Loop Industries sells first license, reports Q3 fiscal 2025 results

Loop Industries Inc., a Montreal-based company seeking to accelerate a circular plastics economy by manufacturing 100 percent-recycled polyethylene terephthalate (PET) plastic and textile-to-textile (T2T) polyester fiber, has reported its consolidated financial results for the third quarter of its 2025 fiscal year that ends Feb. 28 and provided an update on business developments.

For the three months ended Nov. 30, 2024, Loop reports revenue from contracts with customers of $52,000 compared with $26,000 in the same period of its 2024 fiscal year. The revenues resulted from the delivery of initial volumes to customers of Loop PET resin produced using monomers manufactured at its Terrebonne, Quebec, facility.

Its total expenses were nearly $12 million for the quarter, for a net loss of $11.9 million. That compares with expenses of nearly $4.3 million in the third quarter of its 2024 fiscal year and a net loss of $4.2 million.

Loop’s total reported assets as of the end of the quarter totaled $4.7 million, while its total liabilities were $11.6 million.

Reed Societe General Group transactions

Loop says it closed its financing and technology licensing transactions Dec. 23, 2024, with Reed Societe Generale Group, a European investment firm majority-owned by Societe Generale, for total cash proceeds of $20.8 million (20 million euros). These transactions mark a pivotal step in Loop's commercialization strategy, enabling the deployment of the company’s patented recycling technology across Europe and supporting capital investment in cost-effective manufacturing regions, including its joint venture in India with strategic partner Ester Industries Ltd. Proceeds from the financing and licensing deal will be used to fund the Indian project and Loop's operational cash flow needs, according to the company.

As part of the financing transaction, Loop issued 1,044,430 shares of Series B Convertible Preferred Stock to Reed Circular Economy, an affiliate of Reed Societe General Group, at $10 per share, generating total proceeds of approximately $10.4 million (10 million euros). The Series B Shares bear a 13 percent payment-in-kind dividend and are convertible to Loop common stock at $4.75 per share or redeemable in cash.

Loop sold its first license to deploy its proprietary depolymerization technology in a single Infinite Loop manufacturing facility in Europe for an upfront payment of $10.4 million (10 million euros). The technology license includes two additional payments based on milestones. Loop says it also expects to generate engineering fees for the provision of engineering packages and support services for all Infinite Loop manufacturing facilities and future facilities under this partnership will require the purchase of additional technology licenses from Loop.

The technology license will be used by a European partnership owned 90 percent by Reed Circular Economy and 10 percent by Loop, which is being formed to develop Infinite Loop manufacturing facilities in Europe. Loop reports that it retains the right to increase its equity stake in the European manufacturing facility, as well as potential future facilities, to a maximum of 50 percent for each facility.

The company says the license sale underscores the commercial readiness of Loop's technology, validated by four years of successful operations at its Terrebonne facility, which supplies bottle-grade PET resin for consumer packaging and T2T polyester fiber to advance circular fashion for apparel brands. Loop says it will expand the reach of technology by partnering with well-financed, reliable customers through technology licenses and engineering services, allowing Loop to address global demand in regions where it does not plan to build facilities.

"The successful completion of our transaction with Reed Societe Generale Group marks a significant step towards our strategic goals,” Daniel Solomita, founder and CEO of Loop, says. “This includes investing in low-cost manufacturing locations like India and licensing our technology to companies seeking solutions to the plastic waste crisis in higher-cost regions such as Europe. We are eager to collaborate closely with Reed Societe Generale Group to deliver our first European project.”

Infinite Loop India update

Loop and its joint venture partner, Ester Industries Ltd., an Indian manufacturer of polyester films and specialty polymers, continue to make progress toward the groundbreaking of the Infinite Loop India manufacturing facility. Following an extensive land study, the Gujarat province was confirmed as the optimal site given its robust infrastructure, proximity to a seaport, renewable energy potential and abundant end-of-life PET and polyester feedstocks, Loop says. The companies are completing due diligence with various parties for the acquisition of land in this region.

Loop and Ester have contracted with Tata Consulting Engineers Ltd., a prominent global engineering firm based in India, to provide engineering services for the construction of the project. Loop has been contracted to provide all the process-related engineering services to support Tata Consulting Engineers. An accounting firm also has been hired to produce the detailed project report and to manage the debt syndication of the project. Groundbreaking is expected in the second quarter of this year, with completion of construction anticipated in late 2026 and commercial operations starting in 2027, Loop says.

The Infinite Loop India project is positioned to fulfill demand by circular fashion brands for T2T polyester, Loop says. The project plans to source waste polyester feedstocks in India to manufacture polyester resin made fully from textile scrap to supply apparel brands. Loop says it also has been developing relationships and expertise within the polyester fiber supply chain to deliver polyester fiber for certain customers rather than polyester resin. The company notes that it has qualified Loop's fiber for brands with large spinning companies in various geographical regions.

The Infinite Loop India facility also will produce bottle grade PET resin using end-of-life PET bottles as feedstock for customers in the beverage and packaging industries.

With the proceeds from the Reed transactions and expected government support, Loop says it is in a position to finance its share of the initial equity capital required to finance the Indian facility. It also is pursuing additional licensing opportunities and other sources of financing as it continues with the development of the India project.

“Our Indian joint venture is progressing as planned,” Solomita says. “We have witnessed strong customer engagement within the circular fashion sector, driven by Loop's unique ability to provide virgin-quality polyester fiber to fashion brands through our innovative textile-to-textile recycling technology. We have further expanded our product offerings to include spun polyester fiber, enabling us to become a Tier 3 supplier and broaden our reach within the fashion industry. To effectively serve our customers, we've established a global network of spinning partners who will collaborate with Loop.”

He adds that Loop's engineering services division has started generating revenue, with the company intending to continue to invest in this team to expand its service offerings to its partners and licensees of its technology.

Partnership with SK Geo Centric

Effective Jan. 14, Loop and SK Geo Centric (SKGC) have agreed to terminate their joint venture agreement executed by the parties April 27, 2023, to construct and operate an Infinite Loop manufacturing facility in Ulsan, South Korea. This decision reflects 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 reorientation within the SK Group, Loop says.

Although SKGC currently intends to maintain its financial investment in Loop and continues to have the right to nominate a director on Loop's board of directors, Jonghyuk Lee resigned from the board Jan. 13 with immediate effect as the result of a change in his role within the restructured SKGC organization.

The termination of the SKGC joint venture led to an increase in the company’s impairment of assets expense of $8.46 million for the quarter, reflecting an impairment charge for machinery and equipment of $8.46 million. Loop says it plans to use the equipment in a future commercial production facility.