LOOP 10-K & 10-Q changes, risk factors and insider trading

Since our inception in 2010, we have incurred net losses. Our net loss for the year ended February 28, 20252026 was $15.1$12.2 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. As of February 28, 2026, management has determined that our existing cash resources, together with amounts available under our undrawn credit facility, will not be sufficient to fund our ongoing operations, obligations and commitments for at least the next twelve months from the issuance date of our audited consolidated financial statements. These conditions raise substantial doubt about our ability to continue as a going concern. 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.

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 begungenerated generating revenue, including a €10.0 million upfront licensing fee under our transactions with Reed and $0.4$0.5 million in engineering services revenue from our India JV in the quarteryear ended February 28, 2025,2026, 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.

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.

Our technology may not be successful in developingachieving widespread commercial products.success at scale.

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 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, withand groundbreakingthere expectedcan inbe theno secondassurance half of calendar 2025 andwhen commercial operations projectedwill to begin in calendar 2027.begin. The total initial funding requirement is estimated at approximately $176$165 to $170 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.

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.

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$2.6 million (CDN $3.5 million) secured credit facility with a Canadian bank, which is secured by the Company’s Terrebonne, Québec propertyproperty. andAs isof subjectFebruary to28, 2026, we have a minimumloan equityfrom covenantInvestissement testedQuebec quarterly.with an outstanding balance of $3.0 million (CDN $4.1 million). These existing and potential obligations, together with any new financings we may pursue, could impact our future liquidity and operational flexibility.

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$175.0 million in any combination of debt securities, common stock, preferred stock, depositary shares, warrants, subscription rights, and units. In addition, on July 3, 2025, we haveentered into an effectiveAt resalethe registrationMarket statementOffering on Form S-3Agreement (Filethe No.“Sales 333-281224Agreement”) with Roth Capital Partners, LLC (“Roth”), declaredpursuant effectiveto bywhich thewe SECmay onoffer Augustand 14,sell 2024,shares coveringof our common stock having an aggregate offering price of up to 7,072,220$15.0 million from time to time through Roth, acting as sales agent or principal, in transactions that may be deemed to be “at-the-market” offerings under Rule 415 promulgated under the Securities Act (the “ATM Equity Offering”. As of February 28, 2026, the Company had sold 510,435 shares of common stock (includingunder upthe toSales 4,714,813Agreement, sharesand as of outstandingMay common26, stock2026, andthe upCompany tohad 2,357,407approximately shares$14.1 issuable upon exercisemillion of warrantscapacity whichremaining have since expired) held by a selling stockholder, which was filed pursuant tounder the InvestorATM RightsEquity Agreement with SKGC entered into in July 2021.Offering.

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-K10K .

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 ishas also been used for research and development activities.

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$10.4 million (€10.0 million) with additional milestone payments to be received by Loop as the project advances. Infinite Loop Europe was formed with the purpose of developing Infinite Loop™ manufacturing facilities in Europe to be owned 10% by Loop and 90% by 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 agreementagreements 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$0.5 million in the quarteryear ended February 28, 2025.2026.

We are also in the process of implementing a modular construction strategy, in order to reduce overall capital expenditures and operating expenses, while improving project timelines and ensuring standardized design and quality, and providing a scalable solution for global expansion. This strategy envisages that we wouldthe manufacture of 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.

Revenues for the three-month period ended February 28, 20252026 increaseddecreased $10,764$10,633 to $10,809$176 as compared to $45$10,809 for the same period in 2024.2025. The revenues for the three-month period ended February 28, 2026 resulted from $176 in engineering fees. The revenues of $10,809 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 expenses for the three-month period ended February 28, 20252026 decreased $1,712$608 to $1,306,$480, as compared to $3,018$1,088 for the same period in 2024.2025. 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$365 decrease in employee compensation expenses.expenses, a $175 decrease in other, mainly legal fees, and an $89 decrease in external engineering.

General and administrative expenses for the three-month period ended February 28, 20252026 decreased $647$188 to $1,574,$1,386, as compared to $2,221$1,574 for the same period in 2024.2025. The decrease was primarily attributable to a decrease of $342$188 in employeeprofessional compensationfees, expensesmainly includinglegal stock-based compensation,fees, a decrease of $173$148 in insurance expenses, andoffset aby decreasean increase of $107$233 in professionalstock-based fees.compensation.

