ループインダストリーズの年次報告

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the fiscal year ended February 28, 2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from ___________ to __________

Commission File No. 000-54768

Loop Industries, Inc.

(Exact name of registrant as specified in its charter)

Nevada		27-2094706
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

480 Fernand-Poitras Terrebonne, Québec, Canada J6Y 1Y4

(Address of principal executive offices zip code)

Registrant’s telephone number, including area code (450) 951-8555

Securities registered pursuant to Section 12(b) of the Act:

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

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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 August 30, 2024, the last business day of the Registrant’s most recently completed second fiscal quarter, the aggregate market value of the voting common stock held by non-affiliates of the Registrant (without admitting that any person whose shares are not included in such calculation is an affiliate) was approximately $38,219,401. As at May 28, 2025, there were 47,718,350 shares of the Registrant’s common stock, par value $0.0001 per share, outstanding.

Documents incorporated by reference:

The information required by Items 10, 11, 12, 13 and 14 of Part III of this Annual Report on Form 10-K is incorporated herein by reference from the registrant’s proxy statement to be filed with the Securities and Exchange Commission in connection with the solicitation of proxies for the registrant’s 2025 Annual Meeting of Stockholders.

LOOP INDUSTRIES, INC.

TABLE OF CONTENTS

		Page No.
PART I

Item 1.	Business		4
Item 1A.	Risk Factors		16
Item 1B.	Unresolved Staff Comments		27
Item 1C.	Cybersecurity		27
Item 2.	Properties		28
Item 3.	Legal Proceedings		28
Item 4.	Mine Safety Disclosures		29

PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		30
Item 6.	[Reserved]		30
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		30
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		42
Item 8.	Financial Statements and Supplementary Data		43
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		44
Item 9A.	Controls and Procedures		44
Item 9B.	Other Information		45
Item 9C	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections		45

PART III

Item 10.	Directors, Executive Officers and Corporate Governance		46
Item 11.	Executive Compensation		46
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		46
Item 13.	Certain Relationships and Related Transactions, and Director Independence		46
Item 14.	Principal Accountant Fees and Services		46

PART IV

Item 15.	Exhibits and Financial Statement Schedules		47
Item 16	Form 10-K Summary		49
	Signatures		50

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CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K of Loop Industries, Inc., a Nevada corporation (the “Company,” “Loop,” “Loop Industries,” “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 to 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-K, 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 Annual Report on Form 10-K, 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.

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PART I

General

As used in this Annual Report on Form 10-K, 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 thermoplastic polymer resin of the polyester family showing excellent tensile and impact strength, chemical resistance, clarity, and processability, and reasonable thermal stability. It is typically produced through the reaction of terephthalic acid or DMT and MEG. PET is the material which is most commonly used for the production of 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 the specific type of polyester most commonly used to produce 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.

Industry and Market Data

We obtained the industry and market data relating to our business included in this Annual Report on Form 10-K from our own internal estimates and research, as well as publications, research, surveys, and studies conducted by independent third parties not affiliated with us.

Industry publications, studies, and surveys generally state that they were prepared based on sources believed to be reliable, although there is no guarantee of accuracy. While we believe that each of these studies and publications is reliable, we have not independently verified the market and industry data provided by third-party sources. In addition, while we believe our internal research is reliable, not all such research has been verified by an independent source. We note that assumptions underlying industry and market data are subject to risks and uncertainties, including those discussed under “Cautionary Statements Regarding Forward-Looking Statements” and Item 1A. Risk Factors of this Annual Report on Form 10-K.

ITEM 1. BUSINESS

Overview

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.

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Loop plans to commercialize the Infinite Loop™ technology through a combination of direct investments with strategic partners to own and operate commercial facilities and the licensing of its technology.

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 is also 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, known as Reed Societe Generale Group, for one Infinite Loop™ manufacturing facility in Europe for an initial down payment of €10 million with additional milestone payments to be received by Loop as the project advances. Infinite Loop Europe, an entity to be owned 10% by Loop and 90% by 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.

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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 require 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.

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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. A joint entity, which under French Law is referred to as a simplified joint-stock company, was incorporated (“Infinite Loop Europe”), to be owned 90% by Reed Societe Generale Group and 10% by Loop, with the purpose of developing Infinite Loop™ manufacturing facilities in Europe. Pursuant to the Amended Agreement, the Company will enter into a Securityholders Agreement with RCE to establish the framework for the governance, ownership, and operations of Infinite Loop Europe.

On December 23, 2024, the Company received total cash proceeds of $20.8 million (€20.0 million) upon closing of the financing and licensing transactions contemplated by the Amended Agreement. The Company entered into a license agreement with RCE, acting on behalf of Infinite Loop Europe, granting a license to use Loop’s proprietary depolymerization technology for one facility within Europe. Pursuant to the terms of the license agreement, the Company received an initial upfront royalty payment of $10.4 million (€10.0 million), with additional milestone-based payments from Reed Societe Generale Group to follow. Additionally, the Company issued and sold 1,044,430 shares of Series B Convertible Preferred Stock (“Series B CPS”) at $10.00 per share to Reed Circular Economy (“RCE”), an affiliate of Reed Societe Generale Group for cash proceeds of $10.4 million (€10.0 million).

Key terms of the Series B CPS include:

	·	13% PIK dividend rate
	·	5-year term
	·	Convertible to Loop common stock at $4.75 per share or redeemable in cash

We believe the licensing and financing transactions mark a pivotal 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 are being 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.

Under the agreed terms of the partnership with Reed Societe Generale Group, Loop retains the right to increase its equity stake in the European manufacturing facility, as well as potential future facilities, to a maximum of 50% for each facility. As the license is to build one Infinite Loop™ manufacturing facility in Europe, future facilities under this partnership would require the purchase of additional technology licenses from Loop.

Loop and Reed Societe Generale Group are actively assessing opportunities for the first Infinite Loop™ facility in Europe. Current activities include evaluating potential project locations, engaging with local and national governments to assess the availability of subsidies and incentives, and identifying potential strategic partners to support the execution of the project. In parallel, Loop is in the process of implementing a modular construction strategy, including the development of a standardized facility design and pre-fabrication approach aimed at reducing construction costs and timelines, with the objective of improving scalability for future projects across Europe and other regions with high construction costs.

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 existing engineering package which should accelerate the lead-time towards groundbreaking.

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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. Loop and Ester made the decision to incorporate a continuous polymerization line at the Infinite Loop™ India facility. By integrating polymerization assets within the Infinite Loop™ India facility, we expect improved efficiency and lower operating costs with a minimal impact on overall project cost.

Loop and Ester anticipate that the total funding required for the India JV for the purposes of construction, development and operationalization of the project, including the initial working capital requirements, will be financed by a combination of debt and equity capital. Ester and Loop are each contributing 50% of the equity capital of the India JV. As of February 28, 2025, Loop and Ester had each made total equity contributions of $1.9 million in cash to the India JV. The funds injected in the India JV are being used for preliminary project costs, which are mainly engineering fees.

Subject to the terms of the relevant governing documents, Ester will be the exclusive producer of specialty polymers for the India JV, and Loop will be the exclusive seller and marketing agent of the India JV’s products. Ester and Loop are working in collaboration on all financing activities for the India JV pursuant to the terms of the agreement.

The India JV will also 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 an engineering services agreement with the India JV to provide engineering services and support the local engineering firm. This has resulted in Loop generating engineering services revenue of $0.4 million in the quarter ended February 28, 2025.

The development of the Infinite Loop™ India facility continues to progress towards groundbreaking. Following the completion of a detailed land study by an external engineering firm, the India JV partners have identified the Gujarat province of India as the optimal location for the facility based on several key requirements such as infrastructure, proximity to a seaport for exports, renewable energy for a reduction in CO2 emissions and proximity to waste PET and polyester feedstocks. Additionally, feedstock sourcing for the facility, of which there is abundant supply from textile waste in India, is well advanced.

Two globally recognized firms are currently executing two key mandates for the India JV. A leading global advisory firm is leading the debt syndication process, while a globally renowned engineering firm is performing the local engineering work, supported by Loop’s engineering team. Based on the engineering study completed in May 2025, the estimated total investment cost for the facility, including continuous polymerization, financing costs during construction and initial working capital requirements, is expected to be approximately $176 million. Groundbreaking for the Infinite Loop™ India facility is now expected to occur in the second half of calendar 2025, with commercial operations projected to commence in calendar 2027.

Recent Product Activations

Loop has collaborated with multiple customers and prospective customers in recent and upcoming launches for products and product packaging incorporating Loop™ PET manufactured from monomers produced at the Terrebonne Facility. Most recently:

On February 23, 2025, Loop, Hyosung TNC (“Hyosung”), a complete sustainable textile solutions provider, and Pleatsmama, a sustainable fashion brand, announced a three-way collaboration to produce 100% recycled drawn textured yarn used in limited-edition handbags using Loop’s virgin-quality polyester produced using the Infinite Loop™ technology. Under this collaboration, Loop supplied 100% recycled, virgin-quality polyester chips, Hyosung transformed the Loop polyester chips into high-performance drawn textured yarn, and Pleatsmama crafted stylish, eco-friendly handbags emphasizing circular design principles.

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Loop and On AG, the Swiss sportswear brand, collaborated to launch the Cloudeasy Cyclon shoe which was unveiled on May 21st, 2024. The upper of the Cloudeasy shoe is crafted with 100% recycled and infinitely recyclable yarn, using monomers that were produced at our Terrebonne Facility with the Infinite Loop™ technology. On AG is the first footwear company to launch a shoe using the Infinite Loop™ technology which enables fiber-to-fiber recycling. The Cloudeasy Cyclon shoe is part of On AG’s monthly subscription service Cyclon™ where customers receive, wear, and then return Cylon™ products, which are then recycled.

Loop continues to pursue opportunities for new activations and marketing campaigns with additional consumer goods brand and apparel companies.

Termination of Partnership with SKGC

Effective January 14, 2025, Loop and SK Geo Centric (“SKGC”) have mutually agreed to terminate their joint venture agreement executed by the parties on April 27, 2023 to construct and operate an Infinite Loop™ manufacturing facility in Ulsan, South Korea. This joint decision reflected Loop’s strategy to focus capital deployment in low-cost jurisdictions and prioritize a licensing and engineering services model in higher cost countries, as well as a strategic restructuring and re-orientation within the SK Group.

Although SKGC continues to have the right to nominate a director on Loop’s Board of Directors (the “Board”), Mr. Jonghyuk Lee resigned from the Board on January 13, 2025 with immediate effect, due to a change in his role within the restructured SKGC organization.

Suspension of European partnership with Suez and SKGC

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. On June 16, 2022, Loop, together with Suez and SKGC, announced that the three companies would become equal participants in the strategic partnership. The Company, Suez and SKGC have mutually agreed to suspend the project. Loop currently plans to deploy its technology in Europe through its partnership with Reed Societe Generale Group as discussed above.

Market Opportunity

In the past years, we have seen major consumer brands make significant commitments to close the loop on their plastic use by transitioning their packaging and textile applications to recyclable materials like PET, and by incorporating more recycled content into their products. We believe Loop™ PET resin and polyester fiber provides the ideal solution for these brands because it is recyclable and is made from 100% recycled PET and polyester fiber waste, while being virgin-quality and suitable for use in food-grade packaging, packaging applications in the pharmaceutical industry and polyester fiber.

Due to the commitments by large global consumer brands to incorporate more recycled content into their product packaging, the regulatory requirements for minimum recycled content in packaging imposed by governments, the virgin quality of Loop™ branded PET resin and its marketability to enhance the sustainability credentials of consumer brands that incorporate it, we believe we will be able to sell Loop™ branded PET resin at a premium price relative to virgin and mechanically recycled PET resin.

In 2023, global production of PET plastic and polyester fiber totaled an estimated 101 million metric tons. Supported by steady growth across the packaging and textile industries, total production volumes are expected to rise to approximately 135 million metric tons by 2032, reflecting a weighted average compound annual growth rate of 3.5%.

We believe plastic pollution and climate change continue to be the most persistently covered environmental issues by media and local and global environmental non-governmental organizations. Some of the main concerns associated with PET are the greenhouse gas (“GHG”) emissions associated with its production from non-renewable hydrocarbons and the length of time it persists in landfills and the natural environment. There is an increasing demand for action to address the global plastic crisis, as evidenced by the March 2022 endorsement by 175 nations of a historic resolution at the UN Environmental Assembly to end plastic pollution, which initiated the formation of the Intergovernmental Negotiating Committee (INC), tasked with crafting a legally binding global treaty addressing the full lifecycle of plastics from production and design to disposal. In the last few years, governments in North America, Europe and Asia have been enacting and proposing laws and regulations mandating the use of minimum recycled content in packaging, which underlies the strength of this issue in the marketplace.

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Consumer brands are actively addressing the challenges posed by plastic and polyester fiber waste. In recent years, many have made substantial commitments to advancing circularity by transitioning to recyclable packaging and products, while significantly increasing the use of recycled content in both materials and supply chains.

Global consumer packaged goods companies (“CPG companies”), apparel manufacturers, and retail brands have announced significant public commitments and targets to make the transition to a circular plastic economy, for example:

	·	Nike has announced a 2025 target of diverting 100% of its waste from landfills, with at least 80% recycled back into its products and goods;
	·	H&M Group aims to incorporate 50% recycled materials by 2030, aiming for 100% of materials to be either recycled or sustainably sourced by the same year;
	·	Ikea maintains its goal that, all plastics used in products to be from renewable or recycled sources by 2030;
	·	By 2025, Lululemon aims to achieve at least 75% sustainable materials for their products, including fibers that are recycled, renewable, regenerative, sourced responsibly and are manufactured using low-resource processes;
	·	Adidas Group aims to use 100% recycled polyester wherever technically possible by the end of 2024;
	·	Evian aims to use 100% rPET in all bottles globally by 2025; already achieved in the U.S. market in 2024;
	·	L’OCCITANE committed to implementing 100% recycled content plastic in their bottles by 2025;
	·	L’Oréal Group committed to using 100% recycled or biobased plastic in their packaging by 2030; and
	·	PepsiCo has set new goals to cut virgin plastic per serving by 50% across its global food & beverage portfolio by 2030 and plans to utilize 50% recycled content in its plastic packaging. In the U.S., the company plans to increase its use of rPET in its bottled products, with an objective to roll out 100% rPET bottles in multiple U.S. areas by 2030.

There is a growing regulatory and policy environment to encourage a reduction in the production of virgin fossil fuel-based plastic and for minimum recycled content in packaging imposed by various governments:

North America:

	-	Canada has announced a goal of zero-plastic waste by 2030 and is targeting for all plastic packaging to contain 50% recycled content by 2030.
	-	California law requires that plastic bottles contain at least 25% post-consumer resin by 2025, and at least 50% by 2030.

Europe:

	-	As of January 2021, the European Union introduced a new tax of €800/ton on non-recycled plastic packaging based on the amount of plastic packaging placed on each member state’s market.
	-	Spain imposed a tax of €450 per ton on non-reusable plastic packaging, effective January 1, 2023.
	-	Effective April 2022, a new £200/ton tax applies in the UK to plastic packaging produced or imported into the UK that does not contain at least 30% recycled plastic.
	-	France maintains its goal of having 100% plastics recycled by 2025 and 77% of beverage bottles to be collected.

Asia:

	-	India has mandated consumer brands to include at least 30% recycled plastic in their packaging by 2025.
	-	Japan has set national targets to reduce single-use plastic waste by 25% by 2030, achieve 60% reuse or recycling of plastic containers and packaging by 2030, and ensure 100% effective utilization of all plastic waste by 2035 through reuse, recycling, or energy recovery.
	-	South Korea continues to target reduction of plastic waste by 20%, an increase in recycling rates from 54% to 70% by 2025, and utilization of 30% renewable plastic by 2030.

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The growing regulatory environment combined with global consumer goods companies, apparel manufacturers, and retail brand commitments for 2025 and beyond are expected to further increase the demand for rPET.

Closed-loop circularity and keeping materials within their own cycle (bottle-to-bottle and textile-to-textile) is gaining increasing attention as the focus on sustainability intensifies. Governments and regulators have considered or enacted heightened standards for recycled materials that discourage downcycling of bottles into polyester fiber. Additionally, it is becoming increasingly difficult to secure inventory of post-consumer bottles due to the increased demand from the bottle industry as they strive to achieve their own sustainability goals. A textile-to-textile recycling strategy addresses these problems and allows fashion brands and companies to secure volume and support the increasing demand of recycled polyester fiber in the textile industry.

The European Union is advancing a regulatory framework aimed at establishing a circular textile economy. Key measures include a prohibition on the destruction of unsold textiles, which has been enforced in France since 2022 and under consideration for EU-wide adoption by 2025, and a mandate for all member states to implement separate textile waste collection systems starting January 1, 2025 under the Waste Framework Directive. Extended Producer Responsibility (EPR) requirements are taking effect beginning in 2025, with full implementation anticipated by 2027. Further, the Ecodesign for Sustainable Products Regulation (ESPR) will impose mandatory design standards focused on durability, recyclability, and minimum recycled content, alongside the introduction of Digital Product Passports for all textile products by 2030. In alignment with these developments, leading global brands are increasingly seeking to adopt textile-to-textile recycling technologies, which offer a compliant, closed-loop solution superior to mechanical recycling in both quality retention and scalability.

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 of sales and marketing. We believe these income sources will support long-term financial sustainability and growth.

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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 €10.0 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 Reed Societe Generale Group.

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 $0.4 million in the quarter ended February 28, 2025.

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, and providing a scalable solution for global expansion. This strategy envisages that we would manufacture plant modules in a low-cost country to be transported and assembled on site at global locations, and would potentially provide an additional income stream alongside returns from owned facilities and royalties.

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.

Proprietary Technology and Intellectual Property

We believe the power of the Infinite Loop™ technology lies in its ability to use post-industrial and post-consumer waste PET plastic and polyester fiber feedstocks, which could end up in landfills, rivers, oceans and natural areas, to create Loop™ PET resin. We believe our technology can deliver high-purity profitable virgin-quality, 100% recycled PET resin suitable for use in food-grade packaging and polyester fiber.

The Infinite Loop™ technology is a methanolysis-based depolymerization technology that uses temperatures below 90 °C to depolymerize waste PET and polyester fiber. The low temperature offers several key advantages which the Company believes will improve its ability to commercialize our technology, including;

	·	Lower energy usage during depolymerization, and therefore reduced processing cost and lower GHG emissions relative to higher temperature processes;
	·	Avoidance of side reactions with non-PET waste, which are inherent in waste PET feedstock streams, during depolymerization which may occur during higher temperature and higher pressure depolymerization processes. This allows for a simplified distillation purification process resulting in fewer, and more effective, steps to isolate the desired high purity DMT and MEG monomers suitable to produce virgin-quality PET required to meet food contact regulations as well as the quality and clarity requirements of global consumer product companies;

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	·	Allowing the depolymerization of less costly and low-quality feedstocks, which cannot be effectively recycled today, such as carpet fiber, clothing and mixed plastics, and upcycling them into high-quality PET that can be used in food contact use; and
	·	The Infinite Loop™ technology uses only trace amounts of water and uses a catalyst at low concentration.

We believe that the Infinite Loop™ technology requires less energy and fewer resource inputs than conventional PET production processes. We also believe it is an environmentally sustainable method for producing virgin-quality food-grade PET plastic by decoupling PET manufacturing from the fossil fuel industry.

The Infinite Loop™ technology has been the subject of multiple due diligence exercises performed by independent experts mandated by third parties such as customers and strategic partners, which have all yielded positive results. Most recently, the Infinite Loop™ technology was validated by independent advisors hired by Reed Societe Generale Group, concurrent with their due diligence review performed in the context of the investment and technology licensing transactions closed in December 2024.

Also, our technology was validated in March 2023, when Loop and SKGC announced the successful completion of the technical due diligence conducted by SKGC. Key parameters of the Infinite Loop™ technology that were validated through SKGC’s comprehensive due diligence include the production yields, operational stability, quality of the output monomers and overall performance of Loop’s Terrebonne Facility. The technical due diligence validated that the PET resin and polyester fiber produced using Loop’s technology is of virgin quality.

As part of our intellectual property and commercialization strategy, we aim to expand the global deployment of the Infinite Loop™ technology through royalty-bearing licensing arrangements, allowing partners to establish and operate manufacturing facilities using our proprietary technology, while we retain full ownership of the underlying intellectual property, including any improvements. As demonstrated by the licensing agreement we entered into in December 2024 for our European joint venture with Reed Societe Generale Group, we plan to structure these arrangements to generate revenue through a combination of upfront fees and potential ongoing royalties, with licensees typically being granted a non-transferable, facility-specific license, and sublicensing permitted only under defined conditions and subject to our oversight. However, specific terms of each arrangement may vary depending on the negotiations in each transaction. This licensing model is a key component of our strategy to scale our technology efficiently and with limited capital investment, as further described under “Commercialization Strategy” in Item 1. Business.

To protect our technology and intellectual property rights, we rely on a combination of patents, trademarks, trade secrets, confidentiality agreements and provisions as well as other contractual provisions to protect our proprietary rights, which are primarily our patents, brand names, product designs and marks.

The Infinite Loop™ technology portfolio currently consists of four patent families:

	·	One family has four issued U.S. patents, and one pending U.S. application, the last of which is expected to expire on or around September 2037, not including any patent term extensions. Internationally, this patent family has twenty-one issued or allowed patents in various foreign jurisdictions, which are expected to expire on or around September 2038, and pending applications in various foreign jurisdictions. Any patents that issue from these pending applications would be expected to expire on or around September 2038.
	·	An additional aspect of the Infinite Loop™ technology, as claimed in three issued U.S. patents and one pending U.S. application, all expected to expire on or around June 2039, not including any patent term extensions. Internationally, this patent family includes twenty issued or allowed patents in various foreign jurisdictions, which are expected to expire on or around June 2039, and pending applications in various foreign jurisdictions. Any patents that issue from these pending applications would be expected to expire on or around June 2039.
	·	Another aspect of the Infinite Loop™ technology, which is the subject of one issued U.S. patent and one pending U.S. application, both expected to expire on or around March 2040, not including any patent term extensions. Internationally, this patent family includes one allowed patent in Brazil, which is expected to expire on or around March 2040, and pending applications in various foreign jurisdictions. Any patents that issue from these pending applications would be expected to expire on or around March 2040.
	·	Another aspect of the Infinite Loop™ technology, which is the subject of two issued U.S. patents and one pending U.S. application, all expected to expire on or around March 2040, not including any patent term extensions. Internationally, this patent family includes twenty-three issued or allowed patents in various foreign jurisdictions, which are expected to expire on or around March 2040, and pending applications in various foreign jurisdictions. Any patents that issue from these pending applications would be expected to expire on or around March 2040.
	·	We have also filed one international PCT application directed to another aspect of the Infinite Loop™ technology. Any patents that ultimately issue from this application are expected to expire on or around September 2044, not including any patent term adjustment or extensions.

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Loop owns registrations for its trademarks in Cambodia, Canada, China, the European Union, Japan, Taiwan, the United Kingdom, Vietnam, and the U.S. Loop also has pending applications in South Korea and the U.S.

Government Regulation and Approvals

As we seek to further develop and commercialize our technology, we will be subject to extensive and frequently developing federal, state, provincial and local laws and regulations in the jurisdictions we operate or plan to operate. Compliance with current and future regulations, including those relating to chemical handling, environmental protection, and health and safety standards applicable to the operation of our Terrebonne Facility, as well as food packaging regulations applicable to our products, could increase our operational costs. As we continue to enter into joint venture, licensing, financing, and service or product provision agreements with partners globally, currently focused primarily in the European Union and Asia, we will be subject to additional jurisdiction-specific requirements that may affect our existing and planned construction, manufacturing, licensing, and commercialization activities.

Our operations require various governmental permits and approvals. We need to maintain existing permits and obtain new ones required to support the operation and expansion of our business; however, any of these permits or approvals may be subject to denial, revocation or modification under various circumstances. Failure to obtain or comply with the conditions of permits and approvals or to have the necessary approvals in place may adversely affect our operations and may subject us to penalties. See “Risk Factors” below for additional information.

We believe that if we are successful in addressing food packaging regulations in various countries and economic regions, the regulatory environment may provide Loop™ PET resin a competitive advantage relative to mechanically recycled alternative resins and virgin PET. Below is a summary of the certifications and regulatory confirmations we have obtained.

Loop’s PET resin was subjected to independent testing by an external and certified laboratory, which confirmed the PET complies with FDA Regulation 21 CFR § 177.1630 on August 26, 2021, as well as EU Commission Regulation No 10/2011 on July 27, 2021. These results attest that Loop’s PET is safe for use in food-contact applications, including but not limited to bottled water, carbonated drinks and food trays. Demonstration of compliance with food-contact requirements follows the No Objection Letter (“NOL”) from the FDA previously granted to Loop in March 2021. The NOL confirms that Loop’s monomers can produce PET of a purity suitable for food-contact use, provided it meets the applicable requirements of Title 21 of the Code of Federal Regulations. The monomers used in the PET resin submitted for testing were produced at the Terrebonne Facility.

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We have received from the European Chemicals Agency a confirmation of registration for our MEG on November 17, 2020, and for our DMT on December 7, 2020. The registration under the Registration, Evaluation, Authorization and Restriction of Chemicals (“REACH”) Regulation (EC 1907/2006) confirms that our monomers are of a purity equal to what is currently recognized within Europe and entitles us to manufacture/import the monomers into Europe. It should be noted that MEG and DMT are on the positive list for plastic materials, which means that the two monomers can be used as food contact materials.

On August 31, 2021, Loop also received a NOL from Health Canada, which states that the PET produced by Loop’s recycling process is suitable for use in the manufacture of water bottles and articles for contact with all food types under all conditions of use.

On December 13, 2023, Loop announced that its Loop™ branded PET resin has been tested and is compliant for use in packaging applications in the pharmaceutical industry. The rigorous requirements and standards outlined by the United States Pharmacopeia (USP <661.1>, Plastic Materials of Construction) and the European Pharmacopeia (Ph.Eur. 3.1.15, Polyethylene Terephthalate for Containers for Preparations not for Parenteral Uses) ensure that materials used in pharmaceutical packaging maintain the highest levels of integrity and do not compromise the safety and efficacy of the enclosed products. Test results executed by a worldwide leader in laboratory testing services confirm that Loop’s PET resin has successfully met these requirements, opening new possibilities for sustainable packaging solutions in the pharmaceutical industry.

Additional Information

Human Capital

Our employees are essential to our success, and we are committed to providing a safe, productive, discrimination-free and harassment-free work environment. All employees are responsible for compliance with our Code of Ethics as well as our health and safety, and anti-harassment policies. These policies and practices help us foster a workplace environment that promotes inclusion and diversity.

To attract and retain highly capable and innovative employees, we have developed competitive compensation packages and benefits programs. Our compensation packages include market-competitive pay, healthcare benefits, paid time off and family leave. We also offer equity awards with multi-year vesting provisions to incentivize and reward certain employees for long-term corporate performance and promote retention throughout the vesting period.

As of February 28, 2025, we had 49 employees of which 20 work in research and development, 18 in engineering and operations, and 11 in administrative functions.

Corporate History

We were originally incorporated under the name Radikal Phones Inc. in Nevada in March 2010. Loop Holdings, Inc. (“Loop Holdings”) was originally incorporated in Nevada in October 2014. In June 2015 we completed a reverse acquisition of Loop Holdings and the depolymerization business of Loop Holdings became our sole operating business. In July 2015 we changed our name to Loop Industries, Inc.

On November 20, 2017, Loop Industries, Inc. commenced trading on the Nasdaq Global Market under the trading symbol, “LOOP.”

Corporate Information

Our principal executive offices are located at 480 Fernand-Poitras Street, Terrebonne, Québec, Canada J6Y 1Y4. Our telephone number is (450) 951-8555.

Available Information

Our website is www.loopindustries.com, and our investor relations web page can be found at https://loopindustries.com/investors/overview/. Copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are available, free of charge, on our investor relations website as soon as reasonably practicable after we file such material electronically with or furnish it to the SEC. The SEC also maintains a website that contains our SEC filings. The address of the site is www.sec.gov. The information contained on, or that can be accessed through, our website shall not be deemed incorporated by reference in any filing under the Exchange Act.

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ITEM 1A. RISK FACTORS

You should carefully consider the risks described below together with all of the other information included in this Form 10-K before making an investment decision with regard to our securities. The statements contained in or incorporated herein that are not historic facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. If any of the following risks actually occur, our business, financial condition or results of operations could be harmed. In that case, you may lose all or part of your investment.

RISKS RELATING TO OUR BUSINESS AND TECHNOLOGY

We have incurred net losses since inception. We expect to continue to incur losses for the foreseeable future and may never achieve or maintain profitability.

Since our inception in 2010, we have incurred net losses. Our net loss for the year ended February 28, 2025 was $15.1 million and we have earned limited revenues to date. We have financed our operations primarily through sales of capital stock and incurrence of debt and have devoted substantial efforts to research and development, process engineering, as well as building our team and business partnerships. We expect to continue to incur significant expenses and operating losses for the foreseeable future, and our net losses may fluctuate significantly from quarter to quarter. Although we believe that our business plan has significant profit potential, there is no assurance that we will attain profitable operations or that management will succeed in realizing our business objectives.

Our ability to generate revenue at scale depends on the successful commercialization of our technology and products, including the scale-up of our technology, obtaining and maintaining necessary regulatory approvals, attracting additional partners and customers, and securing financing to build and operate commercial facilities. With the development of our core technology substantially complete, our ability to advance to the next stage, including constructing manufacturing plants and commercializing our products at scale, is dependent on our ability to secure financing through a combination of debt, equity, joint ventures, government incentives, and/or customer contributions.

We expect to continue incurring operating losses, as our revenues are not yet sufficient to offset the costs of our business operations. While we have begun generating revenue, including a €10.0 million upfront licensing fee under our transactions with Reed and $0.4 million in engineering services revenue from our India JV in the quarter ended February 28, 2025, we may not generate material revenues from licensing or product sales for several years. If we are not able to develop our business as anticipated, the revenues we generate may not be sufficient to support our operations or achieve profitability. There can be no assurance that we will successfully generate sufficient revenues in the future, and failure to do so would prevent us from earning profits or continuing operations.

We may not be able to execute our business plan or stay in business without additional funding.

Our ability to successfully commercialize our business and generate future revenues depends on whether we can obtain the necessary financing to implement our business plan, on acceptable terms. We will require additional financing through a combination of the issuance of debt, equity, and/or joint ventures and/or government incentive programs in order to establish profitable operations, and such financing may not be forthcoming. We are pursuing financial incentives and financing for our proposed projects with several countries through multiple programs that involve various branches of government. There is no assurance that we will be able to attract government incentives and financing to our projects or investors to invest in our business, or acquire additional financing through debt or equity markets. Our failure to secure additional financing on acceptable terms when it becomes required would have an adverse effect on our ability to execute our business plan or remain in business.

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Conditions in the financial markets and economic conditions in general may adversely affect our ability to raise additional capital, execute our business plan or remain in business.

The business environment in which we operate has been impacted by the effects of worldwide macroeconomic uncertainty. Economic activity improved slightly during 2024; however, economic concerns remain as a result of the cumulative weight of uncertainty regarding the economic conditions in the United States, where our securities are listed and in foreign countries, including global political hostilities and other financial disruptions. The imposition of broad tariffs by the United States in April 2025 has contributed to global market volatility. These protectionist measures have intensified trade tensions and heightened economic uncertainty, which may adversely impact investor confidence and constrain the availability of capital. Inflationary pressures have persisted and may continue to rise, driven by supply-demand imbalances, ongoing supply chain disruptions, and broader pricing pressures. The near-term outlook for global markets remains uncertain, and strategic risks, including potentially rising interest rates and sluggish economic growth, continue to pose challenges to many business models.

It is difficult to predict the extent to which these challenging economic conditions will persist or whether recent progress in the economic recovery will instead shift to the potential for further decline. We are not directly affected by U.S. tariff policies, given the nature of our current business, including the fact that our principal operations are based in Canada and that the joint ventures we are focused on establishing and expanding are with non-U.S. partners. However, while we have begun to generate some revenue, our ability to scale operations and achieve profitability depends on continued access to external capital and execution of our business plan. If macroeconomic conditions worsen affecting market demand for our technology and products, and if capital becomes less available, it is uncertain how our business would be affected or whether we could successfully mitigate those impacts. Accordingly, these factors in the global economy could have an adverse effect on our ability to raise additional capital, execute our business plan or remain in business.

Our technology may not be successful in developing commercial products.

We and our collaborators may spend many years and dedicate significant financial and other resources to developing our technology that may never be successfully commercialized at scale. Our technology may never achieve widespread commercial success for, among others, any of the following reasons:

	·	We may not be able to secure sufficient funding to progress our technology through development and commercial validation;
	·	We or our collaborators may be unable to obtain the requisite regulatory approvals for our technology or may be adversely affected by changes in applicable laws and regulations;
	·	Competitors may launch competing or more effective technology;
	·	Our technology may not achieve broad market adoption or sustained commercial success;
	·	Current and future collaborators may be unable to fully develop and commercialize products containing our technology or may decide, for whatever reason, not to commercialize such products; and
	·	We may be unable to secure adequate patent protection in the necessary jurisdictions.

If any of these things were to occur, it could have an adverse effect on our ability to raise additional capital, execute our business plan, or remain in business.

We face business risks due to our relationships with strategic partners and other factors that may affect our joint venture endeavors.

We rely on our strategic partner relationships for the scaling, manufacturing and commercialization of our technology. We have arrangements with Ester and Reed Societe Generale Group to commercially scale our technology in India and Europe, respectively. Termination of any of these agreements could have an adverse effect on our business. Although we have not received any indication from our strategic partners of an intent to terminate and we expect these relationships to continue progressing, we cannot guarantee that our partners will not exercise their applicable termination rights, which are outside our control, or that other unforeseen factors will not affect the continuation of these collaborations.

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There are various reasons, whether operational, strategic, or external, that could lead either us or our partners to determine not to proceed with a joint venture project. For example, we and our partner SKGC mutually agreed in January 2025 to terminate our joint venture agreement to build an Infinite Loop™ facility in South Korea. This decision reflected our shift in strategy to focus on capital deployment in lower-cost jurisdictions and emphasized licensing and engineering services in higher-cost regions, while SKGC underwent a broader strategic restructuring. Similarly, a planned European partnership with SUEZ and SKGC was suspended in 2022 after the parties determined not to proceed. These decisions, while strategic, resulted in the suspension or winding down of planning efforts with associated sunk costs.

Joint ventures and strategic partnerships require significant time, financial investment, and management attention during early-stage planning, engineering, and feasibility activities, all of which may be incurred before a final investment decision is made. If a joint venture is suspended or terminated prior to commercialization, we may be unable to recover these investments. Moreover, strategic shifts by partners, changes in market or regulatory conditions, misalignment of commercial priorities, or challenges in achieving project economics could impact the long-term viability and expected benefits of such arrangements. Any failure of our strategic partners or us to meet our required commitments, whether financial or otherwise, could result in a termination of such agreements as described above, operational issues, increased expenditures, or damage to our reputation or loss of clients or customers, any of which could adversely affect our business and operations, financial performance, or prospects.

If we are unable to successfully scale our manufacturing processes, we may not meet customer demand.

To be successful, we will need to scale our manufacturing processes in a cost-effective manner while maintaining high product quality and reliability. If we cannot maintain high product quality at a large scale and with an acceptable cost structure, our business will be adversely affected. We may encounter difficulties in scaling up production, including problems with the supply of key components, cost over-run, or quality control. Even if we are successful in developing our manufacturing capability including through joint ventures, we do not know whether we will do so quickly and efficiently enough to satisfy the requirements of our customers. Our current manufacturing facility is a small-scale plant with limited production capacity used principally for research and development, training, and customer marketing purposes. In order to fully implement our business plan, we will need to scale the operations to a larger industrial commercial facility, develop strategic partnerships, or find other means to produce greater volumes of finished product with cost efficiency. We, however, have not yet tested our technology at the scale that will be required for large commercial use nor at a scale and cost structure sufficient to conclude the commercial success of our technology.

Disruption at, damage to, or destruction of our Terrebonne Facility could impede our ability to continue innovating and refining our technological process, and supporting our commercial projects, which would harm our business, financial condition, and operating results.

Our research and development activities are performed from a single location in Terrebonne, Québec. Our continued innovation activities rely on an uninterrupted and fully functioning plant. In addition to supporting innovation and process optimization, the Terrebonne Facility also serves as a technical reference point for our plans to deploy modular construction in lower-cost jurisdictions. Interruptions in operations at this location could result in our inability to provide the most efficient and effective technological solution to our partners and customers, as well as hinder continued validation of our technology. A number of factors could cause interruptions, including, but not limited to, equipment malfunctions or failures, technology malfunctions, work stoppages or slow-downs, damage to or destruction of the facility, or regional power shortages. As our equipment ages, it will need to be replaced. Any disruption that impedes our ability to optimize our process and provide support for our commercial projects in a timely manner could reduce our revenues and materially harm our business. Additionally, the repair or replacement of critical equipment, and the restoration of operations at the Terrebonne Facility if a disruption occurs, could result in substantial costs, operational delays, and the diversion of management’s time and resources.

Our joint venture with Ester to construct and operate a manufacturing facility in India involves significant risks, and any delays or disruptions could adversely affect our business, financial condition, and prospects.

We are currently advancing a joint venture with Ester to construct the Infinite Loop™ India manufacturing facility, which is expected to produce approximately 70,000 tons per year of Loop branded PET resin and polyester fiber. This project is in the early stages of development, with groundbreaking expected in the second half of calendar 2025 and commercial operations projected to begin in calendar 2027. The total initial funding requirement is estimated at approximately $176 million and is expected to be financed through a combination of debt and equity capital. The success of the facility depends on a number of factors, many of which are outside of our control.

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Risks related to this joint venture and facility construction include, but are not limited to:

	·	Delays in securing required permits, land use approvals, or regulatory clearances in India;
	·	Increases in construction costs or supply chain disruptions that could affect budget and timeline;
	·	Inability to raise sufficient debt or equity capital on acceptable terms or within the expected timeframe;
	·	Engineering or technical challenges during construction or commissioning;
	·	Risks associated with political, regulatory, or economic changes in India that could impact construction or operations;
	·	Potential misalignment between joint venture partners on key strategic or operational decisions; and
	·	Failure to achieve expected operating efficiencies or projected economic returns.

Although we and Ester have a well-established working relationship and have made initial equity contributions to support engineering work, the facility remains in the pre-construction phase. If we or our joint venture partner are unable to meet our respective obligations, secure financing, or complete the facility as planned, our commercialization strategy could be delayed, and our business, financial condition, and results of operations could be adversely affected.

We may not realize the expected benefits and may face risks associated with our licensing arrangements, and our ability to continue to generate significant revenue from technology licensing may be limited or delayed.

A key component of our commercialization strategy is the licensing of our proprietary depolymerization technology to third parties for the development and operation of Infinite Loop™ manufacturing facilities. Under the License Agreement entered with RCE, acting on behalf of Infinite Loop Europe SAS, we granted a non-transferable, royalty-bearing license to use our technology at a single facility in Europe, with the possibility of sublicensing to a third-party operator under certain conditions. While the agreement includes an upfront €10.0 million upfront licensing fee payment and provides for additional royalty payments upon satisfaction of certain conditions, future revenues are dependent on Infinite Loop Europe SAS’s ability and willingness to proceed with facility construction and commercialization activities.

Our ability to scale this model and generate meaningful revenue from licensing depends on a number of uncertain factors, including the relevant joint venture’s progress in executing the project, satisfaction of conditions that trigger payments, and our ability to enter into new license agreements with additional partners or for new facilities.

If a joint venture project is delayed, canceled, or otherwise fails to meet commercial expectations, or if we are unable to enter into additional license agreements on favorable terms, our ability to generate recurring revenue from licensing may be adversely affected. Furthermore, any termination of existing or future licensing agreements due to breach, failure to meet payment obligations, or other triggering events could materially impact our revenue streams and strategic growth plans. There can be no assurance that our licensing model will be adopted at scale or that it will result in meaningful or sustained revenue.

Licensing arrangements also present legal and operational risks, including challenges in protecting our intellectual property, especially as our technology is deployed in multiple jurisdictions with differing enforcement standards. While we retain ownership of our technology and all related intellectual property rights under our license agreements, we rely on licensees to comply with confidentiality and use restrictions and to notify us of any potential infringement or misuse. Failure by a licensee to adequately safeguard our intellectual property or unauthorized use or disclosure of our proprietary technology could compromise our competitive advantage. In addition, sublicensing rights, where permitted, may create added complexity and limit our direct oversight over third-party operators.

We operate in a highly competitive and rapidly evolving industry, and increased competition or technological advances could adversely affect our business, financial condition, and results of operations.

The plastics manufacturing industry is extremely price-competitive because of the commodity-like nature of virgin PET resin, and its correlation to the price of crude oil. If our cost to manufacture rPET is not competitive with virgin PET, or if the price of oil decreases significantly, it may adversely impact our ability to penetrate the market or be profitable.

The demand for rPET has historically fluctuated with the price of crude oil. Recent volatility in global financial markets and a resulting decline in oil prices have increased uncertainty in the pricing dynamics of the plastics industry. If crude oil prices decline, the cost to manufacture rPET may become comparatively higher than the cost to manufacture virgin alternatives. This could reduce demand for recycled alternatives if customers prioritize cost over sustainability. Our ability to penetrate the market will depend in part on the cost of manufacturing of our products, and if we do not successfully distinguish our products from those of virgin manufacturers our entry into the market and our ability to secure customer contracts can be adversely affected.

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In addition, we operate in a highly competitive market that is attracting increased interest from both industrial and environmental stakeholders, which may lead to greater competition, particularly from new entrants promoting circular economy solutions. The development of competing recycling technologies, especially those based on chemical depolymerization processes, has gained momentum in recent years and may benefit from greater financial, technical, or operational resources. While we believe our depolymerization process offers advantages in handling more contaminated feedstock and in its scalability, which is expected to differentiate it from other available methods, there can be no assurance that technically, environmentally, or economically superior solutions will not be developed and brought to market. If competing technologies offer better performance, cost advantages, or gain greater customer or regulatory acceptance, our competitive position could be materially impacted, which could have a material adverse effect on our business, financial condition, or results of operations.

We are vulnerable to fluctuations in the supply and price of raw materials.

We purchase raw materials and packaging supplies from several sources. While all such materials are available from independent suppliers, raw materials are subject to fluctuations in price and availability attributable to a number of factors, including general economic conditions, commodity price fluctuations, the demand by other industries for the same raw materials, and the availability of complementary and substitute materials. The profitability of our business also depends on the availability and proximity of these raw materials to our factories. The choice of raw materials to be used at our facility is determined primarily by the price and availability, yield loss of lower quality raw materials, and the capabilities of the producer’s production facility. Additionally, the cost of transportation could favor suppliers located in close proximity to our factories. If the quality of these raw materials is lower, the quality of our product may suffer. Economic and financial factors could impact our suppliers, thereby causing supply shortages. Increases in raw material costs could have a material adverse effect on our business, financial condition, or results of operations. Our feedstock supply strategy, including any hedging procedures, may be insufficient, and our results could be materially impacted if costs of materials increase.

The loss of the services of Mr. Daniel Solomita, our President and Chief Executive Officer, and Chairman of the Board of Directors, or our failure to timely identify and retain competent personnel could negatively impact our ability to develop our business.

The development of our business and the marketing of our products will continue to place a significant strain on our limited personnel, management, and other resources. Our future success depends upon the continued services of our executive officers who are developing our business, and on our ability to identify and retain competent consultants and employees with the skills required to execute our business objectives. The loss of the services of Mr. Daniel Solomita or our failure to timely identify and retain competent personnel could negatively impact our ability to develop our business, which could adversely affect our financial results and impair our growth plans.

We are subject to certain risks related to litigation filed by or against us and investigations we are subject to, and adverse results may harm our business.

We cannot predict with certainty the cost of defense, of prosecution, or of the ultimate outcome of litigation, investigations and other proceedings filed by or against us or individuals to whom we may have indemnity and/or advancement obligations, including penalties or other civil or criminal sanctions, or remedies or damage awards, and adverse results in any litigation and other proceedings may materially harm our business, including the subpoena we received from the SEC in October 2020 requesting certain information regarding testing, testing results and details of results from our GEN I and GEN II technologies and certain of our partnerships and agreements. In March 2022, we received a subpoena requesting additional information, including information concerning our reverse-merger in 2015, and communications with certain individuals and entities. There have been no further information requests relating to the Company’s business or technology. Litigation and other proceedings may include, but are not limited to, actions relating to intellectual property, international trade, commercial arrangements, product liability, environmental, health and safety, joint venture agreements, labor and employment, or other harms resulting from the actions of individuals or entities outside of our control. In the case of intellectual property litigation and proceedings, adverse outcomes could include the cancellation, invalidation or other loss of material intellectual property rights used in our business and injunctions prohibiting our use of business processes or technology that are subject to third-party patents or other third-party intellectual property rights. We expect to continue to incur legal fees in relation to litigation, investigations and other proceedings.

We are subject to an SEC Investigation which could have a material adverse impact on our business, financial condition, results of operation, cash flows and reputation.

As described in “Item 3. Legal Proceedings—SEC Investigation,” of this Annual Report on Form 10-K, the SEC in October 2020 requested certain information regarding testing, testing results and details of results from our GEN I and GEN II technologies and certain of our partnerships and agreements. In March 2022, we received a subpoena requesting additional information, including information concerning our reverse-merger in 2015, and communications with certain individuals and entities. There have been no further information requests relating to the Company’s business or technology. We cannot predict or provide any assurance as to the timing, outcome or consequences of the SEC investigation. If the SEC were to conclude that enforcement action is appropriate, we could be required to pay civil penalties and fines, and the SEC could impose other sanctions against us or against our current and former officers and directors. We have incurred, and may continue to incur, significant expenses related to legal and other professional services in connection with matters relating to or arising from the SEC investigation. In addition, our Board of Directors, management, and employees may expend a substantial amount of time on the SEC investigation, diverting resources and attention that would otherwise be directed toward our operations and implementation of our business strategy, all of which could materially adversely affect our business, financial condition, and results of operations. Furthermore, while the SEC has informed us that the investigation should not be construed as an indication by the SEC or its staff that any violation of law has occurred, nor as a reflection upon any person, entity or security, publicity surrounding the foregoing, or any SEC enforcement action or settlement as a result of the SEC’s investigation, even if ultimately resolved favorably for us, could have an adverse impact on our reputation, business, financial condition, or results of operations.

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Our Terrebonne Facility or other planned facilities must operate under policies, procedures, and controls for the operation of a chemical manufacturing facility as required under various federal, provincial and local regulations and codes. Failure to comply with such regulations and codes may lead to disruption of operations at the Terrebonne Facility or other planned facilities and the development of our technology, and financial sanctions.

We are subject to health and safety as well as environmental, zoning and any other regulatory requirements to operate our Terrebonne Facility and our other planned facilities, and as our business evolves, we, directly or indirectly through our partners or other related parties, may be subject to additional government regulations. Any failure to comply with ongoing regulatory requirements, as well as discovery of previously unknown problems, may result in, among other things, costly regulatory inspections, fines or remediation plans. If regulatory issues arise, the value of our business and our operating results may be adversely affected.

Additionally, applicable regulations may change, and additional government regulations may be enacted that could impact our business. We cannot predict the likelihood, nature, or extent of government regulation that may arise from future legislation or administrative action, either in Canada or in other jurisdictions where we or our partners will operate manufacturing facilities. If we are not able to maintain regulatory compliance, are slow or unable to adopt new requirements or policies, or effect changes to existing requirements, our business may be adversely affected.

Our failure to protect our intellectual property and proprietary technology may significantly impair our competitive advantage.

Our success and ability to compete depend in large part upon protecting our proprietary technology. We rely on a combination of patent, trademark and trade secret protection, confidentiality, nondisclosure and non-use agreements to protect our proprietary rights. As we expand our business through licensing and joint venture arrangements, our intellectual property is increasingly exposed to third-party use and international enforcement environments.

The steps we have taken may not be sufficient to prevent the misappropriation of our intellectual property, particularly in foreign countries where the laws may not protect our proprietary rights as fully as in the United States or Canada. Moreover, as we allow third-party partners to access and implement our technology under license or through engineering collaboration, we rely on contractual safeguards and partner cooperation to ensure appropriate protection and restricted use of our intellectual property. Even with these measures in place, there is a risk that partners, sublicensees, contractors, or others may misappropriate our trade secrets or reverse-engineer our technology, knowingly or inadvertently, which could compromise our competitive position.

The patent and trademark law and trade secret protection may not be adequate to deter third party infringement or misappropriation of our patents, trademarks and similar proprietary rights. If we are unable to adequately protect our intellectual property or enforce our rights, our ability to generate licensing revenue, maintain strategic control over our technology, and preserve long-term value may be materially impaired. Additionally, we may be required to expend significant time and resources to monitor compliance, enforce our rights, or defend against claims of infringement, any of which could adversely affect our business and financial condition.

We may face costly intellectual property infringement claims, the result of which would decrease the amount of cash available to operate and complete our business plan.

We anticipate that, from time to time, we will receive communications from third parties asserting that we are infringing certain patents and other intellectual property rights of others or seeking indemnification against alleged infringement. If anticipated claims arise, we will evaluate their merits. Any claims of infringement brought forth by third parties could result in protracted and costly litigation, damages for infringement, and the necessity of obtaining a license relating to one or more of our products or current or future technologies, which may not be available on commercially reasonable terms or at all. Litigation, which could result in substantial costs to us and diversion of our resources, may be necessary to enforce our patents or other intellectual property rights or to defend us against claimed infringement of the rights of others. Any intellectual property litigation and the failure to obtain necessary licenses or other rights could have a material adverse effect on our business, financial condition and results of operations.

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We rely in part on trade secrets to protect our technology, and our failure to obtain or maintain trade secret protection could harm our business.

We rely on trade secrets to protect some of our technology and proprietary information, especially where we believe patent protection is not appropriate or obtainable. However, trade secrets are difficult to protect. Litigating a claim that a third party had illegally obtained and used our trade secrets would be expensive and time-consuming, and the outcome would be unpredictable. Moreover, if our competitors independently develop similar knowledge, methods and know-how, it will be difficult for us to enforce our rights and our business could be harmed.

If our information technology systems or data, or those of third parties upon which we rely, are or were compromised, we could experience material adverse effects on our business, financial condition, results of operations and prospects.

Cyberattacks, malicious internet-based activity, and online and offline fraud are prevalent and continue to increase. These threats are becoming increasingly difficult to detect and pose a risk to the security of our systems and networks and the confidentiality, availability and integrity of data. Disruptions or failures in the physical infrastructure or operating systems that support our business, suppliers and other partners, or cyber-attacks or security breaches of our networks or systems or of third party suppliers and service providers, could result in the loss of customers and business opportunities, lawsuits, regulatory fines, penalties or intervention, reputational damage, reimbursement or other compensatory costs, and additional compliance costs, any of which could materially adversely affect our business, financial condition, results of operations and prospects. Increasing costs associated with cybersecurity protections may be costly and may also adversely affect our financial condition. While we attempt to mitigate these risks, our systems, data, networks, products, and technology remain potentially vulnerable to advanced and persistent cybersecurity threats.

In the ordinary course of our business, we may process proprietary, confidential, and sensitive data, including personal data, intellectual property, and trade secrets (collectively, sensitive information), that is subject to privacy and security laws and regulations. Despite our efforts to protect sensitive information, our facilities and systems, business partners, suppliers and third-party service providers may be vulnerable to cybersecurity incidents, theft, misplaced or loss of data, programming and/or human errors that could lead to the compromise of sensitive, confidential or personal data or information or unauthorized use or disruption of our systems and software.

While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective. We take steps to detect and remediate vulnerabilities, but we may not be able to detect and remediate all vulnerabilities because the threats and techniques used to exploit such vulnerabilities change frequently and are often sophisticated in nature. Therefore, such vulnerabilities could be exploited but may not be detected until after a security incident has occurred. These vulnerabilities pose material risks to our business.

Despite our efforts to identify and remediate vulnerabilities, if any, in our information technology systems, our efforts may not be successful. Further, we may experience delays in developing and deploying remedial measures designed to address any such identified vulnerabilities. Applicable data privacy and security obligations may require us to notify relevant stakeholders of security incidents. Such disclosures are costly, and the disclosures or the failure to comply with such requirements could lead to adverse consequences.

If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect investor confidence in us and the price of our common stock.

We are required to evaluate our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”). Section 404 requires us to include an internal control report with our Annual Report on Form 10-K. This report must include management’s assessment of the effectiveness of our internal control over financial reporting as at the end of the fiscal year. This report must also include disclosure of any material weaknesses in internal control over financial reporting that we have identified.

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The process of designing and implementing internal control over financial reporting required to comply with Section 404 of the Sarbanes-Oxley Act is time consuming, costly and complex. If, during the evaluation and testing process, we identify one or more material weaknesses in our internal control over financial reporting or determine that existing material weaknesses have not been remediated, our management will be unable to assert that our internal control over financial reporting is effective. Even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm may conclude that there are material weaknesses with respect to our internal controls or the level at which our internal controls are documented, designed, implemented or reviewed. As we remain a Smaller Reporting Company, our independent registered public accounting firm is not required to express an opinion as to the effectiveness of our internal control over financial reporting. However, pursuant to Section 404, in the future, we may be required to furnish an attestation on internal control over financial reporting issued by our independent registered public accounting firm. Despite our efforts, our independent registered public accounting firm may determine we have a material weakness or significant deficiency in our internal controls over financial reporting once such firm begins its Section 404 reviews in the future. If we are unable to assert that our internal controls over financial reporting are effective, or when required in the future, if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal controls over financial reporting as required by Section 404, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could be adversely affected and we could become subject to litigation or investigations by the stock exchange on which our securities are listed, the SEC or other regulatory authorities, which could require additional financial and management resources.

We are subject to risks associated with currency fluctuations, and changes in foreign currency exchange rates could impact our results of operations.

We operate mainly through two entities, Loop Industries, Inc., which is a Nevada corporation and has a U.S. dollar functional currency, and our wholly-owned subsidiary, Loop Canada Inc. (“Loop Canada”), which is based in Terrebonne, Québec, Canada and has a Canadian dollar functional currency. Our reporting currency is the U.S. dollar.

We mainly finance our operations through the sale and issuance of shares of common stock of Loop Industries, Inc. in U.S. dollars while our operations are concentrated in our wholly-owned subsidiary, Loop Canada. Accordingly, we are exposed to foreign exchange risk as we maintain bank accounts in U.S. dollars and a significant portion of our operational costs (including payroll, site costs, costs of locally sourced supplies, and income taxes) are denominated in Canadian dollars.

Significant fluctuations in U.S. dollar to Canadian dollar exchange rates could materially affect our result of operations, cash position and funding requirements. In addition, as we expand internationally through joint ventures and other arrangements, including agreements entered into with strategic partners in Europe and India, we expect to become subject to additional foreign exchange risks related to local currencies, contract payments, and operating costs in other jurisdictions. Volatility in these regions could impact the financial performance of our joint ventures, the timing and value of payments, and the funding requirements of our global commercialization strategy. To the extent that fluctuations in currency exchange rates cause our results of operations to differ materially from our expectations or the expectations of our investors, the trading price of our common stock could be adversely affected.

From time to time, we may engage in exchange rate hedging activities in an effort to mitigate the impact of exchange rate fluctuations. As part of our risk management program, we may enter into foreign exchange forward contracts to lock in the exchange rates for future foreign currency transactions, which is intended to reduce the variability of our operating costs and future cash flows denominated in currencies that differ from our functional currencies. We do not enter into these contracts for trading purposes or speculation, and our management believes all such contracts are entered into as hedges of underlying transactions. Nonetheless, these instruments involve costs and have risks of their own in the form of transaction costs, credit requirements and counterparty risk. If our hedging program is not successful, or if we change our hedging activities in the future, we may experience significant unexpected expenses from fluctuations in exchange rates. Any hedging technique we implement may fail to be effective. If our hedging activities are not effective, changes in currency exchange rates may have a more significant impact on the trading price of our common stock.

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We are subject to extensive and evolving domestic and global legal and regulatory requirements, and failure to obtain or maintain necessary approvals and comply with applicable laws could adversely affect our ability to commercialize our technology and operate our business.

As part of our commercialization strategy, we plan to expand the deployment of our proprietary Infinite Loop™ technology globally through a mix of owned facilities, joint ventures, licensing arrangements, and engineering services. This exposes us to a broad range of legal and regulatory regimes, including those related to environmental protection, chemical handling, health and safety, food and pharmaceutical packaging, land use, and foreign investment.

Our operations in Canada, including our Terrebonne Facility, are subject to federal and provincial regulations with which we are required to comply. While we have obtained relevant certifications for food and pharmaceutical packaging materials in Canada, the U.S., and the EU, maintaining these approvals requires ongoing compliance and may be affected by changes in laws or regulatory interpretations. As we expand internationally, including through current joint ventures in India and Europe, we will encounter additional permitting, compliance, and operational risks that vary by jurisdiction. Delays or failures in obtaining required approvals, or changes in regulatory requirements, could impact project timelines, increase costs, or limit our ability to operate. In addition, our reliance on third-party partners under licensing and joint venture structures adds complexity to compliance, particularly in jurisdictions with less predictable legal enforcement. Failure to obtain or maintain required permits and approvals, or to ensure compliance by our partners, could result in penalties, project delays, increased costs, reputational damage, or other adverse effects on our business and financial condition.

RISKS ASSOCIATED WITH OUR SECURITIES

Our current arrangements contain certain restrictions and potential cash obligations, and raising additional funds may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies.

We currently have several financing arrangements in place that contain restrictions and potential cash obligations. For example, our Series B CPS issued to an affiliate of Reed carries voting rights and a 13% cumulative annual PIK dividend, and is redeemable by the holder on the fifth anniversary of issuance. Additionally, we have a $2.4 million (CDN $3.5 million) secured credit facility with a Canadian bank, which is secured by the Company’s Terrebonne, Québec property and is subject to a minimum equity covenant tested quarterly. These existing and potential obligations, together with any new financings we may pursue, could impact our future liquidity and operational flexibility.

If we raise additional funds through equity offerings or offerings of equity-linked securities, including warrants or convertible debt securities, our existing stockholders may experience significant dilution, and the terms of such securities may include liquidation or other preferences that may adversely affect the rights of our stockholders. Debt financings, if available, may subject us to restrictive covenants that could limit our flexibility in conducting future business activities, including covenants limiting or restricting our ability to incur additional debt, dispose of assets or incur capital expenditures. We may also incur ongoing interest expenses and be required to grant a security interest in our assets in connection with any debt issuance. If we raise additional funds through strategic partnerships or licensing agreements with third parties, we may have to relinquish valuable rights to our technologies or grant licenses on terms that are not favorable to us.

Trading volume in our stock can fluctuate and an active trading market for our common stock may not be available on a consistent basis to provide stockholders with adequate liquidity. Our stock price may be volatile, and our stockholders could incur significant investment losses.

