Loop Industries, Inc. Q3 FY2025 earnings call

• Finalized Reed transaction with Societe Generale: €20 million financing, €10 million convertible preferred security, and sold first license for European manufacturing facility. • India JV moving along: finalizing land acquisition, using polyester textile waste as feedstock, aiming to break ground in 2Q 2025. • Expanded product offering to sell spun fiber to customers. • Canceled joint venture with SK due to high-cost manufacturing strategy. • Write-down of polymerization equipment due to accounting principle.

Research and development costs totaled $1.38 million, a reduction of 25%. G&A expenses were $2.15 million, a reduction of 13%. Cash burn rate for the third quarter was $2.8 million. The financials also reflect the impairment of polymerization equipment mentioned, but the Reed transaction financing will be reflected in future statements. Revenue from engineering services is starting to be recognized, with the India JV contributing to this.

• Reduced full-year expense for 2025 to $10 million. • Q4 run rate expected to be about $900,000 per month. • Fiscal 2025 run rate expected to be between $800,000 and $900,000 per month. • Engineering services revenue expected in next quarter filings.

• Forward-looking statements involve risks and uncertainties as future activities and results may differ from expectations. • Market conditions and changes in strategic partnerships (like with SK) could impact future performance.

Q: On the Reed financing, what are the terms for additional licensing payments and milestones?

A: Milestones related to customer contracts and FID, with two attainable milestone payments likely in end of 2025 and beginning of 2026. Engineering services on Societe Generale project could be ~€10 million over 24 months.

Q: What's the timeline for CapEx deployment, especially in India?

A: Expected to break ground in 2Q 2025. Key milestones include completion of engineering package by Tata and Loop's engineers, KPMG's work on debt syndication and DPR, and finalizing customer contracts.

Q: When will we start seeing engineering revenue?

A: Start seeing engineering revenue in next quarter filings as we're already receiving it now.

Q: Thoughts on additional licensing opportunities outside Europe?

A: There are opportunities for licensing outside Europe, with discussions ongoing with potential partners in higher-cost manufacturing countries in Asia.

Q: Relationship with spinners, tolling agreement?

A: Tolling relationship where Loop sends chip to spinners, who spin into fibers and send to customers. Qualified material with large spinners, and some spinners interested in buying material to sell to other customers.