Loss on equity accounted investment increaseddecreased by $687$334 for the three-month period ended February 28, 2025.2026. 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, 2025,2026, during which the India JV incurred preliminary project costs for the planned Infinite Loop™ facility in India, which are mainly engineering fees.

The netNet income for the three-month period ended February 28, 20252026 increaseddecreased $11,973$9,585 to $6,882a loss of $2,703 in the period, as compared to a net lossincome of $5,091$6,882 for the same period in 2024.2025. The increasedecrease was primarily due to the increasedecrease of $10,764$10,633 in revenues, which was partially offset by the decrease of $1,712$608 in research and development expenses, and the decrease of $647$188 in general and administrative expenses,expenses whichand werethe partiallydecrease offsetof by an increase in $687$334 in loss on equity accounted investment and an increase in $511 in interest and other financial expenses.investment.

Revenues for the year ended February 28, 20252026 increaseddecreased $10,736$10,375 to $10,889,$514, as compared to $153$10,889 for the same period in 2024.2025. The revenues for the year ended February 28, 2026 resulted from $506 in engineering fees and $8 from sales of Loop™ PET resin produced using monomers manufactured at the Terrebonne Facility. The revenues of $10,889 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.Facility The revenues of $153 for the year ended February 29, 2024 resulted from sales of Loop™ PET resin..

Research and development expenses for the year ended February 28, 20252026 decreased significantly by $4,515$3,174 to $6,864,$3,472, as compared to $11,379$6,646 for the same period in 20242025 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$1,381 decrease in plantexternal and laboratory operatingengineering 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$1,238 decrease in employee compensation expenses including stock-based compensation,and a $1,078$478 decrease in purchasesother, ofmainly machinerylegal and equipment for the Terrebonne Facility, and a $860 decrease in external engineering expenses.fees.

General and administrative expenses for the year ended February 28, 20252026 decreased $760$2,823 to $9,228,$6,405, as compared to $9,988$9,228 for the same period in 2024.2025. The decrease was primarily attributable to a $809$1,916 decrease in insurancelegal fees, a decrease of $426 in employee compensation expenses, a decrease of $296 in other expenses and a decrease of $401$267 in employeeinsurance compensation expenses, which were partially offset by a $500 increase in professional fees.expenses.

Impairment of equipment expense increaseddecreased by $8,460 for the year ended February 28, 2025,2026. reflecting an impairment loss for equipment of $8,460. ThisThe impairment was duefully torecognized in the terminationyear ofended February 28, 2025 and the agreement with the joint venture agreement between the Company and SKGC underwas whichterminated. theyThere hadare intendedno future plans to construct and operate an Infinite Loop™ manufacturing facility in Ulsan, South Korea. WhileAs thea Companyresult, plansthere is no impairment 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 beingbe recognized in the year endedending February 28, 2025.2026.

The net loss for the year ended February 28, 20252026 decreased $6,030$2,758 to $15,057,$12,299, as compared to $21,087$15,057 for the same period in 2024.2025. The decrease was primarily due to the$8,460 $10,736 increasedecrease in revenues,impairment of equipment, the $4,515$3,174 decrease in research and development expenses, and the $760$2,823 decrease in general and administrative expenses.expenses, Thewhich were offset by a $10,375 decrease in netrevenue loss was partially offsetand by the impairment of equipment of $8,460, an$1,085 increase in $687 in loss on equity accounted investment, and an increase in $659 in interest and other financial expenses.

The Company’s ability to continue as a going concern and execute upon management's plans 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.equity, technology licensing and engineering services arrangements, and/or financing from government incentive programs. 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. While the Company is actively engaged in financing discussions, there is no assurance that the Company will be successful in attracting additional funding on terms acceptable to the Company. Failure to secure additional financing on acceptable 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.

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 financingFinancing facility,Facility, at the end of the 36-month moratorium, capital and interest was repayable in 84 monthly installments. There is no remaining amount available for disbursement under the Financing Facility after the second disbursement.Facility.

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 SecondThird Financing Facility Amendment, total annual principal repayments in monthly installments are of $287 (CDN $414)$275 for the fiscal year ending February 28, 2026 and $495 (CDN $714)$605 for the fiscal year ending February 28, 2027, with the remainder of the principal amount being repayable in 3624 monthly installments. Pursuant to the Third Financing Facility Amendment the interest rate of the Financing Facility was increased from 3.36% to 4.36%.

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$2,566 (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.property. 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, 2025,2026, the $2,424 (CDN $3,500)$2,566 Credit Facility was available and undrawn.

We are subject to various risks and uncertainties in the course of our business. Risk factors relating to us are set forth under “Risk Factors” in our 20252026 Annual Report. No material changes to such risk factors have occurred during the three months ended NovemberMay 30,31, 2025. An additional risk factor is included below in connection with the prior launch of our ATM Equity Offering.2026.

The following information and any forward-looking statements should be read in conjunction with the unaudited financial information and the notes thereto included in this Quarterly Report on Form 10-Q, including those risks identified in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended February 28, 2025,2026, filed with the SEC on May 29,27, 2025, as amended by the Amendment No. 1 on Form 10-K/A filed with the SEC on May 30, 20252026 (the “20252026 Annual Report”).

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

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

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

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

On December 12, 2024, the Company entered into an Amended and Restated Share Purchase Agreement (the “Amended Agreement”) with Reed ManagementSociete SASGenerale (“Reed”),Group, a European investment firm focused on high impact and technology-enabled infrastructure majority-owned by the bank Societe Generale. The Amended Agreement amends the original Share Purchase Agreement dated May 30, 2024 previously reported by the Company in a current report on Form 8-K filed on June 4, 2024. To facilitate the closing of the transactions contemplated by the Amended Agreement and to develop Infinite Loop™ manufacturing facilities in Europe, aInfinite simplifiedLoop joint-stockEurope company has beenwas incorporated under French law (“Infinite Loop Europe”), owned 90% by Reed Circular Economy (“RCE”), an affiliate of Reed and 10% by Loop.law.

We believe the licensing and financing transactions markmarked aan pivotalimportant 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 arehave beingbeen used to fund the India JV project and Loop's operational cash flow needs.

On September 23, 2025, Loop entered into a formal agreement with Reed Circular Economy (“RCE”) to establish the framework for the governance, ownership, and operations of Infinite Loop Europe SAS (“Infinite Loop Europe”),Europe, a European entity formed to pursue the non-exclusive development, financing, construction, ownership, operation, and commercialization of chemical upcycling plants and related products using Loop’s technology within Europe. Under this agreement, RCE and Loop hold equity interests in Infinite Loop Europe on a 90/10 basis. In September 2025, Loop purchased 250 shares of Infinite Loop Europe for €0.25$0.3 ($0.305€0.3) in consideration for its 10% ownership stake. The agreement provides Infinite Loop Europe with priority rights to evaluate European project opportunities, establishes financing arrangements between the shareholders, grants Loop options to participate in up to 50% of project-level equity, and confirms that Loop retains ownership of its intellectual property while granting Infinite Loop Europe limited use rights.

Infinite Loop Europe is managed by a chief executive officer proposed by RCE, with governance provided by a four-member board of directors, of which Loop is entitled to nominate one director and RCE nominates the remaining directors. Certain transactions that could risk the disclosure of Loop’s technology, as well as certain related-party transactions, require unanimous board approval. RCE has provided Infinite Loop Europe with a €10$10.4 million (€10.0 million) shareholder loan to fund the first royalty tranche under the license agreement, which accrues payment-in-kind interest at 11.9% per annum and matures on December 27, 2027.

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

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

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 IndiaI ndia JV. As of NovemberMay 30,31, 2025,2026 Loop and Ester had each made total equity contributions of $2.91$2.9 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.fees and the purchase of land.

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.

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 state of Gujarat, India's synthetic textile capital 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.

On August 13, 2025, the India JV executed an agreement with a group of sellers for the acquisition of approximately 93 acres in Gujarat, India, for total consideration of 9,072,000approximately US $0.1 million (9.1 million Indian rupees (approximately US $103,720) per acre. The sellers are obligated to consolidate the parcels, deliver marketable title with requisite governmental approvals, and construct bituminous access road infrastructure, with completion required within five months of execution, subject to extension at India JV's sole discretion.infrastructure. The purchase price is payable through advance payments secured by equitable mortgages over designated parcels, with remaining consideration due upon title transfer. The agreement incorporates customary representations, warranties, and covenants, together with termination provisions permitting India JV to reject non-compliant parcels or terminate for material breach, including failure to deliver contiguous parcels, with full restitution of payments made.

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

The front-end engineering design for the Infinite Loop™ India facility was completed by Tata Consulting Engineers. SubsequentIn to November 30,December 2025, the India JV awarded the detailed engineering contract for the Infinite Loop™ India facility to Toyo Engineering India Private Limited, covering the full scope of detailed design, procurement engineering, and technical documentation. This represents the final engineering phase prior to construction. The net total investment cost for the facility, including continuous polymerization, financing costs during construction and initial working capital requirements, is budgeted to be $176approximately million.$165 Theto project$170 ismillion, anticipatedincluding forapproximately completion$13 bymillion of a GST tax which will be refunded to the endIndia ofJV calendaras 2027.it generates international sales.

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

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

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 $0.33$0.2 million in the nine-monththree month period ended NovemberMay 30,31, 2025.2026.

We are also in the process of implementing a modular construction strategy, in order to reduce overall capital expenditures and operating expenses, while improving project timelines and ensuring standardized design and quality, and providing a scalable solution for global expansion.quality. This strategy envisagesconsists thatof we wouldthe manufacture of plant modules in a low-cost country towhich can then be transported and assembled on site at global locations,locations. This would provide a more economical scalable approach for global expansion and would potentially provide an additional income stream alongsidefor returnsLoop fromas ownedit facilitiescoordinates andthe royalties.process.

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

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

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

As of NovemberMay 30,31, 2025,2026, we had 4038 employees of which 1617 work in research and development, 1613 in engineering and operations, and 8 in administrative functions.

The following table summarizes our operating results for the three-month periods ended NovemberMay 30,31, 20252026 and 2024,2025, in thousands of U.S. Dollars.

ThirdFirst Quarter Ended NovemberMay 30,31, 20252026

Revenues for the three-monththree month period ended NovemberMay 30,31, 2025,2026, increaseddecreased $34$73 to $86,$179, as compared to $52$252 for the same period in 2024.2025. The revenues of $86$179 for the three-monththree month period ended NovemberMay 30,31, 20252026 resulted from engineering services provided to the India JV. The revenues of $52$8 for the three-monththree month period ended NovemberMay 30,31, 20242025 resulted from engineering services provided to the India JV for $244 and sales of Loop™ PET resin.resin for $8.

Research and development expense for the three-monththree month period ended NovemberMay 30,31, 2025,2026, decreased $410$297 to $967,$962, as compared to $1,377$1,259 for the same period in 2024.2025. The decrease was primarily attributable to a $68 decrease in external engineering expenses for design work for our Infinite Loop™ manufacturing process, and a $117$341 decrease in employee compensation expenses.expenses, a $63 decrease in other, mainly legal fees, a $49 decrease in plant and laboratory expenses, partially offset by a $146 increase in stock compensation.

General and administrative expenses for the three-monththree month period ended NovemberMay 30,31, 2025,2026, decreased $648$75 to $1,500,$1,574, as compared to $2,148$1,649 for the same period in 2024.2025. The decrease was primarily attributable to a $438$298 decrease in insurance expenses, a $181 decrease in employee compensation, a $117 decrease in professional fees, whichpartially wasoffset mainly attributable to legal costs related to our partnerships with Reed Societe Generale Group and Ester incurred in the three-month period ended November 30, 2024, andby a $158$458 decreaseincrease in employee compensation.compensation and $63 increase in other.

The net loss for the three-monththree month period ended NovemberMay 30,31, 2025,2026, decreased $8,968$61 to $2,944,$3,385, as compared to $11,912$3,446 for the same period in 2024.2025. This decrease was primarily due to the decrease of $410$297 in research and development expenses, a decrease of $648$75 in general and administrative expenses, and a decrease of $8,460 in the prior year quarter due to an impairment charge for machinery and equipment.expenses. These decreases were partially offset by the $326decrease of $95 in interest income, increase of $65 in cost of services, $17 increase in interest and other financial expenses.