The trading price for our common stock will be affected by a number of factors, including:

	·	any change in the status of our Nasdaq listing;
	·	the need for near-term financing to continue operations;
	·	our ability to develop and commercialize our technology, relative to investor expectations;
	·	general market conditions and other factors unrelated to our operating performance or the operating performance of our competitors;

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	·	volatility in the financial and credit markets, including the recent volatility due, in part, to current geo-political events, inflation, economic uncertainty and the corresponding fiscal and monetary responses by central banks and governments;
	·	future issuances and/or sales of our securities;
	·	announcements or the absence of announcements by us, or our competitors, regarding collaborations, new products, significant contracts, commercial relationships or capital commitments;
	·	commencement of, or involvement in, litigation or investigations;
	·	any major change in our Board of Directors or management;
	·	changes in governmental regulations or in the status of our regulatory approvals;
	·	announcements related to patents issued to us or our competitors and to litigation involving our intellectual property;
	·	a lack of, or negative security analyst coverage;
	·	uncertainty regarding our ability to secure additional cash resources with which to operate our business;
	·	short-selling or similar activities by third parties;
	·	limited trading liquidity in our shares and any short positions held; and
	·	other factors described elsewhere in these Risk Factors.

As a result of these factors, our stockholders may not be able to resell their shares at, or above, their purchase price. In addition, the stock prices of many technology companies have experienced wide fluctuations that have often been unrelated to the operating performance of those companies. Any negative change in the public’s perception of the prospects of companies in our industry could depress our stock price regardless of our results of operations. These factors may have a material adverse effect on the market price and liquidity of our common stock and affect our ability to obtain the required financing.

Our President and Chief Executive Officer and Chairman of the Board of Directors, Mr. Daniel Solomita, beneficially owns a majority of the total voting power of our capital stock, and accordingly, has control over stockholder matters, our business and management.

As at May 28, 2025, Mr. Daniel Solomita, our President and Chief Executive Officer, Chairman of the Board of Directors, and controlling stockholder, beneficially owns 19,108,722 shares of common stock, or 40.0% of our issued and outstanding shares of common stock and also holds one share of Series A Preferred Stock. The one share of Series A Preferred Stock issued to Mr. Solomita holds a majority of the total voting power so long as Mr. Solomita holds not less than 7.5% of the total number of outstanding shares of our common stock on February 12, 2016 (as adjusted for any stock splits and stock dividends effected after February 12, 2016), assuring Mr. Solomita of control of the Company in the event that his ownership of the issued and outstanding shares of our common stock is diluted to a level below a majority. Currently, Mr. Solomita’s beneficial ownership of 19,108,722 shares of common stock and one share of Series A Preferred Stock provides him with 74.1% of the voting control of the Company.

Additionally, the one share of Series A Preferred Stock issued to Mr. Solomita contains protective provisions, which preclude us from taking certain actions without Mr. Solomita’s (or that of any person to whom the one share of Series A Preferred Stock is transferred) approval. More specifically, so long as any shares of Series A Preferred Stock are outstanding, we are not permitted to take certain actions without first obtaining the approval (by vote or written consent, as provided by law) of the holders of at least a majority of the then outstanding shares of Series A Preferred Stock, voting as a separate class, including for example and without limitation, amending our articles of incorporation, changing or modifying the rights of the Series A Preferred Stock, including increasing or decreasing the number of authorized shares of Series A Preferred Stock, increasing or decreasing the size of the Board of Directors or removing the director appointed by the holders of our Series A Preferred Stock, replacing the President and/or Chief Executive Officer of the Company (unless approved by the Board of Directors, including the director appointed by the holders of our Series A Preferred Stock), and declaring or paying any dividend or other distribution.

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As a result, Mr. Solomita has the ability to control the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation, or sale of all or substantially all of our assets. In addition, under Nevada law and subject to certain exceptions, any director or one or more of the incumbent directors may be removed as a director only by the vote of stockholders representing not less than two-thirds of the voting power of the issued and outstanding stock entitled to vote. Mr. Solomita therefore has the voting power to remove directors who oppose actions or decisions he favors. This concentrated control could delay, defer, or prevent a change of control, merger, consolidation, or sale of all or substantially all of our assets that our other stockholders support, or conversely this concentrated control could result in the consummation of such a transaction that our other stockholders do not support. This concentrated control could also discourage a potential investor from acquiring our common stock due to the limited voting power of such stock relative to the Series A Preferred Stock and might harm the market price of our common stock. In addition, Mr. Solomita has the ability to control the management and major strategic investments of our company as a result of his position as our President, Chief Executive Officer, and Chairman of the Board of Directors and his ability to control the election or replacement of our directors. Because of this significant ownership position, new investors may not be able to effect a change in our business or management, and therefore, stockholders would have no recourse as a result of decisions made by management. As a board member and officer, Mr. Solomita owes a fiduciary duty to our stockholders and must act in good faith in a manner he reasonably believes to be in the best interests of our stockholders. As a stockholder, even a controlling stockholder, Mr. Solomita is entitled to vote his shares in his own interests, which may not always be in the interests of our stockholders generally.

In addition, sales of significant amounts of shares held by Mr. Solomita, or the prospect of these sales, could adversely affect the market price of our common stock. Management’s stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price.

Anti-takeover effects of certain provisions of Nevada state law hinder a potential takeover of our company.

Though not now, we may in the future become subject to Nevada’s control share law. A corporation is subject to Nevada’s control share law if it has more than 200 stockholders, at least 100 of whom are stockholders of record and residents of Nevada, and it does business in Nevada or through an affiliated corporation. The law focuses on the acquisition of a “controlling interest,” which means the ownership of outstanding voting shares sufficient, but for the control share law, to enable the acquiring person to exercise the following proportions of the voting power of the company in the election of directors: (i) one-fifth or more but less than one-third, (ii) one-third or more but less than a majority, or (iii) a majority or more. The ability to exercise such voting power may be direct or indirect, as well as individual or in association with others.

The effect of the control share law is that the acquiring person, and those acting in association with it, obtains only such voting rights in the control shares as are conferred by a resolution of our stockholders, approved at a special or annual meeting of stockholders. The control share law contemplates that voting rights will be considered only once by the other stockholders. Thus, there is no authority to strip voting rights from the control shares of an acquiring person once those rights have been approved. If the stockholders do not grant voting rights to the control shares acquired by an acquiring person, those shares do not become permanent non-voting shares. The acquiring person is free to sell its shares to others. If the buyers of those shares themselves do not acquire a controlling interest, their shares do not become governed by the control share law.

If control shares are accorded full voting rights and the acquiring person has acquired control shares with a majority or more of the voting power, any stockholder of record, other than an acquiring person, who has not voted in favor of approval of voting rights, is entitled to demand fair value for such stockholder’s shares.

In addition to the control share law, Nevada has a business combination law that prohibits certain business combinations between Nevada corporations and “interested stockholders” for three years after the “interested stockholder” first becomes an “interested stockholder,” unless the company’s board of directors approves the combination in advance. For purposes of Nevada law, an “interested stockholder” is any person who is (i) the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the outstanding voting shares of the company, or (ii) an affiliate or associate of the company and at any time within the two previous years was the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the then outstanding shares of the company. The definition of the term “combination” is sufficiently broad to cover virtually any kind of transaction that would allow a potential acquirer to use the company’s assets to finance the acquisition or otherwise to benefit its own interests rather than the interests of the company and its other stockholders.

The effect of Nevada’s business combination law is to potentially discourage parties interested in taking control of us from doing so if it cannot obtain the approval of our Board of Directors.

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Because we do not intend to pay any cash dividends on our common stock, our stockholders will not be able to receive a return on their shares unless they sell them.

We intend to retain any future earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them. Stockholders may not be able to sell shares when desired. Before you invest in our securities, you should be aware that there are various risks. You should consider carefully these risk factors, together with all of the other information included in this Annual Report on Form 10-K before you decide to purchase our securities. If any of these risks and uncertainties develop into actual events, our business, financial condition or results of operations could be materially adversely affected.

Sales of a significant number of shares of our common stock in the public markets, or the perception that such sales could occur, could depress the market price of our common stock.

Sales of a significant number of shares of our common stock in the public markets, or the perception that such sales could occur could depress the market price of our common stock and impair our ability to raise capital through the sale of additional equity securities.

We currently have an effective shelf registration statement on Form S-3 (File No. 333-281883), declared effective by the SEC on September 10, 2024, which allows us to offer and sell up to $175 million in any combination of debt securities, common stock, preferred stock, depositary shares, warrants, subscription rights, and units. In addition, we have an effective resale registration statement on Form S-3 (File No. 333-281224), declared effective by the SEC on August 14, 2024, covering up to 7,072,220 shares of common stock (including up to 4,714,813 shares of outstanding common stock and up to 2,357,407 shares issuable upon exercise of warrants which have since expired) held by a selling stockholder, which was filed pursuant to the Investor Rights Agreement with SKGC entered into in July 2021.

If a significant number of shares is sold in the public market, this could put downward pressure on our stock price. Moreover, we cannot in general predict the effect that future sales of our common stock, or the market perception that such sales may occur, would have on the market price of our common stock. Even the perception of potential dilution could adversely affect investor confidence and market value.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 1C. CYBERSECURITY

Cybersecurity Risk Management and Strategy

Assessment, identification and management of material risks from cybersecurity threats are integrated into the Company’s overall risk management processes to promote a company-wide culture of cybersecurity risk management. Our Chief Financial Officer is responsible for the evaluation of material risks from cybersecurity threats and reports to both the Company’s executive management team and the Audit Committee of the Board of Directors. We also regularly use third-party service providers to assist us to identify, assess, and manage material risks from cybersecurity threats, including cybersecurity consultants, as well as data backup and recovery providers.

We have implemented and maintain information security processes designed to identify, assess, and manage material risks from cybersecurity threats to our critical networks, third-party hosted services, communications systems, hardware and software, and our critical data, including intellectual property and confidential information that is proprietary, strategic, or competitive in nature (“Information Systems and Data”).

The Chief Financial Officer is responsible, with the support of the Company’s internal IT staff and external service providers, for helping to identify, assess and manage the Company’s cybersecurity threats and risks, using internal resources as well as third-party service providers, by monitoring our threat environment using, among other things, manual processes, automated tools, internal audits, threat and vulnerability assessments, evaluating threats reported to us, evaluating our risk profile, and subscribing to reports and services that identify cybersecurity threats.

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We implement and maintain various technical, physical, and organizational measures, processes, and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data. These include, amongst others, data encryption, risk assessments, network security and access controls, physical security, asset management, and systems monitoring. In addition, to oversee and identify any risks associated with our use of third-party service providers, we review Service Organization Controls reports of such third-party service providers when onboarding the provider and quarterly thereafter.

To protect our information systems from cybersecurity threats, we use various security tools that help prevent, identify, escalate, investigate, resolve and recover from identified vulnerabilities and security incidents in a timely manner. These include, but are not limited to, internal reporting, monitoring and detection tools, some of which are managed by a third-party service provider.

For a description of the risks from cybersecurity threats that may materially affect the Company and how they may do so, see our risk factors under Part I. Item 1A. Risk Factors in this Annual Report on Form 10-K.

Cybersecurity threats have not materially affected the Company, including its business strategy, results of operations or financial condition. The Company does not believe that cybersecurity threats resulting from any previous cybersecurity incidents of which it is aware are reasonably likely to materially affect the Company.

Cybersecurity Governance

Our Board of Directors oversees the Company’s risk management process, including cybersecurity risks, directly and through its committees. Pursuant to the Audit Committee Charter, the Audit Committee of the Board of Directors oversees management’s processes for identifying, monitoring and addressing enterprise risks. In addition, the Audit Committee of the Board of Directors discusses with management the adequacy and effectiveness of the Company’s policies and procedures regarding information technology risk management and internal controls related to cybersecurity.

Our cybersecurity risk assessment and management processes are implemented and maintained by certain members of the Company’s management. In particular, the Chief Financial Officer is responsible for hiring appropriate personnel and engaging external service providers with relevant cybersecurity expertise, helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy, and communicating key priorities to relevant personnel, helping prepare for cybersecurity incidents, approving cybersecurity processes and technologies, and reviewing security assessments and other security-related reports. In addition, the Chief Financial Officer provides reports to the Audit Committee concerning the Company’s cybersecurity posture and significant threats and risks and the processes to address them.

Our security incident response plan (“SIRP”) is designed to escalate certain cybersecurity incidents to members of the Company’s executive management team depending on the circumstances. The Chief Financial Officer and relevant department heads work with our incident response team to help the Company mitigate and remediate cybersecurity incidents of which they are notified. The SIRP provides for escalation of potentially material cybersecurity incidents to the Audit Committee.

ITEM 2. PROPERTIES

Our Terrebonne Facility and corporate offices are located at 480 Fernand-Poitras, Terrebonne, Québec, Canada J6Y 1Y4. We own the facility, which comprises approximately 33 thousand square feet including 13 thousand square feet for our executive offices and 20 thousand square feet for our innovation and operational activities. We believe that our existing facilities are adequate for our current needs.

ITEM 3. LEGAL PROCEEDINGS

SEC Investigation

As previously disclosed, we received a subpoena from the SEC in October 2020 requesting certain information from us, including information regarding testing, testing results and details of results from our GEN I and GEN II technologies, and certain of our partnerships and agreements. In March 2022, we received a second subpoena requesting additional information, including information concerning our reverse-merger in 2015, and communications with certain individuals and entities. There have been no additional information requests from the SEC relating to the Company’s business or technology.

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The SEC informed us that its investigation does not mean that the SEC has concluded that anyone has violated the law and that the investigation does not mean that the SEC has a negative opinion of us. We cannot predict when this matter will be resolved or what, if any, action the SEC may take following the conclusion of the investigation.

On September 30, 2022, the SEC filed a complaint (the “SEC complaint”) against several named defendants (“Defendants”), and also identified as a relief defendant Daniel Solomita, our Chief Executive Officer. The SEC complaint does not allege wrongdoing by the Company or Mr. Solomita. The SEC complaint identifies Mr. Solomita and an entity he owns as relief defendants because they purportedly received monies from the Defendants in 2015 that the SEC alleges were derived from the Defendants’ fraud. The SEC complaint does not allege that Mr. Solomita was aware of the alleged wrongdoing by the Defendants and does not allege that he was aware that any alleged monies received were derived from fraud.

Litigation

From time to time, we may become involved in various lawsuits and legal proceedings or investigations that arise in the ordinary course of business. Except as noted above, we are not presently a party to any legal proceedings, government actions, administrative actions, investigations or claims that are pending against us or involve us that, in the opinion of our management, could reasonably be expected to have a material adverse effect on our business, financial condition or operating results. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

It is possible that we may expend financial and managerial resources in the defense of our intellectual property rights in the future if we believe that our rights have been violated. It is also possible that we may expend financial and managerial resources to defend against claims that our products and services infringe upon the intellectual property rights of third parties.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information for Common Stock

Our common stock is currently traded on the Nasdaq Global Market under the symbol “LOOP.”

Holders

As at May 28, 2025, there were 47,718,350 shares of common stock issued and outstanding (excluding shares of common stock issuable upon conversion of all of our currently outstanding Series A Preferred Stock or Series B CPS) held by approximately 44 stockholders of record. The actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees. This number of holders of record also does not include stockholders whose shares may be held in trust by other entities.

Dividends

We have not declared any dividends and we do not plan to declare any dividends in the foreseeable future. There are no restrictions in our Articles of Incorporation or By-laws that prevent us from declaring dividends, except that we are not permitted to declare or pay any dividend or other distribution without first obtaining the approval (by vote or written consent, as provided by law) of the holders of at least a majority of the then outstanding shares of Series A Preferred Stock, voting as a separate class. The Nevada Revised Statutes, however, prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:

	·	we would not be able to pay our debts as they become due in the usual course of business; or

	·	our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of stockholders who have preferential rights superior to those receiving the distribution, unless otherwise permitted under our Articles of Incorporation.

Recent Sales of Unregistered Securities

During the period covered by this Annual Report on Form 10-K, we have not sold any equity securities that were not registered under the Securities Act that were not previously reported in a quarterly report on Form 10-Q or in a current report on Form 8-K.

Purchases of Equity Securities by the Registrant and Affiliated Purchasers

We did not purchase any of our shares of common stock or other securities during the year ended February 28, 2025.

ITEM 6. [Reserved]

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and any forward-looking statements should be read in conjunction with the “Cautionary Statements Regarding Forward-Looking Statements” in this Annual Report on Form 10-K and the Risk Factors section included in Part I, Item 1A of this Annual Report on Form 10-K .

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Overview

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 Societe Generale Group for one Infinite Loop™ manufacturing facility in Europe for an initial down payment of €10 million with additional milestone payments to be received by Loop as the project advances. Infinite Loop Europe, an entity to be owned 10% by Loop and 90% by 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.

Commercialization Plan and Progress

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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 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 Reed Societe Generale Group.

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Key Commercial Developments

Agreements with Reed Societe Generale Group

Key terms of the Series B CPS include:

	·	13% PIK dividend rate
	·	5-year term
	·	Convertible to Loop common stock at $4.75 per share or redeemable in cash

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.

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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.

The planned production capacity of the Infinite Loop™ India facility is 70,000 tons per year of Loop branded PET resin and polyester fiber.

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RESULTS OF OPERATIONS

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

Fourth Quarter Ended February 28, 2025

The following table summarizes our operating results for the three-month periods ended February 28, 2025 and February 29, 2024, in thousands of U.S. Dollars.

	Three months ended
	February 28, 2025			February 29, 2024			Change favorable / (unfavorable)
Revenues	$	10,809		$	45		$	10,764

Expenses
Research and development
Employee compensation		670			980			310
Stock-based compensation		104			66			(38	)
Plant and laboratory operating expenses		193			1,081			888
External engineering		129			786			657
Machinery and equipment expenditures		20			21			1
Other		190			84			(106	)
Total research and development		1,306			3,018			1,712

General and administrative
Professional fees		570			677			107
Insurance		450			623			173
Employee compensation		148			459			311
Stock-based compensation		185			216			31
Other		221			246			25
Total general and administrative		1,574			2,221			647

Loss on equity accounted investment		687			-			(687	)
Depreciation and amortization		126			135			9
Interest and other financial expenses (income)		329			(182	)		(511	)
Interest income		(83	)		(74	)		9
Foreign exchange loss (gain)		(12	)		18			30
Total expenses		3,927			5,136			1,209
Net income (loss)	$	6,882		$	(5,091	)	$	11,973

Revenues

Revenues for the three-month period ended February 28, 2025 increased $10,764 to $10,809 as compared to $45 for the same period in 2024. The revenues for the three-month period ended February 28, 2025 resulted from $10,395 in licensing revenue from the up-front royalty received from Reed Societe Generale Group, $368 in engineering fees and $46 from sales of Loop™ PET resin produced using monomers manufactured at the Terrebonne Facility. The revenues of $45 for the three-month period ended February 29, 2024 resulted from sales of Loop™ PET resin.

Research and Development

Research and development expenses for the three-month period ended February 28, 2025 decreased $1,712 to $1,306, as compared to $3,018 for the same period in 2024. The decrease was primarily attributable to a $888 decrease in plant and laboratory operating expenses, which included an inventory write-down of $817 on finished goods and work in process inventories in the three-month period ended February 29, 2024, a $657 decrease in external engineering expenses, and a $310 decrease in employee compensation expenses.

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General and administrative expenses

General and administrative expenses for the three-month period ended February 28, 2025 decreased $647 to $1,574, as compared to $2,221 for the same period in 2024. The decrease was primarily attributable to a decrease of $342 in employee compensation expenses including stock-based compensation, a decrease of $173 in insurance expenses, and a decrease of $107 in professional fees.

Loss on equity accounted investment

Loss on equity accounted investment increased by $687 for the three-month period ended February 28, 2025. This loss relates to the Company’s 50% portion of the loss incurred by the India JV for the three-month period ended February 28, 2025, during which the India JV incurred preliminary project costs for the planned Infinite Loop™ facility in India, which are mainly engineering fees.

Net Loss

The net income for the three-month period ended February 28, 2025 increased $11,973 to $6,882 in the period, as compared to a net loss of $5,091 for the same period in 2024. The increase was primarily due to the increase of $10,764 in revenues, the decrease of $1,712 in research and development expenses, and the decrease of $647 in general and administrative expenses, which were partially offset by an increase in $687 in loss on equity accounted investment and an increase in $511 in interest and other financial expenses.

Fiscal Year Ended February 28, 2025

The following table summarizes our operating results for the years ended February 28, 2025 and February 29, 2024, in thousands of U.S. Dollars.

	Years ended
	February 28, 2025			February 29, 2024			Change favorable / (unfavorable)
Revenues	$	10,889		$	153		$	10,736

Expenses
Research and development
Employee compensation		3,317			4,591			1,274
Stock-based compensation		471			542			71
External engineering		1,493			2,353			860
Plant and laboratory operating expenses		870			2,318			1,448
Machinery and equipment expenditures		64			1,142			1,078
Other		649			433			(216	)
Total research and development		6,864			11,379			4,515

General and administrative
Professional fees		3,428			2,928			(500	)
Employee compensation		1,942			2,343			401
Stock-based compensation		881			880			(1	)
Insurance		1,871			2,680			809
Other		1,106			1,157			51
Total general and administrative		9,228			9,988			760

Impairment of equipment		8,460			-			(8,460	)
Loss on equity accounted investment		687			-			(687	)
Depreciation and amortization		524			535			11
Interest and other financial expenses (income)		618			(41	)		(659	)
Interest income		(238	)		(558	)		(320	)
Foreign exchange gain		(197	)		(63	)		134
Total expenses		25,946			21,240			(4,706	)
Net loss	$	(15,057	)	$	(21,087	)	$	6,030

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Revenues

Revenues for the year ended February 28, 2025 increased $10,736 to $10,889, as compared to $153 for the same period in 2024. The revenues for the year ended February 28, 2025 resulted from $10,395 in licensing revenue from the up-front royalty received from Reed Societe Generale Group, $368 in engineering fees and $126 from sales of Loop™ PET resin produced using monomers manufactured at the Terrebonne Facility. The revenues of $153 for the year ended February 29, 2024 resulted from sales of Loop™ PET resin.

Research and Development

Research and development expenses for the year ended February 28, 2025 decreased significantly by $4,515 to $6,864, as compared to $11,379 for the same period in 2024 as we believe we have established to our satisfaction that Loop’s technology can be successfully scaled up, and are now focusing on the development of large-scale commercial manufacturing facilities. The decrease was primarily attributable to a $1,448 decrease in plant and laboratory operating expenses, which included an inventory write-down of $817 on finished goods and work in process inventories in the year ended February 29, 2024, a $1,345 decrease in employee compensation expenses including stock-based compensation, a $1,078 decrease in purchases of machinery and equipment for the Terrebonne Facility, and a $860 decrease in external engineering expenses.

General and administrative expenses

General and administrative expenses for the year ended February 28, 2025 decreased $760 to $9,228, as compared to $9,988 for the same period in 2024. The decrease was primarily attributable to a $809 decrease in insurance expenses, and a decrease of $401 in employee compensation expenses, which were partially offset by a $500 increase in professional fees.

Impairment of equipment

Impairment of equipment expense increased by $8,460 for the year ended February 28, 2025, reflecting an impairment loss for equipment of $8,460. This impairment was due to the termination of the joint venture agreement between the Company and SKGC under which they had intended to construct and operate an Infinite Loop™ manufacturing facility in Ulsan, South Korea. While the Company plans to utilize the equipment in a future commercial production facility, the deployment plans for the use of this equipment are not fully developed at this time, therefore the recoverability of the carrying value of the equipment was tested for impairment, resulting in an impairment loss of $8,460 being recognized in the year ended February 28, 2025.

Loss on equity accounted investment

Loss on equity accounted investment increased by $687 for the year ended February 28, 2025. This loss relates to the Company’s 50% portion of the loss incurred by the India JV for the year ended February 28, 2025, during which the India JV incurred preliminary project costs for the planned Infinite Loop™ facility in India, which are mainly engineering fees.

Net Loss

The net loss for the year ended February 28, 2025 decreased $6,030 to $15,057, as compared to $21,087 for the same period in 2024. The decrease was primarily due to the $10,736 increase in revenues, the $4,515 decrease in research and development expenses, and the $760 decrease in general and administrative expenses. The decrease in net loss was partially offset by the impairment of equipment of $8,460, an increase in $687 in loss on equity accounted investment, and an increase in $659 in interest and other financial expenses.

LIQUIDITY AND CAPITAL RESOURCES

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

Since its inception, the Company has been in the pre-commercialization stage with its ongoing operations and commercialization plans financed primarily by raising equity. The Company has incurred net losses and negative cash flow from operating and investing activities since its inception and expects to incur additional net losses while it continues to advance its commercialization efforts. As at February 28, 2025, the Company had cash and cash equivalents of $12,973. Our liquidity position is subject to risks and uncertainties, including those discussed under “Cautionary Statements Regarding Forward-Looking Statements” in this Annual Report on Form 10-K and the Risk Factors section included in Part I, Item 1A of this Annual Report on Form 10-K.

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Management continuously monitors the Company’s cash resources against its short-term cash commitments to ensure there is sufficient liquidity to fund its costs for at least twelve months from the financial statements issuance date. It evaluates the Company’s liquidity to determine if there is substantial doubt about its ability to continue as a going concern. In preparing this liquidity assessment, management applies significant judgment in estimating future cash flow requirements of the Company based on budgets and forecasts, which includes developing assumptions related to: (i) the estimation of amount and timing of future cash outflows and inflows, and (ii) determining what future expenditures are committed and what could be considered discretionary. Based on this assessment, management believes that current available liquidity will be sufficient to meet the Company’s obligations, commitments and budgeted expenditures for at least twelve months from the issuance date of the consolidated financial statements.

The Company’s ability to move to the next stage of its strategic development and construct manufacturing facilities is dependent on, among other factors, whether the Company can obtain the necessary financing through a combination of further technology licensing arrangements, government incentive programs, and/or the issuance of debt and/or equity. In particular, the Company will require capital sufficient to fund its equity contributions to the India JV for the construction of the planned Infinite Loop™ facility in India, as well as its ongoing cash requirements until Loop begins receiving returns from the India JV.

There is no assurance that the Company will be successful in attracting additional funding. Even if additional financing is available, it may not be available on terms favorable to the Company. Failure to secure additional financing on favorable terms when it becomes required would have an adverse effect on the Company’s financial position and on its ability to execute its business plan.

Sale and issuance of Series B CPS

On December 23, 2024 (the “Issuance Date”), the Company issued and sold 1,044,430 shares of Series B CPS at $10.00 per share to Reed Circular Economy (the “Holder”), an affiliate of Reed Societe Generale Group, for cash proceeds of $10,395 (€10,000). The main features of the Series B CPS are as follows:

	·	Automatic conversion of the stated value ($10,395 on the Issuance Date) on the fifth anniversary of the Issuance Date into shares of the Company’s common stock at a conversion price of $4.75 per share;
	·	Accrues a cumulative fixed annual PIK dividend at a rate of 13% of the stated value, which is added to the stated value of the Series B CPS on September 30 of each year;
	·	Redeemable in cash at any time, starting after the third anniversary of the Issuance Date by the Company (issuer call option);
	·	Redeemable in cash on the fifth anniversary of the Issuance Date at the option of the Holder (put feature); and
	·	Voting rights equal to the number of whole shares of the Company’s common stock (rounded to the nearest whole share) into which the stated value of Series B CPS would be convertible on a given date.

Investissement Québec financing facility

We have a long-term debt obligation to Investissement Québec in connection with a financing facility (the “Financing Facility”) for the expansion of the Terrebonne Facility up to a maximum of $3,390. We received the first disbursement in the amount of $1,628 on February 21, 2020 and the second disbursement in the amount of $1,762 on August 26, 2021. The loan can be repaid at any time by us without penalty. The loan’s interest rate was initially set at 2.36% and there was a 36-month moratorium on both capital and interest repayments as of the first disbursement date. Under the original terms of the financing facility, at the end of the 36-month moratorium, capital and interest was repayable in 84 monthly installments. There is no remaining amount available under the Financing Facility after the second disbursement.

On November 21, 2022, the Company and Investissement Québec entered into an agreement to amend the existing Financing Facility which modifies the repayments of the principal amount (the “Financing Facility Amendment”). As per the Financing Facility Amendment, a total of $37 (CDN $50) of the principal amount was repayable in monthly installments in the fiscal year ended February 29, 2024, with the remainder of the principal amount being repayable in 72 monthly installments.

On February 28, 2024, the Company and Investissement Québec entered into an agreement to amend the existing Financing Facility which modifies the repayments of the principal amount (the “Second Financing Facility Amendment”). As per the Second Financing Facility Amendment, a total of $74 (CDN $100) of the principal amount was repayable in monthly installments in the fiscal year ended February 28, 2025, with the remainder of the principal amount being repayable in 60 monthly installments. Pursuant to the Second Financing Facility Amendment the interest rate of the Financing Facility was increased from 2.36% to 3.36%.

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On February 5, 2025, the Company and Investissement Québec entered into an agreement to amend the existing Financing Facility which modifies the repayments of the principal amount (the “Third Financing Facility Amendment”). As per the Second Financing Facility Amendment, total annual principal repayments in monthly installments are of $287 (CDN $414) for the fiscal year ending February 28, 2026 and $495 (CDN $714) for the fiscal year ending February 28, 2027, with the remainder of the principal amount being repayable in 36 monthly installments. Pursuant to the Third Financing Facility Amendment the interest rate of the Financing Facility was increased from 3.36% to 4.36%.

Under the original terms of the Financing Facility, the principal amount was repayable in 84 monthly installments beginning in March of 2023. The amendments do not modify the repayment terms of accrued interest or any of the other terms of the Financing Facility that are not mentioned above. The amendments did not meet the criteria of ASC 470, Debt for an extinguishment of debt as the amendments did not substantially modify the terms of the Financing Facility. The Company therefore applied modification accounting and no immediate gain or loss was recognized related to the amendments.

Credit facility from a Canadian bank

On July 26, 2022, Loop Canada, Inc., a wholly-owned subsidiary of the Company, entered into an Operating Credit Facility (the “Credit Facility”) with a Canadian bank. The Credit Facility allows for borrowings of up to $2,424 (CDN $3,500) in aggregate principal amount. The Credit Facility is secured by the Company’s Terrebonne, Québec property and is subject to a minimum equity covenant, tested quarterly with which the Company was not in compliance as at February 28, 2025. All borrowings under the Credit Facility will bear interest at an annual rate equal to the bank’s Canadian prime rate plus 1.0%. As at February 28, 2025, the $2,424 (CDN $3,500) Credit Facility was available and undrawn.

Due to customer

In October 2022, the Company received a cash deposit from a customer of $1,000 in relation to an executed capacity reservation agreement. The deposit was intended to be credited against any future sales of Loop™ PET resin over a five-year period, commencing two years after the first delivery of Loop™ PET resin to the customer. Upon mutual agreement, the capacity reservation agreement with the customer was terminated on January 18, 2024. The customer and the Company agreed for the deposit to be refunded in full on July 1, 2027, with no restriction on the Company’s use of the funds. The amount bears no interest. The cause of the termination is related to the customer’s decision to abandon its plans to incorporate recycled PET in its products for technical reasons.

The following table summarizes the exchange rates used:

February 28,

2025

February 29,

2024

Period end Canadian $: US Dollar exchange rate

0.69

0.74

Average period Canadian $: US Dollar exchange rate

0.72

0.74

Expenditures are translated at the average exchange rate for the period presented.

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Flow of Funds

Summary of Cash Flows

A summary of cash flows for the years ended February 28, 2025, and February 29, 2024 in U.S. dollars was as follows:

	February 28, 2025			February 29, 2024
Net cash used in operating activities	$	(2,121	)	$	(18,046	)
Net cash (used in) investing activities		(2,036	)		(5,644	)
Net cash provided by (used in) financing activities		10,318			(63	)
Effect of exchange rate changes on cash		(146	)		120
Net change in cash	$	6,015		$	(23,633	)

Net Cash Used in Operating Activities

During the year ended February 28, 2025, we used $2,121 in operations compared to $18,046 during the year ended February 28, 2025. As discussed above in the Results of Operations, the year-over-year decrease was mainly due to increased revenues and decreased operating expenses as we have completed the upgrade of the Terrebonne Facility and our basic design package for the Infinite Loop™ full-scale manufacturing facilities, in addition to decreased general and administrative expenses.

Net Cash Used in Investing Activities

During the year ended February 28, 2025, we used $2,036 in investing activities compared to $5,644 during the year ended February 29, 2024. During the year ended February 28, 2025, we invested $1,954 in our joint venture in India and received a distribution of $368 from our joint venture with Indorama. During the year ended February 29, 2024, cash used for the purchase of long-lead equipment amounted to $5,065.

During the year ended February 28, 2025, we made investments in intangible assets of $450, as compared to $482 during the year ended February 29, 2024, particularly to file patents for the Infinite Loop™ technology in the United States and around the world.

Net Cash Used in Financing Activities

During the year ended February 28, 2025, we received cash proceeds of $10,395 for the sale and issuance of Series B CPS.

In the year ended February 28, 2025, we made repayments of long-term debt of $77 as compared to $63 in the year ended February 29, 2024.

OUTLOOK

In connection with the upcoming fiscal year ending February 28, 2026, we intend to continue to execute our corporate strategy. We believe we must execute on several areas of our operational strategic plan, namely:

	·	Continuing to drive the commercialization of our Infinite Loop™ Technology. This entails the continuation of executing partnerships and/or commercial agreements with customers, including product activations using product manufactured at the Terrebonne Facility and multi-year offtake agreements for the planned commercial facilities;
	·	Continuing to identify and secure feedstock to ensure planned commercial facilities can operate continuously and efficiently;
	·	Completing the engineering design and executing on the project plan for the planned Infinite Loop™ manufacturing facility in India;
	·	Securing financing to fund our operations, including our planned commercial projects and continued growth;
	·	Identifying and pursuing additional strategic partners and regions for Infinite Loop™ projects;
	·	Protecting our intellectual property; and
	·	Limiting expenses for our current operations at our head office and facilities in Terrebonne, Quebec to optimize our liquidity position.

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Risks that may affect our ability to execute on this strategy include, but are not limited to, those listed under “Risk Factors” elsewhere in this Annual Report on Form 10-K.

CRITICAL ACCOUNTING ESTIMATES

Liquidity Assessment

Revenue recognition

The Company recognizes revenue with customers in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). This standard applies to all contracts with customers, except for contracts with customers that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Under ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

The Company enters into contracts with customers to sell Loop™ PET resin. These contracts include a single performance obligation, which is the delivery of Loop™ PET resin, and the transaction price is a fixed rate per delivered volume. Revenue is recognized when control of the product transfers to the customer, which is when product is delivered to the customer location. Shipping and handling costs are accounted for as a fulfillment cost.

The Company enters into licensing agreements with customers, or licensees, for the use of the Company’s proprietary technology. Licensing agreements may include various types of payments, including upfront fees, milestone payments, and royalties. Upfront licensing fees are generally recognized at a point in time, when the license is made available for the customer’s benefit and the customer can benefit from the technology independently. Milestone payments are recognized when the milestone is achieved and the payment is no longer subject to reversal. Royalties are recognized when the underlying transactions occur.

The Company also enters into agreements to provide engineering services for Infinite Loop™ facilities. Engineering fees are recognized over time, as services are performed.

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Stock-Based Compensation

The Company periodically issues stock options, warrants and restricted stock units to employees and non-employees in non-capital raising transactions for services and financing expenses. The Company accounts for stock options granted to employees based on the authoritative guidance provided by the Financial Accounting Standards Board (the “FASB”) wherein the fair value of the award is measured on the grant date and recognized as compensation expense on the straight-line basis over the vesting period. When performance conditions exist, the Company recognizes compensation expense when it becomes probable that the performance condition will be met. Forfeitures on share-based payments are recognized as they occur.

The Company accounts for stock options and warrants granted to non-employees in accordance with the authoritative guidance of the FASB wherein the fair value of the stock compensation is based upon the measurement date determined as the earlier of the date at which either a) a commitment is reached with the counterparty for performance or b) the counterparty completes its performance.

The Company estimates the fair value of restricted stock unit awards to employees and directors based on the closing market price of its common stock on the date of grant.

The fair value of the stock options granted is estimated using the Black-Scholes model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options, and future dividends. Stock-based compensation expense is recorded based on the value derived from the Black-Scholes model and on actual experience. The assumptions used in the Black-Scholes model could materially affect stock-based compensation expenses recorded in the current and future periods.

Convertible Preferred Stock

The accounting for convertible preferred stock involves significant management judgment and estimation, particularly when determining the appropriate classification and measurement under applicable U.S. GAAP, including ASC 480, Distinguishing Liabilities from Equity, ASC 470, Debt, and ASC 815, Derivatives and Hedging. These instruments may exhibit characteristics of both debt and equity, and the assessment of classification and subsequent measurement depends on contractual terms such as redemption rights, dividend features, and conversion mechanisms.

Convertible preferred stock is classified as a liability when it contains features such as mandatory redemption provisions or holder-initiated redemption rights that are outside the Company’s control. These features create an obligation that may require settlement in cash or other financial assets, regardless of whether the instrument ultimately converts into equity securities. Instruments classified as liabilities are initially recorded at fair value, net of issuance costs, and subsequently measured at amortized cost using the effective interest method. Periodic accretion of the carrying value, including the impact of any fixed paid-in-kind (PIK) dividends, is recognized as interest expense in the consolidated statements of operations.

In addition, the Company evaluates all convertible instruments to determine whether they contain embedded features requiring separate accounting as derivatives under ASC 815. This evaluation involves assessing the economic characteristics and risks of the embedded terms relative to the host instrument. If bifurcation is required, the embedded derivative is measured at fair value with subsequent changes in value recognized through earnings. The determination of whether bifurcation is required and the valuation of embedded derivatives, if present, require the use of complex valuation models and significant judgment regarding assumptions such as volatility, discount rates, and the probability of various settlement outcomes.

Because of the complexity and subjectivity involved in evaluating classification, estimating fair value, and determining accretion and derivative valuation, accounting for convertible preferred stock is considered a critical accounting estimate. Changes in assumptions or interpretations could have a material impact on the Company’s financial statements.

Impairment of Property, Plant and Equipment

The Company reviews its property, plant and equipment (“PP&E”) for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. This analysis requires significant management judgment and is therefore considered a critical accounting estimate.

Indicators of potential impairment may include, but are not limited to, significant adverse changes in the business climate, legal or regulatory environment, technological developments, business strategy or operating performance compared to expectations. If such indicators are identified, the Company performs a recoverability test by comparing the carrying value of the asset group to the estimated undiscounted future cash flows expected to be generated over the asset group’s remaining useful life.

If the carrying amount of the asset group exceeds the estimated undiscounted future cash flows, an impairment loss is recognized equal to the amount by which the carrying value exceeds the fair value. Fair value is typically determined using either a discounted cash flow analysis or market-based approaches, both of which require management to make estimates and assumptions regarding future revenue, operating costs, useful lives, discount rates, and residual values. These estimates are inherently uncertain and may change over time based on evolving market conditions, operational results, and technological developments.

Due to the significance of the assumptions involved and the potential material impact on the financial statements, the assessment of impairment for PP&E is considered a critical accounting estimate. Actual results may differ materially from those assumed in the Company’s impairment analysis, which could result in future impairments or changes in depreciation expense.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Pursuant to SEC Release No. 33-8876, we are permitted to use the scaled disclosure requirements applicable to a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act, and therefore, we are not required to provide the information called for by this Item.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Loop Industries, Inc.

February 28, 2025

Index to the Consolidated Financial Statements

Contents		Page(s)

Report of Independent Registered Public Accounting Firm (PCAOB ID: 271)		F-1

Consolidated balance sheets as at February 28, 2025 and February 29, 2024		F-2

Consolidated statements of operations and comprehensive loss for the years ended February 28, 2025 and February 29, 2024		F-3

Consolidated statements of changes in stockholders’ equity for the years ended February 28, 2025 and February 29, 2024		F-4

Consolidated statements of cash flows for the years ended February 28, 2025 and February 29, 2024		F-6

Notes to the consolidated financial statements		F-7

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Loop Industries, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Loop Industries, Inc. and its subsidiaries (the Company) as of February 28, 2025 and February 29, 2024, and the related consolidated statements of operations and comprehensive loss, of changes in stockholders’ equity and of cash flows for the years then ended, including the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of February 28, 2025 and February 29, 2024, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Liquidity risk assessment

As described in Note 1 and 2 to the consolidated financial statements, the Company’s consolidated financial statements have been prepared on a going concern basis, as management has assessed and determined that the Company will be able to realize its assets and discharge its liabilities in the normal course of business as they become due for at least twelve months from the issuance date of these consolidated financial statements. For the year ended February 28, 2025, the Company incurred a net loss of $15.1 million and net cash used in operating activities was $2.1 million. As of February 28, 2025, the accumulated deficit amounted to $192.0 million. Management evaluates the Company’s liquidity to determine if there is substantial doubt about the Company’s ability to continue as a going concern. In preparing this liquidity assessment, management applies significant judgment in estimating future cash flow requirements of the Company based on budgets and forecasts, which includes developing assumptions related to (i) the estimation of amount and timing of future cash outflows and cash inflows; and (ii) determining what future expenditures are committed and what could be considered discretionary.

The principal considerations for our determination that performing procedures relating to the liquidity risk assessment is a critical audit matter are the significant judgments made by management in estimating the future cash flow requirements of the Company based on budgets and forecasts and in developing the related assumptions. This in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence related to management’s liquidity risk assessment and the development of assumptions included in the estimated future cash flows.

Additionally, these procedures included evaluating the sufficiency of the Company’s liquidity risk disclosure.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others, (i) evaluating management’s assessment of whether the Company has sufficient cash resources for at least twelve months from the issuance date of the consolidated financial statements; (ii) testing the completeness and accuracy of the underlying data used in management’s estimation of future cash flow requirements; (iii) evaluating the reasonableness of management’s assumptions related to the estimation of the amount and timing of future cash outflows and cash inflows; and (iv) determining what future expenditures are committed and what could be considered discretionary. The evaluation of these assumptions considered (i) management’s historical accuracy in forecasting cash flows and setting budgets; and (ii) whether these assumptions were consistent with evidence obtained in other areas of the audit.

/s/PricewaterhouseCoopers LLP

Montréal, Canada

May 29, 2025

We have served as the Company’s auditor since 2017.

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Loop Industries, Inc.

Consolidated Balance Sheets

(in thousands of U.S. dollars, except per share data)	As at
	February 28, 2025			February 29, 2024

Assets
Current assets
Cash and cash equivalents	$	12,973		$	6,958
Accounts receivable (Note 3)		639			351
Inventories (Note 4)		82			102
Prepaid expenses (Note 5)		158			577
Total current assets		13,852			7,988
Investments in joint ventures (Note 11)		1,281			381
Property, plant and equipment, net (Note 6)		1,737			10,636
Intangible assets, net (Note 7)		1,708			1,548
Total assets	$	18,578		$	20,553

Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued liabilities (Note 9)	$	3,545		$	2,321
Unearned revenue (Note 16)		102			-
Current portion of long-term debt (Note 13)		312			100
Total current liabilities		3,959			2,421
Due to customer (Note 10)		832			770
Series B Convertible Preferred stock (Note 12)		10,647			-
Long-term debt (Note 13)		2,773			3,220
Total liabilities		18,211			6,411

Stockholders' Equity
Series A Preferred stock par value $0.0001; 25,000,000 shares authorized; one share issued and outstanding (Note 15)		-			-
Common stock par value $0.0001; 250,000,000 shares authorized; 47,620,263 shares issued and outstanding (2024 – 47,528,908) (Note 15)		5			5
Additional paid-in capital		193,529			171,792
Additional paid-in capital – Warrants (Note 21)		-			20,385
Accumulated deficit		(192,027	)		(176,970	)
Accumulated other comprehensive loss		(1,140	)		(1,070	)
Total stockholders' equity		367			14,142
Total liabilities and stockholders' equity	$	18,578		$	20,553

See accompanying notes to the consolidated financial statements.

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Loop Industries, Inc.

Consolidated Statements of Operations and Comprehensive Loss

(in thousands of U.S. dollars, except for share data)	Years Ended
	February 28, 2025			February 29, 2024
Revenues (Note 16)	$	10,889		$	153

Expenses :
Research and development (Note 17)		6,864			11,379
General and administrative (Note 18)		9,228			9,988
Impairment of equipment (Note 6)		8,460			-
Depreciation and amortization (Notes 6 and 7)		524			535
Total expenses		25,076			21,902

Other loss (income) :
Loss on equity accounted investment (Note 11)		687			-
Interest and other financial expenses (income) (Note 22)		618			(41	)
Interest income		(238	)		(558	)
Foreign exchange gain		(197	)		(63	)
Total other loss (income)		870			(662	)
Net loss		(15,057	)		(21,087	)

Other comprehensive income (loss) -
Foreign currency translation adjustment		(70	)		71
Comprehensive loss	$	(15,127	)	$	(21,016	)
Net loss per share
Basic and diluted	$	(0.32	)	$	(0.44	)
Weighted average common shares outstanding
Basic and diluted		47,587,038			47,522,483

See accompanying notes to the consolidated financial statements.

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Loop Industries, Inc.

Consolidated Statements of Changes in Stockholders’ Equity

For the Years Ended February 28, 2025 and February 29, 2024

(in United States dollars)

(in thousands of U.S. dollars, except for share data)	Year ended February 28, 2025

	Common stock par value $0.0001				Preferred stock par value $0.0001				Additional		Additional Paid-in						Accumulated Other			Total
	Number of Shares		Amount		Number of Shares		Amount		Paid-in Capital		Capital - Warrants			Accumulated Deficit			Comprehensive Loss			Stockholders' Equity

Balance, February 29, 2024		47,528,908	$	5		1	$	-	$	171,792	$	20,385		$	(176,970	)	$	(1,070	)	$	14,142
Issuance of shares upon the settlement of restricted stock units (Notes 15 and 19)		91,355		-		-		-		-		-			-			-			-
Expiration of warrants (Note 21)		-		-		-		-		20,385		(20,385	)		-			-			-
Stock options issued for services (Note 19)		-		-		-		-		555		-			-			-			555
Restricted stock units issued for services (Note 19)		-		-		-		-		797		-			-			-			797
Foreign currency translation		-		-		-		-		-		-			-			(70	)		(70	)
Net loss		-		-		-		-		-		-			(15,057	)		-			(15,057	)
Balance, February 28, 2025		47,620,263	$	5		1	$	-	$	193,529	$	-		$	(192,027	)	$	(1,140	)	$	367

See accompanying notes to the consolidated financial statements.

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Loop Industries, Inc.

Consolidated Statements of Changes in Stockholders’ Equity

For the Years Ended February 28, 2025 and February 29, 2024 (continued)

(in United States dollars)

(in thousands of U.S. dollars, except for share data)	Year ended February 29, 2024

	Common stock par value $0.0001				Preferred stock par value $0.0001				Additional		Additional Paid-in					Accumulated Other			Total
	Number of Shares		Amount		Number of Shares		Amount		Paid-in Capital		Capital - Warrants		Accumulated Deficit			Comprehensive Loss			Stockholders' Equity

Balance, February 28, 2023		47,469,224	$	5		1	$	-	$	170,370	$	20,385	$	(155,883	)	$	(1,141	)	$	33,736
Issuance of shares upon the settlement of restricted stock units (Notes 15 and 19)		51,963		-		-		-		-		-		-			-			-
Issuance of shares upon the exercise of stock options (Notes 15 and 19)		7,721		-		-		-		-		-		-			-			-
Stock options issued (Note 19)		-		-		-		-		644		-		-			-			644
Restricted stock units issued (Note 19)		-		-		-		-		778		-		-			-			778
Foreign currency translation		-		-		-		-		-		-		-			71			71
Net loss		-		-		-		-		-		-		(21,087	)		-			(21,087	)
Balance, February 29, 2024		47,528,908	$	5		1	$	-	$	171,792	$	20,385	$	(176,970	)	$	(1,070	)	$	14,142

See accompanying notes to the consolidated financial statements.

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Loop Industries, Inc.

Consolidated Statements of Cash Flows

(in United States dollars)

(in thousands of U.S. dollars)	February 28, 2025			February 29, 2024
Cash Flows from Operating Activities
Net loss	$	(15,057	)	$	(21,087	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization (Notes 6 and 7)		524			535
Stock-based compensation (Note 19)		1,352			1,422
Write-down of inventory (Note 4)		-			817
Accrued interest and other financing costs (Note 22)		359			(159	)
Impairment of equipment (Note 6)		8,460			-
Loss on equity accounted investment (Note 11)		687			-
Customer deposits		-			(12	)
Changes in operating assets and liabilities:
Sales tax and tax credits receivable (Note 3)		(322	)		731
Inventories (Note 4)		14			(187	)
Prepaid expenses (Note 5)		410			87
Accounts payable and accrued liabilities (Note 9)		1,350			(193	)
Unearned revenue (Note 16)		102			-
Net cash (used in) operating activities		(2,121	)		(18,046	)

Cash Flows from Investing Activities
Investment in joint venture (Note 11)		(1,954	)		-
Distribution from equity investment (Note 11)		368			-
Additions to property, plant and equipment (Note 6)		-			(5,162	)
Additions to intangible assets (Note 7)		(450	)		(482	)
Net cash (used in) investing activities		(2,036	)		(5,644	)

Cash Flows from Financing Activities
Proceeds from issuance of series B Convertible Preferred stock (Note 12)		10,395			-
Repayment of long-term debt (Note 13)		(77	)		(63	)
Net cash provided by (used in) financing activities		10,318			(63	)

Effect of exchange rate changes		(146	)		120
Net change in cash and cash equivalents		6,015			(23,633	)
Cash and cash equivalents, beginning of year		6,958			30,591
Cash and cash equivalents, end of year	$	12,973		$	6,958

Supplemental Disclosure of Cash Flow Information:
Income tax paid	$	-		$	-
Interest paid	$	257		$	118
Interest received	$	307		$	488

See accompanying notes to the consolidated financial statements.

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Loop Industries, Inc.

February 28, 2025 and February 29, 2024

Notes to the Consolidated Financial Statements

(in thousands of United States dollars except where otherwise indicated)

1. The Company and Basis of Presentation

The Company

Loop Industries, Inc. (the “Company,” “Loop,” “we,” or “our”) is a technology company that owns patented and proprietary technology that depolymerizes no and low-value waste polyethylene terephthalate (“PET”) plastic and polyester fiber 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. The Company is currently in the pre-commercialization stage with limited revenues.

Basis of presentation

These consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“US GAAP”) and comprise the consolidated financial position and results of operations of Loop Industries, Inc. and its subsidiaries, Loop Innovations, LLC and Loop Canada Inc. All subsidiaries are, either directly or indirectly, wholly owned subsidiaries of Loop Industries, Inc. (collectively, the “Company”). The Company owns, through Loop Innovations, LLC, a 50% interest in a joint venture, Indorama Loop Technologies, LLC, which is accounted for under the equity method. The Company also owns a 50% interest in a joint venture, Ester Loop Infinite Technologies Private Limited, which is accounted for under the equity method.

Intercompany balances and transactions are eliminated on consolidation.

The consolidated financial statements of the Company have been prepared on a going concern basis, which contemplates the continuing of operations, the realization of assets and the settlement of liabilities in the normal course of business.

All monetary amounts in these notes to the consolidated financial statements are in thousands of U.S. dollars unless otherwise specified, except for per share data.

2. Summary of Significant Accounting Policies

Liquidity risk assessment

On December 23, 2024, the Company received cash proceeds of $20,790 from the closing of transactions with Reed Societe Generale Group consisting of the issuance of Series B Convertible Preferred Stock and its first technology licensing agreement (see Notes 12 and 16 for additional details).

Management continuously monitors the Company’s cash resources against its short-term cash commitments to ensure there is sufficient liquidity to fund its costs for at least twelve months from the financial statements issuance date. It evaluates the Company’s liquidity to determine if there is substantial doubt about its ability to continue as a going concern. In preparing this liquidity assessment, management applies significant judgment in estimating future cash flow requirements of the Company based on budgets and forecasts, which includes developing assumptions related to: (i) the estimation of amount and timing of future cash outflows and inflows, and (ii) determining what future expenditures are committed and what could be considered discretionary. Based on this assessment, management has determined that current available liquidity will be sufficient to meet the Company’s obligations, commitments and budgeted expenditures for at least twelve months from the issuance date of these consolidated financial statements.

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Revenue recognition

The Company also enters into agreements to provide engineering services for Infinite Loop™ facilities. Engineering fees are recognized over time, as services are performed.

Use of estimates

The preparation of financial statements in conformity with US GAAP requires management to use its judgment to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Those estimates and assumptions include the going concern assessment, estimates for depreciable lives and recoverability of property, plant and equipment and intangible assets, assumptions made in the classification of convertible preferred securities, assumptions made in the revenue recognition for licensing contracts, assumptions made in calculating the fair value of stock-based compensation and other equity instruments, and the assessment of performance conditions for stock-based compensation awards.

Joint Ventures

The Company accounts for investments in joint ventures in which it exercises significant influence but does not have a controlling financial interest using the equity method of accounting in accordance with ASC 323, Investments—Equity Method and Joint Ventures. Under the equity method, the Company's share of the investee’s net income or loss is recognized in the consolidated statements of operations and added to or deducted from the carrying value of the investment. Distributions received from joint ventures are recorded as reductions to the carrying amount of the investment.

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The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable. If an impairment is identified and deemed other-than-temporary, the investment is written down to its fair value. The Company assesses whether a joint venture is a variable interest entity (VIE) under ASC 810, Consolidation, and consolidates the entity if it is deemed to be the primary beneficiary.

Convertible Preferred Stock

The Company accounts for convertible preferred stock in accordance with applicable accounting guidance, including ASC 480, Distinguishing Liabilities from Equity and ASC 470, Debt. Instruments are classified as liabilities when they include contractual obligations that may require the issuer to settle in cash or other financial assets, or when redemption is outside the issuer’s control.

Convertible preferred stock is classified as a liability when it contains redemption features or other settlement terms that result in an obligation for the Company, including mandatory or holder-initiated redemption rights, even when the instrument ultimately settles in equity securities. Such instruments may also accrue fixed paid-in-kind (“PIK”) dividends, which are recognized through periodic accretion to the carrying amount of the liability.

These instruments are initially recorded at fair value, net of issuance costs, and subsequently measured at amortized cost using the effective interest method. Periodic accretion of the carrying value and dividend accruals are recognized in the consolidated statement of operations as interest expense.

The Company evaluates all convertible instruments for potential embedded features requiring separate accounting under ASC 815, Derivatives and Hedging. If applicable, bifurcated derivative components are measured at fair value, with changes recognized in earnings.

Fair value of financial instruments

The Company applies Financial Accounting Standards Board (“FASB”) Codification (“ASC”) 820, Fair Value Measurement, which defines fair value and establishes a framework for measuring fair value and making disclosures about fair value measurements. FASB ASC 820 establishes a hierarchal disclosure framework which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is impacted by a number of factors, including the type of financial instruments and the characteristics specific to them. Financial instruments with readily available quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

There are three levels within the hierarchy that may be used to measure fair value:

Level 1 –	A quoted price in an active market for identical assets or liabilities.

Level 2 –	Significant pricing inputs that are observable, which are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources.

Level 3 –	Significant pricing inputs that are unobservable, which are inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

The fair value measurements level of an asset or liability within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used should maximize the use of observable inputs and minimize the use of unobservable inputs.

The valuation methodologies described above may produce a fair value calculation that may not be indicative of future net realizable value or reflective of future fair values.

The fair value of cash, cash equivalents, accounts receivable and accounts payable and accrued liabilities approximate their carrying values due to their short-term maturity.

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Research and development expenses

Research and development costs are charged to expense as they are incurred. Research and development expenses relate primarily to process development and design, customer trials and characterization studies, testing of pre-production samples, machinery and equipment expenditures for use in the production facility in Terrebonne, Québec (the “Terrebonne Facility”), compensation, and consulting and engineering fees. Research and development costs are presented net of related tax credits and government grants.

Government grants

US GAAP for profit-oriented entities does not define government grants; nor is there specific guidance applicable to government grants. Under the Company’s accounting policy for government grants and consistent with non-authoritative guidance, grants are recognized on a systematic basis over the periods in which the entity recognizes the related costs.

Grants that relate to the acquisition of an asset are recognized as a reduction of the cost of the asset and in the statement of operations and comprehensive loss as the asset is depreciated or amortized.

A grant that is compensation for expenses or losses already incurred, or for which there are no future related costs, is recognized in the statement of operations and comprehensive loss in the period in which it becomes receivable.

Low-interest loans or interest-free loans from a government are initially measured at fair value and an interest expense is recognized on the loan subsequently under the effective interest method, with the difference recognized as a government grant.

Reimbursable tax credits are recognized when amounts can be reasonably estimated on a systematic basis over the periods in which the Company recognizes the related costs. The Company is currently eligible for reimbursable Provincial research and development tax credits and investment tax credits, which are related to costs associated with its Terrebonne Facility and recorded as a reduction of research and development expenses.

Deferred financing costs, debt discounts, discount on due to customer and other transaction costs

Deferred financing costs represent commitment fees, legal fees and other costs associated with obtaining commitments for financing. These fees are amortized as a component of interest expense over the terms of the respective financing agreements using the effective interest rate method. Unamortized deferred financing fees are expensed in full when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined that the financing will not be successful.

Transaction costs associated with issuing equity are reflected as a reduction of accumulated paid-in-capital.

Foreign currency translations and transactions

The accompanying consolidated financial statements are presented in U.S. dollars, the reporting currency of the Company. Assets and liabilities of subsidiaries that have a functional currency other than that of the Company are translated to U.S. dollars at the exchange rate as at the balance sheet date. Income and expenses are translated at the average exchange rate of the period. The resulting translation adjustments are included in other comprehensive income (loss) (“OCI”). The Company currently is not engaged in any currency hedging activities.

For transactions and balances, monetary assets and liabilities denominated in foreign currencies are translated into the functional currency of the entity at the prevailing exchange rate at the reporting date. Non-monetary assets and liabilities, and revenue and expense items denominated in foreign currencies are translated into the functional currency using the exchange rate prevailing at the dates of the respective transactions. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in the consolidated statements of operations and comprehensive loss, except for gains or losses arising from the translation of intercompany balances denominated in foreign currencies that forms part in the net investment in the subsidiary which are included in OCI.

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Property, plant and equipment

Property, plant and equipment are recorded at cost, net of accumulated amortization and impairment, and are amortized over their estimated useful lives at the time they are put to use, unless the useful life is indefinite, using the straight-line method over the following periods:

Building	30 years
Land	Indefinite
Office equipment and furniture	8 years
Building and land improvements	5-10 years

Costs related to repairs and maintenance of property, plant and equipment are expensed in the period in which they are incurred. Upon sale or disposal, the Company writes off the cost of the asset and the related amount of accumulated depreciation. The resulting gain or loss is included in the consolidated statement of operations and comprehensive loss.

Management reviews the carrying values of its property, plant and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group might not be recoverable. Assets are grouped at the lowest level for which identifiable cash flows are largely independent when testing for, and measuring for, impairment. In performing its review of recoverability, the Company estimates the future cash flows expected to result from the use of the asset or asset group and its eventual disposition. If the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset or asset group, an impairment loss is recognized in the consolidated statements of operations. Measurement of the impairment loss is based on the excess of the carrying amount of the asset or asset group over the fair value calculated using discounted expected future cash flows.

Stock‑based compensation

The Company periodically issues stock options, warrants and restricted stock units to employees and non-employees in non-capital raising transactions for services and financing expenses. The Company accounts for stock options granted to employees based on the authoritative guidance provided by the FASB wherein the fair value of the award is measured on the grant date and recognized as compensation expense on the straight-line basis over the vesting period. When performance conditions exist, the Company recognizes compensation expenses when it becomes probable that the performance condition will be met. Forfeitures on share-based payments are recognized as they occur.

The Company estimates the fair value of restricted stock unit awards to employees and directors based on its intrinsic value at date of grant.

Inventories

Inventories are stated at the lower of cost or net realizable value using the average cost method. Inventory cost includes direct labor, cost of raw materials and production overhead costs. Inventories expensed during the year are classified as research and development expenses in the consolidated statement of operations and comprehensive loss.

The Company separates its inventories into three main categories: raw materials, work in process, and finished goods. The raw materials category includes goods used in the production process that have not yet entered the production process at the balance sheet date and mainly comprises chemicals and other process consumables. The work in process category includes goods that are in the production process at the balance sheet date and mainly comprises recycled monomers that have not yet been polymerized into Loop™ branded PET resin. The finished goods category includes goods that have completed the production process at the balance sheet date and mainly comprises Loop™ branded PET resin.

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Intangible assets

Intangible assets are recorded at cost, net of accumulated amortization and impairment, and are amortized using the straight-line method over 7 years, unless the useful life is deemed to be indefinite.

The Company reviews the carrying value of intangible assets subject to amortization whenever events or changes in circumstances indicate that the carrying amount of an intangible asset or asset group might not be recoverable or a change in the remaining useful life of an intangible asset. If the carrying value of an asset exceeds its undiscounted cash flows, the Company writes down the carrying value of the intangible asset to its fair value in the period identified. If the carrying value of assets is determined not to be recoverable, the Company records an impairment loss equal to the excess of the carrying value over the fair value of the assets. The Company’s estimate of fair value is based on the best information available, in the absence of quoted market prices. The Company generally calculates fair value as the present value of estimated future cash flows that the Company expects to generate from the asset. If the estimate of an intangible asset’s remaining useful life is changed, the Company amortizes the remaining carrying value of the intangible asset prospectively over the revised remaining useful life.

Income taxes

The Company calculates its provision for income tax on the basis of the tax laws enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income, in accordance with FASB ASC 740, Income Taxes. The Company uses an asset and liability approach for financial accounting and reporting for income taxes that allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense.

Net loss per share

The Company computes net loss per share in accordance with FASB ASC 260, Earnings Per Share. Basic loss per share is computed by dividing the net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the year. The Company includes common stock issuable in its calculation. Diluted loss per share is computed by dividing the net loss applicable to common stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential common shares are excluded from the computation if their effect is antidilutive.

For the years ended February 28, 2025 and February 29, 2024, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an antidilutive effect. As at February 28, 2025, the potentially dilutive securities consisted of 2,771,216 outstanding stock options (2024 – 2,772,000), 4,466,958 outstanding restricted stock units (2024 – 4,368,897), and nil outstanding warrants (2024 – 7,089,400).

Recently adopted accounting pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07, Segment Reporting, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. The updated standard is effective for our annual period ending February 28, 2025. The adoption of this accounting guidance for the year ended February 28, 2025 resulted in the inclusion of Note 24. Segment Reporting in our consolidated financial statements.

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Recently issued accounting pronouncements not yet adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09—Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances the transparency and decision usefulness of income tax disclosures. The amendments in this Update address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information and includes certain other amendments to improve the effectiveness of income tax disclosures. The updated standard is effective for our annual period beginning after December 15, 2024 and all joint ventures formed on or after January 1, 2025, which for the Company will be the annual period ending February 28, 2026. Early adoption is permitted. Management is currently evaluating the impact that the updated standard will have on our annual financial statement disclosures.

In August 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-05, Joint Venture Formations, which requires joint ventures to apply a new basis of accounting by measuring assets and liabilities at fair value upon formation. The amendments address diversity in practice by establishing requirements for recognition and measurement of net assets and liabilities on the formation date. The updated standard is effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted. Management is currently evaluating the impact that the updated standard will have on our consolidated financial statements and related disclosures.

In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires public business entities to disclose, in interim and annual reporting periods, additional information about certain expenses in the notes to financial statements. The updated standard is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. Management is currently evaluating the impact that the updated standard will have on our financial statement disclosures.

In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments, which clarifies the accounting for settlements of convertible debt instruments that occur on terms different from the original contractual conversion terms. The amendments introduce a "preexisting contract approach," requiring that, to qualify for induced conversion accounting, the inducement offer must preserve the form of consideration and provide an amount of consideration that is no less than what was issuable under the original conversion privileges. This guidance applies to convertible debt instruments with cash conversion features and to instruments that are not currently convertible but had substantive conversion features at issuance and at the time the inducement offer is accepted. The updated standard is effective for annual reporting periods beginning after December 15, 2025, including interim periods within those fiscal years. Early adoption is permitted for entities that have adopted the amendments in ASU 2020-06. Management is currently evaluating the impact that the updated standard will have on our consolidated financial statements and related disclosures.

In January 2025, the Financial Accounting Standards Board (FASB) issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. This update clarifies the effective date of ASU 2024-03, which requires public business entities to provide disaggregated disclosures of certain income statement expenses. Specifically, ASU 2025-01 confirms that the guidance in ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and for interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. Management is currently evaluating the impact that the updated standard will have on our financial statement disclosures.

3. Accounts Receivable

Accounts receivable as at February 28, 2025 and February 29, 2024 were as follows:

	February 28, 2025		February 29, 2024
Accounts receivable from customers	$	420	$	43
Research and development tax credits		121		160
Sales tax		89		75
Interest income receivable		-		70
Other receivables		9		3
	$	639	$	351

The Company is registered for the Canadian federal and provincial goods and services taxes. As such, the Company is obligated to collect from third parties and is entitled to claim sales taxes paid on its expenses and capital expenditures incurred in Canada.

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In addition, Loop Canada Inc. is entitled to receive government assistance in the form of refundable and non-refundable research and development tax credits from the federal and provincial taxation authorities, based on qualifying expenditures incurred during the fiscal year. The refundable credits are from the provincial taxation authorities and are not dependent on its ongoing tax status or tax position and accordingly are not considered part of income taxes. The Company records refundable tax credits as a reduction of research and development expenses when the Company can reasonably estimate the amounts and it is more likely than not, they will be received. During the year ended February 28, 2025, the Company recorded tax credits of $85 (2024 – $263) as a reduction of research and development expenses and received $209 (2024 – $510) from taxation authorities for research and development tax credits, net of fees.

The Company is also eligible for non-refundable research and development tax credits from the federal taxation authorities which can be used as a reduction of income tax expense in any given year to the extent the Company has taxable income. The Company has not had taxable income since inception and has not been able to use these non-refundable federal research and development tax credits. During the year ended February 28, 2025, the Company was eligible for non-cash research and development tax credits in the amount of $347 (2024 – $432). These non-cash tax credits, which have an unlimited carry forward period are not recognized in the Company’s consolidated financial statements. As at February 28, 2025, the carry forward balance of non-cash research and development tax credits was $2,671 (2024 - $2,519).

Loop Canada Inc. is also eligible for refundable investment tax credits from the provincial taxation authorities based on qualifying expenditures for manufacturing equipment. The Company records refundable tax credits as a reduction of research and development expenses when the Company can reasonably estimate the amounts and it is more likely than not, they will be received. During the year ended February 28, 2025, the Company recorded investment tax credits of $5 (2024 – $56) as a reduction of research and development expenses and received $5 (2024 – $522) from taxation authorities for investment tax credits.

4. Inventories

Inventories as at February 28, 2025 and February 29, 2024 were as follows:

	February 28, 2025			February 29, 2024
Finished goods	$	488		$	552
Work in process		318			333
Raw materials		14			34
Allowance for inventory write-down		(738	)		(817	)
	$	82		$	102

As at February 28, 2025 and February 29, 2024, inventories included finished goods, work in process and raw materials. Finished goods inventories consist of bottle grade and fiber grade Loop™ PET resin which is intended to be sold to customers. Work in process inventories consist of recycled monomers (dimethyl terephthalate (“rDMT”) and monoethylene glycol (“rMEG”)), either purified or yet to be purified, resulting from the depolymerization of PET feedstock. These monomers are intended be polymerized into Loop™ PET resin in the future. Raw materials inventories consist of chemicals which are used as inputs in the PET depolymerization process. As at February 28, 2025 and February 29, 2024, finished goods and work in process inventories were presented at their net realizable value, while raw materials were presented at average cost. As at February 28, 2025, the Company recorded an allowance for inventory write-down of $738 (2024 – $817) on finished goods and work in process inventories related to inventory volumes not expected to be sold in the next twelve months.

5. Prepaid Expenses

Prepaid expenses as at February 28, 2025 and February 29, 2024 were as follows:

	February 28, 2025		February 29, 2024
Insurance	$	69	$	449
Utilities		29		31
Software		28		35
Other		32		62
	$	158	$	577

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6. Property, Plant and Equipment, net

	As at February 28, 2025
	Cost		Accumulated depreciation, write-down and impairment			Net book value
Machinery and equipment – pre-construction	$	8,460	$	(8,460	)	$	-
Building		1,717		(406	)		1,311
Land		212		-			212
Building and Land Improvements		1,741		(1,616	)		125
Office equipment and furniture		259		(170	)		89
	$	12,389	$	(10,652	)	$	1,737

	As at February 29, 2024
	Cost		Accumulated depreciation, write-down and impairment			Net book value
Machinery and equipment – pre-construction	$	8,460	$	-		$	8,460
Building		1,827		(371	)		1,456
Land		226		-			226
Building and Land Improvements		1,853		(1,472	)		381
Office equipment and furniture		275		(162	)		113
	$	12,641	$	(2,005	)	$	10,636

During the year ended February 28, 2025 the Company recorded an impairment charge for equipment of $8,460. This impairment was due to the termination of the joint venture arrangement between the Company and SK Geo Centric Co. Ltd. (“SKGC”) under which they had intended to construct and operate an Infinite Loop™ manufacturing facility in Ulsan, South Korea. While the equipment may be utilized in a future commercial production facility, the deployment plans for the use of this equipment are not fully developed at this time, therefore the recoverability of the carrying value of the equipment was tested for impairment, resulting in an impairment loss of $8,460 being recognized in the year ended February 28, 2025.

Depreciation expense amounted to $322 for the year ended February 28, 2025 (2024 – $387).

7. Intangible Assets, net

	As at February 28,			As at February 29,
	2025			2024

Patents, at cost – beginning of year	$	1,996		$	1,514
Additions in the year – patents		450			482
Patents, at cost – end of year		2,446			1,996

Patents, accumulated depreciation – beginning of year		(379	)		(231	)
Amortization of patents		(202	)		(148	)
Patents, accumulated depreciation – end of year		(581	)		(379	)

Foreign exchange effect		(157	)		(69	)
Patents, net – end of year	$	1,708		$	1,548

On April 9, 2019, the first U.S. patent was issued for the Infinite Loop™ technology. During the year ending February 28, 2025, the Company continued to develop the Infinite Loop™ technology and filed various patents in jurisdictions around the world.

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The Infinite Loop™ technology portfolio currently consists of four patent families for which the Company has 10 issued U.S. patents and four pending U.S. applications. Internationally, the Company also has issued or allowed patents in various foreign jurisdictions. All patents and patent applications, if granted are expected to expire between 2038 and 2044, not including any patent term extension.

Amortization expense amounted to $202 for the year ended February 28, 2025 (2024 - $148).

8. Financial Instruments and Management of Financial Risk

Carrying values and fair values

The following table presents the fair value of the Company’s financial liabilities at February 28, 2025 and February 29, 2024:

	Fair Value at February 28, 2025
	Carrying Amount		Fair Value		Level in the hierarchy
Financial liabilities measured at amortized cost:
Long-term debt (Note 13)	$	3,085	$	3,085	Level 2
Due to customer (Note 10)	$	832	$	832	Level 2

	Fair Value as at February 29, 2024
	Carrying Amount		Fair Value		Level in the hierarchy
Financial liabilities measured at amortized cost:
Long-term debt (Note 13)	$	3,320	$	3,377	Level 2
Due to customer (Note 10)	$	770	$	770	Level 2

The fair value of cash and cash equivalents, accounts receivable, and accounts payable and accrued liabilities approximate their carrying values due to their short-term maturity.

Currency Risk

We are subject to risks associated with currency fluctuations, and changes in foreign currency exchange rates could impact our results of operations. We operate mainly through two entities, Loop Industries, Inc., which is a Nevada corporation and has a U.S. dollar functional currency, and our wholly-owned subsidiary, Loop Canada Inc. (“Loop Canada”), which is based in Terrebonne, Québec, Canada and has a Canadian dollar functional currency. Our reporting currency is the U.S. dollar.

We mainly finance our operations through the sale and issuance of equity in U.S. dollars while our operations are concentrated in our wholly-owned subsidiary, Loop Canada. Accordingly, we are exposed to foreign exchange risk as we maintain bank accounts in U.S. dollars and a significant portion of our operational costs (including payroll, site costs, costs of locally sourced supplies and income taxes) are denominated in Canadian dollars.

Significant fluctuations in U.S. dollar to Canadian dollar exchange rates could materially affect our result of operations, cash position and funding requirements. To the extent that fluctuations in currency exchange rates cause our results of operations to differ materially from our expectations or the expectations of our investors, the trading price of our common stock could be adversely affected.

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9. Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities as at February 28, 2025 and February 29, 2024 were as follows:

	February 28, 2025		February 29, 2024
Accounts payable	$	2,010	$	602
Accrued employee compensation		554		801
Accrued engineering fees		431		511
Accrued professional fees		276		274
Other accrued liabilities		274		133
	$	3,545	$	2,321

10. Due to Customer

In October 2022, the Company received a cash deposit from a customer of $1,000 in relation to an executed capacity reservation agreement. The deposit was intended to be credited against any future sales of Loop™ PET resin over a five-year period, commencing two years after the first delivery of Loop™ PET resin to the customer. Under the terms of the capacity reservation agreement, the cash deposit was designated for expenditures related to a planned Infinite Loop™ manufacturing facility and was refundable to the customer in the event that the Infinite Loop™ manufacturing facility was not constructed.

Upon mutual agreement, the capacity reservation agreement with the customer was terminated on January 18, 2024. The customer and the Company agreed for the deposit to be refunded in full on July 1, 2027, with no restriction on the Company’s use of the funds. The amount bears no interest. The cause of the termination is related to the customer’s decision to abandon its plans to incorporate recycled PET in its products for technical reasons.

The Company reclassified the customer deposit as a due to customer and established its fair value at $762 based on a discount rate of 8.20%, which reflected a discount of $238. The discount rate used was based on the external financing from a Canadian bank. The discount on due to customer is amortized to “Interest and other financial expenses” in our Consolidated Statements of Operations and Comprehensive Loss. During the year ended February 28, 2025, the Company recorded an accretion expense of $62 (2024 – $8).

11. Investments in Joint Ventures

Joint venture with Indorama

On September 15, 2018, the Company, through its wholly-owned subsidiary Loop Innovations, LLC, a Delaware limited liability company, entered into a Joint Venture Agreement (the “Joint Venture Agreement”) with Indorama Ventures Holdings LP, USA (“Indorama”), an indirect subsidiary of Indorama Ventures Public Company Limited, to manufacture and commercialize sustainable polyester resin. Each company has a 50/50 equity interest in Indorama Loop Technologies, LLC (“ILT”), which was specifically formed to operate and execute the joint venture.

ILT meets the accounting definition of a joint venture where neither party has control of the joint venture entity and both parties have joint control over the decision-making process in ILT. As such, the Company uses the equity method of accounting to account for its share of the investment in ILT. There were no operations in ILT from the date of inception of September 24, 2018 to February 28, 2025. All contributions to ILT, which have been matched by Indorama Ventures, were used to fund engineering design costs which were capitalized in ILT. During the year ended February 28, 2025, we made no contributions to ILT (2024 – nil).

As at February 29, 2024, the carrying value of the equity investment was $381, which represented 50% of the cash balance in ILT. On October 9, 2024, ILT distributed a total of $735 in cash to the Company and Indorama, of which $368 was received by the Company. The carrying value of the Company’s investment ILT was $13 after the distribution and as of February 28, 2025.

Joint Venture with Ester

On May 1, 2024, the Company entered into an agreement with Ester Industries Ltd. (“Ester”), a manufacturer of polyester films and specialty polymers in India, to form a 50/50 joint venture based in India (“India JV”). The purpose of the India JV is to build and operate an Infinite Loop™ manufacturing facility in India which will produce lower carbon footprint rDMT, rMEG and specialty polymers, using the Infinite Loop™ Technology. During the year ended February 28, 2025, Ester Loop Infinite Technologies Private Limited (“ELITe”) was incorporated to form the India JV.

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Subject to the terms of the relevant governing documents, Ester will be the exclusive producer of specialty polymers for the India JV, and the Company will be the exclusive seller and marketing agent of the India JV’s products. Ester and the Company are contracted to work in collaboration on all financing activities for the India JV pursuant to the terms of the agreement. Pursuant to the terms of the relevant governing documents, Loop and Ester parties are required to obtain debt for a minimum of 60% of the total installed cost of the Infinite Loop™ manufacturing facility in India and will each contribute 50% of the initial equity capital of the India JV.

ELITe meets the accounting definition of a joint venture where neither party has control of the joint venture entity and both parties have joint control over the decision-making process. As such, the Company uses the equity method of accounting to account for its share of the investment in ELITe.

During the year ended February 28, 2025, Loop and Ester each contributed $1,954 (2024 – nil) to ELITe to fund preliminary project costs for the planned Infinite Loop™ facility in India, which are mainly engineering costs. ELITe incurred losses of $1,374 (2024 – nil) during the year ended February 28, 2025, resulting in the Company recording a loss on equity accounted investment of $687 (2024 – nil) for the period. As a result, the value of the carrying value of the Company’s investment in ELITe was $1,268 (2024 – nil) as at February 28, 2025.

12. Series B Preferred Stock

On December 23, 2024 (the “Issuance Date”), the Company issued and sold 1,044,430 shares of Series B Convertible Preferred Stock (“Series B CPS”) at $10.00 per share to Reed Circular Economy (the “Holder”), an affiliate of Reed Societe Generale Group, for cash proceeds of $10,395 (€10,000). The main features of the Series B CPS are as follows:

	·	Automatic conversion of the stated value ($10,395 on the Issuance Date) on the fifth anniversary of the Issuance Date into shares of the Company’s common stock at a conversion price of $4.75 per share;
	·	Accrues a cumulative fixed annual PIK dividend at a rate of 13% of the stated value, which is added to the stated value of the Series B CPS on September 30 of each year;
	·	Redeemable in cash at any time, starting after the third anniversary of the Issuance Date by the Company (issuer call option);
	·	Redeemable in cash on the fifth anniversary of the Issuance Date at the option of the Holder (put feature); and
	·	Voting rights equal to the number of whole shares of the Company’s common stock (rounded to the nearest whole share) into which the stated value of Series B CPS would be convertible on a given date.

The Series B CPS is classified as a liability in accordance with ASC 480, Distinguishing Liabilities from Equity. Although the Series B CPS is mandatorily convertible into a fixed number of common shares after five years, it contains provisions that create obligations for the Company that meet the definition of a liability under US GAAP.

Because the holder has the right to demand redemption for cash at maturity, and the issuer can redeem the instrument prior to conversion, the instrument is not solely within the Company’s control to avoid settlement in a form that would require asset transfer. Accordingly, liability classification is required under ASC 480-10-25-4.

The Series B CPS is initially recognized at fair value, net of issuance costs, and is subsequently measured at amortized cost using the effective interest method. The PIK dividends are accrued over the term of the instrument and increase the carrying amount of the liability.

Although the instrument includes voting rights on an as-converted basis, such rights do not affect the classification assessment under US GAAP. The Company has evaluated the instrument for any embedded features requiring bifurcation under ASC 815, such as derivative elements, and has concluded that separate accounting is not required.

Changes in the carrying value of the instrument, including accrued PIK dividends, are recorded in “Interest and other financial expenses” in our Consolidated Statements of Operations and Comprehensive Loss.

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The balance of Series B CPS as at February 28, 2025 and February 29, 2024 was as follows:

	February 28, 2025		February 29, 2024
Stated value at issuance	$	10,395	$	-
Accrued PIK dividends		252		-
Series B Convertible Preferred Stock	$	10,647	$	-

13. Long-Term Debt

	February 28, 2025			February 29, 2024
Investissement Québec financing facility:
Principal amount	$	3,099		$	3,353
Unamortized discount		(138	)		(191	)
Accrued interest		124			158
Total Investissement Québec financing facility		3,085			3,320
Less: current portion of long-term debt		(312	)		(100	)
Long-term debt, net of current portion	$	2,773		$	3,220

Investissement Québec financing facility

On February 21, 2020, the Company received $1,530 (CDN$2,209) from Investissement Québec as the first disbursement of our financing facility, out of a maximum of $3,186 (CDN$4,600) (the “Financing Facility”). The loan’s interest rate was initially set at 2.36% and there was a 36-month moratorium on both capital and interest repayments starting on the date of the first disbursement, after which capital and interest is repayable in 84 monthly installments. The Company established the fair value of the loan for the first disbursement at $1,354 based on a discount rate of 5.45%, which reflected a debt discount of $291. The discount rate used was based on the external financing from a Canadian bank. The Company, under the loan agreement, was required to pay fees representing 1% of the loan amount, $32 (CDN$46) to Investissement Québec which we deferred and recorded as a reduction of the Financing Facility. Debt discount and deferred financing expenses are amortized to “Interest and other financial expenses” in our Consolidated Statements of Operations and Comprehensive Loss.

On August 26, 2021, the Company received $1,656 (CDN$2,391) from Investissement Québec as the second disbursement of the Financing Facility, the balance of the total amount available under the Financing Facility. The second disbursement bears the same interest rate and repayment terms as the first disbursement. The Company established the fair value of the loan for the first disbursement at $1,750 based on a discount rate of 3.95%, which reflected a debt discount of $139. The discount rate used was based on the external financing from a Canadian bank. There were no fees associated with the second disbursement. Debt discount and deferred financing expenses are amortized to “Interest and other financial expenses” in our Consolidated Statements of Operations and Comprehensive Loss.

The Company recorded interest expense on the Investissement Québec loan for the year ended February 28, 2025 in the amount of $114 (2024 – $84) and an accretion expense of $45 (2024 – $71).

The Company also agreed to issue to Investissement Québec warrants to purchase shares of common stock of the Company in an amount equal to 10% of each disbursement up to a maximum aggregate amount of $319 (CDN$460). The exercise price of the warrants is equal to the higher of (i) $11.00 per share and (ii) the ten-day weighted average closing price of Loop 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 have a term of three years from the date of issuance. The loan can be repaid at any time by the Company without penalty. In connection with the first disbursement of the Financing Facility, the Company issued a warrant (“First Disbursement Warrant”) to acquire 15,153 shares of common stock at a strike price of $11.00 per share to Investissement Québec. The Company determined the fair value of the warrants using the Black-Scholes pricing formula. The fair value of the First Disbursement Warrant was determined to be $78 and is included in “Additional paid-in capital – Warrants” in our Condensed Consolidated Balance Sheets. In connection with the second disbursement of the Financing Facility, the Company issued a warrant (“Second Disbursement Warrant”) to acquire 17,180 shares of common stock at a strike price of $11.00 per share to Investissement Québec. The Company determined the fair value of the warrants using the Black-Scholes pricing formula. The fair value of the First Disbursement Warrant was determined to be $69 and is included in “Additional paid-in capital – Warrants” in our Condensed Consolidated Balance Sheets. The First Disbursement Warrants expired in the year ended February 28, 2023 and the Second Disbursement Warrants expired in the year ended February 28, 2025.

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Total repayments due on the Company’s indebtedness over the next five years are as follows:

Years ending	Amount
February 28, 2026	$	312
February 28, 2027		519
February 29, 2028		797
February 28, 2029		797
February 28, 2030		798
Thereafter		-
Total	$	3,223

Credit facility from a Canadian bank

14. Related Party Transactions

Employment Agreement

On June 29, 2015, the Company entered into an employment agreement with Mr. Daniel Solomita, the Company’s President and Chief Executive Officer (“CEO”). The employment agreement is for an indefinite term.

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On July 13, 2018, the Company and Mr. Solomita entered into an amendment and restatement of the employment agreement which provided for a long-term incentive grant of 4,000,000 shares of the Company’s common stock, in tranches of one million shares each, upon the achievement of four performance milestones. This was modified to provide a grant of 4,000,000 restricted stock units covering 4,000,000 shares of the Company’s common stock while the performance milestones remained the same. The grant of the restricted stock units became effective upon approval by the Company’s stockholders at the Company’s 2019 annual meeting, of an increase in the number of shares available for grant under the 2017 Equity Incentive Plan (the “Plan”). Such approval was granted by the Company’s stockholders at the Company’s 2019 annual meeting. The restricted stock units vest upon the achievement of applicable performance milestones, as follows:

i)	1,000,000 shares of common stock shall be issued to Mr. Solomita when the Company’s securities are listed on an exchange or the OTCQX tier of the OTC Markets;

ii)	1,000,000 shares of common stock shall be issued to Mr. Solomita when the Company executes a contract for a minimum quantity of 25,000 M/T of DMT/MEG or a PET;

iii)	1,000,000 shares of common stock shall be issued to Mr. Solomita when the Company’s first full-scale production facility is in commercial operation; and

iv)	1,000,000 shares of common stock shall be issued to Mr. Solomita when the Company’s second full-scale production facility is in commercial operation.

During the year ended February 28, 2017, it became probable that the first milestone would be met. Accordingly, 1,000,000 performance incentive shares of common stock with a fair value of $800,000 were earned and issuable to Mr. Solomita. This amount was reflected as stock-based compensation expense during the year ended February 28, 2017 based on the grant date fair value. The 1,000,000 performance incentive shares of common stock were replaced by vested restricted stock units, of which 200,000 were settled in October 2019, 2020 and 2021, each.

On April 30, 2020, the Company and Mr. Solomita entered into an amendment of Mr. Solomita’s employment agreement. The amendment clarified the milestones consistent with the shift in the Company’s business from the production of terephthalate to the production of dimethyl terephthalate, another proven monomer used to produce PET plastic. When a milestone becomes probable, the corresponding expense will be valued based on the grant date fair value on April 30, 2020, the date of the last modification of Mr. Solomita’s employment agreement. The closing price of the Company’s common stock on the Nasdaq on April 30, 2020 was $7.74 per share.

The vested units are settled annually in tranches of 200,000 units on October 15 of each year, unless Mr. Solomita and the Company elect to defer settlement before such date. The unvested 2,000,000 RSUs would be forfeited if Mr. Solomita left the Company, except in the case of termination without cause or resignation for good reason, in which case he would receive 50% of the unvested RSUs at the time of termination, or 100% in the case of termination without cause or resignation for good reason within 24 months after a change in control.

During the year ended February 28, 2023, Mr. Solomita met a performance milestone in relation to the signature of a supply agreement with a customer. Accordingly, 1,000,000 performance incentive RSUs with a total fair value of $7,740 were earned and issuable to Mr. Solomita. This amount was reflected as stock-based compensation expense during the year ended February 28, 2023.

As at February 28, 2025, 3,400,000 (2024 – 3,400,000) of Mr. Solomita’s RSUs were outstanding of which 1,400,000 were vested (2024 – 1,400,000). On October 12, 2023, Mr. Solomita and the Company agreed to defer by one year the settlement of 800,000 RSUs that would have otherwise settled on October 15, 2023. On October 9, 2024, Mr. Solomita and the Company agreed to defer by one year the settlement of 1,000,000 RSUs that would have otherwise settled on October 15, 2024. During the year ended February 28, 2025, no outstanding milestones became probable of being met and, accordingly, no additional stock-based compensation expense was recorded.

15. Stockholders’ Equity

Series A Preferred Stock

Mr. Solomita’s amended employment agreement of February 15, 2016 provided that the Company shall issue to Mr. Solomita one share of the Company’s Series A Preferred Stock in exchange for Mr. Solomita agreeing not to terminate his employment with the Company for a period of five years from the date of the amendment. The amendment effectively provides Mr. Solomita with a “change of control” provision over the Company in the event that his ownership of the issued and outstanding shares of common stock of the Company is diluted to less than a majority. In order to issue Mr. Solomita his one share of Series A Preferred Stock under the amendment, the Company created a “blank check” preferred stock. Subsequently, the Board of Directors of the Company approved a Certificate of Designation creating the Series A Preferred Stock, and the Company issued one share of Series A Preferred Stock to Mr. Solomita.

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The one share of Series A Preferred Stock issued to Mr. Solomita holds a majority of the total voting power so long as Mr. Solomita holds not less than 7.5% of the total number of outstanding shares of our common stock on February 12, 2016 (as adjusted for any stock splits and stock dividends effected after February 12, 2016), assuring Mr. Solomita of control of the Company in the event that his ownership of the issued and outstanding shares of common stock of the Company is diluted to a level below a majority. Mr. Solomita’s ownership as of February 28, 2025 of 19,108,722 shares of common stock and 1 share of Series A Preferred Stock provided him with 74.2% of the voting control of the Company.

Additionally, the one share of Series A Preferred Stock issued to Mr. Solomita contains protective provisions, which preclude the Company from taking certain actions without Mr. Solomita’s (or that of any person to whom the one share of Series A Preferred Stock is transferred) approval. More specifically, so long as any shares of Series A Preferred Stock are outstanding, the Company shall not, without first obtaining the approval (by vote or written consent, as provided by law) of the holders of at least a majority of the then outstanding shares of Series A Preferred Stock, voting as a separate class:

(a)	amend the Articles of Incorporation or, unless approved by the Board of Directors, including by the Series A Director, amend the Company’s By-laws;

(b)	change or modify the rights, preferences or other terms of the Series A Preferred Stock, or increase or decrease the number of authorized shares of Series A Preferred Stock;

(c)	reclassify or recapitalize any outstanding equity securities, or, unless approved by the Board of Directors, including by the Series A Director, authorize or issue, or undertake an obligation to authorize or issue, any equity securities or any debt securities convertible into or exercisable for any equity securities (other than the issuance of stock-options or securities under any employee option or benefit plan);

(d)	authorize or effect any transaction constituting a Deemed Liquidation (as defined in this subparagraph) under the Articles, or any other merger or consolidation of the Company;

(e)	increase or decrease the size of the Board of Directors as provided in the By-laws of the Company or remove the Series A Director (unless approved by the Board of Directors, including the Series A Director);

(f)	declare or pay any dividends or make any other distribution with respect to any class or series of capital stock (unless approved by the Board of Directors, including the Series A Director);

(g)	redeem, repurchase or otherwise acquire (or pay into or set aside for a sinking fund for such purpose) any outstanding shares of capital stock (other than the repurchase of shares of common stock from employees, consultants or other service providers pursuant to agreements approved by the Board of Directors under which the Company has the option to repurchase such shares at no greater than original cost upon the occurrence of certain events, such as the termination of employment) (unless approved by the Board of Directors, including the Series A Director);

(h)	create or amend any stock option plan of the Company, if any (other than amendments that do not require approval of the stockholders under the terms of the plan or applicable law) or approve any new equity incentive plan;

(i)	replace the President and/or Chief Executive Officer of the Company (unless approved by the Board of Directors, including the Series A Director);

(j)	transfer assets to any subsidiary or other affiliated entity (unless approved by the Board of Directors, including the Series A Director);

(k)	issue, or cause any subsidiary of the Company to issue, any indebtedness or debt security, other than trade accounts payable and/or letters of credit, performance bonds or other similar credit support incurred in the ordinary course of business, or amend, renew, increase or otherwise alter in any material respect the terms of any indebtedness previously approved or required to be approved by the holders of the Series A Preferred Stock (unless approved by the Board of Directors, including the Series A Director);

(l)	modify or change the nature of the Company’s business;

(m)	acquire, or cause a Subsidiary of the Company to acquire, in any transaction or series of related transactions, the stock or any material assets of another person, or enter into any joint venture with any other person (unless approved by the Board of Directors, including the Series A Director); or

(n)	sell, transfer, license, lease or otherwise dispose of, in any transaction or series of related transactions, any material assets of the Company or any Subsidiary outside the ordinary course of business (unless approved by the Board of Directors, including the Series A Director).

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Common Stock

For the year ended February 28, 2025	Number of shares		Amount
Balance, February 29, 2024		47,528,908	$	5
Issuance of shares upon settlement of restricted stock units		91,355		-
Balance, February 28, 2025		47,620,263	$	5

For the year ended February 29, 2024	Number of shares		Amount
Balance, February 28, 2023		47,469,224	$	5
Issuance of shares upon settlement of restricted stock units		51,963		-
Issuance of shares upon the exercise of stock options		7,721		-
Balance, February 29, 2024		47,528,908	$	5

During the year ended February 28, 2025, the Company recorded the following common stock transactions:

(i)	The Company issued 91,355 shares of the common stock to settle restricted stock units.

During the year ended February 29, 2024, the Company recorded the following common stock transactions:

(i)	The Company issued 51,963 shares of the common stock to settle restricted stock units.
(ii)	The Company issued 7,721 shares of the common stock to settle stock options exercised in the period.

16. Revenues

Revenue for the years ended February 28, 2025 and February 29, 2024 were as follows:

	February 28, 2025		February 29, 2024
Technology licensing	$	10,395	$	-
Engineering services		368		-
Sales of PET		126		153
	$	10,889	$	153

During the year ended February 28, 2025, the Company recorded revenues of $10,395 (2024 – nil) for technology licensing fees, which were related to the sale of a license to Reed Societe Generale Group. The Company entered into a license agreement with Reed Circular Economy (“RCE”), an affiliate of Reed Societe Generale Group, granting a non-transferable, royalty-bearing license to use Loop's proprietary depolymerization technology for one facility within Europe. Pursuant to the terms of the license agreement, the Company received an upfront royalty payment of $10,395 (€10,000).

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During the year ended February 28, 2025, the Company recorded revenues of $368 (2024 – nil) for engineering fees, which were related to an engineering services agreement between Loop and ELITe. Pursuant to the agreement, Loop is providing engineering services and support the local engineering firm for the planned Infinite Loop™ facility in India.

During the year ended February 28, 2025, the Company recorded revenues of $126 (2024 – $153) for sales of Loop™ PET resin. As at February 28, 2025, unearned revenue was $102 (2023 – nil), comprised of a payment received from a customer while the Company has not yet fulfilled its obligation to deliver PET.

17. Research and Development Expenses

Research and development expenses for the years ended February 28, 2025 and February 29, 2024 were as follows:

	February 28, 2025		February 29, 2024
Employee compensation	$	3,788	$	5,133
External engineering		1,493		2,353
Plant and laboratory operating expenses(1)		870		2,318
Machinery and equipment expenditures		64		1,142
Other		649		433
	$	6,864	$	11,379

(1)	The amount for the year ended February 29, 2024 includes an inventory write-down of $817 on finished goods and work in process inventories related to inventory volumes not expected to be sold in the next twelve months (Note 4).

18. General and Administrative Expenses

General and administrative expenses for the years ended February 28, 2025 and February 29, 2024 were as follows:

	February 28, 2025		February 29, 2024
Employee compensation	$	2,823	$	3,223
Professional fees		3,428		2,928
Insurance		1,871		2,680
Other		1,106		1,157
	$	9,228	$	9,988

19. Share-Based Payments

Stock Options

The following tables summarizes the continuity of the Company’s stock options during the years ended February 28, 2025 and February 29, 2024:

	2025					2024
	Number of stock options			Weighted average exercise price		Number of stock options			Weighted average exercise price
Outstanding, beginning of year		2,772,000		$	5.10		2,542,000		$	5.27
Granted		199,216			2.89		240,000			3.11
Exercised		-			-		(10,000	)		0.80
Forfeited		(200,000	)		0.80		-			-
Expired		-			-		-			-
Outstanding, end of year		2,771,216		$	5.25		2,772,000		$	5.10
Exercisable, end of year		2,040,000		$	6.12		1,810,000		$	6.53

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		2025				2024
Exercise price		Number of stock options outstanding		Weighted average remaining life (years)		Number of stock options outstanding		Weighted average remaining life (years)
$	0.80		280,000		0.75		480,000		1.75
$	2.68		972,000		7.75		972,000		8.75
$	2.89		199,216		9.02		-		-
$	3.11		240,000		8.08		240,000		9.08
$	5.25		380,000		2.49		380,000		3.50
$	12.00		700,000		2.54		700,000		3.54
Outstanding, end of year			2,771,216		5.13		2,772,000		5.53
Exercisable, end of year			2,040,000		4.04		1,810,000		4.55

The Company applies the fair value method of accounting for stock-based compensation awards granted. Fair value is calculated based on a Black-Scholes option pricing model. The principal components of the pricing model for the stock options granted in the years ended February 28, 2025 and February 29, 2024 were as follows:

	2025			2024
Exercise price	$	2.89		$	3.11
Risk-free interest rate		4.09	%		3.61	%
Expected dividend yield		0	%		0	%
Expected volatility		73	%		73	%
Expected life	7 years			6.5 years

During the year ended February 28, 2025, stock-based compensation expense attributable to stock options amounted to $555 (2024 – $644).

Restricted Stock Units

The following table summarizes the continuity of the restricted stock units (“RSUs”) during the years February 28, 2025 and February 29, 2024:

	2025					2024
	Number of units			Weighted average fair value price		Number of units			Weighted average fair value price
Outstanding, beginning of year		4,368,897		$	6.53		3,888,618		$	7.09
Granted		213,046			2.10		585,364			2.93
Settled		(91,355	)		6.74		(51,963	)		8.66
Forfeited		(23,630	)		4.88		(53,122	)		5.56
Outstanding, end of year		4,466,958		$	6.32		4,368,897		$	6.53
Outstanding vested, end of year		1,761,421		$	5.86		1,635,241		$	6.22

The Company applies the fair value method of accounting for awards granted through the issuance of restricted stock units. Fair value is calculated based on the intrinsic value at grant date multiplied by the number of restricted stock unit awards granted.

During the year ended February 28, 2025, stock-based compensation attributable to RSUs amounted to $797 (2024 - $778).

Stock-Based Compensation Expense

During the year ended February 28, 2025, stock-based compensation included in research and development expenses amounted to $471 (2024 – $542), and in general and administrative expenses amounted to $881 (2024 – $880).

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20. Equity Incentive Plan

On July 6, 2017, the Company adopted the 2017 Equity Incentive Plan (the “Plan”). The Plan permits the granting of warrants, stock options, stock appreciation rights and restricted stock units to employees, directors and consultants of the Company. A total of 3,000,000 shares of common stock were initially reserved for issuance under the Plan at July 6, 2017, with annual automatic share reserve increases, as defined in the Plan, amounting to the lessor of (i) 1,500,000 shares, (ii) 5% of the outstanding shares on the last day of the immediately preceding fiscal year, or (iii) such number of shares determined by the Administrator of the Plan, effective March 1, 2018. On March 1, 2023 and 2024, the share reserve was increased by 1,500,000 shares. The Plan is administered by the Board of Directors who designates eligible participants to be included under the Plan, the number of awards granted, the share price pursuant to the awards and the vesting conditions and period. The awards, when granted, will have an exercise price of no less than the estimated fair value of shares at the date of grant and a life not exceeding 10 years from the grant date. However, where a participant, at the time of the grant, owns stock representing more than 10% of the voting power of the Company, the life of the options shall not exceed 5 years.

The following table summarizes the continuity of the Plan units that were authorized for issuance as at and during the years ended February 28, 2025 and February 29, 2024:

	2025			2024
	Number of units*			Number of units*
Authorized, beginning of period		848,244			120,486
Automatic share reserve increase		1,500,000			1,500,000
Units granted		(412,262	)		(825,364	)
Units forfeited		223,630			53,122
Units expired		-			-
Authorized, end of period		2,159,612			848,244

*The use of the term “units” in the table above describes a combination of stock options and RSUs.

21. Warrants

The following table summarizes the continuity of warrants during the years ended February 28, 2025 and February 29, 2024:

	2025					2024
	Number of warrants			Weighted average exercise price		Number of warrants		Weighted average exercise price
Outstanding, beginning of year		7,089,400		$	16.65		7,089,400	$	16.65
Issued		-			-		-		-
Exercised		-			-		-		-
Expired		(7,089,400	)		16.65		-		-
Outstanding, end of year		-		$	-		7,089,400	$	16.65

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22. Interest and Other Financial Expenses

Interest and other financial expenses for the years ended February 28, 2025 and February 29, 2024 are as follows:

	2025		2024
Accrued dividends on convertible securities (Note 12)	$	252	$	-
Interest on long-term debt (Note 13)		114		84
Interest on credit facility from a Canadian bank (Note 13)		101		-
Accretion expense (Notes 10 and 13)		107		79
Discount on due to customer (Note 10)		-		(238	)
Other		44		34
	$	618	$	(41	)

23. Income Taxes

The components of the Company’s loss before taxes are summarized below:

	February 28, 2025			February 29, 2024
U.S. operations	$	(6,049	)	$	(6,012	)
Foreign operations		(9,008	)		(15,075	)
Loss before taxes	$	(15,057	)	$	(21,087	)

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A reconciliation from the statutory U.S. income tax rate and the Company’s effective income tax rate, as computed on loss before taxes, is as follows:

	February 28, 2025			February 29, 2024
Statutory Federal rate		21	%		21	%

Federal income tax at statutory rate	$	(3,162	)	$	(4,427	)
Effect of foreign jurisdiction		(410	)		(937	)
Non-deductible expenses		1,641			1,435
Tax credits related to research and development expenditures		(340	)		(367	)
Change in valuation allowance and other items		2,271			4,296
Effective income tax expense	$	-		$	-

Current	$	-		$	-
Deferred	$	-		$	-

The Company has net operating loss carry forwards of approximately $36,285 (2024 – $37,472) for U.S. Federal income tax purposes expiring between 2035 and 2038, post 2018 net operating losses may be carried forward indefinitely. The Company has net operating loss carry forwards for Canadian Federal and Québec tax purposes of approximately $80,560 (CDN$109,168), 2024 - $83,073 (CDN$112,797), and $86,816 (CDN$117,651), 2024 - $89,532 (CDN$121,572), respectively, expiring between 2037 and 2045. Realization of future tax assets is dependent on future earnings, the timing and amount of which are uncertain. Accordingly, the net future tax assets have been fully offset by a valuation allowance. The valuation allowance increased by $1,260 and $4,905, respectively, for the years ended February 28, 2025 and February 29, 2024. The Company has provided a full valuation allowance on the deferred tax assets as a result of the uncertainty regarding the probability of its realization.

The Company has approximately $10,517 (CDN$15,185), 2024 - $9,506 (CDN$12,903) of research and development expenditures for Canadian Federal and Québec provincial purposes that are available to reduce taxable income in future years and have an unlimited carry forward period, the benefit of which has not been reflected in these financial statements. Research and development expenditures are subject to audit by the taxation authorities and accordingly, these amounts may vary.

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The tax effect of temporary differences between US GAAP accounting and federal income tax accounting creating deferred income tax assets and liabilities were as follows:

	As at
	February 28, 2025			February 29, 2024
Deferred tax assets
Canada net operating loss carry forward	$	20,703		$	22,765
U.S. net operating loss carry forward		7,620			7,869
Accrual and reserves		691			616
Intangibles		357			304
Property, plant and equipment		4,115			1,914
Research and development expenditures and credits		4,745			4,428
Basis in partnership		235			235
Other		1,828			859
Deferred tax assets		40,294			38,990
Deferred tax liabilities
Intangibles		(453	)		(409	)
Deferred tax liabilities		(453	)		(409	)

Deferred tax assets, net		39,841			38,581
Valuation allowance		(39,841	)		(38,581	)
Deferred tax assets, net	$	-		$	-

Assessment of the amount of value assigned to the Company's deferred tax assets under the applicable accounting rules is judgmental. The Company is required to consider all available positive and negative evidence in evaluating the likelihood that the Company will be able to realize the benefit of its deferred tax assets in the future. Such evidence includes scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and the results of recent operations. Since this evaluation requires consideration of events that may occur some years into the future, there is an element of judgment involved. Realization of the Company's deferred tax assets is dependent on generating sufficient taxable income in future periods. Management does not believe that it is more likely than not that future taxable income will be sufficient to allow it to recover substantially all of the value assigned to its deferred tax assets. Accordingly, the Company has provided for a valuation allowance of the Company's deferred tax assets.

The tax years subject to examination by major tax jurisdiction include the years ended February 28, 2019 and forward by the U.S. Internal Revenue Service and most state jurisdictions, and the years ended February 28, 2019 and forward for the Canadian jurisdiction.

24. Segment Reporting

The Company manages its operations as a single reportable segment for the purpose of assessing performance and making operating and strategic decisions, which currently focuses on the commercialization of its technology. The accounting policies of the single reportable segment are the same as those described in the summary of significant accounting policies. The chief operating decision maker, or “CODM,” assesses performance decides whether to allocate resources for the Company’s single reportable segment based on consolidated net loss. The CODM uses net loss to regularly monitor budget versus actual results which are used in assessing performance and in establishing management’s compensation. The CODM does not review assets in evaluating the results of the single reportable segment, therefore such information is not presented.

The consolidated statement of operations provides the operating results for the single reportable segment. Significant segment expenses within the financial statement line items, Research and Development and General and administrative, are further presented in Note 17 and 18, respectively.

	Year ended
	February 28, 2025		February 29, 2024
Research and development (See components in Note 17)		6,864		11,379
General and administrative (See components in Note 18)		9,228		9,988

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Interim Chief Financial Officer, we are responsible for conducting an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as at the end of the fiscal year covered by this report. Disclosure controls and procedures means that the material information required to be included in our SEC reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to our company, including any consolidating subsidiaries, and was made known to us by others within those entities, particularly during the period when this report was being prepared. Based on this assessment, management determined that the Company’s disclosure controls and procedures as of February 28, 2025 were effective.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act, as amended, as a process designed by, or under the supervision of, our Chief Executive Officer and Interim Chief Financial Officer and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP in the United States of America and includes those policies and procedures that:

·	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions of our assets;
·	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with GAAP, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
·	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Management, under the supervision of our Chief Executive Officer and Interim Chief Financial Officer have performed an evaluation of our internal control over financial reporting under the framework in Internal Control-Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission. The objective of this assessment was to determine whether our internal control over financial reporting was effective at February 28, 2025. Based on this assessment, management determined that the Company’s internal control over financial reporting as of February 28, 2025 was effective.

Table of Contents

Attestation Report of the Registered Public Accounting Firm

This Annual Report on Form 10-K does not include an attestation report of the Company’s registered public accounting firm regarding internal controls over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to law, rules and regulations that permit us to provide only management’s report in this Annual Report on Form 10-K.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended February 28, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitation on the Effectiveness of Internal Controls

The effectiveness of any system of internal controls over financial reporting is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, any system of internal control over financial reporting can only provide reasonable, not absolute, assurances. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business but cannot assure that such improvements will be sufficient to provide us with effective internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

During the three months ended February 28, 2025, no director or officer of the Company adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

Not applicable.

Table of Contents

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item concerning our directors is incorporated by reference to the information set forth in the section titled “Proposal One: Election of Directors” in our Proxy Statement for the 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended February 28, 2025 (our “Proxy Statement”). Information required by this item concerning our executive officers is incorporated by reference to the information set forth in the section entitled “Executive Officers” in our Proxy Statement. Information required by this item concerning our audit committee and our security holder director nomination procedures is incorporated by reference to the information set forth in the section entitled “Corporate Governance” in our Proxy Statement. Information regarding Section 16 reporting compliance is incorporated by reference to the information set forth in the section entitled “Delinquent Section 16(a) Reports” in our Proxy Statement.

Our Board of Directors adopted a Code of Ethics for all of our directors, officers and employees on January 25, 2017. A copy of our Code of Ethics is available under Corporate Governance Documents in the Investors section of our website, and via the following hyperlink: http://www.loopindustries.com/cms/documents/. To date, there have been no waivers under our Code of Ethics. We will post any amendments to or waivers of, if and when granted, our Code of Ethics on our website at www.loopindustries.com. The information contained on, or that can be accessed through, our website is not a part of this Annual Report on Form 10-K.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item regarding director’s compensation table and compensation risk management disclosures are incorporated by reference to the information set forth in the section titled “Corporate Governance” in our Proxy Statement. All other information required by this item regarding executive compensation is incorporated by reference to the information set forth in the sections titled “Executive Compensation” and “Compensation Tables” in our Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this item regarding security ownership of certain beneficial owners and management and related stockholder matters is incorporated by reference to the information set forth in the sections titled “Security Ownership of Certain Beneficial Owners and Management,” “Executive Compensation” and “Compensation Tables” in our Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

It is the policy of the Board that all transactions required to be reported pursuant to Item 404 of Regulation S-K be subject to approval by the Audit Committee of the Board of Directors. In furtherance of relevant Nasdaq rules and our commitment to corporate governance, the charter of the Audit Committee provides that the Audit Committee shall review and approve any proposed related party transactions, including transactions required to be reported pursuant to Item 404 of Regulation S-K for potential conflict of interest situations. The Audit Committee reviews the material facts of all transactions that require the committee’s approval and either approves or disapproves of the transaction. In determining whether to approve a transaction, the Audit Committee will take into account, among other factors it deems appropriate, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances.

The additional information required by this item regarding director independence and certain relationships and related party transactions is incorporated by reference to the information set forth in the sections titled “Transactions with Related Persons” and “Corporate Governance” in our Proxy Statement.

ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this section is incorporated by reference from the information in the section entitled “Proposal Two: Ratification of Appointment of Independent Registered Public Accounting Firm” in our Proxy Statement.

Table of Contents

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE

(1) Financial Statements

The response to this portion of Item 15 is set forth under Item 8 above.

(2) Financial Statement Schedules.

All schedules have been omitted because they are not required or because the required information is given in the Consolidated Financial Statements or Notes thereto set forth under Item 8 above.

(3) Exhibits.

The following Exhibits, as required by Item 601 of Regulation SK, are attached or incorporated by reference, as stated below.

Exhibit Index

		Incorporated by Reference
Number	Description	Form	File No.	Filing Date	Exhibit No.
2.1	Share Exchange Agreement, dated June 29, 2015, by and among First American Group Inc., Loop Holdings, Inc., and the stockholders of Loop Holdings, Inc.	8-K	000-54768	June 30, 2015	2.1
3.1	Articles of Incorporation, as amended to date	10-K	001-38301	May 29, 2024	3.1
3.2	Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock.	8-K	001-38301	December 26, 2024	3.1
3.3	By-laws, as amended to date	8-K	000-54768	April 10, 2018	3.1
4.1	Description of Securities			Filed herewith
4.2	Investors Rights Agreement, by and between SK Global Chemical Co., LTD, Loop Industries, Inc., and Daniel Solomita	S-3	333-258982	August 20, 2021	4.1
4.3	Form of Senior Indenture	S-3	333-281883	August 30, 2024	4.3
4.4	Form of Subordinated Indenture	S-3	333-281883	August 30, 2024	4.4
10.1+	2017 Equity Incentive Plan	10-Q	000-54768	October 11, 2017	4.2
10.2+	Form of Stock Option Agreement	10-Q	000-54768	October 11, 2017	4.3
10.3+	Form of Restricted Stock Unit Agreement	10-Q	000-54768	October 11, 2017	4.4
10.4+	Amended and Restated Employment Agreement, dated July 13, 2018, by and between Loop Industries, Inc. and Daniel Solomita.	8-K	001-38301	July 13, 2018	10.12
10.5+	Form of Indemnification Agreement	10-K	000-54768	May 30, 2017	10.10
10.6	Limited Liability Company Agreement, dated September 24, 2018, by and between Loop Industries, Inc. and Indorama Loop Technologies, LLC.	8-K	001-8301	September 28, 2018	10.1
10.7	License Agreement, dated September 24, 2018, by and between Loop Industries, Inc. and Indorama Loop Technologies, LLC.	8-K	001-8301	September 28, 2018	10.2
10.8	Marketing Agreement, dated September 24, 2018, by and between Loop Industries, Inc. and Indorama Loop Technologies, LLC.	8-K	001-8301	September 28, 2018	10.3

Table of Contents

10.9+

Amendment No. 1, dated April 30, 2020, to the Amended and Restated Employment Agreement by and between Loop Industries, Inc. and Daniel Solomita, dated July 13, 2018.

10-K

000-54768

May 5, 2020

10.22

10.10

Amendment to Joint Venture Agreements, dated June 18, 2021, by and between the Company, Indorama Ventures Holdings LP and other parties thereto.

10-Q

000-54768

July 15, 2021

10.1

10.11

Securities Purchase Agreement, dated June 22, 2021, by and between SK Global Chemical Co. LTD.

10-Q

000-54768

July 15, 2021

10.2

10.12+

Employment Agreement, dated March 22, 2023, by and between Loop Canada Inc. and Fady Mansour.

10-K

001-38301

May 18, 2023

10.13

10.13*

Joint Venture Agreement, dated April 27, 2023, between SK Geo Centric Co., Ltd. and Loop Industries, Inc.

10-Q

001-38301

July 12, 2023

10.1

10.14+

Employment Agreement, dated January 30, 2020, by and between Loop Canada Inc. and Stephen Champagne.

10-Q

001-38301

July 14, 2020

10.1

10.15

Operating Credit Facility dated July 26, 2022, by and between the Company, Loop Canada, Inc. and Canadian Imperial Bank of Commerce.

10-Q

001-38301

October 12, 2022

10.1

10.16

Enhanced Recycling Partnership Agreement, dated September 10, 2020, by and between Loop Industries, Inc. and Suez Groupe.

10-Q

001-38301

October 7, 2020

10.3

10.17

Know-how and Engineering Agreement, dated September 2, 2020, by and between Loop Canada Inc. and Chemtex Global Corporation.

10-Q

001-38301

October 7, 2020

10.2

10.18

Share Purchase Agreement, dated May 30, 2024, by and between Loop Industries, Inc. and Reed Management SAS.

8-K

001-38301

June 4, 2024

10.1

10.19*

Joint Venture Agreement, dated May 1, 2024, by and among Ester Industries Limited and Loop Industries, Inc.

10-Q

001-38301

July 15, 2024

10.2

10.20

Amended and Restated Share Purchase Agreement, dated December 12, 2024, by and between Loop Industries, Inc. and Reed Management SAS.

Filed herewith

10.21

Securities Purchase Agreement, dated December 23, 2024, by and between Reed Circular Economy and Loop Industries, Inc.

Filed herewith

10.22

Investors Rights Agreement, dated December 23, 2024, by and among Reed Circular Economy, Loop Industries, Inc. and Daniel Solomita.

Filed herewith

10.23*

License Agreement, dated December 23, 2024, by and between Loop Industries, Inc. and Reed Circular Economy, acting exclusively in the name and on behalf of Infinite Loop Europe SAS.

Filed herewith

Table of Contents

Code of Ethics

8-K

000-54768

Jan 31, 2017

14.1

19.1

Insider trading policy

Filed herewith

21.1

Subsidiaries of Registrant

10-K

000-54768

May 30, 2017

21.1

23.1

Consent of PricewaterhouseCoopers LLP

Filed herewith

31.1

Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Filed herewith

31.2

Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Filed herewith

32.1

Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Furnished herewith

32.2

Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Furnished herewith

97.1

Policy Relating to Recovery of Erroneously Awarded Compensation

10-K

000-54768

May 29, 2024

97.1

101.INS

XBRL Instance Document

Filed herewith

101.SCH

XBRL Taxonomy Extension Schema Document

Filed herewith

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

Filed herewith

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

Filed herewith

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

Filed herewith

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

Filed herewith

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

________

* Portions of this document (indicated by “[***]”) have been omitted because such information is not material and is the type of information that the registrant treats as private or confidential.

+ Represents a management contract or a compensatory plan or arrangement.

ITEM 16. FORM 10-K SUMMARY

None.

Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	LOOP INDUSTRIES, INC.

Date: May 29, 2025	By:	/s/ Daniel Solomita
	Name:	Daniel Solomita
	Title:	Chief Executive Officer, President, and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.

Date: May 29, 2025	By:	/s/ Daniel Solomita
	Name:	Daniel Solomita
	Title:	Chief Executive Officer, President, and Director (principal executive officer)

Date: May 29, 2025	By:	/s/ Nicolas Lafond
	Name:	Nicolas Lafond
	Title:	Interim Chief Financial Officer (principal accounting officer and principal financial officer)

Date: May 29, 2025	By:	/s/ Laurence Sellyn
	Name:	Laurence Sellyn
	Title:	Lead Director

Date: May 29, 2025	By:	/s/ Spencer Hart
	Name:	Spencer Hart
	Title:	Director

Date: May 29, 2025	By:	/s/ Laurent Auguste
	Name:	Laurent Auguste
	Title:	Director

Date: May 29, 2025	By:	/s/ Louise Sams
	Name:	Louise Sams
	Title:	Director

Date: May 29, 2025	By:	/s/ Jay Stubina
	Name:	Jay Stubina
	Title:	Director

EX-4.1 2 loop_ex41.htm DESCRIPTION OF SECURITIES loop_ex41.htm

EXHIBIT 4.1

DESCRIPTION OF SHARE CAPITAL

The following information describes our capital stock and provisions of our articles of incorporation, as amended (the “Articles”), and bylaws, as amended (the “Bylaws”). This description is only a summary. You should refer to our Articles and Bylaws, which have been filed with the Securities and Exchange Commission.

Share Capital

Our Articles authorize 275,000,000 shares of capital stock, all with a par value of $0.0001 per share, which consists of:

●

250,000,000 shares designated as common stock;

	●	1 share designated as Series A Preferred Stock;

	●	1,044,430 shares designated as Series B Convertible Preferred Stock, with the terms and rights described in the Current Report on Form 8-K filed on December 26, 2024, which is incorporated herein by reference to the extent required; and

●

23,955,569 shares as undesignated preferred stock, the rights, preferences and privileges of which may be designated from time to time by our board of directors.

Undesignated Preferred Stock

Subject to the rights of the preferred stockholders set forth in “Series A Preferred Stock; Common Stock-Protective Provisions” below, under the terms of our Articles, our board of directors is authorized to issue shares of our undesignated preferred stock in one or more series without stockholder approval. Our board of directors has the discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock.

The purpose of authorizing our board of directors to issue preferred stock and determine its rights and preferences is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of preferred stock, while providing flexibility in connection with possible future acquisitions and other corporate purposes, will affect, and may adversely affect, the rights of holders of common stock. It is not possible to state the actual effect of the issuance of any shares of preferred stock on the rights of holders of common stock until our board of directors determines the specific rights attached to that preferred stock. The effects of issuing preferred stock could include one or more of the following:

●

restricting dividends on the common stock;

●

diluting the voting power of the common stock;

●

impairing the liquidation rights of the common stock; or

●

delaying or preventing changes in control or management of our company.

Series A Preferred Stock; Common Stock

Voting

Except as set forth below, each holder of Series A Preferred Stock has the same rights as holders of common stock and shall be entitled to notice of any stockholders’ meeting. They shall also be entitled to vote with the holders of common stock, and not as a separate class, except as may otherwise be required by law. Except as set forth below, each stockholder shall be entitled to one (1) vote for each share of stock outstanding. Except as otherwise required by law, the Articles or the Bylaws, in all matters other than the election of directors, the affirmative vote of a majority of the voting power of the shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders. Except as otherwise required by law, the Articles or the Bylaws, directors shall be elected by a plurality of the voting power of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. Where a separate vote by a class or series or classes or series is required, in all matters other than the election of directors, the affirmative vote of the majority of shares of such class or series or classes or series present in person or represented by proxy at the meeting shall be the act of such class or series or classes or series, except as otherwise provided by law, the Articles or the Bylaws. There are no cumulative rights to voting.

Each share of Series A Preferred Stock is entitled to the number of votes n calculated as follows:

n = ((Ct / 0.35) - (Ct + Cdp)) / SAt

Where: Ct = The total number of shares of common stock outstanding and entitled to vote;

Cdp = The number of shares of common stock outstanding and entitled to vote and held by Daniel Solomita, our President and Chief Executive Officer, and his permitted transferees; and

SAt = The total number of shares of Series A Preferred Stock outstanding.

Additionally, for as long as any shares of Series A Preferred Stock are outstanding, the holders of Series A Preferred Stock shall be entitled to elect one director (the “Series A Director”).

Protective Provisions

For as long as any shares of Series A Preferred Stock are outstanding, the Company must obtain the approval of the holders of at least a majority of the then outstanding shares of Series A Preferred Stock, voting as a separate class, to:

Amend our Articles or, unless approved by our board of directors, including by the Series A Director, amend our Bylaws;

Change or modify the rights, preferences or other terms of the Series A Preferred Stock, or increase or decrease the number of authorized shares of Series A Preferred Stock;

Reclassify or recapitalize any outstanding equity securities, or, unless approved by our board of directors, including by the Series A Director, authorize or issue, or undertake an obligation to authorize or issue, any equity securities or any debt securities convertible into or exercisable for any equity securities (other than the issuance of stock-options or securities under any employee option or benefit plan);

Authorize or effect any transaction constituting a Deemed Liquidation (as defined in this subparagraph), or any other merger or consolidation of the Company, where a Deemed Liquidation shall mean: (1) the closing of the sale, transfer or other disposition of all or substantially all of the Company’s assets (including an irrevocable or exclusive license with respect to all or substantially all of the Company’s intellectual property); (2) the consummation of a merger, share exchange or consolidation with or into any other corporation, limited liability company or other entity (except one in which the holders of capital stock of the Company as constituted immediately prior to such merger, share exchange or consolidation continue to hold at least 50% of the voting power of the capital stock of the Company or the surviving or acquiring entity (or its parent entity)), (3) authorizing or effecting any transaction liquidation, dissolution or winding up of the Company, either voluntary or involuntary; provided, however, that none of the following shall be considered a Deemed Liquidation: (A) a merger effected exclusively for the purpose of changing the domicile of the Company, or (B) a transaction or other event deemed to be exempt from the definition of a Deemed Liquidation by the holders of at least a majority of the then outstanding Series A Preferred Stock.

Increase or decrease the size of our board of directors as provided in our Bylaws or remove the Series A Director (unless approved by our board of directors, including the Series A Director);

Declare or pay any dividends or make any other distribution with respect to any class or series of capital stock (unless approved by our board of directors, including the Series A Director);

Redeem, repurchase or otherwise acquire (or pay into or set aside for a sinking fund for such purpose) any outstanding shares of capital stock (other than the repurchase of shares of common stock from employees, consultants or other service providers pursuant to agreements approved by our board of directors under which the Company has the option to repurchase such shares at no greater than original cost upon the occurrence of certain events, such as the termination of employment) (unless approved by our board of directors, including the Series A Director);

Create or amend any stock option plan of the Company, if any (other than amendments that do not require approval of the stockholders under the terms of the plan or applicable law) or approve any new equity incentive plan;

Replace the President and/or Chief Executive Officer of the Company (unless approved by our board of directors, including the Series A Director);

10.

Transfer assets to any subsidiary or other affiliated entity (unless approved by our board of directors, including the Series A Director);

11.

Issue, or cause any subsidiary of the Company to issue, any indebtedness or debt security, other than trade accounts payable and/or letters of credit, performance bonds or other similar credit support incurred in the ordinary course of business, or amend, renew, increase or otherwise alter in any material respect the terms of any indebtedness previously approved or required to be approved by the holders of the Series A Preferred Stock (unless approved by our board of directors, including the Series A Director);

12.

Modify or change the nature of the Company’s business;

13.

Acquire, or cause a subsidiary of the Company to acquire, in any transaction or series of related transactions, the stock or any material assets of another person, or enter into any joint venture with any other person (unless approved by our board of directors, including the Series A Director); or

14.

Sell, transfer, license, lease or otherwise dispose of, in any transaction or series of related transactions, any material assets of the Company or any subsidiary outside the ordinary course of business (unless approved by our board of directors, including the Series A Director).

Dividends

Subject to the rights of the preferred stockholders set forth in “-Protective Provisions” above, our board of directors shall have full power and discretion, to determine out of legally available funds what, if any, dividends or distributions shall be declared and paid. Dividends may be paid in cash, in property, or in shares of common stock. Shares of common stock and Series A Preferred Stock are treated equally and ratably, on a per share basis, with respect to any dividend or distribution from the Company. If a dividend is paid in the form of shares of common stock or rights to acquire common stock, the holders of common stock and Series A Preferred Stock shall both receive common stock or rights to acquire common stock. No dividends shall be declared or payable in the form of Series A Preferred Stock.

Liquidation Rights

If there is a liquidation, dissolution or winding up of the Company, holders of our common stock and Series A Preferred Stock would be entitled to share in our assets remaining after the payment of liabilities equally and ratably, on a per share basis.

Conversion

Voluntary Conversion: Each share of Series A Preferred Stock shall be convertible into one fully paid and nonassessable share of common stock at the option of the holder.

Automatic Conversion: Each share of Series A Preferred Stock shall automatically convert into one share of common stock upon the first to occur of (a) a transfer of such share of Series A Preferred Stock other than to a permitted transferee, (b) the death or incapacity of Daniel Solomita or any permitted transferee holding such share of Series A Preferred Stock, (c) the resignation of Daniel Solomita as an officer of the Company, or (d) on the first business day falling on or after the date on which Daniel Solomita ceases to hold, together with his permitted transferees, an aggregate number of the outstanding shares of common stock held by him on February 12, 2016 that are at least equal to seven and one-half percent (7.5%) of the total number of outstanding shares of common stock on February 12, 2016 (as adjusted for any stock splits and stock dividends effected after February 12, 2016).

Other Provisions

Holders of our common stock and Series A Preferred Stock have no preemptive or conversion rights or other subscription rights, and there are no redemption or sinking fund provisions applicable to the common stock or Series A Preferred Stock.

Listing on the NASDAQ

We have been approved to list our common stock, par value $0.0001 per share, on The Nasdaq Global Market under the symbol “LOOP”.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is Equiniti Trust Company, LLC. Its address is 55 Challenger Road 2nd floor Ridgefield Park, NJ 07660.

Effect of Certain Provisions of our Articles and Bylaws

The following is a summary of certain important provisions of the Articles and the Bylaws. Please note that this is only a summary and is not intended to be exhaustive. This summary is subject to, and is qualified in its entirety by reference to, the provisions of the Articles and the Bylaws.

Articles and Bylaws

Some provisions of our Articles and Bylaws contain provisions that could make the following transactions more difficult:

●

acquisition of us by means of a tender offer;

●

acquisition of us by means of a proxy contest or otherwise; or

●

removal of our incumbent officers and directors.

These provisions, summarized below, are designed to discourage coercive takeover practices and inadequate takeover bids and to promote stability in our management. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with our board of directors.

●

Undesignated Preferred Stock. The ability to authorize undesignated preferred stock makes it possible for our board of directors to issue one or more series of preferred stock with voting or other rights or preferences that could impede the success of any attempt to change control. These and other provisions may have the effect of deferring hostile takeovers or delaying changes in control or management of our Company.

●

Protective Provisions. The Series A Preferred Stock has certain protective provisions, as set forth in “-Protective Provisions,” that could have an effect of delaying, deferring or preventing a change in control of the Company.

EX-10.20 3 loop_ex1020.htm SHARE PURCHASE AGREEMENT ex1020.htm

EXHIBIT 10.20

Execution Version

Dated

December 12, 2024

REED MANAGEMENT SAS

and

LOOP INDUSTRIES, INC.

AMENDED AND RESTATED SHARE PURCHASE AGREEMENT

Contents

Section			Page

Article 1 Interpretation			8
	1.1	Definitions	8
	1.2	Gender and Number	12
	1.3	Certain Phrases and Calculation of Time	13
	1.4	Other Terms	13
	1.5	Agreed Form Documents	14
	1.6	Headings, etc.	14
	1.7	References to the Data Room and Exhibits	14
	1.8	Currency	15
	1.9	Statutory References	15
	1.10	No Presumption	15
	1.11	Governing Law	15
Article 2 Purchased Shares and Purchase Price			15
	2.1	Purchase and Sale	15
	2.2	Purchase Price	15
	2.3	Payment of the Purchase Price	16
	2.4	No Adjustments	16
Article 3 Representations and Warranties of the Purchaser			16
	3.1	Incorporation and Corporate Power	16
	3.2	Corporate Authorizations	16
	3.3	No Conflict with Authorizations, Laws, etc.	16
	3.4	Required Purchaser Authorizations	16
	3.5	No Conflict with Contracts	17
	3.6	Execution and Binding Obligation	17
	3.7	No Insolvency	17
	3.8	Purchaser as Principal	17

- 2 -

Contents

Section			Page

	3.9	Financing	17
	3.10	No Other Project in the Territory	17
	3.11	Other Representations and Warranties	18
Article 4 Representations and Warranties of the Seller			18
	4.1	Incorporation and Corporate Power	18
	4.2	Corporate Authorization	18
	4.3	No Conflict with Authorizations, Laws, etc.	18
	4.4	Required Seller Authorizations	18
	4.5	No Conflict with Contracts	19
	4.6	Execution and Binding Obligation	19
	4.7	Authorized and Issued Capital	19
	4.8	Title to Purchased Shares	19
	4.9	No Other Agreements to Purchase	19
	4.10	No Insolvency	20
	4.11	Corporations Operations and Assets	20
	4.12	Financing	20
Article 5 Covenants of the Parties			21
	5.1	Confidentiality	21
	5.2	Constitution and Organization of the Corporation	21
	5.3	Ordinary Course of Business	22
	5.4	Actions to Satisfy Closing Conditions	22
	5.5	Transfer of the Purchased Shares	23
	5.6	Corporation Bonds	23
	5.7	Convertible Preferred Stock	23
	5.8	Disbursement of the Shareholder Loan	24
	5.9	Transaction Documents and Closing Deliveries	24

- 3 -

Contents

Section			Page

Article 6 Closing			24
	6.1	Date, Time and Place of Closing	24
	6.2	Seller’s Closing Deliveries	24
	6.3	Purchaser’s Closing Deliverables	25
	6.4	Closing Payments	25
	6.5	Default at Closing	26
Article 7 Conditions of Closing			26
	7.1	Conditions in Favour of the Purchaser	26
	7.2	Conditions in Favour of the Seller	27
Article 8 Termination and Dispute Resolution			28
	8.1	Termination	28
	8.2	Effect of Termination	28
	8.3	Waiver of Conditions of Closing	29
	8.4	Dispute Resolution	29
	8.5	Efforts to Settle Disputes	29
	8.6	Litigation	29
	8.7	Injunctive Relief	29
Article 9 Indemnification and Remedies			30
	9.1	Indemnification by the Seller: General Matters	30
	9.2	Indemnification by the Purchaser	30
	9.3	Indemnification Procedure: Third Party Claims	30
	9.4	Survival of Representations and Warranties	32
	9.5	Duty to Mitigate	33
	9.6	Limitations on Liability	33
	9.7	Rights Limited	34
	9.8	Procedures for Indemnification – Direct Claims	34

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Contents

Section			Page

	9.9	Exceptions to Indemnification	34
	9.10	Rights and Remedies	34
	9.11	Tax Treatment	34
Article 10 Miscellaneous			35
	10.1	Notices	35
	10.2	Entire Agreement	36
	10.3	Variation – Termination	36
	10.4	Waiver	37
	10.5	Severability	37
	10.6	Assignments	37
	10.7	Third Party Beneficiaries	38
	10.8	Expenses	38
	10.9	Further Assurances	38
	10.10	Announcements	39
	10.11	Specific Performance	39
	10.12	Taxes	39
	10.13	Electronic Signature	39

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EXHIBITS

Exhibit	1.1(c)	Form of Articles of Incorporation
Exhibit	1.1(uu)	Form of Shareholders Agreement
Exhibit	2.3	Seller Wire information

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THIS AMENDED AND RESTATED SHARE PURCHASE AGREEMENT is dated December 12, 2024 and made between:

(1)	Reed Management SAS, a simplified joint stock company (société par actions simplifiée) formed under the laws of France having its registered office at 15 rue Soufflot 75005 Paris, France, registered with the Registre du commerce et des sociétés of Paris under number 949 366 363 (the “Seller” or “Reed”); and

(2)	Loop Industries, Inc., a corporation formed under the laws of Nevada having its registered office at 880-50 West Liberty Street – Reno Nevada 89501, USA, registered with the Nevada Secretary of State under number E0108512010-6 (the “Purchaser” or “Loop Industries”).

RECITALS:

(A)	As at the date hereof, Loop Industries is engaged in the business of conversion of waste PET plastic and polyester fiber into high value materials.

(B)	Loop Industries and Reed have entered into a Memorandum of Understanding dated January 15, 2024, and a Share Purchase Agreement dated May 30, 2024 contemplating a partnership through the establishment of Loop Europe as a joint venture to be held on a 50/50 basis by Reed as described therein. After further discussion, the Parties now contemplate a joint venture to be held on a 90% basis by Reed and on a 10% basis by Loop Industries. As such, Reed and Loop Industries desire to further amend certain provisions of the Initial SPA and restate same in its entirety.

(C)	For the purpose of this partnership, Reed is in the process of incorporating a simplified joint-stock company (société par actions simplifiée) to be incorporated under the laws of France (the “Corporation” or “Loop Europe”), which shall have rights to develop, design, finance, construct, own, operate, commercialize, solicit and promote chemical upcycling polyester resin plants and products using proprietary technology held by Loop Industries in the Territory, the whole in accordance with the terms and conditions set forth in the License Agreement and the Shareholders Agreement.

(D)	Before the date of this Agreement, the Seller, with the assistance of its lawyers, auditors and other advisers, had access to information, and conducted audits and due diligence investigations, regarding the Loop Technology (as such term is defined in the Shareholders Agreement), including through the Data Room and other information and documents made available to it. A USB driver containing a copy of all the documents constituting the Data Room has been delivered to the Seller concomitantly with the execution of this Agreement.

(E)	On the Closing Date, and upon completion of the Constitution pursuant to the terms hereof, the Seller will hold directly, or indirectly through a wholly owned subsidiary, 2,500 ordinary shares (actions ordinaires), representing of all of the issued and outstanding shares in the capital of the Corporation.

(F)	The Seller wishes to sell 250 ordinary shares (actions ordinaires), representing ten percent (10%) of the issued and outstanding shares in the capital of the Corporation at Closing and the Purchaser wishes to purchase such shares, on and subject to the terms and conditions set out in this Agreement.

NOW THEREFORE in consideration of the foregoing premises, the mutual covenants and agreements contained in this Agreement and other good and valuable consideration, the Parties agree as follows.

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Article 1

Interpretation

1.1	Definitions

	In this Agreement, the following words and expressions have the following meanings:

	(a)	“Affiliate” of any Person means any other Person who, directly or indirectly, Controls, or is Controlled by, or is under common Control with, such Person, it being specified that (i) Reed's Affiliates shall include any Entity managed or advised by Reed and/or its Affiliates, and (ii) Loop Industries' Affiliates shall be limited to the Entities Controlled, directly or indirectly, by Loop Industries.

	(b)	“Agreement” means this amended and restated share purchase agreement, the exhibits attached to it or otherwise forming part of it, all as the same may be amended, restated, replaced or supplemented from time to time; and, except where otherwise specified, the words “Article” and “Section” followed by a number or letter mean and refer to the specified Article or Section of this amended and restated share purchase agreement.

	(c)	“Articles of Incorporation” means the articles of incorporation of the Corporation (statuts constitutifs) the agreed form of which is set out in Exhibit1.1(c), as the same may be amended by the Seller, acting reasonably, subject to the prior written approval of the Purchaser, such approval not to be unreasonably withheld, delayed or conditioned.

	(d)	“Authorization” means, with respect to any Person, any order, permit, approval, consent, waiver, license or other authorization issued, granted or given by a Governmental Authority having jurisdiction over the Person.

	(e)	“Business Day” means a day on which commercial banks are open for business in Paris, France but excludes (a) a Saturday, Sunday or any other statutory or civic holiday in Paris, France, and (b) any day on which commercial banks are authorized or required to be closed in Montreal, Canada.

	(f)	“Closing” means the completion of the purchase and sale of the Purchased Shares contemplated in this Agreement.

	(g)	“Closing Date” means the date that is two (2) Business Days following the Constitution; and provided further that the Closing Date may be such earlier or later date as the Parties may agree in writing.

	(h)	“Closing Period” means the period between the close of business on the date of this Agreement and the Closing.

	(i)	“Commercially Reasonable Efforts” means the efforts that a reasonable and prudent Person who desires to achieve a business result would use in similar circumstances to ensure that such result is achieved as expeditiously as possible in the context of a commercial transaction provided, however that this shall not require a Person to take extraordinary measures, including making any payments in excess of normal filing or processing fees.

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	(j)	“Conditional License Agreement” means the conditional license agreement to be entered into at Closing, inter alia, between Loop Industries, as licensor, and the Corporation, as licensee, granting a non-transferable, non-exclusive, royalty-free license under the Loop Technology, which is subject to a suspensive condition and may only be implemented once and for one facility, with the right to grant one sublicense, as may be amended or modified from time to time.

	(k)	“Confidentiality Agreement” means the confidentiality agreement dated May 15, 2023 entered into betweenReed and the Purchaser.

	(l)	“Consent” means any consent, approval, waiver or other authorization required from a counterparty or other Person under a Contract.

	(m)	“Constitution” has the meaning specified in Section 5.2(a).

	(n)	“Contracts” means all legally binding agreements, arrangements, understandings, commitments and undertakings (whether written or oral) to which a Person is a party or a beneficiary or pursuant to which any of its property or assets are or may be affected.

	(o)	“Convertible Preferred Stocks” has the meaning specified in Section 5.7.

	(p)	“Control” has the meaning ascribed to it in paragraphs I and II of article L. 233-3 of the French Commercial Code; and “Controlling” and “Controlled by” have corresponding meanings.

	(q)	“Corporation” has the meaning specified above in the Recitals.

	(r)	“Corporation Bonds” has the meaning specified in Section 5.6.

	(s)	“Data Room” means the electronic data room established by or on behalf of the Seller on the website of Datasite (americas.datasite.com), containing certain information and documents, to which the Purchaser and its advisers have had access from January 23, 2024 to the date hereof.

	(t)	“Damages” has the meaning specified in Section 9.1.

	(u)	“Dispute” has the meaning specified in Section 8.4.

	(v)	“Entity” means any partnership, limited partnership, limited liability partnership, syndicate, sole proprietorship, corporation or company (with or without share capacity), limited liability company, stock company, trust, unincorporated association, joint venture or other entity.

	(w)	“Financing Notice” has the meaning specified in Section 5.6.

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	(x)	“First Royalty Tranche” means the amount of ten million euros (€10,000,000) payable on the Closing Date, more specifically, upon the execution of the License Agreement and as specified therein.

	(y)	“Fraud” means, with respect to a Party, the intentional fraud with respect to the making of representations and warranties contained in this Agreement, with the specific, dishonest and wrongful intent to deceive and mislead (as opposed to reckless indifference to the truth).

	(z)	“Governmental Authority” means the governments of France, Canada or any other nation, or of any political subdivision thereof, whether provincial, territorial, state, regional, municipal or local, and any department, agency, authority, instrumentality, regulatory body, central bank, court, commission, board, tribunal, arbitration tribunal, bureau or other Entity exercising executive, legislative, regulatory, judicial or administrative powers or functions under, or for the account of, any of the foregoing (including any applicable stock exchange and securities commission and any administrative independent authority (autorité administrative indépendante)).

	(aa)	“Indemnified Person” has the meaning specified in Section 9.3(a).

	(bb)	“Indemnifying Party” has the meaning specified in Section 9.3(a).

	(cc)	“Initial Notice”has the meaning specified in Section 8.5(a).

	(dd)	“Initial SPA” means the share purchase agreement entered into on May 30, 2024, between Reedand Loop Industries.

	(ee)	“Laws” means any and all (a) laws, constitutions, treaties, statutes, codes, ordinances, orders, decrees, rules, regulations and by-laws, and (b) judicial, arbitral, administrative, ministerial, departmental or regulatory judgments, orders, decisions, rulings, instruments or awards of any Governmental Authority and (c) policies, practices, standards, guidelines and protocols to the extent they have force of law.

	(ff)	“License Agreement” means the license agreement to be entered into at Closing, inter alia, between Loop Industries, as licensor, and the Corporation, as licensee, granting a non-transferable, non-exclusive, royalty-bearing license under the Loop Technology, which may only be implemented once and for one facility, with the right to grant one sublicense, as may be amended or modified from time to time.

	(gg)	“Lien” means (a) any mortgage, charge, pledge (gageor nantissement), hypothec (hypothèque), security interest (sûreté), assignment, lien (statutory or otherwise), privilege, easement, servitude, pre-emptive right or right of first refusal, ownership or title retention agreement, restrictive covenant or conditional sale agreement or option, imperfections of title or encroachments relating to real property, and (b) any other encumbrance of any nature or any arrangement or condition which, in substance, secures payment or performance of an obligation, whether contractual, statutory or otherwise.

	(hh)	“Loop Europe” has the meaning specified above in the Recitals.

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	(ii)	“Loop Industries” has the meaning specified above in the Recitals.

	(jj)	“Material Adverse Effect” means any result, occurrence, fact, change or event that, individually or in the aggregate, has a materially adverse effect on (a) the business, assets, liabilities, capitalization, condition (financial or otherwise), results of operations or prospects of the Seller or the Corporation, (b) the Seller’s ability to complete the Transactions, or (c) in the case of the application of Section 7.2(a) only, the Purchaser’s ability to complete the Transactions; but shall exclude any of the following change, event, circumstance or effect (either alone or in combination with others): (i) the announcement of the Transactions, the execution of this Agreement or the performance of obligations hereunder, including the impact of any of the foregoing on relationships with stakeholders, customers, suppliers or employees, (ii) conditions affecting the global economy or the financial, credit, commodities or capital markets as a whole, including increases in interest rates, (iii) changes generally affecting the industries in which the Corporation will operate, including supply chain interruptions, (iv) any change in, adoption of, or change in the interpretation of any applicable Law or generally accepted accounting principles or IFRS (as applicable), (v) any national or international political or social conditions, including the engagement, escalation or continuation of USA, Canada or France in hostilities, or the occurrence of any military or terrorist attack upon USA, Canada or France, or their respective diplomatic or consular offices or upon any military installation or personnel of USA, Canada or France, (vi) pandemics, epidemics or other similar disease outbreaks, including any binding directives issued by Governmental Authority in response to such disease outbreaks, (vii) earthquakes, hurricanes, floods or other natural disasters, (viii) the failure by the Corporation to meet any revenue or earnings projections, forecasts or predictions, (ix) any action taken by, or with the consent of, the Purchaser relating to the Corporation, or (x) any action by the Seller or its Affiliates required to be taken, or permitted to be taken, by this Agreement; provided, however, that (y) in the case of any of the foregoing clauses (ii), (iii), (iv) and (v) such event, charge or action does not have a materiallydisproportionate effect on the Corporation relative to other comparable Persons operating in the same industry; and (z) references in certain Sections of this Agreement to euro amounts are not intended to be, and shall not be deemed to be, illustrative for purposes of determining whether a Material Adverse Effect has occurred.

	(kk)	“MoU” means the memorandum of understanding entered into on January 15, 2024, between Reedand Loop Industries.

	(ll)	“Parties” means the Seller, the Purchaser and any other Person who may become a party to this Agreement.

	(mm)	“Person” means a natural person or an Entity.

	(nn)	“Purchase Price” has the meaning specified in Section 2.2.

	(oo)	“Purchased Shares”means 250 ordinary shares (actions ordinaires), which will represent ten percent (10%) of all of the issued and outstanding shares in the capital of the Corporation at Closing.

	(pp)	“Purchaser” has the meaning specified above in the Recitals.

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	(qq)	“Reed” has the meaning specified above in the Recitals.

	(rr)	“Seller” has the meaning specified above in the Recitals.

	(ss)	“Shareholder Loan” means the shareholder loan in an aggregate principal amount of ten million euros (€10,000,000) to be made available by the Seller to the Corporation, the key terms of which are set out in the Shareholders Agreement.

	(tt)	“Shareholder Loan Agreement” means the shareholder loan agreement documenting the disbursement of the Shareholder Loan to be entered into at Closing, the agreed form of which is set out in exhibit 5.1(a) to the Shareholders Agreement.

	(uu)	“Shareholders Agreement” means the securityholders’ agreement (pacte d’associés) to be entered into, inter alia, between the Seller and the Purchaser, and to which Loop Europe shall intervene, at Closing, the agreed form of which is set out in Exhibit1.1(uu).

	(vv)	“Territory” means the countries within the European Economic Area (“EEA”), United Kingdom, Switzerland, and Turkey, including for the avoidance of doubt any overseas territories of such countries outside continental Europe and such other territories as may be mutually agreed in writing by the Parties, but in any event excluding Liechtenstein. Countries leaving the EEA will remain part of the Territory. Countries joining the EEA will automatically become part of the Territory.

	(ww)	“Third Party Claim” has the meaning specified in Section 9.3(a).

	(xx)	“Transaction Documents” means this Agreement, the License Agreement, the Conditional License Agreement, the Shareholders Agreement, the Shareholder Loan Agreement, the documents relating to the issuance and subscription to the Corporation Bonds, the documents relating to the issuance, sale and purchase of the Convertible Preferred Stocks and all other agreements, certificates and other instruments or documents delivered or to be delivered pursuant to this Agreement, but excluding for more certainty the Initial SPA and the MoU.

	(yy)	“Transactions” means the acquisition by the Purchaser of the Purchased Shares and the other transactions ancillary thereto as contemplated by this Agreement and the other Transaction Documents, all as further described and provided for herein.

	(ZZ)	“US Securities Purchase Agreement” means the securities purchase agreement related to the Convertible Preferred Stocks to be issued and sold by Loop Industries to Loop Europe to be negotiated between the Parties as indicated in exhibit 1.1(kkk) to the Shareholders Agreement.

1.2	Gender and Number

	In this Agreement, unless there is something in the subject matter or context inconsistent therewith, words importing the singular number only (including defined terms) include the plural and vice versa and words importing a gender include all genders and, in each case, the rest of any sentence including such words is to be construed as if the necessary grammatical changes had been made.

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1.3	Certain Phrases and Calculation of Time

(a)

In this Agreement:

	(i)	the words “including” and “includes” mean “including (or includes) without limitation”; and

	(ii)	in the computation of periods of time from a specified date to a later specified date, unless otherwise expressly stated, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding”. If the last day of any such period is not a Business Day, such period will end on the next Business Day.

	(b)	When calculating the period of time “within” which or “following” which any act or event is required or permitted to be done, notice given or steps taken, the date which is the reference date in calculating such period is to be excluded from the calculation. If the last day of any such period is not a Business Day, such period will end on the next Business Day.

	(c)	Without limiting the generality of the foregoing, whenever payments are to be made or an action taken on a day which is not a Business Day, such payment will be made or such action taken on the next Business Day.

1.4	Other Terms

	In this Agreement:

	(a)	the words “real property” include immovable property;

	(b)	the phrases “the aggregate of”, “the total of” and “the sum of” and phrases of similar meaning mean “the aggregate (or total or sum), without duplication, of”;

	(c)	the words “hereof”, “herein”, “hereunder” and “hereto” and similar expressions refer to this Agreement as a whole;

	(d)	the word “or” is not exclusive;

	(e)	the words “delivered”, “made available” and “furnished” and similar expressions mean that the information, document or materials referred to have been physically or electronically (included through the Data Room) delivered to the relevant Parties; and

	(f)	the words “executed” and “signed” include electronic signatures and execution thereby, and an electronic signature shall have the same legal effect, and be as valid and enforceable, as a manually executed signature.

	(g)	the provisions of articles 640 to 642 of the French Code of Civil Procedure (Code de procédure civile) shall be applied to calculate any period of time within which or following which any act is to be taken or done under this Agreement, provided that the references in article 642 to “un jour férié ou chômé” and “premier jour ouvrable” shall be interpreted by reference to the definition of “Business Day” appearing herein;

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	(h)	unless otherwise provided herein, all references to a fixed time of a day shall mean Paris time;

	(i)	if a French term has been added in parenthesis after an English term, the French term shall prevail for the interpretation of the relevant English term;

	(j)	the obligation of any Party to cause, procure or ensure any action or omission from another Person shall be interpreted as a porte-fort obligation of such Party.

	(k)	to the fullest extent permitted by applicable Law, the Purchaser hereby expressly waives the provisions of article 1602 of the French civil code.

1.5	Agreed Form Documents

	(a)	References to a document in the “agreed form” means a term sheet, list, final draft or other document in a form which has been agreed by the Parties on or before the execution of this Agreement and exchanged between the relevant Parties for the purposes of identification (in each case with such amendments as may be agreed in writing by or on behalf of the relevant Parties).

	(b)	To the extent that there are any square brackets or missing information in any of the agreed form documents referred to herein, each of the relevant Parties, each acting reasonably and in good faith, shall (as applicable) provide such missing information, or agree on such outstanding issues, prior to the Closing Date.

1.6	Headings, etc.

	The inclusion of a table of contents, the division of this Agreement into Articles and Sections and the insertion of headings are for convenient reference only and are not to affect or be used in the construction or interpretation of this Agreement.

1.7	References to the Data Room and Exhibits

	(a)	If a matter is said to be set out, disclosed, listed, described or reflected in the Data Room, it is deemed to have been fairly disclosed to the Purchaser only if such matter is disclosed in such a manner and with sufficient detail and clarity that a reasonably skilled and prudent professional purchaser, duly assisted by competent legal and financial advisors and having conducted a due diligence review, can reasonably understand the nature, scope and consequences of such fact, matter or circumstance.

	(b)	The recitals and exhibits form an integral part of this Agreement.

	(c)	The information contained in the Data Room is confidential information and may not be disclosed unless (i) it is required to be disclosed pursuant to applicable Law, unless such applicable Law permits the Parties to refrain from disclosing the information for confidentiality or other purposes or (ii) a Party needs to disclose it in order to enforce or exercise its rights under this Agreement.

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1.8	Currency

	All monetary amounts in this Agreement, unless otherwise specified, are stated in euros (symbol: €).

1.9	Statutory References

	Except as otherwise specifically provided in this Agreement, any reference to a statute in this Agreement refers to that statute and the rules, regulations and ministerial orders made under that statute in effect on the date of this Agreement and on the Closing Date.

1.10	No Presumption

	The Parties and their counsel have participated jointly in the negotiation and drafting of this Agreement and each of the other Transaction Documents. If an ambiguity or a question of intent or interpretation arises, this Agreement and each of the other Transaction Documents are to be construed as if drafted jointly by the Parties. No presumption or burden of proof should arise in favour of any Party by virtue of the authorship of any provision of this Agreement or any of the other Transaction Documents.

1.11	Governing Law

	(a)	This Agreement is governed by and is to be interpreted and enforced in accordance with the laws of France.

	(b)	Without prejudice to Sections 8.4, 8.5 and 8.6, each of the Parties irrevocably attorns and submits to the exclusive jurisdiction of the Commercial Court of Paris, France (Tribunal de commerce de Paris) in any action or proceeding arising out of, or relating to, this Agreement. Each of the Parties waives objection to the venue of any action or proceeding in such court or any argument that such court provides an inconvenient forum.

Article 2

Purchased Shares and Purchase Price

2.1	Purchase and Sale

	Subject to the terms and conditions of this Agreement, the Seller covenants and agrees to sell and transfer to the Purchaser and the Purchaser covenants and agrees to purchase and acquire from the Seller on the Closing Date, the Purchased Shares, free and clear from all Liens.

2.2	Purchase Price

	The purchase price (the “Purchase Price”) payable by the Purchaser to the Seller for the Purchased Shares shall be a fixed amount equal to two hundred fifty euros (€250).

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2.3	Payment of the Purchase Price

	At the Closing, the Purchaser shall pay the Purchase Price in full by wire transfer to or to the order of the Seller to the bank account set forth in Exhibit 2.3.

2.4	No Adjustments

	It is acknowledged that the Purchase Price is final and that it shall not be subject to any upwards or downwards adjustment, without prejudice to the provisions of Section 9.11.

Article 3

Representations and Warranties of the Purchaser

The Purchaser represents and warrants as follows to the Seller and acknowledges and confirms that the Seller is relying upon the representations and warranties in entering into this Agreement and purchasing the Purchased Shares.

3.1	Incorporation and Corporate Power

	The Purchaser is a corporation duly formed, organized and existing under the laws of Nevada (USA) and has the corporate power and capacity to own and operate its assets, carry on its business and enter into and perform its obligations under this Agreement.

3.2	Corporate Authorizations

	The execution, delivery and performance by the Purchaser of this Agreement (a) have been authorized by all necessary corporate action on the part of the Purchaser, and (b) do not (or would not with the giving of notice, the passage of time or the happening of any other event) result in a breach or a violation of, or conflict with, any of its organizational documents, shareholders agreements, by-laws or resolutions.

3.3	No Conflict with Authorizations, Laws, etc.

	The execution, delivery and performance by the Purchaser of this Agreement do not (or would not with the giving of notice, the passage of time or the happening of any other event) (a) result in a breach or a violation of, conflict with, or cause the termination or revocation of, any Authorization held by the Purchaser and necessary to the ownership and acquisition of the Purchased Shares, or (b) result in a breach or a violation of, or conflict with, any Law applicable to the Purchaser or any judgement or order of any Governmental Authority.

3.4	Required Purchaser Authorizations

	Except for the filings to be made by the Purchaser, (i) as a result of the execution and delivery of the form of certificate of designation, the form of US Securities Purchase Agreement and the form of investors rights agreement set out in exhibit 1.1(kkk) to the Shareholders Agreement, and (ii) under securities Laws applicable to the Purchaser, there is no requirement for the Purchaser to make any filing with, give any notice to, or obtain any Authorization of, any Governmental Authority as a condition to the lawful completion of, the Transactions.

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3.5	No Conflict with Contracts

	The execution, delivery and performance by the Purchaser of this Agreement do not (or would not with the giving of notice, the passage of time or the happening of any other event):

	(a)	result in a breach or a violation of, or conflict with, any Contract to which the Purchaser is a party, or

	(b)	result in or give any Person the right to seek, or to cause:

	(i)	the termination, cancellation, amendment or renegotiation of any Contract to which the Purchaser is a party;

	(ii)	the acceleration of any payment amount or other similar obligation of the Purchaser; or

	(iii)	the forfeiture or other loss, in whole or in part, of any benefit which would otherwise accrue to the Purchaser.

3.6	Execution and Binding Obligation

	This Agreement has been duly executed and delivered by the Purchaser, and constitutes legal, valid and binding obligations of the Purchaser enforceable against it in accordance with its terms.

3.7	No Insolvency

	The Purchaser is not subject to any bankruptcy or equivalent proceedings, in particular to any proceedings with a view to the prevention or resolution of business difficulties nor subject to a judgment of dissolution, liquidation, bankruptcy or receivership.

3.8	Purchaser as Principal

	The Purchaser is acquiring the Purchased Shares for its own account and not for the benefit of, or on behalf of, any other Person (without prejudice to its assignment right to an Affiliate under Section 10.6).

3.9	Financing

	The Purchaser will have, on the Closing Date, all necessary resources to enable it to pay in immediately available funds all amount which shall become due and payable by it on the Closing Date, all other amounts due and payable by it in accordance with this Agreement and all fees and expenses to be paid by it in connection with the transactions contemplated under this Agreement.

3.10	No Other Project in the Territory

	Except for the transactions contemplated by the Transaction Documents, the Purchaser is not involved in any discussions or negotiations with any Person, with a view to, or which could reasonably lead to, create industrial projects using the Purchaser’s technology within the Territory.

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3.11	Other Representations and Warranties

	The Purchaser gives to the Seller the representations and warranties provided under paragraphs (d), (e), (f), (g) and (h) of section 3.2 of the Shareholders Agreement as if such representations and warranties were set out in this Agreement and any reference therein to the "date hereof" (or a similar expression) shall be deemed to include a reference to the date of this Agreement.

Article 4

Representations and Warranties of the Seller

The Seller represents and warrants as follows to the Purchaser and acknowledges and confirms that the Purchaser is relying on the representations and warranties in entering into this Agreement and selling the Purchased Shares to the Seller.

4.1	Incorporation and Corporate Power

	(a)	The Seller is a simplified joint stock company (société par actions simplifiée) duly formed, organized and existing under the laws of France and has the corporate power and capacity to enter into and perform its obligations under this Agreement.

	(b)	Upon the completion of the Constitution, the Corporation will be a corporation validly formed, organized and existing under the laws of France.

4.2	Corporate Authorization

	The execution, delivery and performance by the Seller of this Agreement (a) have been authorized by all necessary corporate action on the part of the Seller, and(b) do not (or would not with the giving of notice, the passage of time or the happening of any other event) result in a violation of, or conflict with, any of its organizational documents, shareholders agreements, by-laws or resolutions.

4.3	No Conflict with Authorizations, Laws, etc.

	The execution, delivery and performance by the Seller of this Agreement do not (or would not with the giving of notice, the passage of time or the happening of any other event) (a) result in a violation of, conflict with, or cause the termination or revocation of, any Authorization held by the Seller or the Corporation or necessary to the ownership and sale of the Purchased Shares, or (b) result in a violation of, or conflict with, any Law applicable to the Seller or the Corporation or any judgment or order of any Governmental Authority.

4.4	Required Seller Authorizations

	There is no requirement for the Seller or the Corporation to make any filing with, give any notice to, or obtain any Authorization of, any Governmental Authority as a condition to the lawful completion of, the Transactions.

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4.5	No Conflict with Contracts

	The execution, delivery and performance by the Seller of this Agreement do not (or would not with the giving of notice, the passage of time or the happening of any other event or circumstance):

	(a)	result in a breach or a violation of, or conflict with, any Contract to which the Seller or the Corporation is a party; or

	(b)	result in or give any Person the right to seek, or to cause:

	(i)	the termination, cancellation, amendment or renegotiation of any Contract to which the Seller or the Corporation is a party;

	(ii)	the acceleration of any payment amount or other similar obligation of the Seller or the Corporation; or

	(iii)	the forfeiture or other loss, in whole or in part, of any benefit which would otherwise accrue to the Seller or the Corporation.

4.6	Execution and Binding Obligation

	This Agreement has been duly executed and delivered by the Seller, and constitutes legal, valid and binding obligations of the Seller enforceable against it in accordance with its terms.

4.7	Authorized and Issued Capital

	(a)	On the Closing Date, upon completion of the Constitution pursuant to the terms hereof, the share capital of the Corporation (capital social) will consist of 2,500 ordinary shares (actions ordinaires), representing all of the issued and outstanding shares in the capital of the Corporation, and will have been duly issued and will be outstanding as fully paid.

	(b)	On the Closing Date, upon completion of the Constitution pursuant to the terms hereof, all of the Purchased Shares will have been issued in compliance with all applicable Laws.

4.8	Title to Purchased Shares

	(a)	On the Closing Date, upon completion of the Constitution pursuant to the terms hereof, the Purchased Shares will be owned by the Seller with good and valid title thereto, free and clear of all Liens.

	(b)	Upon completion of the Transactions, the Purchased Shares will be owned by the Purchaser with good and valid title thereto, free and clear of all Liens.

4.9	No Other Agreements to Purchase

	Except for the Purchaser’s rights under (x) this Agreement and/or (y) the Shareholders Agreement, to be executed upon Closing, no Person has any agreement, option or commitment or any right or privilege (whether by law, contractual or otherwise) capable of becoming such for (a) the purchase or acquisition from the Seller of any of the Purchased Shares, or (b) the purchase or issuance of any of the unissued shares or other securities of the Corporation.

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4.10	No Insolvency

	The Corporation and the Seller are not subject to any bankruptcy or equivalent proceedings, in particular to any proceedings with a view to the prevention or resolution of business difficulties nor subject to a judgment of dissolution, liquidation, bankruptcy or receivership.

4.11	Corporations Operations and Assets

	(a)	On the Closing Date, the Corporation will not own any assets, other than its rights under the US Securities Purchase Agreement, the License Agreement, the Conditional License Agreement and funds received from the Seller as part of the Constitution.

	(b)	Except for liabilities arising from (i) the US Securities Purchase Agreement, (ii) this Agreement, (iii) the License Agreement, (iv) the consummation of the Transactions, (v) applicable Laws, and (vi) de minimis liabilities in connection with corporate maintenance, annual filings, banking, tax returns and preparation of annual financial statements up to immediately prior to the Closing, the Corporation does not have any liabilities or other obligations towards any Person, and the assets of the Corporation are free and clear of any and all Liens.

	(c)	Since the Constitution, the Corporation has not:

	(i)	carried on any business or owned or leased any assets, other than with respect to the US Securities Purchase Agreement, the License Agreement and activities incidental thereto or derived therefrom or relating to maintaining its good standing under applicable Laws;

	(ii)	except for the right to use Reed's premises located in Paris (France) for administrative purposes, owned, leased, occupied or controlled any real or immovable property; or

	(iii)	employed any employees or engaged any consultants.

4.12	Financing

	The Seller will have, on the Closing Date, all necessary resources to enable it to pay in immediately available funds all amount which shall become due and payable by it on the Closing Date (including the Shareholder Loan), all other amounts due and payable by it in accordance with this Agreement (including the Corporation Bonds) and all fees and expenses to be paid by it in connection with the transactions contemplated under this Agreement.

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Article 5

Covenants of the Parties

5.1	Confidentiality

	(a)	The Seller and the Purchaser acknowledge having signed the Confidentiality Agreement and the Parties agree to comply with such agreement in accordance with its terms.

	(b)	The Parties agree to keep the terms of this Agreement and each of the other Transaction Documents confidential on the same terms as are set out in the Confidentiality Agreement as if such agreements had been included and referenced in the Confidentiality Agreement.

	(c)	For more certainty, the Seller acknowledges that the Purchaser may be compelled to make certain disclosures required by law, statute regulation, securities commissions (including the U.S. Securities and Exchange Commission) or other regulatory authorities or bodies. Such disclosures may include (i) the filing of all or part of this Agreement and certain other material Transaction Documents with the U.S. Securities and Exchange Commission; and (ii) posting of such agreements online, including on the public website of the U.S. Securities and Exchange Commission known as EDGAR. The Seller hereby consents to the filing and posting by the Purchaser of that portion of the Transaction Documents that is legally required to be disclosed by the Purchaser subject, to the extent legally permitted, prior information of the Seller.

5.2	Constitution and Organization of the Corporation

	(a)	Prior to (i) the Closing, and (ii) the satisfaction or waiver of the conditions (other than any such conditions which by their terms are not capable of being satisfied until the Closing Date) in favour of the Purchaser or the Seller set forth in Section 7.1 and Section 7.2, the Seller shall take all steps necessary to effect and carry out the constitution of the Corporation under the Laws of France (the “Constitution”).

	(b)	The Constitution shall (i) be duly authorized by all necessary actions of the Seller, (ii) be effected in compliance with all agreements binding upon the Seller, and (iii) be effected in compliance with all applicable Laws.

	(c)	In implementing the Constitution, the Seller shall:

	(i)	execute the Articles of Incorporation; and

	(ii)	file them, along with the complete application for the constitution of a French law company, with the Registre du commerce et des sociétés of Paris, France.

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	(d)	In implementing the steps set forth in Section 5.2(c) above, the Seller shall provide the Purchaser with any supporting information or documents reasonably requested by the Purchaser or its advisors.

	(e)	As part of the Constitution, the Seller shall take all steps necessary to: (i) authorise and accept the domiciliation of the Corporation in its premises located at 15 rue Soufflot 75005 Paris, France; (ii) obtain, if applicable, all required consents from landlords or premises administrators in connection therewith; and (iii) deliver, sign and execute any certificate of domiciliation reasonably required in connection therewith; the whole at no cost for the Corporation or the Purchaser.

	(f)	No representation, warranty or covenant made by the Seller shall be deemed breached or become inaccurate as a result of the implementation of the Constitution pursuant to this Section 5.2.

5.3	Ordinary Course of Business

	During the Closing Period, except (i) as contemplated elsewhere in the Transaction Documents or as is necessary to implement the Transactions, (ii) as may be required under applicable Laws, (iii) as reasonably required in an emergency or disaster situation in order to minimise any adverse effect of such situation, or (iv) as may be consented to in writing by the Purchaser (which consent shall not be unreasonably withheld or delayed), the Seller shall procure that the Corporation does not agree or commit to do any of the following actions (contingent or otherwise):

	(a)	declare, set aside, make or pay any dividend or interim dividend (in cash or otherwise);

	(b)	amend its articles of association, adopt any resolution for liquidation or dissolution or be a party to any merger, asset contribution or spin-off;

	(c)	carry on any business or own or lease any assets, other than maintaining its good standing under applicable Laws;

	(d)	incur any liabilities or other obligations towards any Person, except for de minimis liabilities in connection with corporate maintenance, annual filings, banking, tax returns and preparation of annual financial statements up to immediately prior to the Closing;

	(e)	own, lease, occupy or control any real or immovable property; or

	(f)	employ any employees or engage any consultants.

5.4	Actions to Satisfy Closing Conditions

	(a)	Except as otherwise provided in this Agreement, the Seller shall take all such actions as are within its control and shall use Commercially Reasonable Efforts to cause other actions to be taken which are not within its control, so as to ensure compliance with all of the conditions set forth in Section 7.1 including ensuring that during the Closing Period and at Closing, there is no breach of any of its representations and warranties.

	(b)	Except as otherwise provided in this Agreement, the Purchaser shall take all such actions as are within its control and shall use Commercially Reasonable Efforts to cause other actions to be taken which are not within its control, so as to ensure compliance with all of the conditions set forth in Section 7.2 including ensuring that during the Closing Period and at Closing, there is no breach of any of its representations and warranties.

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5.5	Transfer of the Purchased Shares

	The Seller shall take all necessary steps and corporate proceedings to permit good title to the Purchased Shares to be duly and validly transferred and assigned to the Purchaser at Closing, free and clear of all Liens.

5.6	Corporation Bonds

	Upon reception by Reed of a written notice from Loop Industries (the “Financing Notice”), which shall be provided at any time within six (6) months following Closing Date (and, failing Loop Industries having done so, be deemed provided on the first (1st) Business Day following such six (6) months period following Closing Date), each of Reed and Loop Industries shall take all necessary steps, actions and corporate proceedings to permit the occurrence, within twenty (20) Business Days following the reception of the Financing Notice, of (i) the execution, delivery and performance of the relevant documentation necessary for the issuance by the Corporation, to the sole benefit of Reed, of bonds for a nominal amount of ten million euros (€10,000,000) and governed by the terms and conditions set out in exhibit 1.1(aa) to the Shareholders Agreement (the “Corporation Bonds”), and (ii) the subscription by Reed to all the Corporation Bonds and the related disbursement of the full subscription amount to the Corporation.

5.7	Convertible Preferred Stock

	(a)	Upon reception by Reed of the Financing Notice, which shall be provided at any time within six (6) months following Closing Date (and, failing Loop Industries having done so, be deemed provided on the first (1st) Business Day following such six (6) months period following Closing Date), each of Reed and Loop Industries shall take all necessary steps, actions and corporate proceedings to permit the occurrence, within twenty (20) Business Days following the reception of the Financing Notice and subject to the concurrent issuance of the Corporation Bonds in accordance with Section 5.6, of (i) the execution, delivery and performance of the relevant documentation necessary for the issuance by Loop Industries, and subsequent sale to the Corporation, of convertible preferred stocks for a nominal amount of ten million euros (€10,000,000) governed by the form of certificate of designation, form of US Securities Purchase Agreement and form of investors rights agreements set out in exhibit 1.1(kkk) to the Shareholders Agreement (the “Convertible Preferred Stocks”), and (ii) the purchase by the Corporation of all the Convertible Preferred Stocks and the related disbursement of the full purchase price to Loop Industries.

	(b)	Upon the implementation of the Constitution, but prior to (i) the Closing, and (ii) the satisfaction or waiver of the conditions (other than any such conditions which by their terms are not capable of being satisfied until the Closing Date) in favour of the Purchaser or the Seller set forth in Section 7.1 and Section 7.2, the Seller shall take all steps necessary to cause the Corporation and/or the Purchaser to execute the US Securities Purchase Agreement.

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(c)

No representation, warranty or covenant made by the Seller shall be deemed breached or become inaccurate as a result of the execution of the US Securities Purchase Agreement by the Purchaser or the Corporation pursuant to this Section 5.7.

5.8	Disbursement of the Shareholder Loan

	Each of the Seller and the Purchaser shall take all necessary steps, actions and corporate proceedings to authorize and permit the simultaneous occurrence of (i) the disbursement of the full amount of the Shareholder Loan to the Corporation at Closing; (ii) the execution, delivery and performance of the related Shareholder Loan Agreement to be executed at Closing; and (iii) the disbursement by the Corporation of the full amount of the First Royalty Tranche under the License Agreement.

5.9	Transaction Documents and Closing Deliveries

	Upon the Constitution or as soon as reasonably possible thereafter, each of the Seller and the Purchaser shall take all necessary steps, actions and corporate proceedings to cause the Corporation to (i) authorize, enter into and execute each Transaction Document, to which it is a party; and (ii) take all necessary steps, actions and corporate proceedings to ensure the delivery of the closing deliveries set forth in section 6.2 and Section 6.3 which are under the Corporation’s control.

Article 6

Closing

6.1	Date, Time and Place of Closing

	The completion of the Transactions will take place at the offices of Norton Rose Fulbright Canada LLP located at 1, Place Ville Marie, Suite 2500, Montreal, Québec, H3B 1R1, Canada at 10:00 AM (Montreal time) on the Closing Date or at such other place, on such other date, at such other time or by such other means (including by a virtual closing) as may be agreed by the Parties.

6.2	Seller’s Closing Deliveries

	On or before the Closing Date, the Seller shall deliver or cause to be delivered to the Purchaser the following:

	(a)	a certificate of incorporation (extrait K-bis) of the Corporation evidencing completion of the Constitution;

	(b)	the duly completed, signed and dated transfer order (ordre de mouvement) with respect to the transfer of the Purchased Shares;

	(c)	the duly completed, signed and dated tax form (Cerfa 2759) with respect to the transfer of the Purchased Shares;

	(d)	the share transfer registry (registre des mouvements de titres) and the shareholders’ individual accounts (comptes individuels d’actionnaires) of the Corporation reflecting completion of the transfer of the Purchased Shares from the Seller to the Purchaser;

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	(e)	copies certified by an officer of the Seller of the resolutions adopted by the Seller in its capacity as sole shareholder of the Corporation acknowledging the entry into force of the revised articles of association of the Corporation;

	(f)	the certificates referred to in Section 7.1(a) and Section 7.1(b);

	(g)	a duly executed copy of the Shareholders Agreement;

	(h)	a copy of the Shareholder Loan Agreement duly executed by the Corporation and the Seller;

	(i)	a copy of the US Securities Purchase Agreement duly executed by the Corporation and the Purchaser;

	(j)	a copy of the License Agreement duly executed by the Corporation and the Purchaser; and

	(k)	a copy of the Conditional License Agreement duly executed by the Corporation and the Purchaser.

6.3	Purchaser’s Closing Deliverables

	On or before the Closing Date, the Purchaser shall deliver or caused to be delivered to the Seller the following:

	(a)	the certificates referred to in Section 7.2(a) and Section 7.2(b);

	(b)	a duly executed copy of the Shareholders Agreement;

	(c)	a copy of the License Agreement duly executed by the Corporation and the Purchaser;

	(d)	a copy of the Conditional License Agreement duly executed by the Corporation and the Purchaser; and

	(e)	a copy of the US Securities Purchase Agreement duly executed by the Corporation and the Purchaser.

6.4	Closing Payments

	Subject to satisfaction or waiver of the conditions of Closing by the relevant Party, at Closing:

	(a)	the Seller shall (i) deliver actual possession of the Purchased Shares to the Purchaser or as it may direct (ii) complete the disbursement of the Shareholder Loan by wire transfer to or to the order of the Corporation to the bank account set forth in the Shareholder Loan Agreement and (iii) procure that the Corporation completes the disbursement of the First Royalty Tranche by wire transfer to or to the order of the Purchaser to the bank account set forth in the License Agreement; and

	(b)	the Purchaser shall pay the Purchase Price in accordance with Section 2.3.

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6.5	Default at Closing

	All matters at Closing will be considered to take place simultaneously and no action and no delivery of any document will be deemed complete until all actions, transactions and deliveries of documents required by this Agreement are fully completed, it being specified however that the closing deliveries and closing payments set forth in Section 6.2 and Section 6.4(a) are for the benefit of the Purchaser only, and the closing deliveries and closing payments set forth in Section 6.3 and Section 6.4(b) are for the benefit of the Seller only, and may therefore be waived in whole or in part by the Purchaser in the event of a breach of Section 6.2 and Section 6.4(a) or the Seller in the event of a breach of Section 6.3 and Section 6.4(b), as the case may be.

	If the Purchaser fails to comply with any obligation in Section 6.3 or Section 6.4(b) or if the Seller fails to comply with any obligation in Section 6.2 or Section 6.4(a), then the Seller, if the defaulting party is the Purchaser, or the Purchaser, if the defaulting party is the Seller, shall be entitled (in addition to and without prejudice to all other rights or remedies available to it including the right to claim damages and/or pursue the specific performance of this Agreement (exécution forcée en nature)), by written notice to the Purchaser, if the defaulting party is the Purchaser, or to the Seller, if the defaulting party is the Seller, served on the date set for Closing (but without any need to serve any additional prior notice (mise en demeure)):

	(a)	to terminate this Agreement pursuant to Section 8.1, without liability on its part or on the part of those on whose behalf such notice is served; or

	(b)	to effect Closing so far as practicable having regard to the defaults which have occurred; or

	(c)	to set a new date for Closing (which shall be the last day of the month directly following the date originally set for Closing or, if such new date is not a Business Day, the first Business Day after such date), in which case the provisions of this Section 6.5 shall apply to Closing as so deferred but provided such deferral may only occur once (unless otherwise agreed between the Purchaser and the Seller).

Article 7

Conditions of Closing

7.1	Conditions in Favour of the Purchaser

	The obligation of the Purchaser to complete the Transactions is subject to the following conditions to be fulfilled or performed at or prior to Closing, which conditions are for the exclusive benefit of the Purchaser and may be waived, in whole or in part, by the Purchaser in its sole discretion:

(a)

Truth of Representations and Warranties. Each of the representations and warranties made by the Seller in this Agreement were true and correct as of the Closing Date with the same force and effect as if such representations and warranties had been made on and as of such date (except for representations and warranties made as of a specified date, the accuracy of which shall be determined as of such date), except to the extent that the failure or failures of such representations and warranties to be so true and correct, individually or in the aggregate, would not have a Material Adverse Effect. The Seller shall have delivered a certificate of a senior officer confirming the foregoing dated as of the Closing Date.

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	(b)	Performance of Covenants. The Seller shall have fulfilled, performed or complied in all material respects with all covenants contained in this Agreement to be fulfilled, performed or complied by it at or prior to Closing, and the Seller shall have delivered a certificate of a senior officer confirming the foregoing.

	(c)	No Legal Action. No action or proceeding shall be pending or threatened by any Governmental Authority in any jurisdiction, to enjoin, restrict or prohibit(i) any of the Transactions; or (ii) the right of the Purchaser to acquire or own the Purchased Shares.

7.2	Conditions in Favour of the Seller

	The obligation of the Seller to complete the Transactions is subject to the following conditions to be fulfilled or performed at or prior to Closing, which conditions are for the exclusive benefit of the Seller and may be waived, in whole or in part, by the Seller in its sole discretion:

	(a)	Truth of Representations and Warranties. Each of the representations and warranties made by the Purchaser in this Agreement were true and correct as of the Closing Date with the same force and effect as if such representations and warranties had been made on and as of such date (except for representations and warranties made as of a specified date, the accuracy of which shall be determined as of such date) except to the extent that the failure or failures of such representations and warranties to be so true and correct, individually or in the aggregate, would not have a Material Adverse Effect on the Purchaser’s ability to consummate the Transactions. The Purchaser shall have delivered a certificate of a senior officer confirming the foregoing dated as of the Closing Date.

	(b)	Performance of Covenants. The Purchaser shall have fulfilled, performed or complied in all material respects with all covenants contained in this Agreement to be fulfilled, performed or complied by it at or prior to Closing, and the Purchaser shall have delivered a certificate of a senior officer confirming the foregoing.

	(c)	No Legal Action. No action or proceeding shall be pending or threatened by any Governmental Authority in any jurisdiction, to enjoin, restrict or prohibit any of the Transactions.

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Article 8

Termination and Dispute Resolution

8.1	Termination

	This Agreement may be terminated at any time on or prior to the Closing Date:

	(a)	by the Purchaser upon written notice to the Seller if, on the Closing Date, any of the conditions specified in Section 7.1 have not been satisfied in full or waived by the Purchaser;

	(b)	by the Purchaser upon written notice to the Seller, if there has been a material violation or material breach by the Seller of any covenant, representation and warranty or other agreement contained in this Agreement such that any condition specified in Section 7.1 would be incapable of being satisfied or performed by the Closing Date, and such violation or breach is not waived by the Purchaser or cured by the Seller within thirty (30) days after written notice thereof by the Purchaser, provided that the Purchaser is not then in breach of this Agreement so as to cause any of the conditions in Section 7.1 not to be satisfied;

	(c)	by the Seller upon written notice to the Purchaser if, on the Closing Date, any of the conditions specified in Section 7.2 have not been satisfied in full or waived by the Seller;

	(d)	by the Seller upon written notice to the Purchaser, if there has been a material violation or material breach by the Purchaser of any covenant, representation and warranty or other agreement contained in this Agreement such that any condition specified in Section 7.2 would be incapable of being satisfied or performed by the Closing Date, and such violation or breach is not waived by the Seller or, in the case of a covenant breach, cured by the Purchaser within thirty (30) days after written notice thereof by the Seller, provided that the Seller is not then in breach of this Agreement so as to cause any of the conditions in Section 7.2 not to be satisfied;

	(e)	by either the Purchaser or the Seller if Closing has not occurred (other than through the failure of the Party seeking to terminate this Agreement to comply with its obligations under this Agreement), on or before the first (1st) Business Day occurring following a six-month period after the date hereof; or

	(f)	by written agreement of the Parties.

8.2	Effect of Termination

(a)

If this Agreement is terminated pursuant to Sections 8.1(e) or 8.1(f), all obligations of the Parties pursuant to this Agreement will terminate without further liability of any Party to the other Party except for:

	(i)	Section 5.1 relating to confidentiality;

	(ii)	Section 10.8 relating to expenses;

	(iii)	Section 10.10 relating to public announcements; and

	(iv)	this Section 8.2.

(b)

If the Agreement is terminated by a Party pursuant to Sections 8.1(a), 8.1(b), 8.1(c) or 8.1(d) (including as a result of a breach by the other Party resulting in a condition in favour of the terminating Party failing to be satisfied), then the other Party shall remain fully liable for any and all Damages suffered by the terminating Party as a result thereof.

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8.3	Waiver of Conditions of Closing

	If any of the conditions set forth in Section 7.1 have not been satisfied, the Purchaser may elect in writing to waive any such condition and proceed with the completion of the Transactions and, if any of the conditions set forth in Section 7.2 have not been satisfied, the Seller may elect in writing to waive any such condition and proceed with the completion of the Transactions. Any such waiver and election by the Purchaser or the Seller, as the case may be, will only serve as a waiver of that specific closing condition.

8.4	Dispute Resolution

	Any controversy, dispute, claim, question or difference between the Parties arising out of or relating to or in connection with, this Agreement or any of the other Transaction Documents (a “Dispute”) is to be resolved in accordance with the procedures set out in the following Sections 8.5 and 8.6 which are the exclusive procedures for the resolution of any Dispute between the Parties.

8.5	Efforts to Settle Disputes

	(a)	The Parties shall attempt in good faith to resolve any Dispute promptly by negotiation. However, at any time a Party may give the other Party written notice (the “Initial Notice”) of any Dispute not so resolved. Within fifteen (15) days after delivery of an Initial Notice, the recipient Party shall deliver to the other a written response. Both the Initial Notice and the response must include a statement of that Party’s position, a summary of arguments supporting that position, and the name and contact particulars of the Person who will represent that Party and of any other Person who will accompany the representative. Within thirty (30) days after delivery of the Initial Notice, the representatives of the Parties shall meet at mutually acceptable times and places, as often as they reasonably deem necessary, to attempt to resolve the Dispute.

	(b)	All negotiations pursuant to this Section 8.5 are confidential and are to be treated as compromise and settlement negotiations for purposes of applicable rules of evidence.

8.6	Litigation

	If the Dispute is not resolved by nonbinding means as provided in Section 8.5, either Party may initiate litigation upon ten (10) days prior written notice to the other Party; provided, however, that if one Party has requested the other to participate in a nonbinding procedure and the other Party has failed to participate, the requesting Party may initiate litigation before expiration of the above period.

8.7	Injunctive Relief

	Notwithstanding any other provision of this Agreement, a Party may seek injunctive relief (whether as a temporary restraining order, preliminary injunction or otherwise) or specific performance pending a decision of the court and Section 8.6 will not apply to any such action or proceeding.

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Article 9

Indemnification and Remedies

9.1	Indemnification by the Seller: General Matters

	Subject to the limitations set out in this Article 9, the Seller shall indemnify the Purchaser from and against any loss or liability (the “Damages”, as further defined in Section 9.6), suffered by, imposed upon, or asserted against, the Purchaser as a result of, in respect of, connected with, or arising out of:

	(a)	any breach or inaccuracy of any representation or warranty made by the Seller in this Agreement;

	(b)	any breach or failure by the Seller to perform or fulfill any covenant, condition or obligation of the Seller contained in this Agreement; or

	(c)	any claim by any Person for brokerage or finder’s fees, commissions or similar payments based upon any agreement or understanding made or alleged to have been made by such Person with the Seller (or any Person acting on its behalf) in connection with any of the Transactions.

9.2	Indemnification by the Purchaser

	The Purchaser shall indemnify the Seller from and against any Damages suffered by, imposed upon or asserted against the Seller as a result of, in respect of, connected with, or arising out of:

	(a)	any breach or inaccuracy of any representation or warranty made by the Purchaser in this Agreement;

	(b)	any breach or failure by the Purchaser to perform or fulfill any covenant, condition or obligation of the Purchaser contained in this Agreement, or

	(c)	any claim by any Person for brokerage or finder’s fees, commissions or similar payments based upon any agreement or understanding made or alleged to have been made by such Person with the Purchaser (or any Person acting on its behalf) in connection with any of the Transactions.

9.3	Indemnification Procedure: Third Party Claims

(a)

If any claim or proceeding is made or commenced by a third party (a “Third Party Claim”) against the Purchaser or the Seller, as the case may be (the “Indemnified Person”) in respect of which the Indemnified Person proposes to demand indemnification from the other Party (the “Indemnifying Party”), the Indemnified Person shall give notice to that effect together with particulars of the Third Party Claim to the Indemnifying Party with reasonable promptness. The failure to give, or delay in giving, such notice will not relieve the Indemnifying Party of its obligations except and only to the extent of any prejudice caused to the Indemnifying Party by such failure or delay. From the time the Indemnified Person receives notice of the Third Party Claim, the Indemnified Person shall take all reasonable steps to protect its rights and the rights of the Indemnifying Party in respect of such Third Party Claim.

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(b)

The Indemnifying Party may, by notice to the Indemnified Person given not later than thirty (30) days after receipt of the notice described in Section 9.3(a), assume control of the defence, compromise or settlement of the Third Party Claim provided that:

	(i)	the Third Party Claim involves only money damages and does not seek any injunctive or other equitable relief;

	(ii)	if the named parties in the Third Party Claim include both the Indemnifying Party and an Indemnified Person, representation by the same counsel would, in the judgment of the Indemnified Person, still be appropriate notwithstanding any actual or potential differing interests between them; and

	(iii)	the Indemnifying Party has provided reasonable assurance to the Indemnified Person of its financial ability to defend the Third Party Claim.

(c)

Upon assumption of control of a Third Party Claim by the Indemnifying Party:

	(i)	the Indemnifying Party shall actively and diligently proceed with the defence of the Third Party Claim at its sole cost and expense, retaining counsel reasonably satisfactory to the Indemnified Person; and

	(ii)	the Indemnifying Party shall keep the Indemnified Person fully advised with respect to the status of the Third Party Claim (including supplying copies of all relevant documents promptly as they become available) and shall arrange for its counsel to inform the Indemnified Person on a regular basis of the status of the Third Party Claim.

	(d)	The Indemnified Person may retain separate co-counsel at their sole cost and expense (without any right to claim indemnification for such costs and expenses), and may participate in, but shall have no right to control, the defence of the Third Party Claim, save for any admission of fault or liability, settlement or compromise as provided under paragraph (f) below.

	(e)	The Indemnified Person shall, at the expense of the Indemnifying Party, cooperate with the Indemnifying Party and make available to the Indemnifying Party all relevant information in their possession or under their control (provided that it does not cause either of them to breach any confidentiality obligations) and shall take such other steps as are, in the reasonable opinion of counsel for the Indemnifying Party, necessary to enable the Indemnifying Party to conduct such defence.

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(f)

The Indemnifying Party shall not consent to the entry of any judgment or enter into any compromise or settlement with respect to the Third Party Claim unless consented to in writing by the Indemnified Person (which consent may not be unreasonably or arbitrarily withheld, conditioned or delayed). Without limiting the generality of the foregoing:

	(i)	no admission of fault or liability may be made by or on behalf of the Purchaser without the prior written consent of the Purchaser; and

	(ii)	no admission of fault or liability may be made by or on behalf of the Seller without the prior written consent of the Seller.

(g)

If:

	(i)	the Indemnifying Party fails to give the Indemnified Person the notice required in Section 9.3(b) or any of the other conditions in Section 9.3(b) are not satisfied; or

	(ii)	the Indemnifying Party breaches any of its other obligations under this Section 9.3 in any material respect,

	the Indemnified Person may, upon notice to the Indemnifying Party, assume control of the defence, compromise or settlement of the Third Party Claim and retain counsel as, in its opinion, may appear advisable, the whole at the Indemnifying Party’s sole cost and expense. Any settlement or other final determination of the Third Party Claim will be binding upon the Indemnifying Party subject to the right of the Indemnifying Party to dispute that an indemnification is required pursuant to this Agreement. The Indemnifying Party shall, at its sole cost and expense, cooperate fully with the Indemnified Person, make available to such Indemnified Person all relevant information in its possession or under its control (provided that it does not cause it to breach any confidentiality obligations) and take such other steps as are, in the reasonable opinion of counsel for the Indemnified Person, necessary to enable the Indemnified Person to conduct the defence. The Indemnifying Party shall reimburse the Indemnified Person promptly and periodically for the costs of defending against the Third Party Claim (including legal fees and expenses), and shall remain responsible for any Damages the Indemnified Person may suffer resulting from, arising out of, or relating to, the Third Party Claim to the fullest extent provided in this Article 9.

9.4	Survival of Representations and Warranties

(a)

Except as otherwise provided in this Section 9.4, the representations and warranties of the Seller and the Purchaser contained in this Agreement will survive Closing and continue in full force and effect for a period of one (1) year after Closing, except:

	(i)	in the case of Fraud, in which case the representations and warranties will survive Closing and continue in full force and effect indefinitely; or

	(ii)	to the extent that, during such period, the Indemnified Person has given notice to the Indemnifying Party of a claim in respect of a representation or warranty, in which case such representation or warranty will survive Closing and continue in full force and effect until the final determination of such claim.

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9.5	Duty to Mitigate

	(a)	Nothing in this Agreement limits the general obligation at law of an Indemnified Person to mitigate any Damages which it may suffer or incur by reason of the breach by an Indemnifying Party of its representations, warranties, covenants and other obligations in this Agreement.

	(b)	An Indemnified Person’s right to recover Damages from an Indemnifying Party under this Article 9 will be reduced by any amounts recovered or recoverable by the Indemnified Person under insurance policies, indemnities, reimbursement arrangements or similar agreements. If any such recoveries are received by the Indemnified Person after a payment has been made by the Indemnifying Party to the Indemnified Person with respect thereto, then the Indemnified Person shall promptly reimburse the Indemnifying Party for the amount so received or recovered.

9.6	Limitations on Liability

(a)

The Parties agree that a “Damage” shall mean any certain and direct loss, damage or liability in the meaning of “préjudice direct et certain” under French law and shall be limited to the actual loss, damage or liability effectively suffered (perte éprouvée), with the exclusion of:

	(i)	consequential, indirect or special damages;

	(ii)	loss of profits (manque à gagner), lost opportunities (perte de chance) or diminution in value; or

	(iii)	punitive damages (dommages-intérêts punitifs).

(b)

The obligation of the Party from whom indemnification is sought by the other Party for Damages is subject to the following:

	(i)	in no event shall the aggregate liability (for indemnification or otherwise) of the Party from whom indemnification is sought with respect to Damages under this Article 9 exceed an amount of ten million euros (€10,000,000); and

	(ii)	the limitations on liability set out in Section 9.6(b)(i) shall not apply to any indemnity claims made by a Party in respect of Fraud of the other Party.

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9.7	Rights Limited

	No Party shall be liable for any Damages resulting from or relating to any inaccuracy in or breach of any representation or warranty in this Agreement if the Person seeking indemnification for such Damages had knowledge of such inaccuracy or breach before Closing.

9.8	Procedures for Indemnification – Direct Claims

	A claim for indemnification for any matter not involving a Third Party Claim must be asserted by notice (setting out in reasonable detail the factual basis for the claim and the amount of potential Damages arising from it) to the Party from whom indemnification is sought within the periods specified in Section 9.4 and will be subject, at all times, to the provisions of Sections 9.5, 9.6 and 9.9, mutatis mutandis.

9.9	Exceptions to Indemnification

	The Purchaser is not entitled to any Damages against the Seller nor does the Seller have any liability in connection with any breach or inaccuracy of any representation, warranty or any failure to comply with any obligation, condition or covenant of the Seller in this Agreement, occurring during the Closing Period and which breach, inaccuracy or non-fulfillment was a direct result of written instructions received from the Purchaser (or any of its representatives) and complied with by the Corporation or the Seller.

9.10	Rights and Remedies

	The rights and remedies that a Party may have against the other Party for a breach of any representation, warranty, covenant or obligation under this Agreement are exclusively governed by this Agreement. To the extent permitted by applicable Law, any further claims and remedies (other than claims for specific performance, injunctive relief or other equitable remedy which do not include claims for monetary damages), irrespective of the nature, amount or legal basis, are hereby expressly waived and excluded.

9.11	Tax Treatment

	Any amount payable as an indemnity payment under this Article 9 shall be treated by the Parties as an adjustment to the Purchase Price.

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Article 10

Miscellaneous

10.1	Notices

	Any notice, direction, consent or other communications given under this Agreement must be in writing and delivered by courier, by personal delivery or by electronic transmission (including by email) as follows:

	(a)	to the Purchaser at:

		Reed Management SAS
		15 rue Soufflot 75005 Paris, France

		Attention: Julien Touati and Joni Fontoura
		Email: [*]; [*]

		with a copy (which does not constitute notice to the Purchaser) to:

		Testu, Hill, Henry-Gaboriau & Associés – STH2
		13, rue Royale
		75008 Paris, France

		Attention: Sidonie Hill
		Email: hill@sth2.law

	(b)	to the Seller at:

		Loop Industries, Inc.
		480 Fernand Poitras,
		Terrebonne, Québec, Canada, J6Y 1Y4

		Attention: Daniel Solomita (Founder & CEO) and Fady Mansour (CFO)
		Email: [*]; [*]

		with a copy (which does not constitute notice to the Seller) to:

		Norton Rose Fulbright Canada LLP
		1, Place Ville Marie, Suite 2500
		Montréal, Québec, Canada H3B 1R1

		Attention: Vincent Filiatrault and Marc-Simon Duquette
		Email: vincent.filiatrault@nortonrosefulbright.com;
		marc-simon.duquette@nortonrosefulbright.com

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	Any such communication shall be deemed to have been given and received on the day on which it was so delivered or transmitted (if a Business Day, and if not, then the next succeeding Business Day) unless received after 5:00 pm (local time in the place of receipt) in which case it shall be deemed to have been given and received on the next Business Day.

	In the case of a communication by email, if an autoreply is received indicating that the email is no longer monitored or in use, delivery must be followed by the dispatch of a copy of such communication pursuant to one of the other methods described above; provided however that any communication originally delivered by electronic means shall be deemed to have been given on the date stipulated above for electronic delivery.

	A Person may change its address for services by notice given in accordance with the foregoing and any subsequent communication must be sent to such Person at its changed address.

10.2	Entire Agreement

	(a)	This Agreement together with (i) the other Transaction Documents delivered at Closing and (ii) the Confidentiality Agreement constitute the entire agreement between the Parties with respect to the Transactions and the Corporation and supersede all prior agreements, understandings, negotiations and discussions relating to the subject matter thereof, whether oral or written, including the MoU and the Initial SPA.

	(b)	This Agreement amends and restates the Initial SPA. The Parties agree to terminate the Initial SPA, with effect from the date hereof, without any further liabilities thereunder for any Party.

	(c)	There are no representations, warranties, covenants, conditions or other agreements, express or implied, collateral, statutory or otherwise, between the Parties relating to the subject matter hereof except as specifically set forth in this Agreement and the other Transaction Documents delivered at Closing. Neither Party has relied, or is relying, on any other information, discussions or understandings in entering into and completing the Transactions.

10.3	Variation – Termination

(a)

No variation of this Agreement shall be effective unless in writing and signed by or on behalf of each of the Parties; and no termination, lapse or variation of this Agreement may be effective unless such termination, lapse or variation is expressly provided for in this Agreement as signed between the Parties hereto or is subsequently agreed in writing and signed by each of the relevant Parties.

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(b)

Each of the Parties hereto expressly and irrevocably waives the following provisions of the French civil code which shall not be applicable to this Agreement (nor to any agreement or document entered into by all or some of the Parties hereto in connection with this Agreement): (i) articles 1186 and 1187 of the French civil code (regarding the right to claim that a contract has lapsed as a result of any other contract contributing to the completion of the transactions contemplated hereunder having terminated, lapsed or being ineffective for any reason whatsoever), (ii) article 1195 of the French civil code (regarding the occurrence of unforeseen circumstances referred to in such article and each Party hereto agrees to assume any risk which may arise from any of such unforeseeable circumstances), (iii) article 1223 of the French civil code (regarding the right for a creditor to accept a partial performance of a contract and claim a corresponding reduction of the price), (iv) article 1226 of the French civil code (regarding the right for a creditor to terminate a contract at its own risks), and (v) article 1218 of the French civil code (regarding the debtor's right to suspend the performance of or to terminate a contract in case of a force majeure event), and accordingly no termination, lapse or variation of this Agreement (or of any agreement or document entered into in connection with this Agreement) shall be permitted on the grounds of such provisions of the French civil code.

10.4	Waiver

	The failure or delay by a Party in enforcing, or insisting upon strict performance of, any provision of this Agreement does not constitute a waiver of such provision or in any way affect the enforceability of this Agreement (or any of its provisions) or deprive a Party of the right, at any time or from time to time, to enforce or insist upon strict performance of that provision or any other provision of this Agreement. Any waiver by a Party of any provision of this Agreement is effective only if in writing and signed by a duly authorized representative of such Party.

10.5	Severability

	If any provision of this Agreement is determined by a court of competent jurisdiction to be illegal, invalid or unenforceable, that provision will be severed from this Agreement and the remaining provisions will continue in full force and effect, without amendment. The Parties shall amend any invalid or unenforceable term or provision to the extent reasonably required to make such provision valid or enforceable and corresponding to the purpose thereof.

10.6	Assignments

	(a)	This Agreement will become effective when executed by the Parties and thereafter will be binding upon and enure to the benefit of the Parties and their respective successors and permitted assigns.

	(b)	Except as otherwise provided in this Section 10.6, neither this Agreement nor any of the rights, duties or obligations under this Agreement are assignable or transferable by a Party without the prior written consent of the other Party. Any attempt to assign any of the rights, duties or obligations in this Agreement without such written consent is void.

	(c)	The Seller may, upon giving written notice to the Purchaser, assign its rights and obligations under this Agreement to an Affiliate at any time on or prior to the Closing Date subject to the following conditions:

(i)

the assignee executes and delivers a confidentiality agreement to the Purchaser in substantially the same form as the Confidentiality Agreement; and

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(ii)

the assignee and the Seller execute and deliver to the Purchaser an agreement confirming, inter alia:

(A) the assignment of this Agreement by the Seller to the assignee;

(B) the assumption by the assignee of all obligations of the Seller under this Agreement and the subsequent release of the Seller;

(C) that if the assignee ceases to be an Affiliate of the Seller, this Agreement shall be automatically transferred back to the Seller and such assignee shall have no right any more under this Agreement.

10.7	Third Party Beneficiaries

	Except as otherwise expressly provided in Article 9 of this Agreement, the Parties do not intend that this Agreement benefit or create any legal or equitable right, remedy or cause of action in, or on behalf of, any Person other than a Party and no Person, other than a Party, may rely on the provisions of this Agreement in any proceeding.

	Without limiting the generality of the foregoing, the consent of the Corporation is not required for any amendment or waiver of, or other modification to, this Agreement including any rights of indemnification to which such Person may be entitled.

10.8	Expenses

	Except as otherwise expressly provided in this Agreement, all costs and expenses (including the fees and disbursements of legal counsel, brokers, investment advisers, consultants and accountants) incurred in connection with this Agreement and the Transactions are to be paid by the Party incurring such expenses. If this Agreement is terminated, the obligation of each Party to pay its own expenses will be subject to any rights of such Party arising from a breach of this Agreement by the other Party.

10.9	Further Assurances

	(a)	From time to time after the signature of this Agreement, each Party shall, at the request of the other Party, execute and deliver such additional conveyances, transfers and other assurances and perform or cause to be performed such further and other acts or things as may be reasonably required to give effect to, and carry out the intent of, this Agreement and each of the other Transaction Documents.

	(b)	The Seller undertakes to make all necessary regulatory notices, filings and/or declarations within the applicable deadlines to any relevant regulatory authority (including any applicable stock exchange and securities commission) arising out or in connection with the Transactions.

	(c)	In the event that the Purchaser has, in compliance with its regulatory obligations, to issue any mandatory press release, regulatory filing or other public communication, including any Securities and Exchange Commission filing arising out or in connection with the Transactions, the Purchaser shall submit to the Seller a draft of any such public communication (or relevant part thereof) for its comments, at least two (2) Business Days prior to the issuance thereof if practicable. The Purchaser shall consider in good faith comments provided by the Seller on such communication.

	(d)	The Seller undertakes to cooperate with the Purchaser to that end with the Seller being prior provided with any relevant materials, documents and/or correspondence in accordance with the provisions of this Section 10.9.

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10.10	Announcements

	None of the Parties shall, and they shall cause their respective Affiliates not to, issue any press release or other announcement or publicity regarding the Transactions, this Agreement or any of the other Transaction Documents without the express written consent to the text of such announcement or publicity of the other Party, such consent not to be unreasonably withheld, delayed or conditioned; unless such press release or announcement by a Party or its Affiliate is necessary under disclosure rules and policies of securities Laws and regulations and stock exchange rules applicable to a public company or reporting issuer.

	None of the Parties shall disclose the identity of any other Party without such other Party’s prior written consent. Notwithstanding the foregoing, the Parties hereto may make any disclosures required by applicable Law or the order of any court and requested disclosures to regulatory bodies having jurisdiction over the Party making such disclosure.

10.11	Specific Performance

	Each Party acknowledges and agrees that any specific performance action (exécution forcée en nature) in respect of this Agreement will constitute a balanced course of action falling outside the "manifest disproportion" exclusion contained in Article 1221 of the French civil code.

10.12	Taxes

	The Purchaser shall bear and pay all transfer, documentary, notarial, registration, stamp and other similar taxes that may be levied or imposed by reason of the transfer to the Purchaser of the Purchased Shares at Closing. The Purchaser will, at its own expense, file all necessary tax returns and other documentation with respect to all such taxes.

10.13	Electronic Signature

	In accordance with articles 1366 and 1367 of the French civil code, this Agreement shall be signed electronically. The parties to this Agreement acknowledge and agree that electronic signatures via DocuSign, which is compliant with EU eIDAS Regulation (EU) 910/2014, were used for the execution of this Agreement by its signatories. Furthermore, in accordance with the provisions of article 1375 of the French civil code, the obligation to deliver an original copy to each of the parties to this Agreement is not necessary as proof of the commitments and obligations of each party to this Agreement. The delivery of an electronic copy of this Agreement directly by DocuSign to each party to this Agreement shall constitute sufficient and irrefutable proof of the commitments and obligations of each party to this Agreement.

(signature page follows)

- 39 -

IN WITNESS WHEREOF the Parties have executed this amended and restated share purchase agreement.

REED MANAGEMENT SAS		LOOP INDUSTRIES, INC.

Per:	/s/ Julien Touati	Per:	/s/ Daniel Solomita
	Name: Julien Touati		Name: Daniel Solomita
	Title: President		Title: Chief Executive Officer and President
	Duly authorized for the purposes hereof		Duly authorized for the purposes hereof

[Signature Page - Amended and Restated Share Purchase Agreement]

- 40 -

EXHIBIT 1.1(c)

Form of Articles of Incorporation

- 41 -

EXHIBIT 1.1(uu)

Form of Shareholders Agreement

- 42 -

EXHIBIT 2.3

Seller Wire information

- 43 -

EX-10.21 4 loop_ex1021.htm SECURITIES PURCHASE AGREEMENT loop_ex1021.htm

EXHIBIT 10.21

CONFIDENTIAL

Execution Version

SECURITIES PURCHASE AGREEMENT

BY AND BETWEEN

REED CIRCULAR ECONOMY

AND

LOOP INDUSTRIES, INC.

DATED AS OF DECEMBER 23, 2024

TABLE OF CONTENTS

1.	Definitions		1

2.	Purchase and Sale of Series B Preferred Stock		6

	2.1	Shares to be Issued	6
	2.2	Sale Notice	6
	2.3	Shares to be Issued	6
	2.4	Investor	7
	2.5	Pre-Closing Stock Dividend, Stock Split, or Stock Combination	7

3.	Closing Date; Deliveries		7

	3.1	Closing Date	7
	3.2	Deliveries.	7

4.	Representations and Warranties of the Company		8

	4.1	Organization, Good Standing and Qualification	8
	4.2	Capitalization and Voting Rights	8
	4.3	Subsidiaries	9
	4.4	Authorization	9
	4.5	No Defaults	10
	4.6	No Conflicts	10
	4.7	No Governmental Authority or Third Party Consents	10
	4.8	Valid Issuance of Securities	10
	4.9	Litigation	11
	4.10	Licenses and Other Rights; Compliance with Laws	11
	4.11	Company SEC Documents; Financial Statements; Nasdaq Stock Market	12
	4.12	Absence of Certain Changes	13
	4.13	Internal Controls; Disclosure Controls and Procedures	13
	4.14	Offering	13
	4.15	No Integration	14
	4.16	Intellectual Property	14
	4.18	Solvency	14
	4.19	U.S. Real Property Holding Corporation	14
	4.20	Bank Holding Company Act	15
	4.21	Money Laundering	15
	4.22	Office of Foreign Assets Control	15
	4.23	Foreign Corrupt Practices Act	15
	4.24	[Committee on Foreign Investment in the United States	15
	4.25	Brokers’ or Finders’ Fees	15
	4.26	Investment Company Act	15

5.	Representations and Warranties of the Investor		16

	5.1	Organization; Good Standing	16
	5.2	Authorization	16
	5.3	No Conflicts	16
	5.4	No Governmental Authority or Third Party Consents	16
	5.5	Purchase Entirely for Own Account	17
	5.6	Disclosure of Information	17
	5.7	Investment Experience and Accredited Investor Status	17
	5.8	Acquiring Person	17
	5.9	Restricted Securities	17
	5.10	Restrictive Legend	18
	5.11	Availability of Funds	18

6.	Investor’s Conditions to Closing		18

	6.1	Representations and Warranties	18
	6.2	Covenants	18
	6.3	Sale Notice.	18
	6.4	Other Deliverables	18
	6.5	No Material Adverse Effect	18

7.	Company’s Conditions to Closing		18

	7.1	Representations and Warranties	19
	7.2	Covenants	19
	7.3	Other Deliverables	19

8.	Mutual Conditions to Closing		19

	8.1	No Prohibition	19
	8.2	Market Listing	19
	8.3	Stockholder Approvals	19

9.	Termination		19

	9.1	Ability to Terminate	19
	9.2	Effect of Termination	20

10.	Additional Covenants and Agreements		20

	10.1	Market Listing	20
	10.2	Assistance and Cooperation	20
	10.3	Securities Law Disclosure; Publicity	21
	10.4	Use of Proceeds	21

11.	Indemnification.		21

	11.1	Indemnification by the Company	21
	11.2	Indemnification by the Investor	22
	11.3	Survival of Warranties	22
	11.4	Indemnification Cap	22
	11.5	Procedure	23

12.	Miscellaneous		23

	12.1	Governing Law; Submission to Jurisdiction	23
	12.2	Submission to Jurisdiction	23
	12.3	Waiver	24
	12.4	Notices	24
	12.5	Entire Agreement	24
	12.6	Amendments	25
	12.7	Interpretation	25
	12.8	Severability	25
	12.9	Assignment	25
	12.10	Successors and Assigns	25
	12.11	Counterparts	26
	12.12	Third Party Beneficiaries	26
	12.13	Remedies	26
	12.14	Specific Performance	26
	12.15	Expenses	26

Exhibit A – Form of Cross Receipt

Exhibit B – Notice Addresses

Exhibit C – Form of Certificate of Designation

Exhibit D – Form of Investors Rights Agreement

Exhibit E – Nevada Counsel Legal Opinions

iii

SECURITIES PURCHASE AGREEMENT

THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”), is made as of December 23, 2024, by and between Reed Circular Economy, a simplified joint-stock company (société par actions simplifiée) formed under the Laws of France with its principal offices at 15 rue Soufflot 75005 Paris, France, with a share capital of 3,500 euros, registered with the Registre du commerce et des sociétés of Paris under number {{RCS_Circular}} (the “Investor”) and Loop Industries, Inc., a company incorporated and existing under the laws of the State of Nevada with its principal offices at 480 Fernand-Poitras Terrebonne, Québec, Canada J6Y 1Y4 (the “Company”). Each of the Investor and the Company is referred to in this Agreement as a “party” and together as the “parties.”

WHEREAS, pursuant to the terms and subject to the conditions set forth in this Agreement, the Company desires to issue and sell to the Investor, and the Investor desire to subscribe for and purchase from the Company, certain shares of Series B preferred stock, par value US $0.0001 per share, of the Company (the “Series B Preferred Stock”);

WHEREAS, prior to the execution of this Agreement, the Company has filed with the Secretary of State of the State of Nevada a Certificate of Designation setting forth the designations, powers, preferences and relative rights, and the qualifications, limitations and restrictions thereof, of the Series B Preferred Stock, in substantially the form of Exhibit C attached hereto (as amended, supplemented or otherwise modified from time to time, the “Certificate of Designation”);

AND WHEREAS, concurrently with the execution of this Agreement, the Investor, the Company, and Daniel Solomita are executing and delivering an Investors Rights Agreement, dated as of the date hereof, setting forth certain rights and restrictions relating to the Purchased Shares and Conversion Shares, in substantially the form of Exhibit D attached hereto (as amended, supplemented or otherwise modified from time to time, the “Investors Rights Agreement”), or a joinder agreement thereto;

NOW, THEREFORE, in consideration of the following mutual promises and obligations, and for other good and valuable consideration, the adequacy and sufficiency of which are hereby acknowledged, each party agrees as follows:

1. Definitions. When used in this Agreement, the following terms shall have the respective meanings specified therefor below:

“Aggregate Purchase Price” shall have the meaning set forth in Section 2.2.

“Agreement” shall have the meaning set forth in the Preamble, including all Exhibits attached hereto.

“Average Exchange Rate” shall mean, with respect to any Sale Notice, a composite exchange rate which shall equal the arithmetic average of the exchange rates (e.g., Dollar/Euro) indicated as the “CLOSE” rates, during the five Business Days immediately preceding the date of such Sale Notice, as published in the Market Data Center for Exchange Rates of the Wall Street Journal website (available at, https://www.wsj.com/market-data/quotes/fx/USDEUR/historical-prices), or if not available, the successor website page of the Wall Street Journal.

“Business Day” shall mean a day on which commercial banking institutions in Montréal, Québec, Paris, France and New York, New York are open for business.

“Certificate of Designation” shall have the meaning set forth in the recitals.

“Claim Notice” shall have the meaning set forth in Section 11.5.

“Closing” shall have the meaning set forth in Section 3.1.

“Closing Date” shall have the meaning set forth in Section 3.1.

“Common Stock” shall mean the common stock, par value US$0.0001 per share, of the Company.

“Company” shall have the meaning set forth in the preamble.

“Company Fundamental Warranties” shall mean, collectively, the warranties of the Company as set forth in Section 4.1 (Organization, Good Standing and Qualification), Section 4.2 (Capitalization and Voting Rights), Section 4.3 (Subsidiaries), Section 4.4 (Authorization), and Section 4.8 (Valid Issuance of Securities).

“Company Indemnified Party” shall have the meaning set forth in Section 11.2.

“Company SEC Documents” shall have the meaning set forth in Section 4.11(a).

“Company Securities” shall have the meaning set forth in Section 4.2(c).

“Conversion Shares” shall mean the shares of Common Stock issuable upon conversion of the Purchased Shares.

“Cross Receipt” shall mean an executed document signed by each of the Company and the Investor, in substantially the form of Exhibit A attached hereto.

“Dollars” or “US$” shall mean the lawful currency of the United States.

“Effect” shall have the meaning set forth in the definition of “Material Adverse Effect.”

“Error Notice” shall have the meaning set forth in Section 2.2.

“Euros” or “EUR” shall mean the single currency of participating member states of the economic and monetary union as contemplated in the Treaty on European Union.

“Exchange Act” shall have the meaning set forth in Section 4.11(a).

“Governmental Authority” shall mean any court, agency, authority, department, regulatory body or other instrumentality of any government or country or of any national, federal, state, provincial, regional, county, city or other political subdivision of any such government or country or any supranational organization of which any such country is a member.

“Indemnifiable Losses” shall have the meaning set forth in Section 11.1.

“Indemnified Party” shall mean a Company Indemnified Party or an Investor Indemnified Party, in its respective capacity as such.

“Indemnifying Party” shall mean the Company or the Investor, in their respective capacities as indemnifying parties under Section 11 (Indemnification).

“Investor” shall have the meaning set forth in the preamble.

“Investor Fundamental Warranties” means, collectively, the warranties of the Investor as set forth in Section 5.1 (Organization; Good Standing) and Section 5.2 (Authorization).

“Investor Indemnified Party” shall have the meaning set forth in Section 11.1.

“Investors Rights Agreement” shall have the meaning set forth in the recitals.

“Knowledge of the Company” means the actual knowledge of each of Daniel Solomita, Fady Mansour, and Mike De Notaris, after each such individual shall have made reasonable inquiries from such individual’s direct reports (or their successors, if applicable).

“LAS” shall have the meaning set forth in Section 4.7.

“Law” or “Laws” shall mean all laws, statutes, rules, regulations, orders, judgments, injunctions and/or ordinances of any Governmental Authority.

“Lien” shall mean any charge, encumbrance, claim, community or other marital property interest, equitable ownership interest, collateral assignment, lien (statutory or otherwise), license, option, pledge, security interest, mortgage, deed of trust, attachment, right of way, easement, restriction, encroachment, servitude, right of first offer or first refusal, buy/sell agreement and any other restriction or covenant with respect to, or condition governing the use, construction, voting (in the case of any equity interest), transfer, receipt of income or exercise of any other attribute of ownership of any kind or nature whatsoever affecting or attached to any asset.

“Material Adverse Effect” shall mean any change, event or occurrence (each, an “Effect”) that, individually or when taken together with all other Effects, has had, or would reasonably be expected to have, either alone or in combination with all other Effects, (i) a material adverse effect on the business, financial condition or results of operations of the Company and its Subsidiaries, taken as a whole, or (ii) a material adverse effect on the Company’s ability to perform its obligations, or consummate the Transaction, in accordance with the terms of the Transaction Agreements, except in the case of (i) to the extent that any such Effect results from, arises out of or relates to, whether alone or in combination: (A) changes in economic or political conditions generally or banking, securities, capital and financial markets generally, including changes in interest or exchange rates; (B) changes that generally affect the industry in which the Company or its Subsidiaries operate; (C) change in applicable laws, regulations, rules, orders, or other binding directives issued by any Governmental Authority, or accounting rules (including GAAP) or the enforcement, implementation or interpretation thereof; (D) the announcement of the Transaction Agreements; (E) any change in the trading prices or trading volume of the Common Stock or any failure to meet internal projections or forecasts or revenue or earnings projections; (F) acts of war, sabotage or terrorism, or any escalation or worsening of any such acts of war, sabotage or terrorism; (G) earthquakes, hurricanes, floods or other natural disasters, pandemics or other health crises; or (H) any action taken by the Company in accordance with the Transaction Agreements or with the Investor’s prior written consent; provided in each case with respect to clauses (B) and (C), only if the Company and its Subsidiaries, taken as a whole, are not disproportionately affected by such changes relative to other companies in the industry in which the Company or its Subsidiaries operate, and then only to the extent of such disproportionate effect.

“Modified Clause” shall have the meaning set forth in Section 12.8.

“Money Laundering Laws” shall have the meaning set forth in Section 4.21.

“Nasdaq” shall have the meaning set forth in Section 4.7.

“Organizational Documents” shall mean, in the case of the Company, (i) the Articles of Incorporation of the Company, dated as of March 11, 2010, as amended through the date of this Agreement and (ii) the Amended and Restated By-laws of the Company, as amended through the date of this Agreement, and in the case of any Subsidiary of the Company, the equivalent organizational documents of such Subsidiary.

“party” or “parties” shall have the meaning set forth in the preamble,

“Permits” shall have the meaning set forth in Section 4.10.

“Permitted Liens” shall mean (i) statutory Liens with respect to the payment of taxes, in all cases which are not yet due or payable or that are being contested in good faith by appropriate actions and for which appropriate reserves with respect thereto have been established on the books and records of the Company to the extent required in accordance with GAAP; (ii) statutory Liens of landlords, suppliers, mechanics, carriers, materialmen, warehousemen, service providers or workmen and other similar Liens imposed by Law created in the ordinary course of business the existence of which would not constitute a default or breach under any of the Company’s contracts for amounts that are not yet delinquent and are not, individually or in the aggregate significant; (iii) building, zoning, entitlement and other land use regulations imposed by any Governmental Authority with applicable jurisdiction; (iv) easements, conditions, covenants and restrictions that are of record, (v) non-exclusive and non-material licenses and contractual restrictions to, in or under any intellectual property rights granted by the Company to a Third Party in the ordinary course of business and (vi) Liens that do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and its Subsidiaries, taken as a whole.

“Per Share Price” shall have the meaning set forth in Section 2.1.

“Person” shall mean any individual, partnership, limited liability company, firm, corporation, association, trust, unincorporated organization, government or any department or agency thereof or other entity, as well as any syndicate or group that would be deemed to be a Person under Section 13(d)(3) of the Exchange Act.

“Preferred Stock” shall mean the Series A Preferred Stock, the Series B Preferred Stock and the undesignated preferred stock, par value US$0.0001 per share, of the Company.

“Proceeding” shall have the meaning set forth in Section 12.2.

“Purchased Shares” shall have the meaning set forth in Section 2.1.

“Representatives” shall mean, with respect to any Person, its officers, directors, principals, partners, managers, members, employees, consultants, agents, financial advisors, investment bankers, attorneys, accountants, potential debt and equity financing sources (excluding any co-investors), and other representatives.

“Revised Sale Notice” shall have the meaning set forth in Section 2.2.

“Sale Notice” shall have the meaning set forth in Section 2.2.

“SEC” shall have the meaning set forth in Section 4.7.

“Securities” shall mean the Purchased Shares and the Conversion Shares.

“Securities Act” shall have the meaning set forth in Section 4.11(a).

“Series A Preferred Stock” shall have the meaning set forth in Section 4.2(a).

“Series B Preferred Stock” shall have the meaning set forth in the recitals.

“Subsidiary” shall mean, with respect to any Person, any other Person of which at least a majority of the securities or ownership interests having by their terms ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions is directly or indirectly owned or controlled by such Person and/or by one or more of its Subsidiaries.

“Third Party” shall mean any Person other than the Investor, the Company, or any Affiliate of the Investor or the Company.

“Third Party Claim” shall have the meaning set forth in Section 11.5.

“Transaction” shall mean the issuance and sale of the Purchased Shares by the Company, and the purchase of the Purchased Shares by the Investor, in accordance with the terms hereof.

“Transaction Agreements” shall mean this Agreement, the Certificate of Designation, the Investors Rights Agreement and all other agreements, certificates and other instruments entered into in connection with the transactions contemplated by this Agreement.

2. Purchase and Sale of Series B Preferred Stock.

2.1 Shares to be Issued. Subject to the termination of this Agreement, in accordance with Section 9, from time to time after the date hereof, but no later than the date that is six (6) months from the date hereof, the Company shall sell to the Investor, and the Investor shall purchase from the Company, shares of Series B Preferred Stock at a price per share equal to US$10.00 (the “Per Share Price”) and on the other terms and conditions of this Agreement (collectively, the “Purchased Shares”); provided, however, that (i) the aggregate purchase price for the Purchased Shares hereunder to be paid by the Investor shall be EUR 10,000,000; (ii) the number of Purchased Shares shall be determined in accordance with Section 2.3 and shall be specified in the Sale Notice; and (iii) the Purchased Shares may be purchased through one or more Closings.

2.2 Sale Notice. The Company shall deliver to the Investor a written notice regarding the purchase and sale of shares of the Purchased Shares pursuant to this Agreement (each, a “Sale Notice”) at least ten (10) Business Days prior to any Closing Date, specifying (a) the date for such Closing of such purchase and sale (which shall be a Business Day), (b) the applicable Average Exchange Rate, (c) the number of Purchased Shares to be issued to the Investor at the Closing, and (d) the aggregate purchase price, denominated in Euros, to be paid by the Investor to the Company at the Closing for the Purchased Shares (the “Aggregate Purchase Price”). The Investor will have two (2) Business Days following the date of any applicable Sale Notice to review same and provide to the Company a written notice identifying any manifest error contained therein (an “Error Notice”). If no Error Notice is received by the Company within two (2) Business Days following the date of any applicable Sale Notice, such Sale Notice will be deemed accepted by the Investor and shall be binding upon the Parties. Upon receipt of an Error Notice, the Company and the Investor shall work in good faith to resolve any manifest error identified by the Investor, following which a revised Sale Notice (a “Revised Sale Notice”) providing for an identical Closing Date or a postponed Closing Date, in the Company’s sole discretion, shall be delivered to the Investor. Any such Revised Sale Notice shall be binding upon the Parties once received. The Parties agree that the six (6) months period set forth in Section 2.1 above shall be extended until the Closing Date set forth in any applicable Sale Notice, or any related Revised Sale Notice, if the applicable Sale Notice has been delivered by the Company to the Investor prior to the expiration of the date that is six (6) months from the date hereof.

2.3 Shares to be Issued. Subject to the terms and conditions of this Agreement, on any Closing Date specified in a Sale Notice, the Company shall issue and sell to the Investor, free and clear of all Liens, other than any Liens arising as a result of any action by the Investor and restrictions arising under applicable securities laws, and the Investor shall purchase from the Company such number of shares of Series B Preferred Stock that is equal to the Aggregate Purchase Price first converted to Dollars at the applicable Average Exchange Rate and then divided by the Per Share Price; provided, however, that no fractional shares of Series B Preferred Stock shall be issued, and that the Aggregate Purchase Price shall be adjusted downward so that no payment shall be made for any fractional shares.

2.4 Investor Default. If the amount required to be invested by the Investor pursuant to a Sale Notice has not been paid to the Company by any Closing Date specified in such Sale Notice (an “Investor Default”), then in addition to the other rights and remedies that the Company may have under this Agreement, at law, in equity or otherwise, until the unpaid amount of such Investor Default is paid in full by the Investor or such Investor Default is otherwise cured by the Investor (or waived by the Company) such unpaid amount shall thereafter accrue interest at an interest rate per annum equal to 13% and shall be payable by the Investor upon written demand by the Company.

2.5 Pre-Closing Stock Dividend, Stock Split, or Stock Combination. In the event of any stock dividend, stock split, combination of shares or other similar change in the capital structure of the Company after the date hereof and on or prior to Closing which affects or relates to the Series B Preferred Stock or the Common Stock, the number of Purchased Shares purchased, and the number of Conversion Shares, shall be adjusted proportionately.

3. Closing Date; Deliveries.

3.1 Closing Date. Subject to the satisfaction or waiver of all the conditions to Closing set forth in Sections 6, 7 and 8 hereof (other than those conditions that by their nature are to be satisfied at such Closing), the closing of the purchase and sale of the Purchased Shares hereunder shall be effected through one or more closings (each a “Closing” and collectively, the “Closings”) held remotely via the electronic exchange of documents and signatures on the date specified as the date of the Closing in the applicable Sale Notice at 10:00 a.m., Eastern Time, or at such other time, date and location as the parties may agree. The date on which a Closing occurs is hereinafter referred to as a “Closing Date.”

3.2 Deliveries.

(a) Deliveries by the Company. At each Closing, subject to the terms and conditions hereof, the Company shall deliver or cause to be delivered to the Investor the aggregate number of Purchased Shares to be purchased by the Investor (as determined in accordance with Section 2.3 of this Agreement and specified in the applicable Sale Notice) via book-entry and cause such Purchased Shares to be registered in the name of the Investor. The Company shall also deliver at such Closing: (i) a Cross Receipt duly executed by the Company relating to the number of Purchased Shares to be purchased by the Investor determined in accordance with Section 2.3 of this Agreement based on the purchase price as specified in the applicable Sale Notice; (ii) an opinion letter of Nevada counsel for the Company, dated the Closing Date, to the effect set forth in Exhibit E attached hereto; and (iii) a certificate in form and substance reasonably satisfactory to the Investor and duly executed on behalf of the Company by an authorized executive officer of the Company, certifying that the conditions to Closing set forth in Section 6 of this Agreement have been fulfilled.

(b) Deliveries by the Investor. At Closing, the Investor shall deliver, or cause to be delivered, to the Company the aggregate amount required to be invested by the Investor as specified in the applicable Sale Notice, by wire transfer of immediately available United States funds to an account designated by the Company. The Company shall notify the Investor in writing of the wiring instructions for such account not less than three (3) Business Days before the Closing Date. The Investor shall also deliver, or cause to be delivered, at such Closing: (i) a Cross Receipt duly executed by the Investor; (ii) a certificate in form and substance reasonably satisfactory to the Company and duly executed on behalf of the Investor by an authorized executive officer of the Investor, certifying that the conditions to Closing set forth in Section 7 of this Agreement have been fulfilled; and (iii) a properly completed and executed Internal Revenue Service Form W-8BEN-E certifying that the Investor is the beneficial owner of the Purchased Shares, and a foreign person for United States federal income tax purposes (if applicable), or such other applicable Internal Revenue Service Form W-8, as appropriate.

4. Representations and Warranties of the Company. The Company hereby represents and warrants the following to the Investor as of the date hereof (except for the representations and warranties that speak as of a specific date, which shall be made as of such date):

4.1 Organization, Good Standing and Qualification.

(a) The Company and each of its Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing (to the extent the concept of good standing is applicable in such jurisdiction) under the laws of the jurisdiction of its incorporation and organization. The Company and each of its Subsidiaries has all requisite corporate power and corporate authority to own, lease and operate its properties and assets, to carry on its business as now conducted and, in the case of the Company, as proposed to be conducted as described in the Company SEC Documents, to enter into the Transaction Agreements to which it is (or will be) a party, to issue and sell the Securities and to carry out the other transactions contemplated by the Transaction Agreements to which it is (or will be) a party.

(b) The Company is qualified to transact business and is in good standing in each jurisdiction in which the character of the properties owned, leased or operated by the Company or the nature of the business conducted by the Company makes such qualification necessary, except where the failure to be so qualified would not reasonably be likely to have a Material Adverse Effect.

4.2 Capitalization and Voting Rights.

(a) The authorized capital of the Company as of April 30, 2024 consists of: (i) 250,000,000 shares of Common Stock of which, (A) 47,538,745 shares are issued and outstanding, (B) 848,244 shares are reserved for issuance pursuant to the Company’s equity incentive plans, (C) 2,971,216 shares of Common Stock are issuable upon the exercise of outstanding stock options, (D) 4,399,060 shares of Common Stock are issuable upon the vesting of restricted stock units, (E) 7,089,400 shares of Common Stock are issuable upon the exercise of warrants, and (F) zero shares of Common Stock are issuable upon conversion of convertible notes; and (ii) 25,000,000 shares of undesignated preferred stock of which, (A) one share has been designated as Series A preferred stock, par value US$0.0001 per share, of which one share is issued and outstanding (the “Series A Preferred Stock”), and (B) five million (5,000,000) shares have been designated as Series B Preferred Stock, of which none are issued and outstanding. All of the issued and outstanding shares of Common Stock and Series A Preferred Stock (X) have been duly authorized and validly issued, (Y) are fully paid and non-assessable, and (Z) were issued in compliance with all applicable federal and state securities Laws. None of the issued and outstanding shares of Common Stock or Series A Preferred Stock were issued in violation of any preemptive rights arising under Chapter 78 of Nevada Revised Statutes or the Organizational Documents.

(b) All of the authorized shares of Common Stock are entitled to one (1) vote per share.

(c) Except as described or referred to in Section 4.2(a) above, as provided in the Investors Rights Agreement, as disclosed in the Company SEC Documents or as disclosed to the Investors, there are: (i) no outstanding shares of capital stock of, or other equity interests in, the Company, (ii) no outstanding securities of the Company convertible into or exchangeable for shares of capital stock of, or other equity interests in, the Company, and (iii) no outstanding options, warrants, rights or other commitments or agreements to acquire from the Company, or that obligate the Company to issue, any capital stock of, or other equity interests in, or any securities convertible into or exchangeable for shares of capital stock of, or other equity interests in, the Company (the items in clauses (i), (ii) and (iii) being referred to collectively as “Company Securities”), other than any new grants of equity awards pursuant to the Company’s existing stock option plans or other employee compensation plans in the ordinary course of business.

(d) Except as provided in the Transaction Agreements, as disclosed in the Company SEC Documents, or the Organizational Documents, the Company is not a party to any stockholders’ agreement, voting agreement, registration rights agreement or other similar agreement or understanding relating to any Company Securities or any other agreement relating to the disposition, voting or dividends with respect to any Company Securities or the giving of written consents by a stockholder or director of the Company.

4.3 Subsidiaries. All of the Company’s Subsidiaries are wholly-owned by the Company, free and clear of all Liens other than (i) Permitted Liens and (ii) Liens disclosed in the Company SEC Documents filed prior to the date of this Agreement.

4.4 Authorization.

(a) All requisite corporate action on the part of the Company and its directors required by applicable Law for the authorization, execution and delivery by the Company of the Transaction Agreements to which it is (or will be) a part and the performance of all obligations of the Company hereunder and thereunder, including the authorization, issuance and delivery of the Securities, has (or will be) taken.

(b) No approval by the Company’s stockholders will be required pursuant to Nasdaq listing rule 5635 in connection with the Transaction.

(c) Each of the Transaction Agreements to which the Company is (or will be) a party has been duly authorized, and has been (or will be) duly executed and delivered by the Company and, assuming due authorization, execution and delivery thereof by the other parties hereto, is (or will be) a valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms (except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other Laws of general application relating to or affecting enforcement of creditors’ rights and (ii) rules of Law governing specific performance, injunctive relief or other equitable remedies and limitations of public policy).

4.5 No Defaults. Neither the Company nor any of its Subsidiaries is in default under or in violation of (a) its Organizational Documents, (b) any provision of applicable Law or any ruling, writ, injunction, order, Permit, judgment or decree of any Governmental Authority or (c) any agreement, arrangement or instrument, whether written or oral, by which the Company or any of its assets are bound, except, in the case of subsections (b) and (c), as would not reasonably be likely to have a Material Adverse Effect. To the Knowledge of the Company, there exists no condition, event or act which after notice, lapse of time, or both, would constitute a default or violation by the Company or any of its Subsidiaries under any of the foregoing, except, in the case of subsections (b) and (c), as would not reasonably be likely to have a Material Adverse Effect.

4.6 No Conflicts. The execution, delivery and performance by the Company of the Transaction Agreements to which the Company is (or will be) a party and compliance by the Company with the provisions hereof and thereof do not and will not: (a) violate any provision of applicable Law or any ruling, writ, injunction, order, permit, judgment or decree of any Governmental Authority, (b) constitute a breach of, or default under (or an event which, with notice or lapse of time or both, would become a default under) or conflict with, or give rise to any right of termination, cancellation or acceleration of, any agreement, arrangement or instrument, whether written or oral, by which the Company, any of Subsidiaries, or any of their respective assets are bound or (c) violate or conflict with any of the provisions of the Company’s, or any of its Subsidiaries’, Organizational Documents, except, in the case of subsections (a) and (b), as would not reasonably be likely to have a Material Adverse Effect.

4.7 No Governmental Authority or Third Party Consents. No consent, waiver, approval, authorization or other order of, or filing or registration with, or notice to, any Governmental Authority or other Third Party is required to be obtained or made by the Company in connection with the authorization, execution and delivery by the Company of any of the Transaction Agreements to which it is (or will be) a party or with the authorization, issue and sale by the Company of the Securities, except (a) such filings as may be required to be made with the United States Securities and Exchange Commission (the “SEC”) and with any state blue sky or securities regulatory authority, (b) as required pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder (the “HSR Act”), and (c) with respect to the Securities, the filing with The Nasdaq Stock Market LLC (“Nasdaq”) of a Notification Form: Listing of Additional Shares (the “LAS”).

4.8 Valid Issuance of Securities. When issued, sold and delivered in accordance with the Transaction Agreements, the Securities shall be duly authorized, validly issued, fully paid and nonassessable, free from any Liens other than as arising pursuant to the Transaction Agreements, as a result of any action by the Investor holding such Securities or under federal or state securities Laws. The Company has reserved from its duly authorized capital stock the maximum number of Purchased Shares issuable pursuant to this Agreement and the maximum number of Conversion Shares.

4.9 Litigation. Except as set forth in the Company SEC Documents filed prior to the date of this Agreement, there is no action, suit, proceeding or investigation pending (of which the Company or any of its Subsidiaries has received notice or otherwise has knowledge) or, to the Company’s knowledge, threatened, against the Company or any of its Subsidiaries or which the Company or any of its Subsidiaries intends to initiate which has had or is reasonably likely to have a Material Adverse Effect. No labor dispute exists or, to the Knowledge of the Company, threatened, against the Company or any of its Subsidiaries which has had or is reasonably likely to have a Material Adverse Effect.

4.10 Licenses and Other Rights; Compliance with Laws.

(a) Each of the Company and its Subsidiaries, has all franchises, permits, licenses and other rights and privileges (“Permits”) necessary to permit it to own its properties and to conduct its business as presently conducted and is in compliance thereunder, except where the failure to be in compliance does not and would not be likely to have a Material Adverse Effect. To the Company’s knowledge, neither it nor any of its Subsidiaries has taken any action that would materially interfere with the Company’s or such Subsidiary’s ability to renew all such Permit(s), except where the failure to renew such Permit(s) would not reasonably be likely to have a Material Adverse Effect. Each of the Company and its Subsidiaries is and has been in compliance with all Laws applicable to its business, properties and assets, and to the products and services sold by it, except where the failure to be in compliance does not and would not reasonably be likely to have a Material Adverse Effect.

(b) Except as disclosed in the Company SEC Documents or where the failure to so comply has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, the Company and its Subsidiaries are in compliance with all applicable federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes into the environment, and the Company and its Subsidiaries have received and are in compliance with all Permits required under applicable environmental laws. There has been no storage, generation, transportation, handling, treatment, disposal, discharge, emission, or other release of any kind of toxic or other wastes or other hazardous substances by, due to, or caused by the Company or any Subsidiary (or, to the Company’s knowledge, any other entity for whose acts or omissions the Company or any Subsidiary is or may otherwise be liable) upon any of the property now or previously owned or leased by the Company or any Subsidiary, or upon any other property, in violation of any law, statute, ordinance, rule, regulation, order, judgment, decree or permit or which would, under any law, statute, ordinance, rule (including rule of common law), regulation, order, judgment, decree or permit, give rise to any liability, except for any violation or liability which has not had and would not reasonably be expected to have, singularly or in the aggregate, a Material Adverse Effect; and there has been no disposal, discharge, emission or other release of any kind onto such property or into the environment surrounding such property of any toxic or other wastes or other hazardous substances with respect to which the Company or any subsidiary has knowledge.

(c) The Company and its Subsidiaries, taken as a whole, have good and marketable title in fee simple to all real property owned by them and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Permitted Liens and (ii) Liens disclosed in the Company SEC Documents filed prior to the date of this Agreement. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and its Subsidiaries are in compliance with such exceptions as are not material and do not materially interfere with the use made and proposed to be made of such property by the Company and its Subsidiaries.

(d) Each of the Company and its Subsidiaries has (i) filed all foreign, federal, state and local tax returns (as hereinafter defined) required to be filed with taxing authorities prior to the date hereof or has duly obtained extensions of time for the filing thereof and (ii) paid all taxes (as hereinafter defined) shown as due and payable on such returns that were filed and has paid all taxes imposed on or assessed against the Company or any Subsidiary. The provisions for taxes payable, if any, shown on the financial statements included in the Company SEC Documents are sufficient for all accrued and unpaid taxes, whether or not disputed, and for all periods to and including the dates of such consolidated financial statements. No issues have been raised (and are currently pending) by any taxing authority in connection with any of the returns or taxes asserted as due from the Company or any subsidiary, and no waivers of statutes of limitation with respect to the returns or collection of taxes have been given by or requested from the Company or any Subsidiary. The term “taxes” means all federal, state, local, foreign, and other net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profits, customs, duties or other taxes, fees, assessments, or charges of any kind whatever, together with any interest and any penalties, additions to tax, or additional amounts with respect thereto. The term “returns” means all returns, declarations, reports, statements, and other documents required to be filed in respect to taxes.

4.11 Company SEC Documents; Financial Statements; Nasdaq Stock Market.

(a) Since March 1, 2022, the Company has timely filed all required reports, schedules, forms, statements and other documents (including exhibits and all other information incorporated therein), and any required amendments to any of the foregoing, with the SEC (the “Company SEC Documents”). As of their respective filing dates, each of the Company SEC Documents complied in all material respects with the requirements of the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder (the “Securities Act”), and the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder (the “Exchange Act”) applicable to such Company SEC Documents, and no Company SEC Documents when filed or declared effective, as applicable, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

(b) The financial statements of the Company included in its Annual Report on Form 10-K for the fiscal year ended February 28, 2023 and in its Quarterly Report on Form 10-Q for the quarterly period ended on August 31, 2023 comply as to form in all material respects with the applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended. Except (i) as set forth in the Company SEC Documents or (ii) for liabilities incurred in the ordinary course of business subsequent to the date of the most recent balance sheet contained in the Company SEC Documents, the Company has no liabilities, whether absolute or accrued, contingent or otherwise, that are required to be reflected on a balance sheet prepared in accordance with accounting principles generally accepted in the United States of America, other than those that would not, individually or in the aggregate, reasonably be likely to have a Material Adverse Effect.

(c) As of the date of this Agreement, the Common Stock is listed on The Nasdaq Global Market, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act or delisting the Common Stock from The Nasdaq Global Market. As of the date of this Agreement, the Company has not received any notification that, and has no knowledge that, the SEC or Nasdaq is contemplating terminating such listing or registration.

4.12 Absence of Certain Changes. Except as disclosed in the Company SEC Documents, since August 31, 2023, there has not occurred any event that has caused or would reasonably be expected to cause a Material Adverse Effect.

4.13 Internal Controls; Disclosure Controls and Procedures. The Company maintains internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. The Company has implemented the “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) required in order for the principal executive officer (or its equivalent) and principal financial officer (or its equivalent) of the Company to engage in the review and evaluation process mandated by the Exchange Act, and is in compliance with such disclosure controls and procedures in all material respects. Each of the principal executive officer and the principal financial officer of the Company has made all certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 with respect to all reports, schedules, forms, statements and other documents required to be filed by the Company with the SEC during the past twelve (12) months.

4.14 Offering. Subject to the accuracy of the representations of the Investor set forth in Sections 5.5, 5.6, 5.7, 5.9 and 5.10, the offer, sale and issuance of the Securities to be issued in conformity with the terms of this Agreement constitute transactions which are exempt from the registration requirements of the Securities Act and from all applicable state registration or qualification requirements. Neither the Company nor any Person acting on its behalf will take any action that would cause the loss of such exemption.

4.15 No Integration. The Company has not, directly or through any agent, sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as defined in the Securities Act) which is or will be integrated with the Securities sold pursuant to this Agreement in a manner that would require the registration of the Securities under the Securities Act.

4.16 Intellectual Property. The Company and its Subsidiaries own, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or required for use in connection with their respective businesses as described in the Company SEC Documents and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”), and, to the actual knowledge of the officers of the Company as of the date hereof, the Company has not infringed or misappropriated, and is not currently infringing or misappropriating, the Intellectual Property Rights of any Third Party. To the Knowledge of the Company, all such Intellectual Property Rights owned by the Company or its Subsidiaries are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company further represents and warrants that it no longer is using the Gen I technology, and is using Gen II technology which has been commercialized.

4.17 Insurance. The Company and its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and its Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage at least equal to the aggregate amount of US$10 million. The Company intends to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business.

4.18 Solvency. All outstanding secured and unsecured Indebtedness of the Company or any of its Subsidiaries, or for which the Company or any of its Subsidiaries has commitments, is described in the Company SEC Documents. For the purposes of this Agreement, “Indebtedness” means (a) any liabilities for borrowed money or amounts owed (other than trade accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (c) the present value of any lease payments due under leases required to be capitalized in accordance with GAAP, in each case as reported by the Company in the Company SEC Documents. Neither the Company nor any of its Subsidiaries is in default with respect to any Indebtedness which would reasonably be likely to have a Material Adverse Effect.

4.19 U.S. Real Property Holding Corporation. The Company is not a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended.

4.20 Bank Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956, as amended and to regulation by the Board of Governors of the Federal Reserve System.

4.21 Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in material compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no action or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its Subsidiaries with respect to the Money Laundering Laws is pending or, to the Knowledge of the Company, threatened.

4.22 Office of Foreign Assets Control. Neither the Company nor any of its Subsidiaries nor, to the Company’s knowledge, any director, officer, agent, employee or affiliate of the Company or any of its Subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department.

4.23 Foreign Corrupt Practices Act. Neither the Company nor any of its Subsidiaries, nor to the Knowledge of the Company or any of its Subsidiaries, any agent or other person acting on behalf of the Company or any of its Subsidiaries, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) failed to disclose fully any contribution made by the Company or any of its Subsidiaries (or made by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iii) violated in any material respect any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended.

4.24 Committee on Foreign Investment in the United States. The Company and its Subsidiaries have not provided, and do not intend to provide (i) access to any material nonpublic technical information (as defined in 31 C.F.R. Part § 800.232) in their possession; or (ii) any involvement, other than through voting of shares, in substantive decision making of the Company and its Subsidiaries regarding the use, development, acquisition, or release of critical technology (as defined in 31 C.F.R. § 800.215).

4.25 Brokers’ or Finders’ Fees. No broker, finder, investment banker or other Person is entitled to any brokerage, finder’s or other fee or commission from the Company in connection with the transactions contemplated by the Transaction Agreements.

4.26 Investment Company Act. The Company is not and, after giving effect to the sale of the Purchased Shares and the application of the net proceeds thereof, will not be an “investment company,” as such term is defined in the Investment Company Act of 1940, as amended.

5. Representations and Warranties of the Investor. The Investor hereby represents and warrants the following to the Company as of the date hereof (except for the representations and warranties that speak as of a specific date, which shall be made as of such date):

5.1 Organization; Good Standing. The Investor is an entity duly organized, validly existing and in good standing under the laws of the province, state, or country set out in the preamble of this Agreement. The Investor has or will have all requisite power and authority to enter into the Transaction Agreements to which it is (or will be) a party, to purchase the Securities and to perform its obligations under and to carry out the other transactions contemplated by the Transaction Agreements to which it is (or will be) a party.

5.2 Authorization. All requisite corporate or other action on the part of the Investor and its directors, officers and stockholders required by applicable Law for the authorization, execution and delivery by the Investor of the Transaction Agreements to which it is (or will be) a party and the performance of all of its obligations under the Transaction Agreements, including the subscription for and purchase of the Securities by the Investor, has been taken. Each of the Transaction Agreements to which the Investor is (or will be) a party has been duly authorized, and has been (or will be) duly executed and delivered by the Investor and, assuming due authorization, execution and delivery thereof by the other parties hereto, is (or will be) a valid and legally binding obligation of the Investor, enforceable against the Investor in accordance with its terms (except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other Laws of general application relating to or affecting enforcement of creditors’ rights and (ii) rules of Law governing specific performance, injunctive relief or other equitable remedies and limitations of public policy).

5.3 No Conflicts. The execution, delivery and performance by the Investor of the Transaction Agreements to which it is (or will be) a party and compliance by the Investor with the provisions hereof and thereof do not and will not:

(a) violate any provision of applicable Law or any ruling, writ, injunction, order, permit, judgment or decree of any Governmental Authority;

(b) constitute a breach of, or default under (or an event which, with notice or lapse of time or both, would become a default under) or conflict with, or give rise to any right of termination, cancellation or acceleration of, any agreement, arrangement or instrument, whether written or oral, by which the Investor or any of its assets, are bound; or

(c) violate or conflict with any of the provisions of the organizational documents (including any articles or memoranda of organization or association, charter, bylaws or similar documents) of the Investor;

except in the case of subsections (a) and (b), as would not impair or adversely affect the ability of the Investor to consummate the Transaction and perform its obligations under the Transaction Agreements to which it is a party.

5.4 No Governmental Authority or Third Party Consents. No consent, approval, authorization or other order of, or filing with, or notice to, any Governmental Authority or other Third Party is required to be obtained or made by the Investor in connection with the authorization, execution and delivery of any of the Transaction Agreements to which it is (or will be) a party or with the subscription for and purchase of the Securities, except as may be required pursuant to the HSR Act.

5.5 Purchase Entirely for Own Account. The Securities shall be acquired for investment for the Investor’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and the Investor has no present intention of selling, granting any participation or otherwise distributing the Securities. The Investor does not have and will not have as of such Closing any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participation to a Person any of the Securities.

5.6 Disclosure of Information. The Investor has had the opportunity to review the Company SEC Documents and has received or has had full access to all the information from the Company and its management that the Investor considers necessary or appropriate for deciding whether to purchase the Securities hereunder. The Investor further represents that it has had an opportunity to ask questions and receive answers from the Company regarding the Company, its financial condition, results of operations and prospects and the terms and conditions of the offering of the Securities sufficient to enable it to evaluate its investment. The Investor can bear the economic risk of (a) an investment in the Securities and (b) a total loss in respect of such investment.

5.7 Investment Experience and Accredited Investor Status. The Investor is an “accredited investor” (as defined in Regulation D under the Securities Act). The Investor has such knowledge and experience in financial and business matters and in investments of this type that it is capable of evaluating the merits and risks of the investment in the Securities and of making an informed investment decision.

5.8 Acquiring Person. As of the date of this Agreement, neither the Investor nor any of its Affiliates beneficially own (as determined pursuant to Rule 13d-3 under the Exchange Act without regard for the number of days in which a Person has the right to acquire such beneficial ownership and without regard to the Investor’s rights under this Agreement), Common Stock or any other securities of the Company.

5.9 Restricted Securities. The Investor acknowledges that the Securities have not been registered under the Securities Act or under any state or foreign securities laws. The Investor understands that the Securities, when issued, shall be “restricted securities” under the federal securities Laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such Laws, the Securities may be resold without registration under the Securities Act only in certain limited circumstances. The Investor represents that it is familiar with Rule 144 under the Securities Act, as presently in effect. The Investor will not offer, transfer, sell, pledge or otherwise dispose of any of the Securities, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities Laws.

5.10 Restrictive Legend. The Investor understands that the Securities shall bear the restrictive legend, and be subject to the transfer restrictions, set forth in the Investors Rights Agreement.

5.11 Availability of Funds. The Investor has, and on Closing Date will have, sufficient cash or other sources of immediately available funds to enable the Investor to consummate the Transaction on a timely basis, including the payment of all of its cash obligations under this Agreement.

6. Investor’s Conditions to Closing. The Investor’s obligation to purchase any Purchased Shares at Closing is subject to the fulfillment as of such Closing of the following conditions (unless waived in writing by the Investor):

6.1 Representations and Warranties. Each of the Company Fundamental Warranties shall be true and correct in all material respects as of such Closing Date with the same effect as though made at and as of such date (except to the extent such representations and warranties are specifically made as of a specified date, in which case such representations and warranties shall be true and correct in all material respects as of such specified date); and each of the other representations and warranties made by the Company in Section 4 hereof (disregarding all qualifications as to materiality, “Material Adverse Effect” or words of similar import) shall be true and correct in all respects as of such Closing Date with the same effect as though made at and as of such date (except to the extent such representations and warranties are specifically made as of a specified date, in which case such representations and warranties shall be true and correct in all respects as of such specified date), except where the failure of such representations and warranties to be true and correct would not have a Material Adverse Effect.

6.2 Covenants. All covenants and agreements contained in this Agreement to be performed or complied with by the Company on or prior to such Closing Date shall have been performed or complied with in all material respects.

6.3 Sale Notice. The Company shall have duly delivered to the Investor, pursuant to Section 2.2 of this Agreement, a Sale Notice with respect to such Closing.

6.4 Other Deliverables. The Investor shall have received all items required to be delivered to the Investor pursuant to Section 3.2(a) of this Agreement at or prior to such Closing.

6.5 No Material Adverse Effect. From and after the date of this Agreement until such Closing Date, there shall have occurred no event that has caused or would reasonably be expected to cause a Material Adverse Effect.

7. Company’s Conditions to Closing. The Company’s obligation to issue and sell any Purchased Shares at Closing is subject to the fulfillment as of such Closing of the following conditions (unless waived in writing by the Company):

7.1 Representations and Warranties. Each of the Investor Fundamental Warranties shall be true and correct in all material respects as of such Closing Date with the same effect as though made at and as of such date (except to the extent such representations and warranties are specifically made as of a specified date, in which case such representations and warranties shall be true and correct in all material respects as of such specified date); and each of the other representations and warranties made by the Investor in Section 5 hereof (disregarding all qualifications as to materiality, “material adverse effect” or words of similar import) shall be true and correct in all respects as of such Closing Date with the same effect as though made at and as of such date (except to the extent such representations and warranties are specifically made as of a specified date, in which case such representations and warranties shall be true and correct in all respects as of such specified date), except where the failure of such representations and warranties to be true and correct would not impair or adversely affect the ability of the Investor to consummate the Transaction and perform its obligations under the Transaction Agreements to which it is a party.

7.2 Covenants. All covenants and agreements contained in this Agreement to be performed or complied with by the Investor on or prior to such Closing Date shall have been performed or complied with by the Investor in all material respects.

7.3 Other Deliverables. The Company shall have received all items required to be delivered to the Company pursuant to Section 3.2(b) of this Agreement at or prior to such Closing.

8. Mutual Conditions to Closing. The obligations of the Investor and the Company to consummate Closing are subject to the fulfillment as of such Closing of the following conditions:

8.1 No Prohibition. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Law (whether temporary, preliminary or permanent) that is then in effect and that enjoins, restrains, makes illegal or otherwise prohibits the consummation of the transactions contemplated by the Transaction Agreements.

8.2 Market Listing. The Conversion Shares shall have been approved for listing on The Nasdaq Global Market, subject to official notice of issuance.

8.3 Stockholder Approvals. The approval of the holder of the Series A Preferred Stock, Daniel Solomita, approving of the entry into and execution of the Transaction Agreements and the consummation of the transactions contemplated thereby, as well as any related agreement necessary to consummate the Transaction, shall have been duly and validly obtained.

9. Termination.

9.1 Ability to Terminate. This Agreement may be terminated at any time prior to any Closing by:

(a) mutual written consent of the Company and the Investor;

(b) either the Company or the Investor, upon written notice to the other party, if any of the mutual conditions to such Closing set forth in Section 8 shall have become incapable of fulfillment and shall not have been waived in writing by the other party;

(c) the Company, upon written notice to the Investor, so long as the Company is not then in material breach of its representations, warranties, covenants or agreements under this Agreement, (i) upon a breach of any covenant or agreement on the part of the Investor set forth in this Agreement, or (ii) if any representation or warranty of the Investor shall have been or become untrue, in each case such that any of the conditions set forth in Section 7.1 or 7.2, as applicable, would not be satisfied; provided that in the case of each of clause (i) and (ii), such breach or failure to satisfy conditions shall not have been cured within 30 Business Days after receipt by the Investors of such written notice; and

(d) the Investor, upon written notice to the Company, so long as the Investor is not then in material breach of its representations, warranties, covenants or agreements under this Agreement, (i) upon a breach of any covenant or agreement on the part of the Company set forth in this Agreement, or (ii) if any representation or warranty of the Company shall have been or become untrue, in each case such that any of the conditions set forth in Section 6.1, 6.2, or 6.5, as applicable, would not be satisfied; provided that in the case of each of clause (i) and (ii), such breach or failure to satisfy conditions shall not have been cured within 30 Business Days after receipt by the Company of such written notice.

9.2 Effect of Termination. In the event of the termination of this Agreement pursuant to Section 9.1 hereof, (a) this Agreement (except for this Section 9.2 and Section 12 hereof, and any definitions set forth in this Agreement and used in such sections) shall forthwith become void and have no effect, without any liability on the part of any party hereto or its Affiliates, and (b) all filings, applications and other submissions made pursuant to this Agreement, to the extent practicable, shall be withdrawn from the agency or other Person to which they were made or appropriately amended to reflect the termination of the transactions contemplated hereby; provided, however, that nothing contained in this Section 9.2 shall relieve any party from liability for fraud or any intentional or willful breach of this Agreement.

10. Additional Covenants and Agreements.

10.1 Market Listing. The Company shall use all reasonable best efforts to (a) maintain the listing and trading of the Common Stock on The Nasdaq Global Market (or other Nasdaq market) and (b) effect the listing of the Conversion Shares on such market.

10.2 Assistance and Cooperation.

(a) Prior to Closing, upon the terms and subject to the conditions set forth in this Agreement, each of the parties agrees to use all reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, and to assist and cooperate with the other party in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement, including using all reasonable best efforts to: (a) cause the conditions precedent set forth in Sections 6, 7 and 8 to be satisfied (including, in the case of the Company, promptly notifying the Investors of any notice from The Nasdaq Stock Market LLC with respect to the LAS); (b) obtain all necessary actions or non-actions, waivers, consents, approvals, orders and authorizations from Governmental Authorities and make all necessary registrations, declarations and filings (including registrations, declarations and filings with Governmental Authorities, if any); (c) engage and maintain, at its own expense, a registrar and transfer agent for the Securities as needed; and (d) obtain all necessary consents, approvals or waivers from Third Parties.

(b) Subject to applicable Laws and contractual duties, the Company and the Investor shall, upon request by the Company to the Investor or by the Investor to the Company, furnish the other with all information concerning itself, its Affiliates, directors, officers and stockholders and such other matters as may be reasonably necessary or advisable in connection with any statement, filing, notice or application made by or on behalf of the Investor, the Company or any of their respective Affiliates to any Third Party and/or any Governmental Authority in connection with the Transaction.

(c) Subject to applicable Laws, contractual duties, and as required by any Governmental Authority, the Company and the Investor shall each keep the other apprised of the status of matters relating to consummation of the Transaction.

10.3 Securities Law Disclosure; Publicity. No public release or announcement concerning the transactions contemplated hereby or by any other Transaction Agreement shall be issued by the Company without the prior written consent of the Investor or by the Investor without the prior written consent of the Company (which consents shall not be unreasonably withheld, conditioned or delayed), except for any such release or announcement as may be required by securities Law or other applicable Law or the applicable rules or regulations of any securities exchange or securities market, in which case the Company or the Investor, as the case may be, shall (to the extent permissible under applicable Law) allow the other party, as applicable, reasonable time to comment on such release or announcement in advance of such issuance and the disclosing party shall consider the other party’s comments in good faith.

10.4 Use of Proceeds. The Company shall use the proceeds from the sale of the Purchased Shares for its technology scale up.

11. Indemnification.

11.1 Indemnification by the Company. The Company hereby agrees to, subject to the limitations set forth in this Section 11, indemnify and hold harmless the Investor and its successors, Affiliates, directors, officers, and employees (each, an “Investor Indemnified Party”) from and against any and all losses, liabilities, damages, interest and penalties, costs and expenses (including reasonable expenses of investigation and reasonable attorneys’ fees and expenses in connection with any proceeding) (collectively “Indemnifiable Losses”) incurred or sustained by or imposed upon such Investor Indemnified Party as a result of (a) any breach of or inaccuracy in any warranty made by the Company in this Agreement or (b) any breach of any covenant, agreement or obligation of the Company contained in this Agreement. The Investor agrees and acknowledges that, in the event that the Company incurs an Indemnifiable Loss as a result of the foregoing breach or inaccuracy, for the purpose of this Section 11.1, the Investor Indemnified Parties collectively shall only be deemed to have incurred an Indemnifiable Loss equal to the product of (i) the amount of the Indemnifiable Loss suffered by the Company, multiplied by (ii) the Investor’s beneficial ownership percentage (direct or indirect) in the Company attributable to the Investor’s ownership of the Securities (which shall assume the conversion of all Purchased Shares then outstanding into Conversion Shares upon the terms of such Purchased Shares).

11.2 Indemnification by the Investor. The Investor hereby agrees to, subject to the limitations set forth in this Section 11, indemnify and hold harmless each of the Company, and its successors, Affiliates, directors, officers, and employees (each, a “Company Indemnified Party”) from and against any and all Indemnifiable Losses incurred or sustained by or imposed upon such Company Indemnified Party as a result of (i) any breach of or inaccuracy in any warranty made by the Investor in this Agreement or (ii) any breach of any covenant, agreement or obligation of the Investor contained in this Agreement.

11.3 Survival of Warranties.

(a) Each of (i) the warranties of the Company set forth in Section 4 (other than the Company Fundamental Warranties) and (ii) the warranties of the Investor set forth in Section 5 (other than the Investor Fundamental Warranties) shall survive until the date that is twelve (12) months after the date of this Agreement. Each of the Company Fundamental Warranties and the Investor Fundamental Warranties shall survive until the date that is six (6) years after the date of this Agreement. The covenants to be performed or complied with shall survive until such covenants have been performed or complied with.

(b) It is the express intent of the parties that, if the survival period set forth in this Section 11.3 for the survival of warranties and for the making of claims for indemnification based on any breaches thereof is shorter than the statute of limitations that would otherwise have been applicable thereto, then, by contract, the statute of limitations applicable thereto shall be reduced to the survival period set forth in this Section 11.3, and in respect of the relevant breach or claim the Indemnifying Party shall have no obligation to indemnify and hold harmless any Indemnified Party after the last date that is within the applicable survival period set forth in this Section 11.3, and all rights and remedies that may be exercised by an Indemnified Party with respect to such warranties and any claim for indemnification based on any breaches thereof (other than any unresolved claim set out in a Claim Notice that was delivered prior to such date in respect of an Indemnifiable Loss that was actually suffered prior to such date) will expire and terminate simultaneously with the ending of such applicable survival period. The parties further acknowledge that the survival period set forth in this Section 11.3 are the results of arms’ length negotiations and are intended to be enforced as agreed between the parties. For the avoidance of doubt, if a Claim Notice has been duly given in good faith prior to the expiration of the applicable survival period, then the relevant claim as set out in such Claim Notice shall survive until it has been finally resolved in accordance with the terms hereof.

11.4 Indemnification Cap. The aggregate amount of Indemnifiable Losses recoverable by an Investor Indemnified Party or a Company Indemnified Party in satisfaction of claims of indemnification pursuant to this Section 11 shall not exceed the aggregate amount invested by the Investor pursuant to this Agreement.

11.5 Procedure. Any Indemnified Party seeking indemnification under this Section 11.5 shall give written notice (a “Claim Notice”) to its corresponding Indemnifying Party promptly upon becoming aware of such indemnification claim. The Claim Notice shall include a description in reasonable detail of (a) the basis for, and nature of, such claim, including the facts constituting the basis for such claim, and (b) the estimated amount of Indemnifiable Losses that have been or reasonably will be sustained by the Indemnified Party in connection with such claim. In the event of any claim, demand, action or proceeding asserted against any Indemnified Party by a Third Party with respect to which such Indemnified Party may claim indemnification under Section 11.1 or Section 11.2, as the case may be (a “Third Party Claim”), such Indemnified Party shall give the applicable Indemnifying Party written notice within ten (10) Business Days of receiving written notice of such Third Party Claim. If such Indemnified Party fails to provide each such notice with respect to such Third Party Claim within such time period, the applicable Indemnifying Party will not be obligated to indemnify such Indemnified Party with respect to such Third Party Claim to the extent that the applicable Indemnifying Party is materially prejudiced by such failure of the Indemnified Party. The Indemnifying Party shall notify such Indemnified Party within thirty (30) days after receipt of such notice as to whether the Indemnifying Party will assume the defense of such Third Party Claim. If the Indemnifying Party assumes the defense of such Third Party Claim, (i) the Indemnified Party shall have the right to participate in such defense and to engage separate counsel of its own choosing at its own cost and expense and (ii) the Indemnifying Party shall not agree to any compromise or settlement to which such Indemnified Party has not consented to in writing (which consent shall not be unreasonably withheld, conditioned or delayed) unless such settlement or compromise includes only the payment of monetary damages which shall be paid by such Indemnifying Party (subject to the limitations herein) and includes a release of such Indemnified Party from all liability in respect of such Third Party Claim. If requested by the Indemnifying Party, such Indemnified Party will, at the cost and expense of such Indemnifying Party, provide reasonable cooperation to the Indemnifying Party in defending such Third Party Claim. If the Indemnifying Party elects not to assume the defense of such Third Party Claim, the Indemnified Party may assume the defense thereof at the expense of the Indemnifying Party, provided that the Indemnified Party shall not agree to any compromise or settlement to which the Indemnifying Party has not consented in writing (which consent shall not be unreasonably withheld, conditioned or delayed).

12. Miscellaneous.

12.1 Governing Law; Submission to Jurisdiction. The law, including the statutes of limitation, of the State of New York shall govern this Agreement (except as provided by Nevada law, with respect to the internal affairs of the Company), the interpretation and enforcement of its terms and any claim or cause of action (in law or equity), controversy or dispute arising out of or related to it or its negotiation, execution or performance, whether based on contract, tort, statutory or other law, in each case without giving effect to any conflicts-of-law or other principle requiring the application of the law of any other jurisdiction.

12.2 Submission to Jurisdiction. Each party hereto irrevocably (a) submits to the non-exclusive jurisdiction of the Supreme Court of the State of New York, Borough of Manhattan or the United States District Court for the Southern District of New York for the purpose of any suit, action, or other proceeding arising out of this Agreement, or any of the agreements or transactions contemplated by this Agreement (each a “Proceeding”), (b) agrees that all claims in respect of any Proceeding may be heard and determined in any such court, (c) waives, to the fullest extent permitted by law, any immunity from jurisdiction of any such court or from any legal process therein, (d) agrees not to commence any Proceeding other than in such courts, and (e) waives, to the fullest extent permitted by law, any claim that such Proceeding is brought in an inconvenient forum. Each party hereto agrees that final judgment in any such suit, action or proceeding brought in such court shall be conclusive and binding upon the parties and may be enforced in any court to the jurisdiction of which the parties are subject by a suit upon such judgment. EACH PARTY HERETO (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

12.3 Waiver. No failure or delay of any party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. Any agreement on the part of any party to any such waiver shall be valid only if set forth in a written instrument executed and delivered by a duly authorized officer on behalf of such party.

12.4 Notices. All notices, instructions and other communications hereunder or in connection herewith shall be in writing, shall be sent to the address of the relevant party set forth on Exhibit B attached hereto and shall be deemed duly given (a) on the date of delivery if delivered personally, or if by facsimile or electronic mail, upon written confirmation of receipt by facsimile, electronic mail or otherwise, (b) on the first (1st) Business Day following the date of dispatch if delivered utilizing a next-day service by a recognized next-day courier or (c) on the earlier of confirmed receipt or the fifth (5th) Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. Any party may change its address by giving notice to the other parties in the manner provided above.

12.5 Entire Agreement. This Agreement, the Certificate of Designation, the Investors Rights Agreement (including all exhibits hereto and thereto) and all other agreements, certificates and other instruments entered into in connection with the transactions contemplated by this Agreement constitute the entire agreement among the parties with respect to the subject matter hereof and thereof and supersede all prior and contemporaneous arrangements or understandings, whether written or oral, with respect hereto and thereto.

12.6 Amendments. No provision in this Agreement shall be modified or amended except in a writing executed by an authorized representative of each of the parties hereto.

12.7 Interpretation. When a reference is made in this Agreement to a section, subsection, article, exhibit or schedule such reference shall be to a section, subsection, article, exhibit or schedule of this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement or in any exhibit or schedule are for convenience of reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. All words used in this Agreement will be construed to be of such gender or number as the circumstances require. Any capitalized terms used in any exhibit or schedule but not otherwise defined therein shall have the meaning as defined in this Agreement. All exhibits and schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth herein. The word “including” and words of similar import when used in this Agreement will mean “including, without limitation,” unless otherwise specified. The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision in this Agreement. The term “or” is not exclusive. The word “will” shall be construed to have the same meaning and effect as the word “shall.” References to days mean calendar days unless otherwise specified. Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of names and pronouns shall include the plural and vice-versa. This Agreement has been prepared jointly and will not be construed against either party.

12.8 Severability. If, under applicable Laws, any provision hereof is invalid or unenforceable, or otherwise directly or indirectly affects the validity of any other material provision(s) of this Agreement in any jurisdiction (“Modified Clause”), then, it is mutually agreed that this Agreement shall endure and that the Modified Clause shall be enforced in such jurisdiction to the maximum extent permitted under applicable Laws in such jurisdiction; provided that the parties shall consult and use all reasonable best efforts to agree upon, and hereby consent to, any valid and enforceable modification of this Agreement as may be necessary to avoid any unjust enrichment of either party and to match the intent of this Agreement as closely as possible, including the economic benefits and rights contemplated herein.

12.9 Assignment. Neither this Agreement nor any of the rights or obligations hereunder may be assigned by the Investor or the Company without (a) the prior written consent of the Company in the case of any assignment by the Investor or (b) the prior written consent of the Investor in the case of an assignment by the Company; provided that no such consent shall be required from the Investor in connection with any acquisition of the Company or a majority of the outstanding shares of Common Stock, in each case in a single or series of related transactions.

12.10 Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of, and shall be binding upon, the respective successors and permitted assignees of the parties.

12.11 Counterparts. This Agreement may be executed in two or more counterparts, and by facsimile, pdf or other electronic format, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.

12.12 Third Party Beneficiaries. None of the provisions of this Agreement shall be for the benefit of or enforceable by any Third Party, including any creditor of any party hereto. No Third Party shall obtain any right under any provision of this Agreement or shall by reason of any such provision make any claim in respect of any debt, liability or obligation (or otherwise) against any party hereto.

12.13 Remedies. The rights, powers and remedies of the parties under this Agreement are cumulative and not exclusive of any other right, power or remedy which such parties may have under any other agreement or Law. No single or partial assertion or exercise of any right, power or remedy of a party hereunder shall preclude any other or further assertion or exercise thereof.

12.14 Specific Performance. The parties hereby acknowledge and agree that the rights of the parties hereunder are special, unique and of extraordinary character, and that if any party refuses or otherwise fails to act, or to cause, direct or request its Affiliates to act, in accordance with the provisions of this Agreement, such refusal or failure would result in irreparable injury to the nonbreaching party(ies) as the case may be, the exact amount of which would be difficult to ascertain or estimate and the remedies at law for which would not be reasonable or adequate compensation. Accordingly, if any party refuses or otherwise fails to act, or to cause its Affiliates to act, in accordance with the provisions of this Agreement, then, in addition to any other remedy which may be available to any damaged party at law or in equity, such damaged party will be entitled to obtain specific performance and injunctive relief, without posting bond or other security, and without the necessity of proving actual or threatened damages, which remedy such damaged party will be entitled to seek in any court of competent jurisdiction. Each party hereto hereby further waives any defense in any action for specific performance that a remedy at law would be adequate.

12.15 Expenses. Except as otherwise provided herein and therein, all fees and expenses incurred in connection with or related to this Agreement and the other Transaction Agreements and the transactions contemplated hereby and thereby shall be paid by the party incurring such fees or expenses, whether or not such transactions are consummated. The Company shall pay any expenses in connection with the delivery of the Purchased Shares to the Investors.

[Signature page follows]

IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first above written.

	LOOP INDUSTRIES, INC.


	By:	/s/ Daniel Solomita
	Name:	Daniel Solomita
	Title:	Chief Executive Officer and President

Signature Page to Securities Purchase Agreement

IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first above written.

	REED CIRCULAR ECONOMY

	By:	/s/ Julien Touati
	Name:	Julien Touati
	Title:	President

Signature Page to Securities Purchase Agreement

EXHIBIT A

FORM OF CROSS RECEIPT

EXHIBIT B

NOTICE ADDRESSES

EXHIBIT C

FORM OF CERTIFICATE OF DESIGNATION

EXHIBIT D

FORM OF INVESTORS RIGHTS AGREEMENT

EXHIBIT E

NEVADA COUNSEL LEGAL OPINIONS

EX-10.22 5 loop_ex1022.htm INVESTORS RIGHTS AGREEMENT loop_ex1022.htm

EXHIBIT 10.22

CONFIDENTIAL

Execution Version

INVESTORS RIGHTS AGREEMENT

BY AND AMONG

LOOP INDUSTRIES, INC.,

DANIEL SOLOMITA

AND

THE INVESTORS NAMED HEREIN

DATED AS OF DECEMBER 23, 2024

TABLE OF CONTENTS

1.	Definitions		1

2.	Registration Rights		6

	2.1	Required Registration; Piggyback Registration	6
	2.2	Revocation of Required Registration	7
	2.3	Continuous Effectiveness of Registration Statement	7
	2.4	Obligations of the Company	7
	2.5	Information; Investor Covenants	9
	2.6	Expenses	10
	2.7	Indemnification	10
	2.8	SEC Reports	12
	2.9	Legend Removal	12

3.	Restrictions on Beneficial Ownership		13

	3.1	Standstill	13

4.	Restrictions on Dispositions		14

	4.1	Lock-Up	14
	4.2	Certain Dispositions During Lock-Up	15
	4.3	Certain Dispositions	15
	4.4	Effect of Prohibited Disposition	16
	4.5	Compliance with Laws	16
	4.6	Legends	16

5.	Voting Agreement		16

	5.1	Voting of Shares held by Founder	16
	5.2	Founder Covenant	17

6.	Participation Right.		17

7.	Miscellaneous		18

	7.1	Governing Law	18
	7.2	Submission to Jurisdiction	18
	7.3	Waiver	18
	7.4	Notices	18
	7.5	Entire Agreement	19
	7.6	Amendments	19
	7.7	Interpretation	19
	7.8	Severability	19
	7.9	Additional Investors	20
	7.10	Assignment	20
	7.11	Successors and Assigns	20
	7.12	Counterparts	20
	7.13	Third Party Beneficiaries.	20
	7.14	Remedies	20
	7.15	Specific Performance	20
	7.16	Confidentiality	21
	7.17	Termination.	22

Schedule I – Investors and Investor Notice Addresses

Schedule II – Company and Founder Notice Addresses

Exhibit A – Form of Joinder Agreement

INVESTORS RIGHTS AGREEMENT

THIS INVESTORS RIGHTS AGREEMENT (this “Agreement”) is made as of December 23, 2024, by and among Loop Industries, Inc., a company incorporated and existing under the laws of the State of Nevada with its principal offices at 480 Fernand-Poitras Terrebonne, Québec, Canada J6Y 1Y4 (the “Company”), Daniel Solomita, solely in his individual capacity and for the purposes of Section 5 (the “Founder”), and each of the Investors, each party thereto acting jointly and not jointly nor jointly and severally with the other parties thereto for the purposes hereof,

WHEREAS, the Company and each Investor (or one or more entities owned or controlled by an Investor) are party to a separate Securities Purchase Agreement by and between such Investor (or one or more entities owned or controlled by an Investor) and the Company (with respect to such Investor, the “Purchase Agreement”), which provides for the issuance and sale by the Company to such Investor, and the purchase by such Investor (or one or more entities owned or controlled by an Investor), of Series B Preferred Stock (as defined herein) (the “Purchased Shares”);

AND WHEREAS, it is a condition to the execution and delivery of each Purchase Agreement that each Investor, the Company and the Founder agree to become bound by the terms and conditions of this Agreement, which sets forth certain rights and restrictions with respect to the Purchased Shares and other securities of the Company beneficially owned by the Investors and their Affiliates.

1. Definitions. When used in this Agreement, the following terms shall have the respective meanings specified therefor below:

“Acquisition Proposal” shall have the meaning set forth in Section 3.1(d).

“Affiliate” shall mean, with respect to any Person, another Person that controls, is controlled by or is under common control with such Person. A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. For the purposes of this Agreement, except as specifically stated below, in no event shall (i) any Investor or any of its Affiliates be deemed Affiliates of the Company or any of its Affiliates or (ii) the Company or any of its Affiliates be deemed Affiliates of any Investor or any of its Affiliates.

“Agreement” shall have the meaning set forth in the Preamble, including all Exhibits attached hereto.

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“Automatic Conversion Date” shall have the meaning set forth in the Certificate of Designation.

“beneficial owner,” “beneficially owns,” “beneficial ownership” and terms of similar import used in this Agreement shall, with respect to a Person, have the meaning set forth in Rule 13d-3 under the Exchange Act (i) assuming the full conversion into, and exercise and exchange for, shares of Common Stock of all Common Stock Equivalents beneficially owned by such Person and (ii) determined without regard for the number of days within which such Person has the right to acquire such beneficial ownership.

“Board” shall mean the Board of Directors of the Company.

“Business Combination” shall have the meaning set forth in Section 3.1(g).

“Business Day” shall mean a day on which commercial banking institutions in Montréal, Québec, Paris, France and New York, New York are open for business.

“Certificate of Designation” shall mean the Certificate of Designation of the Series B Preferred Stock setting forth the designations, powers, preferences and relative rights, and the qualifications, limitations and restrictions thereof.

“Change of Control” shall mean, with respect to the Company, any of the following events: (i) any Person becomes the beneficial owner (except that a Person shall be deemed to have beneficial ownership of all shares that any such Person has the right to acquire, whether such right which may be exercised immediately or only after the passage of time), directly or indirectly, of a majority of the total voting power represented by all shares of Common Stock and any other voting securities of the Company then issued and outstanding; (ii) the Company consolidates with or merges into another corporation or entity, or any corporation or entity consolidates with or merges into the Company, other than (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) a majority of the combined voting power of the voting securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person becomes the beneficial owner, directly or indirectly, of a majority of the total voting power of the voting securities of the Company then issued and outstanding or (iii) the Company conveys, transfers or leases all or substantially all of its assets to any Person other than a wholly-owned Affiliate of the Company.

“Closing Date” shall mean the date on which a closing of the purchase and sale of Purchased Shares is effected under a Purchase Agreement.

“Common Stock” shall mean the Company’s common stock, par value $0.0001 per share.

“Common Stock Equivalents” shall mean any options, warrants or other securities or rights convertible into or exercisable or exchangeable for, whether directly or following conversion into or exercise or exchange for other options, warrants or other securities or rights, shares of Common Stock.

“Company” shall have the meaning set forth in the Preamble.

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“Company Notice” shall have the meaning set forth in Section 2.1(b).

“Competitor” shall mean any Person that, directly or indirectly, through one or more of its Affiliates, (i) is regularly engaged in commercializing rDMT/rMEG products or manufacturing technology based on methanolysis below 150 degrees Celsius or (ii) owns a controlling equity interest in any Person described under clause (i) hereof.

“Conversion Date” shall have the meaning set forth in the Certificate of Designation.

“Conversion Shares” shall mean the shares of Common Stock issuable upon conversion of the Purchased Shares, and shall be adjusted for (i) any stock split, stock dividend, share exchange, merger, consolidation or similar recapitalization and (ii) any Common Stock issued as (or issuable upon the exercise of any warrant, right or other security that is issued as) a dividend or other distribution with respect to, or in exchange or in replacement of, the Conversion Shares.

“Derivative” shall have the meaning set forth in Section 3.1(a).

“Disposition” or “Dispose of” shall mean any (i) offer, sale, contract to sell, sale of any option or contract to purchase, purchase of any option or contract to sell, grant of any option, right or warrant for the sale of, or other disposition of or transfer of any shares of Series B Preferred Stock or Common Stock, or any Common Stock Equivalents, including, without limitation, any “short sale” or similar arrangement, or (ii) hedge, swap or any other agreement or transaction that transfers, in whole or in part, directly or indirectly, any of the economic consequence of ownership of shares of Series B Preferred Stock or Common Stock, whether any such hedge, swap, agreement or transaction is to be settled by delivery of Series B Preferred Stock or Common Stock, other securities, in cash or otherwise.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

“Founder” shall have the meaning set forth in the Preamble.

“Founder Shares” shall have the meaning set forth in Section 5.1(a).

“Free Writing Prospectus” shall have the meaning set forth in Section 2.4(c).

“Fully-Diluted Ownership Percentage” shall mean, with respect to any Investor and its Affiliates at any time, the percentage of the issued and outstanding Common Stock beneficially owned by such Investor and its Affiliates at such time, assuming the conversion of all Common Stock Equivalents (and, in the case of the Purchased Shares, assuming that the Purchased Shares are convertible at such time).

“Fundamental Change” shall have the meaning set forth in the Certificate of Designation.

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“Investor” or “Investors” shall mean each Person listed on Schedule I hereto (including, as of the date hereof, each Person executing this Agreement), and hereafter each Person that validly executes a joinder agreement, in compliance with the terms of this Agreement.

“Law” or “Laws” shall mean all laws, statutes, rules, regulations, orders, judgments, injunctions and/or ordinances of any Governmental Authority.

“Lock-Up Term” shall have the meaning set forth in Section 4.1(a).

“Modified Clause” shall have the meaning set forth in Section 7.8.

"Offering Document(s)" shall mean, with respect to any Investor, any Registration Statement registering offers and sales of such Investor's Registrable Securities under the Securities Act, the prospectus and any prospectus supplement related thereto (including any amendments or supplements thereto), or any SEC-filed document that is incorporated (or deemed to be incorporated) therein by reference, and any Free Writing Prospectus utilized in connection with any such Registration Statement.

“Offeror” shall have the meaning set forth in Section 3.1(d).

“Participation Notice” shall have the meaning set forth in Section 6.2.

“Participation Right” shall have the meaning set forth in Section 6.1.

“Proceeding” shall have the meaning set forth in Section 7.2.

“Purchase Agreement” shall have the meaning set forth in the Preamble, and shall include all Exhibits attached thereto.

“Purchased Shares” shall have the meaning set forth in the Preamble, and shall be adjusted for (i) any stock split, stock dividend, share exchange, merger, consolidation or similar recapitalization and (ii) any Series B Preferred Stock issued as (or issuable upon the exercise of any warrant, right or other security that is issued as) a dividend or other distribution with respect to, or in exchange or in replacement of, the Purchased Shares.

“Redemption” shall have the meaning set forth in the Certificate of Designation.

“registers,” “registered,” and “registration” refer to a registration effected by preparing and filing a Registration Statement or similar document in compliance with the Securities Act, and the declaration or ordering of effectiveness of such Registration Statement or document by the SEC.

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“Registrable Securities” shall mean (i) the shares of Common Stock issued upon the conversion of Purchased Shares and (ii) any Common Stock issued as (or issuable upon the exercise of any warrant, right or other security that is issued as) a dividend or other distribution with respect to, or in exchange or in replacement of, the shares of Common Stock described in clause (i) of this definition, provided, however, that shares of Common Stock shall cease to be Registrable Securities when either (A) such shares have been disposed of in accordance with the Registration Statement, or (B) such shares may be sold under Rule 144 of the Securities Act without any limitation as to time, volume or manner of sale and without the need for the Company to comply with the current public information requirement under Rule 144(c)(1) of the Securities Act.

“Registration Statement” shall have the meaning set forth in Section 2.1.

“Required Approvals” shall have the meaning set forth in Section 5.1.

“Required Period” shall have the meaning set forth in Section 2.3.

“Required Registration” shall have the meaning set forth in Section 2.1.

“SEC” shall mean the United States Securities and Exchange Commission.

“Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

“Series B Preferred Stock” shall mean the Company’s Series B convertible preferred stock, par value $0.0001 per share.

“Standstill Term” shall have the meaning set forth in Section 3.1.

“Third Party” shall mean any Person other than the Investors, the Company, or any Affiliate of an Investor or the Company.

“Violation” shall have the meaning set forth in Section 2.7(a).

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2. Registration Rights.

2.1 Required Registration; Piggyback Registration.

(a) As soon as practicable after the expiration of the Lock-Up Term applicable to an Investor, but in any event within 90 days after the expiration of the Lock-Up Term applicable to such Investor, the Company shall prepare and file with the SEC a Registration Statement on Form S-3 (unless the Company is not eligible to file a Form S-3, then it shall be filed on Form S-1 or on such other form appropriate for such purpose) covering the resale of the Registrable Securities of such Investor as a secondary offering to be made on a continuous basis pursuant to Rule 415 (the “Required Registration”). The applicable Registration Statement (including any preliminary or final prospectus or prospectus supplement contained therein) is referred to herein as a “Registration Statement.” If a Registration Statement is not initially filed on Form S-3, then following any date on which the Company becomes eligible to use a registration statement on Form S-3 to register Registrable Securities for resale, the Company shall file a Registration Statement on Form S-3 covering all securities that are then deemed Registrable Securities and shall cause such Registration Statement to be filed as soon as commercially reasonable and declared effective under the Securities Act as soon as reasonably possible.

(b) In addition to the Company’s agreement pursuant to Section 2.1(a) above, if the Company shall, at any time before all Registrable Securities have been sold by the Investors, determine to register with the SEC any offer and sale of shares of its Common Stock in an underwritten offering, the Company shall provide written notice to each Investor, which notice shall be provided no less than fifteen (15) calendar days prior to the filing of the applicable registration statement (the “Company Notice”). In that event, the right of any Investor to include the Registrable Securities in such a registration shall be conditioned upon such Investor's written request to participate which shall be delivered to the Company within ten (10) calendar days after the delivery date of the Company Notice, as well as such Investor's participation in such underwriting and the inclusion of such Investor's Registrable Securities in the underwriting. All Investors proposing to sell any of their Registrable Securities through such underwriting shall (together with the Company and any other stockholders of the Company selling their securities through such underwriting) enter into an underwriting agreement in customary form with the underwriter selected for such underwriting. Notwithstanding anything herein to the contrary, if the underwriter determines that marketing factors require a limitation on the number of shares of Common Stock or the amount of other securities to be underwritten, the underwriter may exclude some or all Registrable Securities from such registration and underwriting. The number of Registrable Securities to be included in such registration and underwriting shall be allocated first to the Company and then to all selling stockholders who have requested to sell in the registration (including any Investors) on a pro rata basis according to the number of shares requested to be included therein.

2.2 Revocation of Required Registration. With respect to the Required Registration, each Investor may, at any time prior to the effective date of such Registration Statement, waive the requirement to have all or any of the Registrable Securities owned by such Investor included therein by providing a written notice to the Company, in which case such Registrable Securities will not be included in such Registration Statement.

2.3 Continuous Effectiveness of Registration Statement. The Company will use its commercially reasonable efforts to cause each Registration Statement (including any post-effective amendments thereto) filed pursuant to Section 2.1(a) to be declared effective by the SEC or to become effective under the Securities Act as promptly as practicable and to keep such Registration Statement that has been declared or becomes effective continuously effective until the Investors no longer hold any Registrable Securities (the “Required Period”).

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2.4 Obligations of the Company. With respect to the Required Registration during the applicable Required Period, the Company shall:

(a) prepare and file with the SEC a Registration Statement with respect to the Registrable Securities; provided that at least ten (10) Business Days prior to filing the Registration Statement or any prospectus or any amendments or supplements thereto, the Company shall furnish to the Investors and their counsel copies of all such documents proposed to be filed, and each Investor shall have the opportunity to comment on any information that is contained therein and the Company shall consider all such comments in good faith and shall make the corrections reasonably requested by such Investor with respect to any information pertaining solely to such Investor and the plan of distribution prior to filing the Registration Statement or other documents;

(b) prepare and file with the SEC such amendments, including post-effective amendments to the Registration Statement and/or replacement shelf registration statements and supplements to the Registration Statement and any prospectus used in connection therewith as may be necessary to keep the Registration Statement effective for the Required Period, and cause the prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act, to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such Registration Statement for the Required Period; provided that at least ten (10) Business Days prior to filing any such amendments and post-effective amendments or supplements thereto, the Company shall furnish to the applicable Investor(s) and their counsel copies of all such documents proposed to be filed, and promptly incorporate into a Registration Statement, prospectus supplement or post-effective amendment such information as such Investor may reasonably request should be included therein relating to the plan of distribution with respect to such Registrable Securities; and make all required filings of such prospectus supplement or post-effective amendment as soon as reasonably practicable after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment;

(c) furnish to the Investors such numbers of conformed copies of such Registration Statement, and of each amendment and supplement thereto, such number of copies of the prospectus contained in or deemed part of such Registration Statement (including each preliminary prospectus and any summary prospectus) and each free writing prospectus (as defined in Rule 405 of the Securities Act) (a “Free Writing Prospectus”) utilized in connection therewith and any other prospectus filed under Rule 424 under the Securities Act in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities;

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(d) notify the Investors promptly of the filing of the Registration Statement, any amendment thereto, the prospectus or any prospectus supplement related thereto or post-effective to the Registration Statement and/or replacement shelf registration statement or any Free Writing Prospectus utilized in connection therewith;

(e) notify the Investors, promptly after the Company shall receive notice thereof, of the time when the Registration Statement becomes or is declared effective or when any amendment or supplement or any prospectus forming a part of such Registration Statement has been filed;

(f) notify the Investors promptly of any comment letter from the SEC or any request by the SEC or any other U.S. or state Governmental Authority for the amending or supplementing of any Offering Document or for additional information and promptly deliver to the Investors copies of any comments received from the SEC and any correspondence from and to the SEC and respond as promptly as reasonably practicable to such comments;

(g) notify the Investors promptly of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose, and use all reasonable efforts to obtain the withdrawal of any such order or the termination of such proceedings;

(h) use all reasonable efforts to register and qualify the Registrable Securities covered by the Registration Statement under such other securities or blue sky Laws of such jurisdictions as shall be reasonably requested by the Investors, use all reasonable efforts to keep each such registration or qualification effective, including through new filings, or amendments or renewals, during the Required Period, and notify the Investors of the receipt of any written notification with respect to any suspension of any such qualification or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction at the earliest reasonable practicable date; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, except as may be required by the Securities Act;

(i) promptly notify the Investors at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which any Offering Document includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and promptly prepare a supplement or amendment to such Offering Document or file any other required document so that, as thereafter delivered to the purchasers of such Registrable Securities, such Offering Document will not contain an untrue statement of material fact or omit to state any fact necessary to make the statements therein not misleading;

(j) use all reasonable efforts to comply with all applicable rules and regulations of the SEC that apply to its registration of offers and sales of Registrable Securities under the Securities Act and make generally available to its security holders earning statements satisfying the provisions of Section 11(a) of the Securities Act, provided that the Company will be deemed to have complied with this Section 2.4(j) with respect to such earning statements if it has satisfied the provisions of Rule 158 promulgated under the Securities Act;

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(k) maintain a transfer agent and registrar for all Registrable Securities covered by such Registration Statement from and after a date no later than the effective date of such Registration Statement;

(l) notify the Investors promptly upon the happening of any event that makes any statement made in any Offering Document untrue in any material respect or that requires the making of any changes in any such Offering Document so that, in the case of a Registration Statement, it will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of any other type of Offering Document, it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that such notice need not include the nature or details concerning such event;

(m) if requested by counsel to an Investor, (i) promptly incorporate in a prospectus supplement or post-effective amendment to the Registration Statement such information as the Company reasonably agrees (upon advice of counsel) is required to be included therein and (ii) make all required filings of such prospectus supplement or such post-effective amendment promptly after the Company has received notification of the matters to be incorporated in such prospectus supplement or post-effective amendment and has agreed to their inclusion in the Registration Statement; and

(n) cause the Registrable Securities covered by such Registration Statement to be listed on each securities exchange, if any, on which equity securities issued by the Company are then listed.

2.5 Information; Investor Covenants. It shall be a condition precedent to the obligations of the Company to take any reasonable action pursuant to this Section 2 with respect to the Registrable Securities that each Investor furnish to the Company such information regarding itself and the Registrable Securities held by it as is required by Regulation S-K Item 507 or as shall be necessary to effect the registration of the Registrable Securities. Each Investor agrees that, upon receipt of any notice from the Company of the happening of an event pursuant to Section 2.4(i) hereof, such Investor will immediately discontinue disposition of Registrable Securities pursuant to any Registration Statement covering such Registrable Securities, until such Investor is advised by the Company that such dispositions may again be made. Each Investor covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it or an exemption therefrom in connection with sales of Registrable Securities pursuant to any Registration Statement.

2.6 Expenses. The Company will pay all expenses associated with the preparation and filing of any Registration Statements required by this Section 2 , including, without limitation, SEC registration fees, FINRA filing fees, stock exchange listing fees, transfer agent fees, the Company’s counsel and accounting fees and expenses, printing expenses, delivery expenses, and costs associated with clearing the Registrable Securities for sale under applicable state securities Laws. In no event shall the Company be responsible for any discounts, commissions, fees and expenses of the Investors’ counsel, underwriters, selling brokers, dealer managers or similar securities industry professionals with respect to the Registrable Securities being sold.

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2.7 Indemnification. In the event any Registrable Securities are included in a Registration Statement under this Agreement:

(a) The Company shall indemnify and hold harmless each Investor, any underwriter (as defined in the Securities Act) for such Investor and each Person, if any, who controls such Investor or underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and the officers, directors, owners, agents and employees of such controlling Persons, against any and all losses, claims, damages or liabilities (joint or several) to which they may become subject under any securities Laws including, without limitation, the Securities Act, the Exchange Act, or any other statute or common law of the United States or any other country or political subdivision thereof, or otherwise, including the amount paid in settlement of any litigation commenced or threatened (including any amounts paid pursuant to or in settlement of claims made under the indemnification or contribution provisions of any underwriting or similar agreement entered into by each Investor in connection with any offering or sale of securities covered by this Agreement), and shall promptly reimburse them, as and when incurred, for any legal or other expenses incurred by them in connection with investigating any claims and defending any actions, insofar as any such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any of the following types of statements, omissions or violations (each, a “Violation”): (i) any untrue statement or alleged untrue statement of a material fact contained in or incorporated by reference into such Registration Statement or any other Offering Document relating to the offering and sale of such securities, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading or (iii) any violation or alleged violation by the Company (or any of its agents or Affiliates) of the Securities Act, the Exchange Act, any state securities Law, or any rule or regulation promulgated under any state securities Law, in each case arising from such Registration Statement; provided, however, the Company shall not be liable in any such case for any such loss, claim, damage, liability or action to the extent that it (A) arises out of or is based upon a Violation which occurs solely in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by such Investor; or (B) is caused by such Investor’s disposition of Registrable Securities after notice from the Company pursuant to Section 2.4(g) during any period during which such Investor is obligated to discontinue any disposition of Registrable Securities as a result of any stop order suspending the effectiveness of any Registration Statement with respect to Registrable Securities. The Company shall pay, as incurred, any legal or other expenses reasonably incurred by any Person intended to be indemnified pursuant to this Section 2.7(a), in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Section 2.7(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed.

(b) Each Investor shall indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the Registration Statement, each Person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and the officers, directors, owners, agents and employees of such controlling Persons, any underwriter, any other Investor selling securities in such Registration Statement and any controlling Person of any such underwriter or other Investor, against any losses, claims, damages or liabilities (joint or several) to which any of the foregoing Persons may become subject, under liabilities (or actions in respect thereto) which arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation: (i) arises out of or is based upon a Violation which occurs solely in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by such Investor; or (ii) is caused by such Investor’s disposition of Registrable Securities after notice from the Company pursuant to Section 2.4(g) during any period during which such Investor is obligated to discontinue any disposition of Registrable Securities as a result of any stop order suspending the effectiveness of any Registration Statement with respect to Registrable Securities. Each such indemnifying Investor shall pay, as incurred, any legal or other expenses reasonably incurred by any Person intended to be indemnified pursuant to this Section 2.7(b), in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Section 2.7(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without consent of such Investor, which consent shall not be unreasonably withheld.

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(c) Promptly after receipt by an indemnified party under this Section 2.7 of notice of the commencement of any action (including any action by a Governmental Authority), such indemnified party shall, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.7, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party shall have the right to retain its own counsel, with the reasonable fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial in a material respect to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 2.7, but the omission so to deliver written notice to the indemnifying party shall not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.7.

(d) In order to provide for just and equitable contribution to joint liability in any case in which a claim for indemnification is made pursuant to this Section 2.7 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 2.7 provided for indemnification in such case, the Company and each Investor shall contribute to the aggregate losses, claims, damages or liabilities to which they may be subject (after contribution from others) in proportion to the relative fault of the Company, on the one hand, and such Investor, on the other hand; provided, however, that in any such case, no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation; provided further, however, that in no event shall any contribution under this Section 2.7(d) on the part of any Investor exceed the net proceeds received by such Investor from the sale of Registrable Securities giving rise to such contribution obligation, except in the case of fraud or willful misconduct by such Investor.

(e) The obligations of the Company and each Investor under this Section 2.7 shall survive the completion of any offering of Registrable Securities in a Registration Statement under this Agreement and otherwise.

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2.8 SEC Reports. With a view to making available to the Investors the benefits of Rule 144 under the Securities Act and any other rule or regulation of the SEC that may at any time permit the Investors to sell Conversion Shares to the public without registration, the Company agrees to at any time that it is a reporting company under Section 13 or 15(d) of the Exchange Act:

(a) file with the SEC in a timely manner all reports and other documents required of the Company under the Exchange Act; and

(b) furnish to each Investor, so long as such Investor owns any Purchased Shares or Conversion Shares, forthwith upon request (i) a written statement by the Company that it has complied with the reporting requirements of the Exchange Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested in availing such Investor of any rule or regulation of the SEC (exclusive of Rule 144A) which permits the selling of any Conversion Shares without registration.

2.9 Legend Removal. After the expiration of the Lock-Up Term applicable to such Investor and provided that such transfer is being made in compliance with this Agreement, the Company shall cause the legends set forth in Section 4.6 to be removed from any Conversion Shares held or beneficially owned by such Investor, no later than two (2) Business Days from receipt of a written request from an Investor pursuant to this Section 2.9, to the extent (a) such shares have been resold under an effective Registration Statement, (b) such shares have been or will be transferred in compliance with Rule 144 under the Securities Act, (c) such shares are eligible for resale pursuant to Rule 144(b)(1)(i) under the Securities Act without the requirement for the Company to be in compliance with the current public information required under Rule 144(c)(1) under the Securities Act as to such shares and without volume or manner-of-sale restrictions or (d) such Investor shall have provided the Company with an opinion of counsel, reasonably satisfactory to the Company, stating that such shares may lawfully be transferred without registration under the Securities Act.

3. Restrictions on Beneficial Ownership.

3.1 Standstill. During the period (such period, the “Standstill Term”) commencing as of the date of this Agreement and continuing until the date that is the six (6)-month anniversary of the Conversion Date of the final tranche of Purchased Shares sold to each Investor under the applicable Purchase Agreement, no Investor nor any of its Affiliates shall do any of the following, either directly or indirectly by causing, requesting or directing its Affiliates to do any of the following, except as expressly approved or invited in writing by the Company:

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(a) other than purchases of additional Purchased Shares as contemplated under the applicable Purchase Agreement, the issuance of Conversion Shares or pursuant to the exercise of the Participation Right, directly or indirectly, acquire beneficial ownership of Common Stock and/or Common Stock Equivalents and/or any instrument that gives such Investor or any of its Affiliates the economic equivalent of ownership of an amount of securities of the Company (a “Derivative”), except, nothing in this Section 3.1(a)shall prevent or prohibit such Investor or any of its Affiliates from (i) investing in a fund with respect to which such Investor or any of its Affiliates does not have or share decision-making authority over investment or divestment decisions; (ii) in the case of an Affiliate that is a private equity fund or a credit fund, investing through a portfolio company of such fund; or (iii) entering into any Derivative with an Investor or its Affiliates or receiving a transfer of any Purchased Shares or Conversion Shares from an Investor or its Affiliates.

(b) make a tender, exchange or other public offer to acquire Common Stock and/or Common Stock Equivalents;

(c) directly or indirectly, (i) seek to have called any meeting of the stockholders of the Company or propose any matter to be voted upon by the stockholders of the Company, or (ii) propose or nominate for election to the Board any person whose nomination has not been approved by a majority of the Board;

(d) directly or indirectly, encourage, accept or support a tender, exchange or other offer or proposal by any other Person or group (an “Offeror”) for securities of the Company (if such offer or proposal would, if consummated, result in a Change of Control of the Company, such offer or proposal is referred to as an “Acquisition Proposal”); provided, however, that from and after the filing of a Schedule 14D-9 (or successor form of Tender Offer Solicitation/Recommendation Statement under Rule 14d-9 of the Exchange Act) by the Company recommending that stockholders accept any such offer filed after such offer has commenced, such Investor shall not be prohibited from taking any of the actions otherwise prohibited by this Section 3.1(d) for so long as the Board maintains and does not withdraw such recommendation;

(e) directly or indirectly, solicit proxies or consents or propose or seek or become a participant in a solicitation (as such terms are defined in Regulation 14A under the Exchange Act), or seek to advise or influence any Person, with respect to voting of any securities of the Company;

(f) deposit any securities of the Company in a voting trust or subject any securities of the Company to any arrangement or agreement with respect to the voting of such securities, including the granting of any proxy;

(g) propose (i) any merger, consolidation, business combination, tender or exchange offer, purchase of the Company’s assets or businesses, purchase of any securities of the Company or any Derivative, or any similar transaction involving the Company or (ii) any recapitalization, restructuring, liquidation or other extraordinary transaction with respect to the Company, in each case without the prior written consent of the Board (a transaction described in clauses (i) and (ii) that would result in a Change of Control, is referred to as a “Business Combination”);

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(h) act in concert with any Third Party to take any action in clauses (a) through (g) above, or, directly or indirectly, form, join or in any way participate in a “partnership, limited partnership, syndicate, or other group” as such terms are used in the rules of the SEC with respect to the Company or any securities of the Company;

(i) request or propose to the Board or the Company (or any of its officers, directors, Affiliates, employees, attorneys, accountants, financial advisors and other professional representatives), directly or indirectly, any amendment or waiver of any provision of this Section 3.1 (including this clause (i));

(j) make any public announcement regarding, or take any action that could require the Company to make a public announcement regarding, a potential Business Combination or any of the matters set forth in clauses (a) through (i) above; or

(k) enter into discussions, negotiations, arrangements or agreements with any Person relating to the foregoing actions referred to in (a) through (i) above;

provided, however, that nothing contained in this Section 3.1 shall prohibit such Investor or any of its Affiliates from making confidential, nonpublic proposals to the Board for a transaction involving a Business Combination following the public announcement by the Company that it has entered into a definitive agreement with a Third Party for a transaction involving a Business Combination.

