the chasing-arrows symbol unless 80 % of Canada's recycling facilities accept and have reliable end markets for these products.
To this end, Loop continues to collaborate with various levels of government and believes that its Infinite Loop™ Project in Bécancour could become important infrastructure in assisting Canada in meeting these objectives.
Infinite Loop™ Engineering Update
The engineering design of Infinite Loop™ manufacturing facilities is progressing on schedule with our partners at Chemtex Global and Worley. In Q3, we have entered into the feasibility study phase of the engineering design. This will allow us to obtain a more precise cost estimate. We are targeting completion at the end of calendar Q1 or start of calendar Q2. The Company has adopted a 'design one, build many' engineering philosophy, which includes a modular facility construction design to allow the Company to replicate the Infinite Loop™ model across all projected facilities in North America, Europe and Asia.
Infinite Loop™ Europe
On September 10, 2020, we announced a strategic partnership with SUEZ GROUP ('Suez'), with the objective to build the first Infinite Loop™ manufacturing facility in Europe. With the combination of the Infinite Loop™ technology and the resource management expertise of Suez, this partnership seeks to meet the growing demand in Europe from global beverage and consumer goods brand companies for virgin quality PET resin made from 100% recycled content. The priorities for the Infinite Loop™ project in Europe are finalizing site selection in Normandy, France, together with feedstock sourcing, customer contracts and government support.
Infinite Loop™ Asia
Asia remains the largest market opportunity for Loop Industries, as it is home to 60% of the world's population, represents nearly 70% of the world's PET consumption and is the center of global polyester fiber manufacturing. Loop and its strategic partner, SK geo centric, signed a memorandum of understanding ('MOU') for exclusivity to commercialize Loop's technology across Asia through a Joint Venture. The JV partners plan to build a minimum of 4 facilities by 2030, the first of which will be located in Ulsan, South Korea. Loop and SK geo centric continue to work in tandem on advancing this important Asia Joint Venture.
Daniel Solomita, Founder and CEO of Loop Industries, commented on these recent updates, saying: 'I am very proud of all Loop has accomplished in 2021. From our joint venture partnership with SK geo centric to the announcement of evian bottles made from 100% recycled Loop™ PET and the beginning of site preparation work in Bécancour, Québec, we have remained steadfast in the pursuit of our commercialization objectives. We expect 2022 to be an equally transformational year, focused on accelerating the commercial development of our technology, cementing partnerships with CPG brand clients through commercial product launches across different markets throughout the year and securing multi year offtake commitments for Infinite Loop™ production facilities.'
Corporate Update Call
Daniel Solomita, Chief Executive Officer of Loop Industries, will host a corporate update call, followed by a question-and-answer session, which can be accessed via the dial-in numbers below.
Date: Wednesday January 12, 2022
Time: 1:00 p.m. Eastern Time
Participant joining details (by Telephone):
Accessing the telephone replay
A recording will be available until Thursday, January 20, 2022
Results of Operations
The following table summarizes our operating results for the three-month periods ended November 30, 2021 and 2020, in U.S. Dollars.
Third Quarter Ended November 30, 2021
The net loss for the three-month period ended November 30, 2021 decreased $4.07 million to $10.10 million, as compared to the net loss for the three-month period ended November 30, 2020 which was $14.17 million. The decrease is primarily due to lower write-down and impairment of property, plant and equipment ('PP&E') expenses of $5.03 million, offset by increased research and development expenses of $0.56 million and increased general and administrative expenses of $0.37 million.
The $5.03 million decrease in write-down and impairment of PP&E is related to the decision in the third quarter of fiscal 2021 to dedicate the Terrebonne Facility to brand activation, initial customer volumes and Infinite Loop™ demonstration, research and development activities. Although the machinery and equipment will continue to be utilized at the Terrebonne Facility as it is an integral part of supporting the commercialization of our technology, application of ASC 730, Research and Development Costs requires machinery and equipment assets to be written off and all future costs associated with the Terrebonne Facility to be recognized as a research and development expense in the consolidated statements of operations and comprehensive loss.
The $0.56 million increase in research and development for the three-month period ended November 30, 2021 was primarily attributable to the following:
- $0.56 million increase in employee compensation expenses related to increased headcount to support the Company's commercialization efforts;
- $0.27 million increase in purchases of research and development machinery and equipment at the Company's small-scale production plant; and
- $0.15 million increase in plant and laboratory operating expenses.