4. Restrictions on Dispositions.

4.1 Lock-Up.

(a) For the period commencing as of the first Closing Date under the Purchase Agreement pursuant to which an Investor directly or indirectly acquires Purchased Shares and continuing until the date that is the first (1st) anniversary of the Conversion Date for the Purchased Shares acquired pursuant to such Purchase Agreement, provided that if there is more than one Conversion Date because there was more than one Closing under such Purchase Agreement, the period shall continue until the first anniversary of the last of such multiple Conversion Dates (with respect to such Investor, the “Lock-Up Term”), such Investor shall not, and shall cause its Affiliates not to, (i) Dispose of any of their Purchased Shares, Conversion Shares, or any other shares of Common Stock beneficially owned by them, together with any shares of Common Stock issued in respect thereof as a result of any stock split, stock dividend, share exchange, merger, consolidation or similar recapitalization, or (ii) Dispose of any Common Stock issued as (or issuable upon the exercise of any warrant, right or other security that is issued as) a dividend or other distribution with respect to, or in exchange or in replacement of, the shares of Common Stock described in clause (i) of this sentence, in each case except (1) with the prior consent of a majority of the Board which consent may be granted or withheld in the Board’s sole discretion, or (2) as provided in Section 4.2 below; provided that such Lock-Up Term shall terminate with respect to an Investor upon a material breach by the Company or Daniel Solomita of any of their obligations under this Agreement or the applicable Purchase Agreement, provided, further, that such Investor has notified the Company or Daniel Solomita (as applicable) of such material breach in writing and, if such material breach is capable of being cured, such material breach remains uncured for 30 days after delivery of such notice.

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4.2 Certain Dispositions During Lock-Up.

(a) Disposition in Tender Offer. Notwithstanding Section 4.1, each Investor and its Affiliates may, at any time, Dispose of any of the Purchased Shares, Conversion Shares or any other shares of Common Stock beneficially owned by them into (i) a tender offer by a Third Party which is not opposed by the Board (but only after the Company’s filing of a Schedule 14D-9, or any amendment thereto, with the SEC disclosing the recommendation of the Board with respect to such tender offer), unless such Investor is then in breach of its obligations pursuant to Section 3.1 with respect to the tender offer or (ii) an issuer tender offer by the Company.

(b) Required Disposition. Notwithstanding Section 4.1 but subject to Section 4.3, each Investor and its Affiliates may, at any time, Dispose of any of the Purchased Shares, Conversion Shares or any other shares of Common Stock beneficially owned by them to the extent such Investor or its Affiliates is ordered or otherwise required to do so by any Law or Governmental Authority. The Company shall use its reasonable best efforts to cooperate with the Investors and their respective Affiliates to facilitate any such Disposition described in this Section 4.2(b).

(c) Disposition to and Investor and its Affiliates. Notwithstanding Section 4.1, each Investor and its Affiliates may, at any time, enter into any Derivative with an Investor and/or its Affiliates and may transfer any of the Purchased Shares or Conversion Shares to an Investor and/or its Affiliates.

(d) Disposition by Reed Circular Economy to its Affiliates. Notwithstanding Section 4.1, Reed Circular Economy may transfer at any time any of the Purchased Shares or Conversion Shares to any Affiliate thereof .

4.3 Certain Dispositions. Notwithstanding Section 4.1, in no event shall the Investors or any of their respective Affiliates do any of the following, either directly or indirectly by causing, requesting or directing their respective Affiliates to do any of the following, at any time: Dispose of any Purchased Shares, Conversion Shares or any other shares of Common Stock beneficially owned by the Investors or any of their respective Affiliates to any Competitor; provided, however, that the restrictions set forth in this sentence shall not apply to any Disposition of Conversion Shares or Common Stock in an unsolicited open market transaction or a registered offering.

4.4 Effect of Prohibited Disposition. If any Disposition is made or attempted contrary to the provisions of this Agreement, (a) such purported Disposition shall be void ab initio, (b) the Company shall have, in addition to all other legal or equitable remedies that it may have, the right to injunctive relief and specific performance to enforce the provisions of this Agreement, and (c) the Company shall have the right to refuse to recognize any transferee in a Disposition as a stockholder for any purpose.

4.5 Compliance with Laws. Notwithstanding any other provision of this Article 4, each Investor acknowledges and agrees that the Purchased Shares and any Conversion Shares may be disposed of only (1) pursuant to an effective registration statement under, and in compliance with the requirements of, the Securities Act, or (2) pursuant to an available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, and in compliance with any applicable state and federal securities Laws.

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4.6 Legends. The Purchased Shares and Conversion Shares will bear restrictive instructions in substantially the following form (and a stop-transfer order may be placed against transfer of the book entries for such Purchased Shares and Conversion Shares):

THE SECURITIES REPRESENTED BY THIS BOOK ENTRY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND ARE SUBJECT TO THE INVESTORS RIGHTS AGREEMENT, DATED [●], BY AND AMONG THE COMPANY, DANIEL SOLOMITA AND THE INVESTORS NAMED THEREIN. THE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, TRANSFERRED OR ASSIGNED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS. IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT, THE COMPANY SHALL BE ENTITLED TO REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR OTHER EVIDENCE OF EXEMPTION EXISTS.

5. Voting Agreement.

5.1 Voting of Shares held by Founder. The Founder agrees that at any meeting of the stockholders of the Company, or any adjournment or postponement thereof, or in connection with any written consent of the stockholders of the Company, with respect to any matter that needs to be approved by stockholders of the Company to give effect to each Investor’s rights under this Agreement, each Purchase Agreement, and the Certificate of Designation (the “Required Approvals”), the Founder shall:

(a) appear at such meeting or otherwise cause the shares of the Series A Preferred Stock of the Company and the Common Stock for which the Founder is the registered and/or direct or indirect beneficial owner of, or exercises control or direction over (the “Founder Shares”) to be counted as present thereat for purposes of calculating a quorum; and

(b) vote (or cause to be voted), or deliver a proxy (or cause a proxy to be delivered) covering all of the Founder Shares that the Founder shall be entitled to so vote, provided that, in the case of the Founder Shares that are shares of Series A Preferred Stock of the Company, the Founder may, where applicable, deliver an action by written consent with respect to such Founder Shares in lieu of voting such Founder Shares at a meeting of the stockholders of the Company, (i) in favor of the Required Approvals, and (ii) against any proposal that conflicts with or would interfere with the exercise of each Investor’s rights under this Agreement.

5.2 Founder Covenant. Prior to the termination of this Agreement, Founder agrees not to enter into any agreement, arrangement or understanding (whether written or oral, binding or non-binding) with any Person to vote, act by written consent, or give instructions in any manner inconsistent with Section 5.1. Any such vote shall be cast, or consent shall be given, in accordance with such procedures relating thereto so as to ensure that it is duly counted for purposes of determining that a quorum is present and for purposes of recording the results of such vote or consent.

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6. Participation Right.

6.1 General. If (and only if), in connection with a Fundamental Change, the Company elects to effectuate a Redemption, the Company shall arrange for each Investor to have a right (the “Participation Right”) to purchase, in connection with such Fundamental Change, a percentage of the shares of Common Stock that are to be converted into cash in such Fundamental Change equal to its Fully-Diluted Ownership Percentage as at immediately prior to such Fundamental Change, on the same terms and conditions that are applicable to, and at a price per share equal to the price paid by, the purchaser(s) in the transaction or series of transactions resulting in such Fundamental Change. For purposes of this section only, “Fully-Diluted Ownership Percentage” shall assume the conversion of all Purchased Shares then outstanding into Common Stock at a conversion price equal to the price per share to be paid by the purchaser(s) in such transaction or series of transactions resulting in such Fundamental Change.

6.2 Procedures. Prior to the execution of a definitive agreement providing for a transaction or series of transactions resulting in a Fundamental Change, the Company shall provide each Investor with written notice of such Fundamental Change (a “Participation Notice”), describing the identity of the purchaser(s) and the price and the other material terms of such transaction or series of transactions resulting in such Fundamental Change. Each Investor shall have ten (10) Business Days from the date of receipt of the Participation Notice to exercise its Participation Right by agreeing in writing to execute the definitive agreements related to such Fundamental Change and the same price, terms and conditions as those applicable to transaction or series of transactions resulting in such Fundamental Change, provided that under no circumstances shall this Section 6 entitle such Investor to enter into any new business relationship with the Company or to have any rights against the Company other than as an investor in the Company. If an Investor fails to so respond in writing within such ten (10) Business Day period to exercise its Participation Right, then such Investor shall forfeit its Participation Right hereunder with respect to such Fundamental Change. Notwithstanding the foregoing, any consummation by an Investor of the Participation Right shall be subject to the satisfaction of all necessary Company stockholder approval requirements and the obtainment of all necessary consents, approvals and waivers under applicable Law.

7. Miscellaneous.

7.1 Governing Law. The law, including the statutes of limitation, of the State of New York shall govern this Agreement (except as provided by Nevada law, with respect to the internal affairs of the Company), the interpretation and enforcement of its terms and any claim or cause of action (in law or equity), controversy or dispute arising out of or related to it or its negotiation, execution or performance, whether based on contract, tort, statutory or other law, in each case without giving effect to any conflicts-of-law or other principle requiring the application of the law of any other jurisdiction.

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7.2 Submission to Jurisdiction. Each party hereto irrevocably (a) submits to the non-exclusive jurisdiction of the Supreme Court of the State of New York, Borough of Manhattan or the United States District Court for the Southern District of New York for the purpose of any suit, action, or other proceeding arising out of this Agreement, or any of the agreements or transactions contemplated by this Agreement (each a “Proceeding”), (b) agrees that all claims in respect of any Proceeding may be heard and determined in any such court, (c) waives, to the fullest extent permitted by law, any immunity from jurisdiction of any such court or from any legal process therein, (d) agrees not to commence any Proceeding other than in such courts, and (e) waives, to the fullest extent permitted by law, any claim that such Proceeding is brought in an inconvenient forum. Each party hereto agrees that final judgment in any such suit, action or proceeding brought in such court shall be conclusive and binding upon the parties and may be enforced in any court to the jurisdiction of which the parties are subject by a suit upon such judgment. EACH PARTY HERETO (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

7.3 Waiver. No failure or delay of any party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. Any agreement on the part of any party to any such waiver shall be valid only if set forth in a written instrument executed and delivered by a duly authorized officer on behalf of such party.

7.4 Notices. All notices, instructions and other communications hereunder or in connection herewith shall be in writing, shall be sent to the address of the relevant party set forth on Schedule I attached hereto (in the case of an Investor) or Schedule II attached hereto (in the case of the Company or the Founder) and shall be deemed duly given (a) on the date of delivery if delivered personally, or if by facsimile or electronic mail, upon written confirmation of receipt by facsimile, electronic mail or otherwise, (b) on the first (1st) Business Day following the date of dispatch if delivered utilizing a next-day service by a recognized next-day courier or (c) on the earlier of confirmed receipt or the fifth (5th) Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. Any party may change its address by giving notice to the other parties in the manner provided above.

7.5 Entire Agreement. This Agreement, the applicable Purchase Agreement (in the case of each Investor), the Certificate of Designation (including all exhibits hereto and thereto) and all other agreements, certificates and other instruments entered into in connection with the transactions contemplated by the applicable Purchase Agreement (in the case of each Investor) constitute the entire agreement among the parties with respect to the subject matter hereof and thereof and supersede all prior and contemporaneous arrangements or understandings, whether written or oral, with respect hereto and thereto.

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7.6 Amendments. No provision in this Agreement shall be modified or amended except in a writing executed by an authorized representative of each of the Company and each Investor, and, in the case of Section 5, by the Founder.

7.7 Interpretation. When a reference is made in this Agreement to a section, subsection, article, exhibit or schedule such reference shall be to a section, subsection, article, exhibit or schedule of this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement or in any exhibit or schedule are for convenience of reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. All words used in this Agreement will be construed to be of such gender or number as the circumstances require. Any capitalized terms used in any exhibit or schedule but not otherwise defined therein shall have the meaning as defined in this Agreement. All exhibits and schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth herein. The word “including” and words of similar import when used in this Agreement will mean “including, without limitation,” unless otherwise specified. The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision in this Agreement. The term “or” is not exclusive. The word “will” shall be construed to have the same meaning and effect as the word “shall.” References to days mean calendar days unless otherwise specified. Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of names and pronouns shall include the plural and vice-versa. This Agreement has been prepared jointly and will not be construed against either party.

7.8 Severability. If, under applicable Laws, any provision hereof is invalid or unenforceable, or otherwise directly or indirectly affects the validity of any other material provision(s) of this Agreement in any jurisdiction (“Modified Clause”), then, it is mutually agreed that this Agreement shall endure and that the Modified Clause shall be enforced in such jurisdiction to the maximum extent permitted under applicable Laws in such jurisdiction; provided that the parties shall consult and use all reasonable best efforts to agree upon, and hereby consent to, any valid and enforceable modification of this Agreement as may be necessary to avoid any unjust enrichment of either party and to match the intent of this Agreement as closely as possible, including the economic benefits and rights contemplated herein.

7.9 Additional Investors. Notwithstanding anything to the contrary contained herein, if the Company issues additional shares of Series B Preferred Stock or an existing Investor duly transfers its shares of Series B Preferred Stock to a permissible transferee in compliance with this Agreement, after the date hereof to any Person, any such purchaser or transferee of such shares of Series B Preferred Stock shall become a party to this Agreement by executing and delivering a joinder agreement to this Agreement in substantially the form of Exhibit A attached hereto, and thereafter shall be deemed an “Investor” for all purposes hereunder. No action or consent by the Investors shall be required for such joinder to this Agreement by such additional Investor, so long as such additional Investor has agreed in writing to be bound by all of the obligations as an “Investor” hereunder. The prior written consent of the Investors shall be required for any other Person to become a party to this Agreement. Upon receipt of a duly executed and valid joinder agreement, Schedule I to this Agreement shall be updated to reflect an accurate listing of the current Investors.

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7.10 Assignment. Neither this Agreement nor any of the rights or obligations hereunder may be assigned by an Investor or the Company without (a) the prior written consent of the Company in the case of any assignment by an Investor or (b) the prior written consent of each Investor in the case of an assignment by the Company; provided that no such consent shall be required from the Investors in connection with any acquisition of the Company or a majority of the outstanding shares of Common Stock, in each case in a single or series of related transactions.

7.11 Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of, and shall be binding upon, the respective successors and permitted assignees of the parties.

7.12 Counterparts. This Agreement may be executed in two or more counterparts, and by facsimile, pdf or other electronic format, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.

7.13 Third Party Beneficiaries. None of the provisions of this Agreement shall be for the benefit of or enforceable by any Third Party, including any creditor of any party hereto. No Third Party shall obtain any right under any provision of this Agreement or shall by reason of any such provision make any claim in respect of any debt, liability or obligation (or otherwise) against any party hereto.

7.14 Remedies. The rights, powers and remedies of the parties under this Agreement are cumulative and not exclusive of any other right, power or remedy which such parties may have under any other agreement or Law. No single or partial assertion or exercise of any right, power or remedy of a party hereunder shall preclude any other or further assertion or exercise thereof.

7.15 Specific Performance. The parties hereby acknowledge and agree that the rights of the parties hereunder are special, unique and of extraordinary character, and that if any party refuses or otherwise fails to act, or to cause, direct or request its Affiliates to act, in accordance with the provisions of this Agreement, such refusal or failure would result in irreparable injury to the nonbreaching party(ies) as the case may be, the exact amount of which would be difficult to ascertain or estimate and the remedies at law for which would not be reasonable or adequate compensation. Accordingly, if any party refuses or otherwise fails to act, or to cause its Affiliates to act, in accordance with the provisions of this Agreement, then, in addition to any other remedy which may be available to any damaged party at law or in equity, such damaged party will be entitled to obtain specific performance and injunctive relief, without posting bond or other security, and without the necessity of proving actual or threatened damages, which remedy such damaged party will be entitled to seek in any court of competent jurisdiction. Each party hereto hereby further waives any defense in any action for specific performance that a remedy at law would be adequate.

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7.16 Confidentiality. Each Investor shall, and shall cause its Affiliates and Representatives to, keep confidential any information (including oral, written and electronic information) concerning the Company, its Subsidiaries or its Affiliates that is not included in any publicly available Offering Documents and that is be furnished to such Investor or its Affiliates or Representatives by or on behalf of the Company or any of its Representatives pursuant to this Agreement (the “Confidential Information”) and to use the Confidential Information solely in connection with managing such Investor’s rights and obligations under this Agreement; provided that the Confidential Information will not include information that (a) is, was or becomes available to the public (other than as a result of a breach of any confidentiality obligation by an Investor or its Affiliates), (b) is or has been independently developed or conceived by such Investor or its Affiliates without use of the Confidential Information or (c) is or has been made known or disclosed to such Investor or its Affiliates by a Third Party without a breach of any confidentiality obligations such Third Party has to the Company that is known to such Investor or its Affiliates; provided further that, each Investor may disclose the Confidential Information (i) to its Representatives in connection with its investment in the Company, (ii) to any prospective purchaser of any Conversion Shares from such Investor and their respective Representatives, provided that (A) to the knowledge of such Investor, such prospective purchaser is not a Competitor or otherwise a party to whom such Investor is not permitted to transfer Conversion Shares pursuant to Section 4.3 of this Agreement, (B) such prospective purchaser agrees to be bound by a confidentiality or non-disclosure agreement with such Investor that is no less restrictive than the confidentiality obligations set forth herein, as the case may be, and agrees to bind each of its Representatives who receives any Confidential Information to also be subject to confidentiality or non-disclosure agreements that are no less restrictive than the confidentiality obligations set forth herein, and (C) within seven (7) days of providing any Confidential Information to any such prospective purchaser, such Investor provides notice to the Company identifying such prospective purchaser, (iii) to any Affiliates of such Investor and their respective Representatives, in each case in the ordinary course of business (provided that the recipients of such Confidential Information are subject to a confidentiality and non-disclosure obligation no less restrictive than the confidentiality obligations set forth herein), or (iv) as may otherwise be required by law or legal, judicial or regulatory process, provided that (x) such Investor provides prompt prior written notice to the Company notifying the Company of the manner, scope and justification for such disclosure, (y) such Investor takes reasonable steps to minimize the extent of any required disclosure described in this clause (iv) and (z) such disclosure requirement does not arise from a breach of Section 3 of this Agreement; and provided, further, that the acts and omissions of any Person to whom such Investor may disclose the Confidential Information (and such Person’s Representatives who receive any such Confidential Information) pursuant to clauses (i), (ii) and (iii) of the preceding proviso shall be attributable to such Investor for purposes of determining such Investor’s compliance with this Section 7.16, except those who have entered into a separate confidentiality or non-disclosure agreement, or are subject to a separate confidentiality or non-disclosure obligation, with the Company.

7.17 Termination. Each Investor’s obligations set forth in this Agreement shall terminate once such Investor no longer holds, directly or indirectly, any Purchased Shares or Conversion Shares.

[Signature page follows]

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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first above written.

	LOOP INDUSTRIES, INC.


	By:	/s/ Daniel Solomita.
	Name:	Daniel Solomita
	Title:	Chief Executive Officer and President

	FOUNDER:

	/s/ Daniel Solomita
	Daniel Solomita

	Solely for purposes of Section 5

Signature Page to Investors Rights Agreement

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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first above written.

	REED CIRCULAR ECONOMY


	By:	/s/ Julien Touati
	Name:	Julien Touati
	Title:	President

Signature Page to Investors Rights Agreement

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SCHEDULE I

INVESTORS AND INVESTOR NOTICE ADDRESSES

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SCHEDULE II

COMPANY AND FOUNDER NOTICE ADDRESSES

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EXHIBIT A

FORM OF JOINDER AGREEMENT

EX-10.23 6 loop_ex1023.htm LICENSE AGREEMENT loop_ex1023.htm

EXHIBIT 10.23

Pursuant to Item 601(b)(10)(iv) of Regulation S-K, certain confidential information has been excluded from this document because Loop Industries, Inc. (“Company”) has determined that the information (i) it is both not material and (ii) is the type that the Company treats as private or confidential. Such information is marked in the document by exhibit with an asterisk [*].

LICENSE AGREEMENT

This License Agreement (this “Agreement”) is made and entered into as of December 23, 2024 (the “Effective Date”), between (1) Loop Industries, Inc., a Nevada corporation with a principal place of business at 480 Fernand-Poitras, Terrebonne, Québec, Canada J6Y 1Y4 (“Loop”), (2) Reed Circular Economy a simplified joint stock company (société par actions simplifiée) incorporated under the laws of France having its registered office at 15 rue Soufflot 75005 Paris, France, with a share capital of 3,500 euros, registered with the Registre du commerce et des sociétés of Paris under number 938 289 048 RCS Paris (“Reed”), acting exclusively in the name and on behalf of Infinite Loop Europe SAS, a simplified joint-stock company (société par actions simplifiée) in the course of being incorporated under the laws of France (the “JV Company”), and (3) Reed, acting in its name and on its behalf solely with respect to Section 2.3, Article 5, Section 7.3, Section 8.1 and Article 9 (each of Loop, Reed, and the JV Company is a “Party”; together they are the “Parties”).

BACKGROUND

A.	The Loop Parties (as defined below) have developed a proprietary depolymerization process, producing dimethyl terepthalate (“rDMT”) and/or mono ethylene glycol (“rMEG”) from waste polyethylene terephthalate (“PET”) and/or polyester, that can be used for the production of PET plastic.

B.	Loop and Reed Management SAS have entered into a share purchase agreement dated May 30, 2024, (the “Share Purchase Agreement”) and have agreed to the forms of various ancillary agreements, including a securityholders agreement (the “Securityholders Agreement”) to be entered into as of the date hereof (as amended, supplemented, or otherwise modified from time to time, collectively with the Share Purchase Agreement the “Joint Venture Agreements”) to form and govern the affairs of the JV Company, and are entering into this Agreement pursuant to the Joint Venture Agreements and concurrently with the formation of the JV Company (collectively the “JV Purpose”).

C.	In connection with the JV Purpose, the JV Company may (i) sublicence the Loop Technology once to a Sublicensee within the Territory for use within a single Licensed Facility; and (ii) own any kind of interest in a single Sublicensee operating the Licensed Facility (as all terms are defined below) within the Territory.

D.	Consequently, the JV Company wishes to receive from the Loop Parties, and the Loop Parties wish to grant to the JV Company, a one-time license to certain Intellectual Property Rights (as defined below) for the purpose of either operating or sublicensing the Loop Technology to a Sublicensee for the purpose of building and operating a single Licensed Facility to manufacture, use, market, and sell Licensed Products (as defined below) under the terms and conditions set forth in this Agreement.

E.	For the avoidance of doubt, the grant of such license shall only be granted once, for a single Licensed Facility. Upon the exercise of the right to avail itself of the use of such license by the JV Company, whether by sublicensing to a Sublicensee or building and operating a Licensed Facility on its own, the JV Company acknowledges that any further licensing of the Loop Technology shall require it to enter into a new license agreement, which may be on distinct terms than the ones set out herein, for any additional Licensed Facility.

Now, therefore, in consideration of the mutual covenants and premises contained in this Agreement, and other good and valuable consideration, the Parties agree as follows.

ARTICLE 1

DEFINITIONS

1.1	“Affiliate” means, with respect to a Party, any corporation or other entity that is directly or indirectly controlling, controlled by or under the common control with such Party. For the purpose of this definition, “control” means the direct or indirect ownership of at least fifty percent (50%) of the outstanding shares or other voting rights of the subject entity to elect directors (or, in the case of an entity that is not a corporation, for the election of the corresponding managing authority), or if not meeting the preceding, any entity owned or controlled by or owning or controlling at the maximum control or ownership right permitted in the country where such entity exists; it being clarified that the JV Company will not be considered as an ‘Affiliate’ of either Reed or Loop for the purposes of this Agreement.

1.2	“Agreed Claims” has the meaning given to it in Section 8.10.

1.3	“Agreement” has the meaning given to it in the recitals of this Agreement.

1.4	“Balance of Plant” means any and all machinery, equipment, infrastructures, fixtures or other items installed, assembled or affixed in or to the Licensed Facilities, other than the Loop Technology.

1.5	“Board” means, at any time, the board of directors (conseil d’administration) of the JV Company.

1.6	“Business Day” means a calendar day on which commercial banks are open for business in Paris, France and in Montreal, Canada but excludes (a) a Saturday, Sunday or (b) any other statutory or civic holiday in Paris, France or Montreal, Canada.

1.7	“Calculation Date” has the meaning given to it in Section 2.4(d).

1.8	“Claims” has the meaning given to it in Section 8.6.

1.9	“Confidential Information” has the meaning given to it in Section 6.1.

1.10	“Direct Indemnity Claim” has the meaning given to it in Section 8.7.

1.11	“Effective Date” has the meaning given to it in the preamble of this Agreement.

1.12	“Entity” means any partnership, limited partnership, limited liability partnership, syndicate, sole proprietorship, corporation or company (with or without share capacity), limited liability company, stock company, trust, unincorporated association, joint venture or other entity.

1.13	“First Option” has the meaning given to it in Section 2.4(b).

1.14	“First Royalty Tranche” has the meaning given to it in Section 2.4(a).

1.15	“Improvement” means any incremental improvement, modification, enhancement, or other change to any Intellectual Property Right or Know-How associated therewith the implementation of which cannot be achieved without reproducing any Intellectual Property Right or Know-How or the use of which is legally dependent on an Intellectual Property Right or Know-How.

1.16	“Indemnitees” has the meaning given to it in Section 10.6.

1.17	“Indemnity Claim Notice” has the meaning given to it in Section 10.7.

1.18	“Indemnity Dispute Notice” has the meaning given to it in Section 10.8.

1.19	“Intellectual Property Rights” means all intellectual property rights arising in any jurisdiction, including: (a) all Patent Rights; (b) all trade-secret rights and all other rights in or to Know-How; (c) all copyrights, copyright registrations and applications therefor, registered designs and applications therefor, and all other rights corresponding thereto throughout the world; (d) all Trademarks, and any similar, corresponding or equivalent rights to any of the foregoing.

1.20	“IP Violation Notice” has the meaning given to it in Section 7.2(a).

1.21	“Joint Venture Agreements” has the meaning given to it in the recitals of this Agreement.

1.22	“JV Company” has the meaning given to it in the preamble of this Agreement.

1.23	“JV Party” and “JV Parties” means the JV Company and its Subsidiaries.

1.24	“JV Purpose” has the meaning given to it in the recitals of this Agreement.

1.25	“Know-How” means any information, whether proprietary or not and whether patentable or not, which is not in the public domain, including know-how, show-how, ideas, concepts, formulas, methods, processes, techniques, procedures, manufacturing and production methods, designs, compositions, plans, documents, specifications data, inventions, discoveries and protocols.

1.26	“Late Payment” has the meaning given to it in Section 7.2(b).

1.27	“Law” means any law, statute, regulation, decree, ordinance, guidelines, directives, requirement, or other legally binding regulation, any holding, decision or order of a court, or any order of all relevant national, local or administrative authorities having competent jurisdiction.

1.28	“Licensable” means: (i) in reference to a Party and an Intellectual Property Right, that the Intellectual Property Right can be rightfully licensed by the Party under the scope granted to the other Party under this Agreement, and (ii) in reference to a Party and Know-How, that the Know-How is possessed by the Party, can be rightfully disclosed and delivered to the other Party by the Party, and can be rightfully licensed by the Party under the scope granted to the other Party under this Agreement; in either case without violating the terms of any agreement under which the Party as of the Effective Date holds or thereafter first acquires rights in such Intellectual Property Rights or Know-How.

1.29	“Licensed Facility” means, to the extent built or retrofitted for the manufacture of Licensed Products, any one facility using the Loop Technology established by a Sublicensee in accordance with a Sublicense Agreement or by the JV Company under the terms of this Agreement.

1.30	“Licensed Facility Foreground IP” has the meaning given to it in Section 3.2.

1.31	“Licensed Products” means rDMT, rMEG, and rDMT/rMEG Products that are produced using rDMT and/or rMEG where (a) the DMT and/or MEG is produced through the depolymerization of PET and/or polyester, and (b) such depolymerization is covered by or otherwise involves the use of any of the Licensed Subject Matter.

1.32	“Licensed Subject Matter” means all Intellectual Property Rights in connection with the Loop Technology that are Licensable by a Loop Party and necessary or reasonably required by the JV Company to (a) build or retrofit a Licensed Facility for the purpose of manufacturing Licensed Products, (b) manufacture Licensed Products, and/or (c) sell, distribute and otherwise use Licensed Products. The patents that form part of the License Subject Matter are annexed at Exhibit B.

1.33	“Licensed Subject Matter Improvements” has the meaning given to it in Section 3.2.

1.34	“Loop” has the meaning given to it in the preamble of this Agreement.

1.35	“Loop Marks” means the Loop name and logo (such logo, the “Loop Logo”) specified in Exhibit A.

1.36	“Loop Background Intellectual Property” has the meaning given to it in Section 3.1.

1.37	“Loop Parties” means Loop and its Subsidiaries, excluding the JV Company.

1.38	“Loop Technology” means proprietary Technology owned or controlled by Loop and/or its Affiliates with respect to PET and other polyester depolymerization technology by methanolysis that produces rDMT and/or rMEG and all Intellectual Property Rights related thereto.

1.39	“Losses” has the meaning given to it in Section 8.6.

1.40	“Options” has the meaning given to it in Section 2.4(c).

1.41	“Party” and “Parties” have the meanings given to them in the preamble of this Agreement.

1.42	“Patent Rights” means the rights and interests in and to issued patents and pending patent applications and similar government-issued rights (e.g., utility models) protecting inventions in any country, jurisdiction or region (including inventor’s certificates and utility models), including patent term extensions and supplementary protection certificates, international patent applications filed under the Patent Cooperation Treaty (PCT) and any foreign equivalents to any of the foregoing.

1.43	“Payment Date” has the meaning given to it in Section 2.4(f).

1.44	“Person” means a natural person or an Entity.

1.45	“PET” has the meaning given to it in the recitals of this Agreement.

1.46	“rDMT/rMEG Product” means any product that is formed or derived from rDMT and/or rMEG.

1.47	“Reed” has the meaning given to it in the preamble of this Agreement.

1.48	“Restricted Person” has the meaning set forth in Exhibit E.

1.49	“Royalty Records” has the meaning given to it in Section 2.4(g).

1.50	“Sale” means any sale of a Licensed Product to any customers by the JV Company or the applicable Sublicensee, as the case may be, excluding, for the avoidance of doubt, any sale or other disposal of a Licensed Product for test marketing, sampling and promotional uses, development, charitable purposes, or similar use.

1.51	“Second Option” has the meaning given to it in Section 2.4(c).

1.52	“Second Royalty Tranche” has the meaning given to it in Section 2.4(b)(ii).

1.53	“Securityholders Agreement” has the meaning given to it in the recitals of this Agreement.

1.54	“Services” has the meaning given to it in Section 5.1.

1.55	“Share Purchase Agreement” has the meaning given to it in the recitals of this Agreement.

1.56	“Sublicense Agreement” has the meaning given to it in Section 2.3.

1.57	“Sublicensee” has the meaning given to it in Section 2.3.

1.58	“Subsidiary” means, with respect to a Party, any Affiliate of the Party that is majority-owned by the Party.

1.59	“Technology” means ideas, concepts, discoveries, inventions, developments, processes, systems, devices, apparatuses, compositions, computer software, methods, procedures, techniques, designs, specifications, plans, documents, schematics, formulae, trade secrets, know-how, algorithms, drawings, diagrams, photos, pictures, prints, models, prototypes, patterns, analysis, evaluations, research, works, physical embodiments, computer files, data, technical information, materials and similar expressions, and all Intellectual Property Rights arising in any and all of the foregoing.

1.60	“Territory” shall mean the countries within the European Economic Area (“EEA”), United Kingdom, Switzerland, and Turkey, including for the avoidance of doubt any overseas territories of such countries outside continental Europe and such other territories as may be mutually agreed in writing by the Parties, but in any event excluding Liechtenstein. Countries leaving the EEA will remain part of the Territory. Countries joining the EEA will automatically become part of the Territory.

1.61	“Third Party Claim” has the meaning given to it in Section 8.12.

1.62	“Third Royalty Tranche” has the meaning given to it in Section 2.4(c)(ii).

1.63	“Trademarks” means trademarks, service marks, trade dress rights and similar designation of origin and rights therein.

ARTICLE 2

LICENSES

2.1	Grant. Subject to the terms and conditions of this Agreement, Loop, on behalf of itself and the Loop Parties, hereby grants to the JV Company a non-transferable (except as provided in Section 9.8), sub-licensable, for the duration of legal protection of the licensed Intellectual Property Rights (and for those with an indefinite period protection, for a period of thirty (30) years automatically renewable for periods of the same duration) (subject to termination as provided in Article 7 of this Agreement), royalty-bearing (as set forth in Section 2.4) license under the Licensed Subject Matter, which may only be exercised once and for one Licensed Facility with the right to grant one sublicense for such one and only Licensed Facility (as set forth in Section 2.3), to (a) build or retrofit one Licensed Facility in the Territory for the purpose of manufacturing Licensed Products, (b) manufacture Licensed Products at such Licensed Facility, (c) sell and distribute the Licensed Products manufactured under subsection 2.1(b) above; and/or (d) otherwise use Licensed Products solely to the extent authorized by this Agreement in connection with the foregoing. Loop shall exercise commercially reasonable efforts to ensure that all Intellectual Property Rights comprised in the Licensed Subject Matter shall continue to remain Licensable to the JV Company at all times in accordance with this Agreement and shall continue to procure all third-party consents in this regard from time to time, if any. In case any such Intellectual Property Rights cease to be Licensable, Loop shall communicate to the JV Company and Reed forthwith of the occurrence of such an event and shall take commercially reasonable efforts to ensure that the JV Company or the applicable Sublicensee, as the case may be, may continue to operate the Licensed Facility and sell the Licensed Products under the same conditions as before such event.

2.2	Sublicensing. Subject to the provisions of Section 2.3, the JV Company, in its sole discretion, may enter into one separate sub-licensing agreement within the Territory with a third-party operator of the Licensed Facility for its access and use of the Loop Technology pursuant to the terms of this Agreement (a “Sublicense Agreement”), in all cases, solely with a third party dealing at arm’s length with the Parties and involved in the development, design, financing, construction, ownership and/or operation of a Licensed Facility, and/or marketing or distribution of the Licensed Products (a “Sublicensee”), in accordance with the main general terms set out in Exhibit C, subject to additional customary restrictions, rights and obligations to be negotiated in good faith on a case-by-case basis between the relevant parties and in all cases, pursuant to the following conditions:

	(a)	the Sublicense Agreement shall contain terms and conditions consistent with the provisions of this Agreement;

	(b)	for such Sublicense Agreement, JV Company shall take all actions that are reasonably necessary to enforce the terms of such Sublicense Agreement including, at the written request of Loop, commencing legal action against the Sublicensee and joining Loop as a party to any such legal action if necessary, and each Party shall bear its own costs in connection with such actions; and

	(c)	in the event that JV Company does not, within thirty (30) days of Loop’s written request to JV Company, commence a legal action to enforce the terms of a Sublicense Agreement against a Sublicensee that is not performing or observing its obligations pursuant to the terms of the Sublicense Agreement then, without limiting Loop’s remedies otherwise available under this Agreement or at law, (A) Loop may commence a legal action against such Sublicensee and JV Company will cooperate with Loop in such legal action (including without limitation, permitting itself to be named as a party to the action (if necessary), providing relevant documents, witnesses, testimony, etc.); and (B) JV Company shall indemnify and hold harmless Loop from and against all out-of-pocket costs and expenses (including the legal and other professional fees and disbursements incurred by Loop) related to any failures of the Sublicensee to perform or observe its obligations pursuant to the terms of the Sublicense Agreement.

2.3	Termination of the Securityholders Agreement. If either or both of the Securityholders Agreement or the Priority Rights Protocol contained thereto are terminated for any reason whatsoever, then the sublicensing rights granted to the JV Company in accordance with Section 2.2 above shall as of such termination be subject to Loop’s prior written consent, not to be unreasonably withheld. Any Sublicense Agreement entered into in contradiction with the provisions of this Section 2.3 shall be null and void. For the avoidance of doubt, the Parties agree that Loop may reasonably withhold its consent if the contemplated Sublicensee, or any Affiliate thereof, is (i) a Restricted Person; or (ii) a Person who conducts business in jurisdictions where Loop’s Intellectual Property Rights may be at risk or difficult to enforce.

2.4	Royalties. In consideration for the licensed rights herein, the fees payable by the JV Company under this Agreement (the “License Fees”) are calculated as follows.

	(a)	First Royalty Tranche. Ten million euros (€10,000,000) paid upon execution of this Agreement (the “First Royalty Tranche”); plus

	(b)	First Option. On the Calculation Date, at the option of the JV Company (the “First Option”), either:

		(i)	[*]; or

		(ii)	[*]; plus

	(c)	Second Option. On the Calculation Date, at the option of the JV Company (the “Second Option” and collectively with the First Option, the “Options”), either:

		(i)	The License Fee payable by the JV Company to Loop pursuant to this Section 2.4(c)(i) shall be equal to [*]:

		(ii)	[*]

		(iii)	In the event that, at the Calculation Date, the JV Company did not enter into any contracts relating to Sales, or the [] as of the Calculation Date is lower than [], the Parties hereby agree that at each anniversary of the Calculation Date, until and including the fifth (5th) anniversary of the Calculation Date, the [] shall be reviewed as follows. If the [] for any given year is equal to or greater than [], then the JV Company shall promptly pay to Loop the Third Royalty Tranche and this review mechanism shall cease. For the avoidance of doubt, the [] shall be calculated [*].

	(d)	Calculation Date. It is clarified that the Options must be exercised at the final investment decision date, which shall be the date of the formal approval from the JV Company to proceed with the applicable opportunity, marking the commitment to allocate capital resources and move from the project planning stages to execution of the Sublicense Agreement (the “Calculation Date”).

	(e)	Sales Taxes and Statutory Deductions. For the avoidance of doubt, the JV Company shall be responsible to pay any sales taxes, statutory deductions, withholding fees, or other fees that may be levied by applicable governmental authorities in addition to the License Fees payable by the JV Company in accordance with the provisions of this Section 2.4, such that Loop shall always receive the full amount of License Fees.

	(f)	Payment of Royalties.

		(i)	The JV Company shall make any payments of License Fees owing under Section 2.4(b)(i) and/or Section 2.4(c)(i), as applicable, no later than the earlier of (i) with respect to the first, second, and third fiscal quarters of the JV Company’s fiscal year, thirty (30) Business Days following the end of the applicable fiscal quarter; and (ii) with respect to the fourth fiscal quarter of the JV Company’s fiscal year, promptly following the delivery by the JV Company’s auditor of the audited annual financial statements of the JV Company but no later than sixty (60) Business Days following the end of such fourth fiscal quarter (the “Payment Date”). It being understood that if no payments were made by the applicable Sublicensee in a given quarter, no amount pursuant to 2.4(c)(i) shall be due on the applicable Payment Date.

		(ii)	The Payment Date for the First Royalty Tranche shall be the date hereof and, if the JV Company elects the choices set forth in Section 2.4(b)(ii) for the Second Royalty Tranche and 2.4(c)(ii), for the Third Royalty Tranche the Payment Date shall be thirty (30) Business Days following the Calculation Date or the applicable anniversary of the Calculation Date, as the case may be.

	(g)	Royalty Records and Audits. The JV Company shall, and, if applicable, shall cause the Sublicensee to, maintain during the term of this Agreement and for seven (7) years thereafter all documents, books, and records that are necessary for or otherwise relate to the calculation of License Fees hereunder (“Royalty Records”) and shall make, and shall cause the applicable Sublicensee to make, such Royalty Records available for examination by Loop during normal business hours. Loop shall have the option to engage, at its own expense, an independent certified public accountant (from one of the “Big Four” accounting firms provided that such Big Four is not the auditor of any of the Loop Parties) to examine, in consultation with the JV Company and its auditor, the Royalty Records to determine the correctness of any payment of royalties hereunder made by the JV Company. If any audit performed under this Section indicates that any payment due hereunder was underpaid, the JV Company shall pay the amount of any underpayment. If any audit performed under this Section indicates that any payment hereunder was in error to Loop’s detriment by more than 5% for any fiscal year of the JV Company, the JV Company shall pay the cost of the audit. If any audit performed under this Section indicates that any payment hereunder was overpaid to Loop, Loop shall reimburse the amount of any such overpayment to the JV Company within thirty (30) Business Days following the conclusion of the audit.

2.5	Delivery. As soon as practicable after the Effective Date, and in any event within sixty (60) Business Days after the Effective Date, Loop shall deliver to the JV Company copies of material documentation that exists as of the Effective Date and is required by the JV Company to exercise the rights granted with respect to the Licensed Subject Matter, including the JV Company’s use thereof as contemplated by this Agreement, (other than any Licensed Subject Matter Improvements) that is Licensable by the Loop Parties as of the Effective Date. In addition, during the term of this Agreement, Loop will promptly provide the JV Company with details, in writing, of any material Loop Licensed Subject Matter Improvements. The JV Company will use commercially reasonable efforts to promptly provide Loop with details, in writing, and documentation of any Licensed Subject Matter Improvements. To the extent Loop or the JV Company identifies material documentation or other information required to be provided to the JV Company pursuant to this Section 2.5, but that was not provided to the JV Company, Loop agrees to promptly provide such materials or information to the JV Company. If the JV Company reasonably believes that it requires additional materials or information to exercise the rights granted with respect to the Licensed Subject Matter, including the Loop Licensed Subject Matter Improvements, Loop agrees to discuss in good faith with the JV Company promptly providing such information to the JV Company to the extent in the possession or control of Loop.

2.6	Ownership. Except as provided in this Article 2 and in Article 3 and Article 4, no Party grants to the other any rights or licenses under its Intellectual Property Rights. At all times each Party retains ownership of its Intellectual Property Rights and Trademarks and, subject to Section 2.2, Loop Parties may use, commercialize and otherwise exploit the Licensed Subject Matter themselves or with third parties. For the avoidance of doubt, in the event of any sale, assignment or transfer of ownership of any Licensed Subject Matter owned by any of the Loop Parties to another Person, the Licensed Subject Matter shall remain subject to the licenses and rights granted to the JV Company in and to such Licensed Subject Matter on the same terms and conditions as set out in this Agreement. Moreover, it is clarified that in the event of any such sale, assignment or transfer Loop and Loop Parties shall: (i) intimate the JV Company and Reed of such sale, assignment or transfer prior to its consummation; and (ii) ensure that such Person adheres to the terms and conditions set forth hereunder this Agreement and may to this end provide for a deed of adherence or similar document to the JV Company. Each Party shall use commercially reasonable efforts to promptly notify the other Party in writing of any known or suspected infringement of the Licensed Subject Matter. Neither Party shall be responsible to the other Party for any costs and expenses related to the preparation, filing, prosecution or maintenance of any applications, registrations or issuances, including all renewals and extensions, of any Intellectual Property Rights owned by the other Party. For the avoidance of doubt, the JV Company will not be responsible for any such costs and expenses related to the Licensed Subject Matter, including with respect to any patents and patent applications contained therein.

2.7	Registration of License. Any party receiving a license under this Agreement shall have the right to register or record the existence of such license with any applicable governmental authority, including any applicable patent office, as reasonably necessary to perfect or secure such party’s rights in and to such license, in each case, at its own cost and expense, provided that such registration or recordation does not require disclosure of this Agreement or its terms other than the existence of the relevant license. The applicable licensor party agrees to reasonably cooperate with such licensee party as reasonably necessary for the registration or recordation of the existence of such license.

2.8	Option for Fee-Based Additional Licensed Subject Matter. In the event a Loop Party owns, licenses, develops or otherwise acquires or obtains any rights to Intellectual Property Rights after the Effective Date that would qualify as Licensed Subject Matter under this Agreement but whose license to the JV Company or use by the JV Company would require a payment by a Loop Party to a third party , then Loop shall give the JV Company prompt written notice of such Intellectual Property Rights and the financial terms by which the JV Company may obtain a license to such Intellectual Property Rights on a pass-through basis (with no additional fee to be charged by any Loop Party other than the additional fees that it will incur based on the license being granted to the JV Company under this Agreement). The JV Company shall have the option to include such additional Intellectual Property Rights within the scope of this Agreement upon written notice to Loop, in which case such Intellectual Property Rights shall thereafter be considered Licensed Subject Matter, and the JV Company will be responsible for paying Loop the corresponding payment obligation thereafter.

2.9	Licensed Subject Matter Defense. The JV Company will use commercially reasonable efforts to identify potential material infringement or misappropriation of the Licensed Subject Matter and will notify Loop Parties promptly about any indication of such material infringement or misappropriation that is discovered.

ARTICLE 3

INTELLECTUAL PROPERTY

3.1	Loop Background Intellectual Property Rights. The JV Company agrees that unless expressly provided otherwise, all Intellectual Property Rights conceived, developed or reduced to practice prior to the Effective Date of this Agreement (including, but not limited to Know-How, specifications, database and other information and documents) and to which Loop, in whole or in part, possesses rights as owner, licensee or otherwise and all rights, titles, interests and improvements thereto conceived, developed or reduced to practice by the Loop Parties outside of the scope of this Agreement (“Loop Background Intellectual Property”) shall remain the sole property of Loop. The JV Company shall not be granted any rights, titles or interests whatsoever with respect to such Loop Background Intellectual Property except as set forth in this Agreement. Despite the foregoing, should the Loop Background Intellectual Property be included in or required to use the Licensed Subject Matter created under this Agreement, then Loop agrees to grant to the JV Company a non-transferable (except as provided in Section 9.8), for the duration of legal protection of the licensed Intellectual Property Rights (and for those with an indefinite period protection, for a period of thirty (30) years automatically renewable for periods of the same duration) (subject to termination as provided in Article 7 of this Agreement), non-exclusive, royalty-free license under the Licensed Subject Matter, with the right to grant sublicenses (as provided in Section 2.3) to in such Loop Background Intellectual Property only to the extent necessary for the necessary JV Company to avail itself of its rights and perform its obligations under this Agreement.

3.2	Ownership During the Term. Loop shall own all right, title, and interest (including Intellectual Property Rights) in, to, and under any Improvements to the Licensed Subject Matter that are produced, developed, created, authored or reduced to practice in the Licensed Facilities (“Licensed Subject Matter Improvements”) that are made by or on behalf of Loop, the JV Company, or any Sublicensee (irrespective of the scope of contribution or inventorship). Without limiting the generality of the foregoing, Loop shall own any other Intellectual Property Rights that are produced, developed, created, authored or reduced to practice in the Licensed Facilities that does not constitute Licensed Subject Matter Improvements, irrespective of inventorship, authorship or reduction to practice (“Licensed Facility Foreground IP”).

3.3	Further Assurances. Loop and the JV Company shall promptly take such steps and actions, including the execution of any documents, files, registrations or other similar items, to ensure that all right, title and interest in the Licensed Subject Matter Improvements and any associated Intellectual Property Rights are properly assigned to or recorded in the name of Loop, provided that such Licensed Subject Matter Improvements and any associated Intellectual Property Rights are licensed to the JV Company in accordance with this Agreement. The JV Company shall also provide reasonable cooperation to Loop, and secure the cooperation of its personnel, as may be reasonably necessary to file, register, or otherwise obtain any Intellectual Property Rights associated with Licensee Improvements.

3.4	No Transfer. For the avoidance of doubt, and notwithstanding anything to the contrary in this Agreement, any licenses granted pursuant to of this Agreement, as applicable, shall survive any transfer of ownership of the Licensed Subject Matter Improvements pursuant to this Section 3.4.

3.5	Enforcement. The JV Company shall promptly provide written notice to Loop reasonably detailing any known or alleged infringement or misappropriation of any of the Licensed Subject Matter by any third party. Loop shall have the first right but not the obligation to institute and direct legal proceedings against any third party believed to be infringing or misappropriating any Licensed Subject Matter or otherwise take action to abate such activities. The JV Company will cooperate with Loop as may reasonably be requested by Loop, at Loop’s reasonable cost and expense. To the extent permitted by applicable law, the JV Company may join any such proceedings at its own cost and expense.

ARTICLE 4

TRADEMARK LICENSE

4.1	Grant. Subject to the terms and conditions of this Agreement, Loop hereby grants to the JV Company, at no cost, a revocable, non-exclusive, non-transferable, non-assignable, license, with the right to grant sublicenses, to use the Loop Marks in the Territory, solely in accordance with the Trademark usage guidelines communicated to the JV Company by Loop from time to time and solely in connection with the packaging and sale, in accordance with this Agreement, and the Joint Venture Agreements, of Licensed Products meeting the product quality control standards communicated to the JV Company by Loop from time to time, it being understood that Loop may update the Trademark usage guidelines and product quality control standards on the JV Company from time to time, and the JV Company will be obligated to comply with such updated guidelines and standards provided that (i) such updated guidelines and standards are no more stringent than the guidelines and standards Loop has established for itself or its other licensees of the Loop Marks, (ii) such updated guidelines and standards do not conflict with or modify the terms of this Agreement, nor unreasonably increase the costs for the JV Company to exercise its rights and comply with its obligations under this Agreement, and (iii) the JV Company is given sufficient time to implement said updates.

4.2	Usage Audits and Controls. The JV Company shall comply with the following:

	(a)	Acknowledgment and Compliance. The JV Company at all times shall conduct its business and use the Loop Marks in a manner consistent with the guidelines and standards provided for in accordance with Section 4.1.

	(b)	Usage Audits and Inspections. The JV Company shall permit, and shall use best efforts to obtain permission for, Loop at all reasonable times to inspect any Licensed Facility to ensure compliance with the guidelines and standards set forth in Section 4.1.

4.3	Ownership. The JV Company acknowledges that as among the Parties, Loop retains ownership of the Loop Marks and the goodwill associated therewith. The JV Company agrees that it will not do anything inconsistent with such ownership and that all use of the Loop Marks by the JV Company will inure to the benefit of and be on behalf of, Loop. The JV Company agrees further, that nothing in this Agreement will be construed as granting to the JV Company any right, title or interest in the Loop Marks, other than the right to use the Loop Marks in accordance with this Agreement. The JV Company, agrees that it will not contest, oppose or challenge Loop’s ownership of and title to the Loop Marks or contest, oppose or challenge the validity of the Loop Marks.

ARTICLE 5

LOOP SERVICES

5.1	Provision of Included Services. For the term of this License Agreement, Loop shall provide, the services listed in Exhibit D (the “Services”), which are provided at no additional cost to the JV Company other than through the payment of the royalties pursuant to Section 2.4 hereof.

5.2	Additional Services. The Parties agree that any services required by the JV Company which do not form a part of the Services, shall be provided by Loop to the JV Company on such terms as may be agreed amongst the Parties and formalized in a separate dedicated agreement.

5.3	Service Standard. Loop shall:

	(a)	provide or procure the provision of the applicable Services:

		(i)	in compliance with all applicable Laws;

		(ii)	to a standard which is (including with respect to the nature, quality and timelines) equivalent to the standard to which equivalent services are provided (or procured) by Loop in the ordinary course of business to its other licensees of the Licensed Subject Matter; and

	(b)	without prejudice to the generality of (a), perform or procure the performance of the Services in a professional manner using reasonable skill, care and diligence provided, for greater certainty, that the foregoing shall not require Loop to hire a new employee, contractor or other Person or maintain the employment or contract relationship with an employee, contractor or other Person if such employee’s, contractor’s or other Person’s services within Loop’s organisation would otherwise no longer be required, as long as the Services are performed in accordance with the standard of services contemplated in this Section 5.3.

5.4	Service Correction. Without prejudice to any other provision of this Agreement, in the event that Loop commits a demonstrable error with respect to any Service or otherwise fails to perform any Service in accordance with Section 5.3, at the JV Company’s reasonable written request, Loop shall use commercially reasonable efforts and good faith to correct such error and to re-perform or cause to be re-performed such Service at no additional cost to the JV Parties.

5.5	No Representation. The JV Company acknowledges and agrees that subject to the obligations of Loop contained in this Agreement and in particular subject to Loop’s obligations to meet the standard of service described in Section 5.3, except as may be agreed-upon between Loop and the JV Company for a particular Service, Loop does not make any representations or warranties whatsoever, whether express, implied, statutory or otherwise, regarding the Services.

5.6	Intellectual Property Rights. All rights, titles and interests in the Intellectual Property Rights stemming from or related to the Services rendered by Loop or its Affiliates to the JV Company under this Article 5, or embodied in any deliverables related thereto, shall, at all times, remain the property of Loop. The JV Company shall assign to Loop any and all Intellectual Property Rights as needed to affect the foregoing.

ARTICLE 6

CONFIDENTIAL INFORMATION

6.1

Confidential Information. The term “Confidential Information” means any information disclosed by one Party to the other (i) prior to the date of this Agreement but with respect to the subject matter of this Agreement, or (ii) pursuant to this Agreement, in each case which is in written, graphic, machine readable or other tangible form and is marked “Confidential,” “Proprietary” or in some other manner to indicate its confidential nature. Confidential Information may also include oral information disclosed by one Party to the other pursuant to this Agreement, provided that such information is designated as confidential at the time of disclosure and reduced to a written summary by the disclosing Party, within twenty (20) Business Days after its oral disclosure, which is marked in a manner to indicate its confidential nature and delivered to the receiving party. Notwithstanding the foregoing, it is hereby acknowledged and agreed that all Licensed Subject Matter delivered or disclosed to the JV Company under this Agreement shall be considered Loop’s Confidential Information, whether marked or otherwise designated as such, other than publicly accessible information concerning Loop’s issued patents and published patent applications.

6.2	Obligation. Each Party shall treat as confidential (as set forth herein) all Confidential Information of the other Parties and shall not use such Confidential Information except as expressly permitted by this Agreement or as otherwise authorized by the disclosing Party in writing. Each Party shall implement reasonable procedures to prohibit the unauthorized disclosure or misuse of the other Parties’ Confidential Information and shall not disclose such Confidential Information to any third party (including any Affiliates) except as may be necessary to exercise the rights and perform the obligations of such Party under this Agreement, and then subject to confidentiality obligations at least as protective of the Confidential Information as those set forth in this Article 6. Furthermore, notwithstanding the foregoing, the JV Company shall not disclose or permit any disclosure of any Licensed Subject Matter to any Reed personnel, except on a confidential basis to Reed personnel who are engaged, subject to and in accordance with the foregoing sentence, in connection with the JV Purpose. Each of the Parties shall use at least the same procedures and degree of care that it uses to prevent the disclosure of its own confidential information of like importance to prevent the disclosure of Confidential Information disclosed to it by the other Parties under this Agreement, but in no event less than reasonable care.

6.3	Exclusions. Notwithstanding the foregoing, Confidential Information excludes information that:

	(a)	was publicly available at the time it was disclosed or becomes publicly available through no fault of the receiving Party;

	(b)	was known to the receiving Party, without similar confidentiality restriction, at the time of disclosure;

	(c)	was independently developed by the receiving Party without any use of the Confidential Information of the disclosing Party; or

	(d)	becomes known to the receiving Party, without similar confidentiality restriction, from a source other than the disclosing Party, without similar confidentiality restriction and without breach of this Agreement by the receiving Party.

6.4	Compelled Disclosure. The receiving Party may disclose the Confidential Information of disclosing Party to the extent compelled to do so by law, a court or other authority; provided that the receiving Party shall give the disclosing Party prompt written notice so that the disclosing Party may take steps to oppose such disclosure.

6.5	Confidentiality of Agreement. Each Party agrees that the terms and conditions, but not the existence, of this Agreement shall be treated as the others’ Confidential Information and that no public reference to the terms and conditions of this Agreement or to activities pertaining to this Agreement can be made without the prior written consent of the other Party; provided, however, that each Party may disclose the terms and conditions of this Agreement, subject to, when applicable, prior written notice sent to the other Parties the comments of whom shall be, to the extent legally permitted, accommodated: (i) as required by any court or other governmental body; (ii) as otherwise required by Law; (iii) to legal counsel and/or auditors, representatives of the Parties, subject to such them agreeing to be bound to similar confidential restrictions; (iv) in public documents, in connection with the requirements of an initial public offering, secondary offering, or debt offering or any securities filing of the Parties; (v) in confidence, to accountants, banks, and financing sources and their advisors; (vi) in confidence, in connection with the enforcement of this Agreement or rights under this Agreement; or (vii) in confidence, in connection with a merger or acquisition or proposed merger or acquisition, or the like.

ARTICLE 7

TERM AND TERMINATION

7.1	Term. This Agreement begins on the Effective Date and shall continue until the first and only Sublicense Agreement entered into by the JV Company expires or is otherwise terminated, unless sooner terminated as provided in this Article 7, provided that with respect to any Intellectual Property Right or Trademark licensed by a Party to the other Party, the licenses granted herein shall terminate with respect to the Intellectual Property Right or Trademark upon the expiration, abandonment or invalidation of the Intellectual Property Right or Trademark. Notwithstanding anything to the contrary, upon the exercise of the licensed rights granted in this Agreement by the JV Company, either (i) directly; or (ii) by sublicence to a Sublicensee, with respect to a Licensed Facility, the JV Company shall have no further rights to use or access the Licensed Subject Matter or the Loop Technology for any additional facility, but the rights of the JV Company or the Sublicensee, as applicable, in the Licensed Subject Matter shall remain in full force in accordance with this Agreement for the applicable Licensed Facility.

7.2	Termination by Loop. Loop shall be entitled to terminate this Agreement only as set forth in Sections 7.2 and 7.4.

	(a)	Infringement and Breach of Confidentiality Obligations. If Reed or the JV Company infringes any of Loop’s material Intellectual Property Rights or breaches its obligations under this Agreement to not use or disclose any Confidential Information constituting a material trade secret of Loop, then Reed, or the JV Company, as applicable, shall use its best efforts to cure such infringement or breach within sixty (60) Business Days of written notice by Loop to the JV Company (the “IP Violation Notice”). If Reed, or the JV Company, as applicable, has not cured such infringement or breach, as determined in Loop’s reasonable discretion, within sixty (60) Business Days of the original IP Violation Notice, then Loop shall be entitled to immediately terminate this Agreement by written notice to the JV Company and Reed.

	(b)	Breach of Payment Obligations. If Loop does not receive any payment owed under Section 2.4(f) of this Agreement by the applicable Payment Date, then the JV Company shall, within twenty (20) Business Days of written notice by Loop to the JV Company (the “Non-Payment Notice”), pay, or cause to be paid, to Loop (i) such outstanding payment and (ii) interest on such outstanding payment from the applicable Payment Date to the date of actual payment at the rate of [*] (collectively, the “Late Payment”). Further, if Loop does not receive the full amount of the Late Payment within sixty (60) Business Days after the issuance of the Non-Payment Notice due to any willful default of the JV Company, then Loop shall be entitled to immediately terminate this Agreement by written notice to the JV Company.

	(c)	Remedies. For the avoidance of doubt, the termination rights and other remedies set forth in this Section 7.2 shall not be deemed to be Loop’s exclusive remedies, but are be in addition to all other remedies available to Loop under this Agreement, at law, or in equity.

7.3	Termination by the JV Company. Reed and the JV Company shall be entitled to terminate this Agreement only as set forth in Sections 7.3 and7 .4.

	(a)	Breach of Loop's contractual obligations. If Loop breaches any of its obligations, representations and warranties under this Agreement (including any obligation towards Reed) and fails to cure such breach within thirty (30) Business Days after having received a written notice from the JV Company, then the JV Company shall be entitled to immediately terminate this Agreement by written notice to the Loop.

	(b)	Remedies. For the avoidance of doubt, the termination rights and other remedies set forth in this Section 7.3 shall not be deemed to be Reed's and the JV Company's exclusive remedies, but are be in addition to all other remedies available to Reed and the JV Company under this Agreement, at law, or in equity.

7.4	Termination by Mutual Agreement. The Parties may terminate this Agreement by mutual written agreement.

7.5	Termination in accordance with the provisions of the Securityholders Agreement. This Agreement shall automatically terminate upon compliance with the provisions of Section 4.3(b) of the Priority Rights Protocol set out in Exhibit 13.1(a) of the Securityholders Agreement by the applicable parties thereto.

7.6	Other Rights. Loop acknowledges that, except as expressly provided in this Article 7, the licenses granted under Section 2.1 of this Agreement are irrevocable and may not be canceled or terminated by Loop for any reason. However, should the JV Company or any Sublicensee breach this Agreement, Loop shall have the right to seek (i) an injunction restraining the JV Company from any purported breach of this Agreement, or specific performance requiring the JV Company to comply with this Agreement, to the fullest extent permitted by law or equity, (ii) all such amounts to which Loop would be entitled as damages or otherwise under law or at equity, and (iii) any other rights or remedies available at law or equity other than termination of the licenses granted under this Agreement.

7.7	Effect of Termination; Survival. From and after the effective date of any termination, the licenses granted to the JV Company under Article 2, Article 3, and Article 4 shall terminate. The other rights and obligations of the Parties under the following Articles and Sections shall survive any expiration or termination of this Agreement, unless otherwise expressly terminated as per the terms governing them: Article 1 (Definitions), Article 3 (Intellectual Property Rights), Article 4 (Trademark License), Article 5 (Loop Services), Article 6 (Confidential Information), Section 7.5 (Survival), Article 8 (Representations, Warranties and Indemnification), Article 9 (General Provisions), and Sections 4.3 (Ownership) and 7.5 (Other Rights).

7.8	Consequences of Termination/Expiration:

	Upon termination or expiration of this Agreement, the JV Company shall within sixty (60) Business Days of such termination or expiration:

	(a)	pay all outstanding amounts to Loop till the date of termination/expiry payable under this Agreement.

	(b)	cease using the Licensed Subject Matter;

	(c)	Erase the Licensed Subject Matter from its internal systems/servers in which it has been stored;

	(d)	Maintain in confidence all knowledge of the Licensed Subject Matter and its use as provided hereunder; and

	(e)	At the option of Loop, either return to Loop or destroy the Licensed Subject Matter or copies thereof and certify to Loop in writing that such destruction has occurred, save and except as may be required to be retained by the JV Company pursuant to any written directions of regulatory or statutory bodies or written order of the competent courts.

ARTICLE 8

REPRESENTATIONS, WARRANTIES, AND INDEMNIFICATION

8.1	Mutual Representations and Warranties. Without limiting the representations and warranties of the Parties under the Joint Venture Agreements, each Party hereby represents and warrants to the other Party that:

	(a)	Organization. It is a company/corporation (or limited liability company) duly organized (or formed), validly existing and in good standing under the Laws of its state of organization (or formation);

	(b)	Authority; Enforceability. It has full power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby; its execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all its requisite entity action; and it has duly executed and delivered this Agreement, and (assuming due authorization, execution and delivery by the other Parties) this Agreement constitutes its legal, valid and binding obligations, enforceable against it in accordance with their respective terms; and

	(c)	No Conflicts; Consents. Its execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated hereby, do not and will not (i) violate or conflict with its organizational documents or (ii) violate or conflict with any provision of law or governmental order applicable to it; and no consent, approval, waiver or authorization is required to be obtained by it from any Person (including any governmental authority) in connection with its execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby.

8.2	Representations and warranties by Loop. Loop hereby represents and warrants to the JV Company the peaceful enjoyment (“la jouissance paisible”) of the Licensed Subject Matter and that:

	(a)	Loop has sufficient rights to license the Licensed Subject Matter and Loop Marks to the JV Company as specified in this Agreement;

	(b)	as of the Effective Date, Loop is not aware of any material unauthorized use, infringement or misappropriation of the Licensed Subject Matter or Loop Marks by a third party;

	(c)	as of the Effective Date, Loop is not aware of any pending or threatened litigation relating to the Licensed Subject Matter or Loop Marks;

	(d)	as of the Effective Date, Loop is not aware of any Intellectual Property Rights or Trademarks of a third party that would be infringed by the JV Company’s use of the Licensed Subject Matter for the JV Purpose or Loop Marks or making or selling Licensed Products;

	(e)	as of the Effective Date, Loop has in its possession all relevant information required to build, operate and market the Licensed Subject Matter;

	(f)	to the knowledge of Loop, neither the Licensed Subject Matter nor any element thereof will infringe or misappropriate the Intellectual Property Rights of any third party;

	(g)	Loop has full right and power to enter into and perform this Agreement without the consent of any third party;

	(h)	Loop will comply with all laws and regulations applicable to it under this Agreement; and

	(i)	as of the Effective Date, the Licensed Subject Matter licensed to the JV Company under this Agreement constitutes all Intellectual Property Rights that are necessary or reasonably required by the JV Company to undertake the JV Purpose with respect to one Licensed Facility.

8.3	NO OTHER REPRESENTATIONS OR WARRANTIES. THE EXPRESS REPRESENTATIONS AND WARRANTIES STATED IN THIS AGREEMENT ARE IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY, REGARDING THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

8.4	LIMITATION OF LIABILITY. IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER UNDER THIS AGREEMENT OR OTHERWISE FOR CONSEQUENTIAL, SPECIAL, INCIDENTAL, EXEMPLARY, STATUTORY, OR PUNITIVE DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT, EXCEPT FOR (i) SUCH PARTY’S INFRINGEMENT OR MISAPPROPRIATION OF THE OTHER PARTY’S INTELLECTUAL PROPERTY RIGHTS, OR (ii) SUCH PARTY’S GROSS NEGLIGENCE, FRAUD, OR WILLFUL MISCONDUCT. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, THE AGGREGATE LIABILITY OF EITHER PARTY FOR ANY CLAIM (AS DEFINED BELOW) SHALL BE LIMITED TO THE TOTAL AMOUNT OF LICENSE FEES EFFECTIVELY PAID TO LOOP BY THE JV COMPANY DURING THE LAST COMPLETED FISCAL YEAR BEFORE THE DATE OF THE EVENT GIVING RISE TO THE CLAIM. THIS CAP ON LIABILITY SHALL NOT APPLY TO INSTANCES OF FRAUD IN RELATION TO CLAIMS.

8.5	JV Company Responsibility. The JV Company acknowledges and agrees that it shall bear full responsibility (and that Loop assumes no liability whatsoever and expressly disclaims all other warranties and conditions, express or implied, including any warranty as to results) and that it shall defend, indemnify and hold harmless Loop and the Loop Parties for any Losses (as defined below) from any and all third party demands, claims, lawsuits, and actions asserted, made, or brought against any Loop Party for:

	(a)	the design and engineering of any Licensed Facilities to the extent it relates to the Balance of Plant, the construction, operation and maintenance of the Licensed Facilities, the integration in the Licensed Facilities of the Loop Technology, in each case other than as expressly provided herein;

	(b)	the security, health and safety of the JV Company’s employees or other representatives as it relates to the Licensed Facilities or otherwise and compliance with all applicable Laws with respect thereto;

	(c)	the proper environmental procedures, rules, regulations, and policies applicable to the operation of Licensed Facilities and the disposal of waste or hazardous materials produced therein or any other of the JV Company’s production waste and chemicals facilities, and for greater certainty, compliance with all applicable Laws with respect thereto; or

	(d)	the PET or other feedstock used by the JV Company, all products manufactured by the JV Company (including all Licensed Products) or the use of these products by any end user or customer.

	Without limiting the generality of the foregoing, the JV Company agrees that any guidance, feedback or know-how provided by Loop to the JV Company with respect to the manipulation, storage and processing of PET or any other feedstock is made without any guarantee of adequacy or compliance with applicable Laws in the jurisdiction where such manipulation, storage or processing occurs.

8.6	Indemnification for Infringement. Loop shall defend the JV Company and Reed and their respective directors, officers, and employees (collectively, the “Indemnitees”) from and against: (i) any documented and demonstrable direct damages and losses, including all reasonable and documented legal fees arising out of any breach of the Representations of Loop set out in Section 8.2 above; and (ii) any and all third party demands, claims, lawsuits, and actions asserted, made, or brought against any Indemnitee by any third party alleging infringement, misappropriation, or other violation of such third party’s Intellectual Property Rights solely by the Licensed Subject Matter (collectively, “Claims”), and Loop will indemnify the Indemnitees from and against all damages, losses, liabilities, obligations, settlements, judgments, costs and expenses, including all reasonable and documented legal fees, to the extent finally awarded by a court of competent jurisdiction to resolve such Claims or agreed to by Loop in settlement of such Claims (collectively, the “Losses”), except that Loop shall have no duty of indemnification for Claims or Losses arising or growing out of any Indemnitee’s gross negligence or willful misconduct.

8.7	Any Claim for indemnity pursuant to Section 8.6 above (“Direct Indemnity Claim”), shall be made by the Indemnitees by notice (“Indemnity Claim Notice”) in writing to Loop as promptly as practicable and in any event within twenty (20) Business Days of the Indemnitees becoming aware of the occurrence of any such Claim for indemnity pursuant to Section 8.5 above, which shall set out in reasonable detail, (a) the amount of Losses claimed along with the specific provision of the Agreement pursuant to which the Losses are being claimed, and (b) brief summary of the facts underlying or related to such Claim and a statement that the Indemnitees seeks indemnification for Losses relating to such Claim along with documentary support to substantiate the Claim and ensure that Loop has been given all reasonable information as available with the Indemnitees, to investigate and defend such Claim. It is clarified that the delivery of an Indemnity Claim Notice shall not preclude the Indemnitees from raising additional Claims if after delivering the Indemnity Claim Notice there is any increase in the extent of Losses actually incurred than what was stated in the Indemnity Claim Notice.

8.8	Within thirty (30) Business Days of receipt of the Indemnity Claim Notice of such Direct Indemnity Claim or any such time as mutually agreed between the Parties, Loop may, (a) accept the Direct Indemnity Claim raised by the Indemnitees, or (b) issue a written notice to the Indemnitees stating that it is disputing the Direct Indemnity Claim raised by the Indemnitees and denying the liability to indemnify the Indemnitees for the Loss alleged to have been suffered by the Indemnitees, along with a summary of the basis for such objection (“Indemnity Dispute Notice”). It is hereby agreed that if Loop does not issue the Indemnity Dispute Notice within the aforesaid period, then, the Loop shall be deemed to have accepted the Direct Indemnity Claim raised by the relevant Indemnitee(s).

8.9	If the indemnifying Parties issue an Indemnity Dispute Notice, the indemnifying Parties and the indemnified Party shall, within twenty (20) Business Days from the date of Indemnity Dispute Notice, attempt in good faith to resolve the dispute in terms of Section 9.13 (Exclusive jurisdiction). If the Parties succeed in reaching an agreement on the dispute, the relevant Parties shall promptly prepare and sign a memorandum setting out such agreement.

8.10	Claims for indemnity for Loss specified in any indemnity Claim (a) which Loop accepts; and/ or (b) for which Loop issues the Indemnity Dispute Notice and which is determined per Section 9.13 (Exclusive jurisdiction) (Disputes) are referred to, collectively, as “Agreed Claims”.

8.11	Within twenty (20) Business Days of any amounts being accepted or determined as Agreed Claims in accordance with the foregoing, Loop shall pay to the Indemnitees an amount equal to the Agreed Claims.

8.12	If any claim or proceeding made against the Indemnitees, covered by the indemnity set forth in this Section 8 is at the behest of a third party (“Third Party Claim”), it shall be dealt with in the manner set out hereinafter:

	(a)	The Indemnitees shall notify Loop of the Third Party Claim in writing as soon as reasonably practicable. Such notice must specify the facts giving rise to the claim as understood by Indemnitees and specify the amount of the claim, if known. It is hereby agreed by Loop that any failure or delay by the Indemnitees to notify Loop as aforesaid shall not prejudice the indemnification rights and/or remedies available to the Indemnitees;

	(b)	Within twenty (20) Business Days of receipt of notice of the Third Party Claim from the Indemnitees, Loop shall have the right, but not the obligation, to (i) conduct and control any proceedings or negotiations, (ii) take such action as it shall deem necessary to avoid, dispute, deny, defend, resist, appeal, compromise or contest any such claim in the name of and on behalf of the Indemnitees; (iii) enter into any compromise or settlement of, or the entry of any judgment arising from, the Third Party Claim and/or make any payments pursuant thereto, in its sole discretion (provided the settlement does not require any payment or admission of liability of the Indemnitees, and includes a complete release of the Indemnitees with respect to the claim), and (iv) employ and pay counsel to contest any such claim or liability. If Loop assumes such control, the Indemnitees shall have the right to (i) participate in the negotiation, settlement or defense of such Third Party Claims at its own expense; and (ii) respond to notices from any governmental authority within the timelines indicated in such notices;

	(c)	If Loop fail to assume the defense of any such Third Party Claim, the Indemnitees shall have the right but not the obligation to defend against such claim at Loop’s expense (including attorney’s fee), and Loop shall cooperate with the Indemnitees in defending such Third Party Claim. In such case, Loop shall be bound by the results obtained by the Indemnitees with respect to such Third Party Claim including pursuant to the entry of any compromise or settlement of, or the entry of any judgment arising from, the Third Party Claim in the Indemnitees sole discretion.

ARTICLE 9

GENERAL PROVISIONS

9.1	Independent Contractors. The Parties are independent contractors. Nothing contained in this Agreement or done pursuant to this Agreement shall constitute either Party as the agent of the other Party for any purpose or in any sense whatsoever or constitute the Parties as partners or joint venturers.

9.2	Amendment. No alteration, amendment, waiver, cancellation or any other change in any term or condition of this Agreement shall be valid or binding on either Party unless mutually assented to in writing by both Parties.

9.3	Notices. All notices required or permitted to be given under this Agreement shall be in writing and shall be delivered by prepaid air express or registered airmail, postage prepaid or by telefax, if confirmed or acknowledged, to the following:

	If to Loop: Loop Industries, Inc. 480 rue Fernand-Poitras Terrebonne, Québec J6Y 1Y4 Canada Email: [] Attention: Daniel Solomita With a copy to: Norton Rose Fulbright Canada LLP 1 Place Ville Marie, Suite 2500 Montréal (Québec) H3B 1R1, Canada Email: vincent.filiatrault@nortonrosefulbright.com Attention: Vincent Filiatrault If to the JV Company: Infinite Loop Europe SAS, in the course of being incorporated Represented by Reed Circular Ecconomy, acting exclusively in the name and on behalf of Infinite Loop Europe SAS during its incorporation process 15 rue Soufflot 75005 Paris, France Attention: Mr. Julien Touati and Mr. Joni Fontoura Emails: []; [*]

	With a copy to: Testu, Hill, Henry-Gaboriau & Associés – STH2 13, rue Royale 75008 Paris, France Email: hill@sth2.law Attention: Sidonie Hill If to Reed: Reed Management SAS 15 rue Soufflot 75005 Paris, France Attention: Mr. Julien Touati and Mr. Joni Fontoura Emails: []; [] With a copy to: Testu, Hill, Henry-Gaboriau & Associés – STH2 13, rue Royale 75008 Paris, France Email: hill@sth2.law Attention: Sidonie Hill Each Party may change its address set forth above by written notice to the other.

9.4	Waiver. Any failure by either Party to enforce at any time any terms and conditions of this Agreement shall not be considered a waiver of that Party’s right thereafter to enforce such terms and conditions or any other terms and conditions of this Agreement.

9.5	Specific waivers. Each of the Parties hereto expressly and irrevocably waives the following provisions of the French civil code which shall not be applicable to this Agreement (nor to any agreement or document entered into by all or some of the Parties hereto in connection with this Agreement): (i) articles 1186 and 1187 of the French civil code (regarding the right to claim that a contract has lapsed as a result of any other contract contributing to the completion of the transactions contemplated hereunder having terminated, lapsed or being ineffective for any reason whatsoever), (ii) article 1195 of the French civil code (regarding the occurrence of unforeseen circumstances referred to in such article and each Party hereto agrees to assume any risk which may arise from any of such unforeseeable circumstances), (iii) article 1223 of the French civil code (regarding the right for a creditor to accept a partial performance of a contract and claim a corresponding reduction of the price), (iv) article 1226 of the French civil code (regarding the right for a creditor to terminate a contract at its own risks), and (v) article 1218 of the French civil code (regarding the debtor's right to suspend the performance of or to terminate a contract in case of a force majeure event), and accordingly no termination, lapse or variation of this Agreement (or of any agreement or document entered into in connection with this Agreement) shall be permitted on the grounds of such provisions of the French civil code.

9.6	Severability. Should any clause, sentence, section, article or paragraph of this Agreement judicially be declared to be invalid, unenforceable, or void, such decision shall not have the effect of invalidating or voiding the remainder of this Agreement.

9.7	Specific Performance. Each Party acknowledges and agrees that any specific performance action (execution forcée en nature) in respect of this Agreement will constitute a balanced course of action falling outside the "manifest disproportion" exclusion contained in Article 1221 of the French civil code.

9.8	Assignment. This Agreement shall inure to the benefit of, and shall be binding upon, the Parties and their respective successors and assigns, but no Party may assign this Agreement, in whole or in part, without the prior written consent of the other Parties, except to a Person, who is not a Restricted Person, into which it has merged or who has otherwise succeeded to all or substantially all of the business and assets of the assignor, and who has assumed in writing or by operation of law its obligations under this Agreement.

9.9	No third-party beneficiary. The Parties do not intend that this Agreement benefit or create any legal or equitable right, remedy or cause of action in, or on behalf of, any Person other than a Party and no Person, other than a Party, may rely on the provisions of this Agreement in any proceeding.

9.10	Entire Agreement. This Agreement (including its Exhibits) sets forth the entire agreement between the Parties as to the subject matter hereof and supersedes all previous negotiations, agreements and writings in respect thereto, and shall not be extended, supplemented or amended in any manner, except by an instrument in writing duly executed by authorized officers or representatives of both Parties.

9.11	Choice of Law. This Agreement shall be governed by and interpreted in accordance with the laws of France, and all disputes arising out of this Agreement shall be dealt with in accordance with Section 9.13 below.

9.12	Exclusive jurisdiction. The Tribunal de commerce de Paris has exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement. The Parties agree that the French courts are the most appropriate and convenient courts to settle disputes arising out of or in connection with this Agreement and accordingly no Party will argue to the contrary.

9.13	Conclusion of this Agreement by Infinite Loop Europe SAS prior to its incorporation. The Parties acknowledge that Infinite Loop Europe SAS is currently being incorporated with the Trade and Companies Registry of Paris and Reed is entering into this Agreement in the name and on behalf of Infinite Loop Europe SAS during its incorporation process.

9.14	Electronic signature. In accordance with articles 1366 and 1367 of the French civil code, this Agreement shall be signed electronically. The Parties acknowledge and agree that electronic signatures via DocuSign, which is compliant with EU eIDAS Regulation (EU) 910/2014, were used for the execution of this Agreement by its signatories. Furthermore, in accordance with the provisions of article 1375 of the French civil code, the obligation to deliver an original copy to each of the Parties is not necessary as proof of the commitments and obligations of each. The delivery of an electronic copy of this Agreement directly by DocuSign to each Party shall constitute sufficient and irrefutable proof of the commitments and obligations of each Party.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed, as of the Effective Date, by their duly authorized officers or representatives.

REED CIRCULAR ECONOMY

/s/ Julien Touati____________________

Per: Julien Touati

Title: President

REED CIRCULAR ECONOMY ACTING EXCLUSIVELY IN THE NAME AND ON BEHALF OF INFINITE LOOP EUROPE SAS, IN THE PROCESS OF BEING INCORPORATED

/s/ Julien Touati ____________________

Per: Julien Touati

Title: Authorized agent

LOOP INDUSTRIES, INC.

/s/ Daniel Solomita _________________

Per: Daniel Solomita

Title: Chief Executive Officer and President

EXHIBIT A

LOOP MARKS

EXHIBIT B

LIST OF PATENTS FORMING PART OF THE LICENSE SUBJECT MATTER

EXHIBIT C

SUBLICENSE AGREEMENT GENERAL TERMS

EXHIBIT D

LOOP SERVICES

EXHIBIT E

RESTRICTED PERSON

EX-19.1 7 loop_ex191.htm INSIDER TRADING POLICY loop_ex191.htm

EXHIBIT 19.1

LOOP INDUSTRIES, INC.

___________________

INSIDER TRADING POLICY

and

Guidelines with Respect to

Certain Transactions in Securities

___________________

(Adopted: June 14, 2017; Effective as of June 14, 2017)

Revised October 12, 2021

TABLE OF CONTENTS

		Page
INTRODUCTION		1
Legal prohibitions on insider trading		1
Detection and prosecution of insider trading		1
Penalties for violation of insider trading laws and this Policy		1
Compliance Officer		2
Reporting violations		2
Personal responsibility		2

PERSONS AND TRANSACTIONS COVERED BY THIS POLICY		3
Persons covered by this Policy		3
Types of transactions covered by this Policy		3
Responsibilities regarding the nonpublic information of other companies		3
Applicability of this Policy after your departure		3
No exceptions based on personal circumstances		3

MATERIAL NONPUBLIC INFORMATION		4
“Material” information		4
“Nonpublic” information		4

POLICIES REGARDING MATERIAL NONPUBLIC INFORMATION		5
Confidentiality of nonpublic information		5
No trading on material nonpublic information		5
No disclosing material nonpublic information for the benefit of others		5
Obligation to disclose material nonpublic information to the Company		5
Responding to outside inquiries for information		5

TRADING BLACKOUT PERIODS		6
Quarterly blackout periods		6
Special blackout periods		6
Regulation BTR blackouts		6
No “safe harbors”		6

TABLE OF CONTENTS

(Continued)

PRE-CLEARANCE OF TRADES		7

ADDITIONAL RESTRICTIONS AND GUIDANCE		8
Short sales		8
Derivative securities and hedging transactions		8
Using Company securities as collateral for loans		8
Holding Company securities in margin accounts		8
Placing open orders with brokers		8

LIMITED EXCEPTIONS		9
Transactions pursuant to a trading plan that complies with SEC rules		9
Receipt and vesting of stock options, restricted stock and stock appreciation rights		9
Exercise of stock options for cash		9
Certain 401(k) plan transactions		10
Stock splits, stock dividends and similar transactions		10
Inheritance		10
Change in form of ownership		10
Other exceptions		10

COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT		11
Obligations under Section 16		11
Notification requirements to facilitate Section 16 reporting		11
Personal responsibility		11

ADDITIONAL INFORMATION		12
Delivery of Policy		12
Amendments		12

SCHEDULE I (Individuals subject to quarterly blackout periods)

SCHEDULE II (Individuals subject to pre-clearance requirements)

SCHEDULE III (Individuals subject to Section 16 reporting and liability provisions of the Securities Exchange Act)

INTRODUCTION

Loop Industries, Inc. (together with its subsidiaries, the “Company”) forbids the unauthorized disclosure of any nonpublic information acquired in the course of your service with the Company and the misuse of material nonpublic information in securities trading. Any such actions will be deemed violations of this Insider Trading Policy (the “Policy”).

Legal prohibitions on insider trading

The antifraud provisions of U.S. federal securities laws prohibit directors, officers, employees and other individuals who possess material nonpublic information from trading on the basis of that information. Transactions will be considered “on the basis of” material nonpublic information if the person engaged in the transaction was aware of the material nonpublic information at the time of the transaction. It is not a defense that the person did not “use” the information for purposes of the transaction.

Disclosing material nonpublic information directly or indirectly to others who then trade based on that information or making recommendations or expressing opinions as to transactions in securities while aware of material nonpublic information (which is sometimes referred to as “tipping”) is also illegal. Both the person who provides the information, recommendation or opinion and the person who trades based on it may be liable.

These illegal activities are commonly referred to as “insider trading”. State securities laws and securities laws of other jurisdictions also impose restrictions on insider trading.

In addition, a company, as well as individual directors, officers and other supervisory personnel, may be subject to liability as “controlling persons” for failure to take appropriate steps to prevent insider trading by those under their supervision, influence or control. The Insider Trading and Securities Fraud Enforcement Act of 1988, for example, mandates that “[e]very person who, directly or indirectly, controls any person liable [for insider trading] shall also be liable jointly and severally with and to the same extent as such controlled person…unless the controlling person acted in good faith and did not directly or indirectly induce the act or acts constituting the violation or cause of action.”

Detection and prosecution of insider trading

The U.S. Securities and Exchange Commission (the “SEC”), the Financial Industry Regulatory Authority (“FINRA”) and The Nasdaq Stock Market use sophisticated electronic surveillance techniques to investigate and detect insider trading, and the SEC and the U.S. Department of Justice pursue insider trading violations vigorously. Cases involving trading through foreign accounts, trading by family members and friends and trading involving only a small number of shares have been successfully prosecuted.

Penalties for violation of insider trading laws and this Policy

Civil and criminal penalties. As of the effective date of this Policy, potential penalties for insider trading violations under U.S. federal securities laws include:

	·	damages in a private lawsuit;

	·	disgorging any profits made or losses avoided;

	·	imprisonment for up to 20 years;

	·	criminal fines of up to $5 million for individuals and $25 million for entities;

	·	civil fines of up to three times the profit gained or loss avoided;

	·	a bar against serving as an officer or director of a public company; and

	·	an injunction against future violations.

Civil and criminal penalties also apply to tipping. The SEC has imposed large penalties in tipping cases even when the disclosing person did not trade or gain any benefit from another person’s trading.

Controlling person liability. U.S. Securities laws mandates that “[e]very person who, directly or indirectly, controls any person liable [for insider trading] shall also be liable jointly and severally with and to the same extent as such controlled person…unless the controlling person acted in good faith and did not directly or indirectly induce the act or acts constituting the violation or cause of action.” As of the effective date of this Policy, the penalty for “controlling person” liability is a civil fine of up to the greater of $1.275 million or three times the profit gained or loss avoided as a result of the insider trading violations, as well as potential criminal fines and imprisonment.

Company disciplinary actions. If the Company has a reasonable basis to conclude that you have failed to comply with this Policy, you may be subject to disciplinary action by the Company, up to and including termination of your employment, regardless of whether or not your failure to comply with this Policy results in a violation of law. It is not necessary for the Company to wait for the filing or conclusion of any civil or criminal action against an alleged violator before taking disciplinary action. In addition, the Company may give stop transfer and other instructions to the Company’s transfer agent to enforce compliance with this Policy.

Compliance Officer

Please direct any questions, requests or reports as to any of the matters discussed in this Policy to the Chief Financial Officer of the Company (the “Compliance Officer”). The Compliance Officer is generally responsible for the administration of this Policy. The Compliance Officer may select others to assist with the execution of his or her duties.

Reporting violations

It is your responsibility to help enforce this Policy. You should be alert to possible violations and promptly report violations or suspected violations of this Policy either to the Compliance Officer at [*] or at 480 Fernand Poitras Street, Terrebonne, QC J6Y 1Y4, Canada, ATTENTION: Compliance Officer, or, if you don’t believe your concern is being adequately addressed, or you are not comfortable speaking with this contact, you may report your concern via our anonymous hotline at [*] through which you may choose to identify yourself or remain anonymous ..

Personal responsibility

The ultimate responsibility for complying with this Policy and applicable laws and regulations rests with you. You should use your best judgment at all times and consult with your legal and financial advisors, as needed. We advise you to seek assistance if you have any questions at all. The rules relating to insider trading can be complex, and a violation of insider trading laws can carry severe consequences.

PERSONS AND TRANSACTIONS COVERED BY THIS POLICY

Persons covered by this Policy

This Policy applies to all directors, officers, employees and agents (such as consultants and independent contractors) of the Company. References in this Policy to “you” (as well as general references to directors, officers, employees and agents of the Company) should also be understood to include members of your immediate family, persons with whom you share a household, persons that are your economic dependents and any other individuals or entities whose transactions in securities you influence, direct or control (including, for example, a venture or other investment fund, if you influence, direct or control transactions by the fund). You are responsible for making sure that these other individuals and entities comply with this Policy.

Types of transactions covered by this Policy

Except as discussed in the section entitled “Limited Exceptions”, this Policy applies to all transactions involving the securities of the Company or the securities of other companies as to which you possess material nonpublic information obtained in the course of your service with the Company. This Policy therefore applies to purchases, sales, bona fide gifts and other transfers of common stock, options, warrants, preferred stock, debt securities (such as debentures, bonds and notes) and other securities. This Policy also applies to any arrangements that affect economic exposure to changes in the prices of these securities. These arrangements may include, among other things, transactions in derivative securities (such as exchange‑traded put or call options), hedging transactions, short sales and certain decisions with respect to participation in benefit plans. This Policy also applies to any offers with respect to the transactions discussed above. You should note that there are no exceptions from insider trading laws or this Policy based on the size of the transaction.

Responsibilities regarding the nonpublic information of other companies

This Policy prohibits the unauthorized disclosure or other misuse of any nonpublic information of other companies, such as the Company’s distributors, vendors, customers, collaborators, suppliers and competitors. This Policy also prohibits insider trading and tipping based on the material nonpublic information of other companies.

Applicability of this Policy after your departure

You are expected to comply with this Policy until such time as you are no longer affiliated with the Company and you no longer possess any material nonpublic information subject to this Policy. In addition, if you are subject to a trading blackout under this Policy at the time you cease to be affiliated with the Company, you are expected to abide by the applicable trading restrictions until at least the end of the relevant blackout period.

No exceptions based on personal circumstances

There may be instances where you suffer financial harm or other hardship or are otherwise required to forego a planned transaction because of the restrictions imposed by this Policy. Personal financial emergency or other personal circumstances are not mitigating factors under securities laws and will not excuse a failure to comply with this Policy.

MATERIAL NONPUBLIC INFORMATION

“Material” information

Information should be regarded as material if there is a substantial likelihood that a reasonable investor would consider it important in deciding whether to buy, hold or sell securities or would view the information as significantly altering the total mix of information in the marketplace about the issuer of the security. In general, any information that could reasonably be expected to affect the market price of a security is likely to be material. Either positive or negative information may be material.

It is not possible to define all categories of “material” information. However, some examples of information that would often be regarded as material include information with respect to:

	·	Financial results, financial condition, earnings pre-announcements, guidance, projections or forecasts, particularly if inconsistent with the expectations of the investment community;

	·	Restatements of financial results, or material impairments, write-offs or restructurings;

	·	Changes in independent auditors, or notification that the Company may no longer rely on an audit report;

	·	Business plans or budgets;

	·	Creation of significant financial obligations, or any significant default under or acceleration of any financial obligation;

	·	Impending bankruptcy or financial liquidity problems;

	·	Significant developments involving business relationships, including execution, modification or termination of significant agreements or orders with customers, suppliers, distributors, manufacturers or other business partners;

	·	Product introductions, modifications, defects or recalls or significant pricing changes or other product announcements of a significant nature;

	·	Significant developments in research and development or relating to intellectual property;

	·	Significant legal or regulatory developments, whether actual or threatened;

	·	Major events involving the Company’s securities, including calls of securities for redemption, adoption of stock repurchase programs, option repricings, stock splits, changes in dividend policies, public or private securities offerings, modification to the rights of security holders or notice of delisting;

	·	Significant corporate events, such as a pending or proposed merger, joint venture or tender offer, a significant investment, the acquisition or disposition of a significant business or asset or a change in control of the company; and

	·	Major personnel changes, such as changes in senior management or lay-offs.

If you have any questions as to whether information should be considered “material”, you should consult with the Compliance Officer. In general, it is advisable to resolve any close questions as to the materiality of any information by assuming that the information is material.

“Nonpublic” information

Information is considered nonpublic if the information has not been broadly disseminated to the public for a sufficient period to be reflected in the price of the security. As a general rule, information should be considered nonpublic until at least two full trading days have elapsed after the information is broadly distributed to the public in a press release, a public filing with the SEC, a pre-announced public webcast or another broad, non-exclusionary form of public communication. However, depending upon the form of the announcement and the nature of the information, it is possible that information may not be fully absorbed by the marketplace until a later time. Any questions as to whether information is nonpublic should be directed to the Compliance Officer.

The term “trading day” means a day on which national stock exchanges and the National Association of Securities Dealers, Inc. Automated Quotation System are open for trading. A “full” trading day has elapsed when, after the public disclosure, trading in the relevant security has opened and then closed.

POLICIES REGARDING MATERIAL NONPUBLIC INFORMATION

Confidentiality of nonpublic information

The unauthorized use or disclosure of nonpublic information relating to the Company or other companies is prohibited. All nonpublic information you acquire in the course of your service with the Company may only be used for legitimate Company business purposes. In addition, nonpublic information of others should be handled in accordance with the terms of any relevant nondisclosure agreements, and the use of any such nonpublic information should be limited to the purpose for which it was disclosed.

You must use all reasonable efforts to safeguard nonpublic information in the Company’s possession. You may not disclose nonpublic information about the Company or any other company, unless required by law, or unless (i) disclosure is required for legitimate Company business purposes, (ii) you are authorized to disclose the information and (iii) appropriate steps have been taken to prevent misuse of that information (including entering an appropriate nondisclosure agreement that restricts the disclosure and use of the information, if applicable). This restriction also applies to internal communications within the Company and to communications with agents of the Company. In cases where disclosing nonpublic information to third parties is required, you should coordinate with the Legal Department.

All directors, officers, employees and agents of the Company are required to sign and comply with an At Will Employment, Confidential Information, Invention Assignment, and Arbitration Agreement.

No trading on material nonpublic information

Except as discussed in the section entitled “Limited Exceptions”, you may not, directly or indirectly through others, engage in any transaction involving the Company’s securities while aware of material nonpublic information relating to the Company. It is not an excuse that you did not “use” the information in your transaction.

Similarly, you may not engage in transactions involving the securities of any other company if you are aware of material nonpublic information about that company (except to the extent the transactions are analogous to those presented in the section entitled “Limited Exceptions”). For example, you may be involved in a proposed transaction involving a prospective business relationship or transaction with another company. If information about that transaction constitutes material nonpublic information for that other company, you would be prohibited from engaging in transactions involving the securities of that other company (as well as transactions involving Company securities, if that information is material to the Company). It is important to note that “materiality” is different for different companies. Information that is not material to the Company may be material to another company. You should note that the Company’s Code of Ethics prohibits you from acquiring financial investments in other companies if your ownership would constitute a conflict of interest.

No disclosing material nonpublic information for the benefit of others

You may not disclose material nonpublic information concerning the Company or any other company to friends, family members or any other person or entity not authorized to receive such information where such person or entity may benefit by trading on the basis of such information. In addition, you may not make recommendations or express opinions on the basis of material nonpublic information as to trading in the securities of companies to which such information relates. You are prohibited from engaging in these actions whether or not you derive any profit or personal benefit from doing so.

Obligation to disclose material nonpublic information to the Company

You may not enter into any transaction, including those discussed in the section entitled “Limited Exceptions”, unless you have disclosed any material nonpublic information that you become aware of in the course of your service with the Company, and that senior management is not aware of, to the Compliance Officer. If you are a member of senior management, the information must be disclosed to the Chief Executive Officer, and if you are the Chief Executive Officer or a director, you must disclose the information to the board of directors, before any transaction is permissible.

Responding to outside inquiries for information

In the event you receive an inquiry from someone outside of the Company, such as a stock analyst, for information, you should refer the inquiry to the Company’s Chief Financial Officer. The Company is required under Regulation FD (Fair Disclosure) of the U.S. federal securities laws to avoid the selective disclosure of material nonpublic information. In general, the regulation provides that when a public company discloses material nonpublic information, it must provide broad, non-exclusionary access to the information. Violations of this regulation can subject the company to SEC enforcement actions, which may result in injunctions and severe monetary penalties. The Company has established procedures for releasing material information in a manner that is designed to achieve broad public dissemination of the information immediately upon its release in compliance with applicable law.

TRADING BLACKOUT PERIODS

To limit the likelihood of trading at times when there is a significant risk of insider trading exposure, the Company has instituted quarterly trading blackout periods and may institute special trading blackout periods from time to time. In addition, to comply with applicable legal requirements, the Company may also institute blackout periods that prevent directors and officers from trading in Company securities at a time when employees are prevented from trading Company securities in the Company’s 401(k) plan.

It is important to note that whether or not you are subject to blackout periods, you remain subject to the prohibitions on trading on the basis of material nonpublic information and any other applicable restrictions in this Policy.

Quarterly blackout periods

Except as discussed in the section entitled “Limited Exceptions”, directors, executive officers and all employees and agents identified by the Company must refrain from conducting transactions involving the Company’s securities during quarterly blackout periods.

Quarterly blackout periods begin on the first trading day following each fiscal quarter and end at the start of the second full trading day following the date of public disclosure of the financial results for that fiscal quarter. This period is a particularly sensitive time for transactions involving the Company’s securities from the perspective of compliance with applicable securities laws due to the fact that, during this period, individuals may often possess or have access to material nonpublic information relevant to the expected financial results for the quarter.

Individuals subject to quarterly blackout periods are listed on Schedule I. From time to time, the Company may identify other persons who should be subject to quarterly blackout periods, and the Compliance Officer may update and revise Schedule I as appropriate.

Special blackout periods

From time to time, the Company may also prohibit directors, officers, employees and agents from engaging in transactions involving the Company’s securities when, in the judgment of the Compliance Officer, a trading blackout is warranted. The Company will generally impose special blackout periods when there are material developments known to the Company that have not yet been disclosed to the public. For example, the Company may impose a special blackout period in anticipation of announcing interim earnings guidance or a significant transaction or business development. However, special blackout periods may be declared for any reason.

The Company will notify those persons subject to a special blackout period. Each person who has been so identified and notified by the Company may not engage in any transaction involving the Company’s securities until instructed otherwise by the Compliance Officer, and should not disclose to others the fact of such suspension of trading.

Regulation BTR blackouts

Directors and executive officers may also be subject to trading blackouts pursuant to Regulation Blackout Trading Restriction, or Regulation BTR, under U.S. federal securities laws. In general, Regulation BTR prohibits any director or executive officer from engaging in certain transactions involving Company securities during periods when 401(k) plan participants are prevented from purchasing, selling or otherwise acquiring or transferring an interest in certain securities held in individual account plans. Any profits realized from a transaction that violates Regulation BTR are recoverable by the Company, regardless of the intentions of the director or officer effecting the transaction. In addition, individuals who engage in such transactions are subject to sanction by the SEC as well as potential criminal liability. The Company has provided, or will provide, separate memoranda and other appropriate materials to its directors and executive officers regarding compliance with Regulation BTR.

The Company will notify directors and officers if they are subject to a blackout trading restriction under Regulation BTR. Failure to comply with an applicable trading blackout in accordance with Regulation BTR is a violation of law and this Policy.

No “safe harbors”

There are no unconditional “safe harbors” for trades made at particular times, and all persons subject to this Policy should exercise good judgment at all times. Even when a quarterly blackout period is not in effect, you may be prohibited from engaging in transactions involving the Company’s securities because you possess material nonpublic information, are subject to a special blackout period or are otherwise restricted under this Policy.

PRE-CLEARANCE OF TRADES

Except as discussed in the section entitled “Limited Exceptions”, directors and executive officers should refrain from engaging in any transaction involving the Company’s securities without first obtaining pre‑clearance of the transaction from the Compliance Officer. In addition, the Company has determined that certain other employees and agents of the Company that may have regular or special access to material nonpublic information should refrain from engaging in any transaction involving the Company’s securities without first obtaining pre‑clearance of the transaction from the Compliance Officer. The Compliance Officer may not engage in a transaction involving the Company’s securities unless the Chief Financial Officer has pre‑cleared the transaction. Individuals subject to pre‑clearance requirements are listed on Schedule II. From time to time, the Company may identify other persons who should be subject to the pre‑clearance requirements set forth above, and the Compliance Officer may update and revise Schedule II as appropriate.

These pre-clearance procedures are intended to decrease insider trading risks associated with transactions by individuals with regular or special access to material nonpublic information. In addition, requiring pre‑clearance of transactions by directors and officers facilitates compliance with Rule 144 resale restrictions under the Securities Act, the liability and reporting provisions of Section 16 under the Exchange Act and Regulation BTR. Pre-clearance of a trade, however, is not a defense to a claim of insider trading and does not excuse you from otherwise complying with insider trading laws or this Policy.

The Compliance Officer is under no obligation to approve a transaction submitted for pre‑clearance, and may determine not to permit the transaction.

ADDITIONAL RESTRICTIONS AND GUIDANCE

This section addresses certain types of transactions that may expose you and the Company to significant risks. You should understand that, even though a transaction may not be expressly prohibited by this section, you are responsible for ensuring that the transaction otherwise complies with other provisions in this Policy that may apply to the transaction, such as the general prohibition against insider trading as well as pre-clearance procedures and blackout periods, to the extent applicable.

Short sales

Short sales (i.e., the sale of a security that must be borrowed to make delivery) and “selling short against the box” (i.e., a sale with a delayed delivery) with respect to Company securities are prohibited under this Policy. Short sales may signal to the market possible bad news about the Company or a general lack of confidence in the Company’s prospects, and an expectation that the value of the Company’s securities will decline. In addition, short sales are effectively a bet against the Company’s success and may reduce the seller’s incentive to improve the Company’s performance. Short sales may also create a suspicion that the seller is engaged in insider trading.

Derivative securities and hedging transactions

You are prohibited from engaging in transactions in publicly-traded options, such as puts and calls, and other derivative securities with respect to the Company’s securities. This prohibition extends to any hedging or similar transaction designed to decrease the risks associated with holding Company securities. Stock options, stock appreciation rights and other securities issued pursuant to Company benefit plans or other compensatory arrangements with the Company are not subject to this prohibition.

Even if you are not prohibited from engaging in derivatives transactions, you should exercise caution when doing so. Transactions in derivative securities may reflect a short‑term and speculative interest in the Company’s securities and may create the appearance of impropriety, even where a transaction does not involve trading on inside information. Trading in derivatives may also focus attention on short‑term performance at the expense of the Company’s long‑term objectives. In addition, the application of securities laws to derivatives transactions can be complex, and persons engaging in derivatives transactions run an increased risk of violating securities laws if not careful.

Using Company securities as collateral for loans

As a general matter, you may not pledge Company securities as collateral for loans. If you default on the loan, the lender may sell the pledged securities as collateral in a foreclosure sale. The sale, even though not initiated at your request, is still considered a sale for your benefit and, if made at a time when you are aware of material nonpublic information or otherwise are not permitted to trade in Company securities, may result in inadvertent insider trading violations, Section 16 and Reg. BTR violations (for officers and directors), violations of this Policy and unfavorable publicity for you and the Company. For these same reasons, even if you are not prohibited from pledging Company securities as collateral for loans, you should exercise caution when doing so. Notwithstanding the above, pledging of Company securities may be permitted in certain circumstances subject to obtaining preclearance from the Compliance Officer.

Holding Company securities in margin accounts

If you are required to comply with Section 16 of the Securities Exchange Act or the blackout periods or pre-clearance requirements under this Policy (i.e., if you are listed on Schedule I, II or III), you may not hold Company securities in margin accounts. Under typical margin arrangements, if you fail to meet a margin call, the broker may be entitled to sell securities held in the margin account without your consent. The sale, even though not initiated at your request, is still considered a sale for your benefit and, if made at a time when you are aware of material nonpublic information or are otherwise not permitted to trade, may result in inadvertent insider trading violations, Section 16 and Reg. BTR violations (for officers and directors), violations of this Policy and unfavorable publicity for you and the Company. For these same reasons, even if you are not prohibited from holding Company securities in margin accounts, you should exercise caution when doing so.

Placing open orders with brokers

Except in accordance with an approved trading plan (as discussed below), you should exercise caution when placing open orders, such as limit orders or stop orders, with brokers, particularly where the order is likely to remain outstanding for an extended period of time. Open orders may result in the execution of a trade at a time when you are aware of material nonpublic information or otherwise are not permitted to trade in Company securities, which may result in inadvertent insider trading violations, Section 16 and Reg. BTR violations (for officers and directors), violations of this Policy and unfavorable publicity for you and the Company. If you are subject to blackout periods or pre-clearance requirements, you should so inform any broker with whom you place any open order at the time it is placed.

LIMITED EXCEPTIONS

The following are certain limited exceptions to the restrictions imposed by the Company under this Policy. Please be aware that even if a transaction is subject to an exception to this Policy, you will need to separately assess whether the transaction complies with applicable law. For example, even if a transaction is indicated as exempt from this Policy, you may need to comply with the “short-swing” trading restrictions under Section 16 of the Exchange Act, to the extent applicable. You are responsible for complying with applicable law at all times.

Transactions pursuant to a trading plan that complies with SEC rules

The SEC has enacted rules that provide an affirmative defense against alleged violations of U.S. federal insider trading laws for transactions pursuant to trading plans that meet certain requirements. In general, these rules, as set forth in Rule 10b5‑1 under the Securities Exchange Act, provide for an affirmative defense if you enter into a contract, provide instructions or adopt a written plan for trading securities when you are not aware of material nonpublic information. The contract, instructions or plan must (i) specify the amount, price and date of the transaction, (ii) specify an objective method for determining the amount, price and date of the transaction and/or (iii) place any subsequent discretion for determining the amount, price and date of the transaction in another person who is not, at the time of the transaction, aware of material nonpublic information.

Transactions made pursuant to a written trading plan that (i) complies with the affirmative defense set forth in Rule 10b5‑1 and (ii) is approved by the Compliance Officer, are not subject to the restrictions in this Policy against trades made while aware of material nonpublic information or to the pre‑clearance procedures or blackout periods established under this Policy. In approving a trading plan, the Compliance Officer may, in furtherance of the objectives expressed in this Policy, impose criteria in addition to those set forth in Rule 10b5‑1. You should therefore confer with the Compliance Officer prior to entering into any trading plan.

The SEC rules regarding trading plans are complex and must be complied with completely to be effective. The description provided above is only a summary, and the Company strongly advises that you consult with your legal advisor if you intend to adopt a trading plan. While trading plans are subject to review and approval by the Company, the individual adopting the trading plan is ultimately responsible for compliance with Rule 10b5‑1 and ensuring that the trading plan complies with this Policy.

Trading plans must be filed with the Compliance Officer and must be accompanied with an executed certificate stating that the trading plan complies with Rule 10b5‑1 and any other criteria established by the Company. The Company may publicly disclose information regarding trading plans that you may enter.

Receipt and vesting of stock options, restricted stock and stock appreciation rights

The trading restrictions under this Policy do not apply to the acceptance or purchase of stock options, restricted stock or stock appreciation rights issued or offered by the Company. The trading restrictions under this Policy also do not apply to the vesting, cancellation or forfeiture of stock options, restricted stock or stock appreciation rights in accordance with applicable plans and agreements.

Exercise of stock options for cash

The trading restrictions under this Policy do not apply to the exercise of stock options for cash under the Company’s stock option plans. Likewise, the trading restrictions under this Policy do not apply to the exercise of stock options in a stock‑for‑stock exercise with the Company or an election to have the Company withhold securities to cover tax obligations in connection with an option exercise. However, the trading restrictions under this Policy do apply to (i) the sale of any securities issued upon the exercise of a stock option, (ii) a cashless exercise of a stock option through a broker, since this involves selling a portion of the underlying shares to cover the costs of exercise, and (iii) any other market sale for the purpose of generating the cash needed to pay the exercise price of an option.

Certain 401(k) plan transactions

The trading restrictions in this Policy do not apply to purchases of Company stock in the 401(k) plan resulting from periodic contributions to the plan based on your payroll contribution election. The trading restrictions do apply, however, to elections you make under the 401(k) plan to (i) increase or decrease the percentage of your contributions that will be allocated to a Company stock fund, (ii) move balances into or out of a Company stock fund, (iii) borrow money against your 401(k) plan account if the loan will result in liquidation of some or all of your Company stock fund balance, and (iv) pre‑pay a plan loan if the pre‑payment will result in the allocation of loan proceeds to a Company stock fund.

Stock splits, stock dividends and similar transactions

The trading restrictions under this Policy do not apply to a change in the number of securities held as a result of a stock split or stock dividend applying equally to all securities of a class, or similar transactions.

Inheritance

The trading restrictions under this Policy do not apply to transfers of the Company’s securities by will or the laws of descent and distribution.

Change in form of ownership

Transactions that involve merely a change in the form in which you own securities are permissible. For example, you may transfer shares to an inter vivos trust of which you are the sole beneficiary during your lifetime.

Other exceptions

Any other exception from this Policy must be approved by the Compliance Officer, in consultation with the Board of Directors or an independent committee of the Board of Directors.

COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT

Obligations under Section 16

Section 16 of the Securities Exchange Act of 1934, and the related rules and regulations, set forth (i) reporting obligations, (ii) limitations on “short‑swing” transactions and (iii) limitations on short sales and other transactions applicable to directors, officers, large shareholders and certain other persons. The Company has provided, or will provide, memoranda and other materials addressing these matters.

The Company has determined that those persons listed on Schedule III are required to comply with Section 16 of the Securities Exchange Act of 1934, and the related rules and regulations, because of their positions with the Company. The Compliance Officer may amend Schedule III from time to time as appropriate to reflect the election of new officers or directors, any change in the responsibilities of officers or other employees and any promotions, demotions, resignations or departures.

Schedule III is not necessarily an exhaustive list of persons subject to Section 16 requirements at any given time. Even if you are not listed on Schedule III, you may be subject to Section 16 reporting obligations because of your shareholdings, for example.

Notification requirements to facilitate Section 16 reporting

To facilitate timely reporting of transactions pursuant to Section 16 requirements, each person subject to Section 16 reporting requirements must provide, or must ensure that his or her broker provides, the Company with detailed information (e.g., trade date, number of shares, exact price, etc.) regarding his or her transactions involving the Company’s securities, including gifts, transfers, pledges and transactions pursuant to a trading plan, both prior to (to confirm compliance with pre-clearance procedures, if applicable) and promptly following execution.

Personal responsibility

The obligation to file Section 16 reports, and to otherwise comply with Section 16, is personal. The Company is not responsible for the failure to comply with Section 16 requirements.

ADDITIONAL INFORMATION

Delivery of Policy

This Policy will be delivered to all directors, officers, employees and agents of the Company when they commence service with the Company. In addition, this Policy (or a summary of this Policy) will be circulated periodically. Each director, officer, employee and agent of the Company is required to acknowledge that he or she understands, and agrees to comply with, this Policy.

Amendments

We are committed to continuously reviewing and updating our policies and procedures. The Company therefore reserves the right to amend, alter or terminate this Policy at any time and for any reason, subject to applicable law. A current copy of the Company’s policies regarding insider trading may be obtained by contacting the Compliance Officer.

* * *

Nothing in this Insider Trading Policy creates or implies an employment contract or term of employment. Employment at the Company is employment at-will. Employment at-will may be terminated with or without cause and with or without notice at any time by the employee or the Company. Nothing in this Insider Trading Policy shall limit the right to terminate employment at-will. No employee of the Company has any authority to enter into any agreement for employment for a specified period of time or to make any agreement or representation contrary to the Company’s policy of employment at-will. Only the Chief Executive Officer of the Company has the authority to make any such agreement, which must be in writing.

The policies in this Insider Trading Policy do not constitute a complete list of Company policies or a complete list of the types of conduct that can result in discipline, up to and including discharge.

SCHEDULE I

INDIVIDUALS SUBJECT TO

QUARTERLY BLACKOUT PERIODS

All directors, officers, employees, consultants, contractors and other agents of Loop Industries, Inc. are subject to quarterly blackout restrictions.

SCHEDULE II

INDIVIDUALS SUBJECT TO

PRE‑CLEARANCE REQUIREMENTS

1.	DIRECTORS

2.	OFFICERS (including officers who are also directors)

3.	OTHERS

	All persons in the Legal department
	All persons in the Finance and Accounting departments
	All directors, officers, employees, consultants, contractors and other agents of Loop Industries, Inc. are subject to preclearance requirements

SCHEDULE III

INDIVIDUALS SUBJECT TO

SECTION 16 REPORTING AND LIABILITY PROVISIONS

1.	DIRECTORS

2.	OFFICERS (including officers who are also directors)

3.	OTHERS

LOOP INDUSTRIES, INC.

INSIDER TRADING POLICY — PRE‑CLEARANCE CHECKLIST

	Person proposing to trade:
	Proposed trade:
	Manner of trade:
	Proposed trade date:

☐	No blackout period. The proposed trade will not be made during a quarterly or special blackout period.

☐	No pension fund blackout under Reg. BTR.* There is no pension fund blackout period in effect.

☐	No prohibition under Insider Trading Policy. The person confirmed that the proposed transaction is not prohibited under the Insider Trading Policy.

☐	Section 16 compliance.* The person confirmed that the proposed trade will not give rise to any potential liability under Section 16 as a result of matched past (or intended future) transactions.

☐	Form 4 filing.* A Form 4 has been or will be completed and will be timely filed with the SEC, if applicable.

☐	Rule 144 compliance.

	☐	The “current public information” requirement has been met (i.e., all 10‑Ks, 10‑Qs and other relevant reports during the last 12 months have been filed);

	☐	The shares that the person proposes to trade are not restricted or, if restricted, the applicable holding period has been met;

	☐	Volume limitations (greater of 1% of outstanding securities of the same class or the average weekly trading volume during the last four weeks) are not exceeded, and the person is not part of an aggregated group;

	☐	The manner of sale requirements will be met (a “broker’s transaction” or directly with a market maker); and

	☐	A Form 144 has been completed and will be timely filed with the SEC and the relevant national securities exchange.

☐

Rule 10b‑5 concerns. The person has been reminded that trading is prohibited when in possession of any material nonpublic information regarding the Company that has not been adequately disclosed to the public. The individual has discussed with the Compliance Officer any information known to the individual or that the individual believes may be material.

* Applies if the individual is a director or an officer subject to Section 16 of the Securities Exchange Act of 1934.


	(Signature of Compliance Officer)

	(Print name of Compliance Officer)

I am not aware of material nonpublic information regarding the Company. I am not trading on the basis of any material nonpublic information. The transaction is in accordance with the Insider Trading Policy and applicable law. I intend to comply with any applicable reporting and disclosure requirements on a timely basis.


	(Signature of person proposing to trade)

M E M O R A N D U M

To:	All directors, officers, employees, consultants, contractors and other agents of Loop Industries, Inc.

From:	Loop Industries, Inc.

Date:	[DATE]

Re:	Insider Trading Policy

Attached is a copy of our policy with respect to transactions involving company securities by our directors, officers, employees and agents (including consultants and contractors). As described in the policy, violations of insider trading laws can result in significant civil and criminal liability. Accordingly, please carefully review the materials provided.

After reading the policy, please sign the receipt and acknowledgement at the bottom of this memorandum and return it to the Chief Financial Officer.

If you have any questions about the policy or insider trading laws generally or about any transaction involving the securities of the company, please call the Chief Financial Officer at (450) 951-8555, ext. 223.

Attachment(s)

Receipt and Acknowledgement

	·	I have received and read the Insider Trading Policy.

	·	I have received satisfactory answers to any questions that I had regarding the Insider Trading Policy and insider trading in general.

	·	I understand and agree to comply with the Insider Trading Policy.

	·	I understand that my failure to comply in all respects with the Insider Trading Policy is a basis for termination for cause of my employment or other service relationship with the company as well as any other appropriate discipline.

	·	I understand and agree that the company may give stop transfer and other instructions to the company’s transfer agent with respect to transactions that the company considers to be in contravention of the Insider Trading Policy.


Signature		Date


Print Name

[Form of special blackout notification]

[INSERT COMPANY LETTERHEAD]

[insert date]

CONFIDENTIAL COMMUNICATION

Loop Industries, Inc.

480 Fernand Poitras Street

Terrebonne, QC J6Y 1Y4

Canada

Dear [insert name]:

Loop Industries, Inc. (the “Company”) has imposed a special blackout period in accordance with the terms of the Company’s Insider Trading Policy (the “Policy”). Pursuant to the Policy, and subject to the exceptions stated in the Policy, you may not engage in any transaction involving the securities of the Company until you receive official notice that the special blackout period is no longer in effect.

You may not disclose to others the fact that a special blackout period has been imposed. In addition, you should take care to handle any confidential information in your possession in accordance with the Company’s policies.

If you have any questions at all, please contact me at [*].

Sincerely,

Chief Financial Officer

EX-23.1 8 loop_ex231.htm CONSENT loop_ex231.htm

EXHIBIT 23.1

Consent of Independent Registered Public Accounting Firm

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No 333-281224, No 333-281883 and No 333-234133) and on Form S-8 (No 333-225943, No 333-232600 and No 333-220323) of Loop Industries, Inc. of our report dated May 29, 2025 relating to the consolidated financial statements, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

Montréal, Canada

May 29, 2025

EX-31.1 9 loop_ex311.htm CERTIFICATION loop_EX311.htm

EXHIBIT 31.1

SECTION 302 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Daniel Solomita, certify that:

1.	I have reviewed this annual report on Form 10-K of Loop Industries, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 29, 2025		/s/ Daniel Solomita
		Daniel Solomita
		President and Chief Executive Officer (principal executive officer)

EX-31.2 10 loop_ex312.htm CERTIFICATION loop_EX312.htm

EXHIBIT 31.2

SECTION 302 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Nicolas Lafond, certify that:

1.	I have reviewed this annual report on Form 10-K of Loop Industries, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 29, 2025

/s/ Nicolas Lafond

Nicolas Lafond

Interim Chief Financial Officer (principal financial officer and principal accounting officer)

EX-32.1 11 loop_ex321.htm CERTIFICATION loop_EX321.htm

EXHIBIT 32.1

SECTION 906 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

In connection with the accompanying Annual Report on Form 10-K of Loop Industries, Inc. for the year ended February 28, 2025, the undersigned, Daniel Solomita, President and Chief Executive Officer of Loop Industries, Inc., does hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

	(1)	such Annual Report on Form 10-K for the year ended February 28, 2025, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

	(2)	the information contained in such Annual Report on Form 10-K for the year ended February 28, 2025, fairly presents, in all material respects, the financial condition and results of operations of Loop Industries, Inc.

Date: May 29, 2025		/s/ Daniel Solomita
		Daniel Solomita
		President and Chief Executive Officer (principal executive officer)

EX-32.2 12 loop_ex322.htm CERTIFICATION loop_EX322.htm

EXHIBIT 32.2

SECTION 906 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

In connection with the accompanying Annual Report on Form 10-K of Loop Industries, Inc. for the year ended February 28, 2025, the undersigned, Nicolas Lafond, Interim Chief Financial Officer of Loop Industries, Inc., does hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

	(1)	such Annual Report on Form 10-K for the year ended February 28, 2025, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

	(2)	the information contained in such Annual Report on Form 10-K for the year ended February 28, 2025, fairly presents, in all material respects, the financial condition and results of operations of Loop Industries, Inc.

Date: May 29, 2025		/s/ Nicolas Lafond
		Nicolas Lafond
		Interim Chief Financial Officer (principal financial officer and principal accounting officer)