These increases were partially offset by a $0.64 million decrease in external engineering expenses as a larger proportion of ongoing design work for our Infinite Loop™ manufacturing process was performed by our in-house engineering team before the start of the feasibility study phase of the engineering design by external engineering.
The $0.37 million increase in general and administrative expenses for the three-month period ended November 30, 2021 was primarily attributable to the following:
- $0.71 million increase in insurance expenses mainly due to directors and officers ('D&O') insurance upon extension of the Company's policy; and
- $0.35 million increase in employee compensation expenses.
Nine Months Ended November 30, 2021
The following table summarizes our operating results for the nine-month periods ended November 30, 2021 and 2020, in U.S. Dollars.
The net loss for the nine-month period ended November 30, 2021 increased $7.50 million to $30.65 million, as compared to the net loss for the nine-month period ended November 30, 2020 which was $23.15 million. The increase is primarily due to increased research and development expenses of $10.25 million and increased general and administrative expenses of $2.64 million, offset by lower write-down and impairment of property, plant and equipment ('PP&E') expenses of $5.04 million, lower depreciation and amortization expenses of $0.25 million and a decrease in foreign exchange loss of $0.23 million.
The $10.25 million increase in research and development for the nine-month period ended November 30, 2021 was primarily attributable to the following:
- $5.38 million increase in purchases of research and development machinery and equipment. Starting in Q3 of fiscal 2021, the Company expensed research and development machinery and equipment in accordance with ASC 730, Research and Development Costs, and no longer capitalized these costs. The timing of this accounting treatment is related to management's decision to dedicate the Terrebonne Facility to brand activation, initial customer volumes and Infinite Loop™ demonstration, research and development activities;
- $2.17 million increase in employee compensation expenses related to increased headcount to support the Company's commercialization efforts;
- $1.80 million increase in external engineering expenses for ongoing design work for our Infinite Loop™ manufacturing process; and
- $0.68 million increase in plant and laboratory operating expenses.
The $2.64 million increase in general and administrative expenses for the nine-month period ended November 30, 2021 was primarily attributable to the following:
- $1.67 million increase in insurance expenses mainly due to directors and officers ('D&O') insurance upon extension of the Company's policy;
- $1.33 million increase in expenses for legal and professional fees due to costs principally associated with the SEC investigation and class action suits described in 'Part II, Item 1. Legal Proceedings' and
- $0.78 million increase in employee compensation expenses.
Loop Industries, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
Loop Industries, Inc.
Condensed Consolidated Balance Sheets
Loop Industries, Inc.
Condensed Consolidated Statements of Cash Flows
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 Industries owns patented and proprietary 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 salt, to its base building blocks (monomers). The monomers are filtered, 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 Industries is contributing to the global movement towards a circular economy by reducing plastic waste and recovering waste plastic for a sustainable future.
Common shares of the Company are listed on the NASDAQ Global Market under the symbol 'LOOP.'
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 'continue' the negative of such terms or similar words. These forward-looking statements include, without limitation, statements about Loop's market opportunity, its strategies, ability to improve and expand its capabilities, competition, expected activities and expenditures as Loop pursues its business plan, the adequacy of its available cash resources, regulatory compliance, plans for future growth and future operations, the size of Loop's addressable market, market trends, and the effectiveness of Loop's internal control over financial reporting. 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 Loop's technology and products, (ii) Loop's status of relationship with partners, (iii) development and protection of Loop's intellectual property and products, (iv) industry competition, (v) Loop's need for and ability to obtain additional funding, (vi) building Loop's manufacturing facility, (vii) Loop's ability to scale, manufacture and sell its products in order to generate revenues, (viii) Loop's proposed business model and its ability to execute thereon, (ix) adverse effects on Loop's business and operations as a result of increased regulatory, media or financial reporting scrutiny 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 Loop's employees, government employment subsidy programs, 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, (xi) the outcome of the current SEC investigation or recent class action litigation filed against Loop, (xii) Loop's ability to hire and/or retain qualified employees and consultants and (xiii) other factors discussed in Loop's subsequent filings with the Securities and Exchange Commission ('SEC'). More detailed information about Loop and the risk factors that may affect the realization of forward-looking statements is set forth in Loop's filings with the 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:
Stephanie Corrente, Director Marketing & Communications
Loop Industries, Inc.
+1 (450) 951-8555
Kevin C. O'Dowd, Vice-President Communications & Investor Relations
Loop Industries, Inc.
SOURCE: Loop Industries, Inc.
View source version on accesswire.com: