Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Nov. 30, 2019 | Jan. 08, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | Loop Industries, Inc. | |
Entity Central Index Key | 0001504678 | |
Document Type | 10-Q | |
Document Period End Date | Nov. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --02-29 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 39,232,528 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Nov. 30, 2019 | Feb. 28, 2019 |
Current assets | ||
Cash and cash equivalents | $ 35,491,491 | $ 5,833,390 |
Sales tax, tax credits and other receivables (Note 3) | 631,436 | 599,000 |
Prepaid expenses | 173,153 | 226,521 |
Total current assets | 36,296,080 | 6,658,911 |
Investment in joint venture (Note 8) | 850,000 | 0 |
Property, plant and equipment, net (Note 4) | 6,495,389 | 5,371,263 |
Intangible assets, net (Note 5) | 206,831 | 127,672 |
Total assets | 43,848,300 | 12,157,846 |
Current liabilities | ||
Accounts payable and accrued liabilities (Note 7) | 1,648,165 | 2,670,233 |
Convertible notes (Notes 6 and 10) | 4,926,734 | 5,636,172 |
Warrants (Note 10) | 0 | 219,531 |
Current portion of long-term debt (Notes 6 and 9) | 52,675 | 53,155 |
Total current liabilities | 6,627,574 | 8,579,091 |
Long-term debt (Notes 6 and 9) | 904,257 | 952,363 |
Total liabilities | 7,531,831 | 9,531,454 |
Stockholders' Equity | ||
Series A Preferred stock, par value $0.0001; 25,000,000 shares authorized; one share issued and outstanding (Note 11) | 0 | 0 |
Common stock, par value $0.0001: 250,000,000 shares authorized; 39,232,528 shares issued and outstanding (February 28, 2019 - 33, 805,706) (Note 11) | 3,923 | 3,381 |
Additional paid-in capital | 75,290,970 | 38,966,208 |
Additional paid-in capital - Warrants (Notes 10 and 11) | 9,700,102 | 757,704 |
Additional paid-in capital - Beneficial conversion feature (Note 10) | 1,200,915 | 1,200,915 |
Common stock issuable, 1,000,000 shares (Note 11) | 0 | 800,000 |
Accumulated deficit | (49,559,084) | (38,811,592) |
Accumulated other comprehensive loss | (320,357) | (290,224) |
Total stockholders' equity | 36,316,469 | 2,626,392 |
Total liabilities and stockholders' equity | $ 43,848,300 | $ 12,157,846 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Nov. 30, 2019 | Feb. 28, 2019 |
Stockholders' Equity | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 39,232,528 | 33,805,706 |
Common stock, shares outstanding | 39,232,528 | 33,805,706 |
Common stock issuable | 1,000,000 | 1,000,000 |
Series A Preferred Stock | ||
Stockholders' Equity | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, share authorized | 25,000,000 | 25,000,000 |
Preferred stock, share issued | 1 | 1 |
Preferred stock, share outstanding | 1 | 1 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2019 | Nov. 30, 2018 | Nov. 30, 2019 | Nov. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenue | $ 0 | $ 0 | $ 0 | $ 0 |
Operating Expenses | ||||
Research and development, net (Note 12) | 1,278,172 | 792,111 | 3,246,246 | 2,924,483 |
General and administrative (Note 12) | 1,825,813 | 1,971,847 | 5,447,056 | 6,721,796 |
Depreciation and amortization (Notes 4 and 5) | 219,628 | 155,053 | 585,367 | 366,710 |
Interest and other finance costs (Note 15) | 693,027 | 14,883 | 1,817,091 | 41,117 |
Interest income | (171,274) | 0 | (363,565) | 0 |
Foreign exchange loss (gain) | 5,533 | (20,132) | 15,297 | (72,404) |
Total expenses | 3,850,899 | 2,913,762 | 10,747,492 | 9,981,702 |
Net loss | (3,850,899) | (2,913,762) | (10,747,492) | (9,981,702) |
Other comprehensive loss | ||||
Foreign currency translation adjustment | 7,552 | (91,249) | (30,133) | (202,838) |
Comprehensive loss | $ (3,843,347) | $ (3,005,011) | $ (10,777,625) | $ (10,184,540) |
Loss per share | ||||
Basic and diluted | $ (.10) | $ (0.09) | $ (0.29) | $ (.30) |
Weighted average common shares outstanding | ||||
Basic and diluted | 39,133,627 | 33,805,706 | 37,404,165 | 33,792,293 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Changes in Stockholders Equity (Unaudited) - USD ($) | Common Stock | Preferred Stock | Additional Paid-In Capital | Additional Paid-In Capital - Warrants | Additional Paid-In Capital - Benificial Conversion Feature | Common Stock Issuable | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total |
Beginning balance, shares at Feb. 28, 2018 | 33,751,088 | 1 | |||||||
Beginning balance, amount at Feb. 28, 2018 | $ 3,376 | $ 0 | $ 30,964,970 | $ 0 | $ 0 | $ 800,000 | $ (21,275,181) | $ (169,100) | $ 10,324,065 |
Issuance of shares upon vesting of restricted stock units, shares | 35,797 | ||||||||
Issuance of shares upon vesting of restricted stock units, amount | $ 3 | (3) | 0 | ||||||
Issuance of shares upon exercise of warrants, shares | 18,821 | ||||||||
Issuance of shares upon exercise of warrants, amount | $ 2 | (2) | 0 | ||||||
Stock options issued | 2,591,263 | 2,591,263 | |||||||
Restricted stock units issued | 570,782 | 570,782 | |||||||
Foreign currency translation | (202,838) | (202,838) | |||||||
Net loss | (9,981,702) | (9,981,702) | |||||||
Ending balance, shares at Nov. 30, 2018 | 33,805,706 | 1 | |||||||
Ending balance, amount at Nov. 30, 2018 | $ 3,381 | $ 0 | 34,127,010 | 0 | 0 | 800,000 | (31,256,883) | (371,938) | 3,301,570 |
Beginning balance, shares at Aug. 31, 2018 | 33,805,706 | 1 | |||||||
Beginning balance, amount at Aug. 31, 2018 | $ 3,381 | $ 0 | 33,156,104 | 0 | 0 | 800,000 | (28,343,121) | (280,689) | 5,335,675 |
Stock options issued | 789,260 | 789,260 | |||||||
Restricted stock units issued | 181,646 | 181,646 | |||||||
Foreign currency translation | (91,249) | (91,249) | |||||||
Net loss | (2,913,762) | (2,913,762) | |||||||
Ending balance, shares at Nov. 30, 2018 | 33,805,706 | 1 | |||||||
Ending balance, amount at Nov. 30, 2018 | $ 3,381 | $ 0 | 34,127,010 | 0 | 0 | 800,000 | (31,256,883) | (371,938) | 3,301,570 |
Beginning balance, shares at Feb. 28, 2019 | 33,805,706 | 1 | |||||||
Beginning balance, amount at Feb. 28, 2019 | $ 3,381 | $ 0 | 38,966,208 | 757,704 | 1,200,915 | 800,000 | (38,811,592) | (290,224) | 2,626,392 |
Issuance of common shares for cash, net of share issuance costs, shares | 4,693,567 | ||||||||
Issuance of common shares for cash, net of share issuance costs, amount | $ 469 | 30,359,394 | 8,663,769 | 39,023,632 | |||||
Issuance of shares for legal settlement, shares | 150,000 | ||||||||
Issuance of shares for legal settlement, amount | $ 15 | (15) | 0 | ||||||
Issuance of shares upon conversion of convertible notes, shares | 319,326 | ||||||||
Issuance of shares upon conversion of convertible notes, amount | $ 32 | 2,372,549 | 316,929 | 2,689,510 | |||||
Issuance of shares upon vesting of restricted stock units, shares | 243,932 | ||||||||
Issuance of shares upon vesting of restricted stock units, amount | $ 24 | 799,976 | (800,000) | 0 | |||||
Issuance of shares upon the cashless exercise of stock options, shares | 4,565 | ||||||||
Issuance of shares upon the cashless exercise of stock options, amount | $ 1 | (1) | 0 | ||||||
Issuance of shares upon exercise of warrants, shares | 15,432 | ||||||||
Issuance of shares upon exercise of warrants, amount | $ 1 | 182,048 | (38,300) | 143,749 | |||||
Stock options issued | 1,628,897 | 1,628,897 | |||||||
Restricted stock units issued | 981,914 | 981,914 | |||||||
Foreign currency translation | (30,133) | (30,133) | |||||||
Net loss | (10,747,492) | (10,747,492) | |||||||
Ending balance, shares at Nov. 30, 2019 | 39,232,528 | 1 | |||||||
Ending balance, amount at Nov. 30, 2019 | $ 3,923 | $ 0 | 75,290,970 | 9,700,102 | 1,200,915 | 0 | (49,559,084) | (320,357) | 36,316,469 |
Beginning balance, shares at Aug. 31, 2019 | 39,032,528 | 1 | |||||||
Beginning balance, amount at Aug. 31, 2019 | $ 3,903 | $ 0 | 74,414,197 | 9,700,102 | 1,200,915 | 0 | (45,708,185) | (327,909) | 39,283,023 |
Issuance of shares upon vesting of restricted stock units, shares | 200,000 | ||||||||
Issuance of shares upon vesting of restricted stock units, amount | $ 20 | (20) | 0 | ||||||
Stock options issued | 549,810 | 549,810 | |||||||
Restricted stock units issued | 326,983 | 326,983 | |||||||
Foreign currency translation | 7,552 | 7,552 | |||||||
Net loss | (3,850,899) | (3,850,899) | |||||||
Ending balance, shares at Nov. 30, 2019 | 39,232,528 | 1 | |||||||
Ending balance, amount at Nov. 30, 2019 | $ 3,923 | $ 0 | $ 75,290,970 | $ 9,700,102 | $ 1,200,915 | $ 0 | $ (49,559,084) | $ (320,357) | $ 36,316,469 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Nov. 30, 2019 | Nov. 30, 2018 | |
Cash Flows from Operating Activities | ||
Net loss | $ (10,747,492) | $ (9,981,702) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 585,367 | 366,710 |
Stock-based compensation expense (Note 12) | 2,610,811 | 3,162,045 |
Accrued interest (Note 10) | 313,433 | 0 |
Loss on revaluation of warrants (Note 10) | 8,483 | 0 |
Debt accretion (Note 10) | 1,584,977 | 0 |
Deferred financing costs (Note 10) | 86,212 | 0 |
Gain on conversion of convertible notes (Note 10) | (232,565) | 0 |
Loss on revaluation of foreign exchange contracts | 10,881 | 0 |
Changes in operating assets and liabilities: | ||
Sales tax and tax credits receivable | (37,536) | 67,606 |
Prepaid expenses | 52,649 | 446,770 |
Accounts payable and accrued liabilities | (1,054,967) | 483,254 |
Net cash used in operating activities | (6,819,748) | (5,455,317) |
Cash Flows from Investing Activities | ||
Investment in a joint venture (Note 8) | (850,000) | 0 |
Additions to property, plant and equipment (Note 4) | (1,647,433) | (1,428,174) |
Additions to intangible assets (Note 5) | (95,488) | (95,179) |
Net cash used in investing activities | (2,592,921) | (1,523,353) |
Cash Flows from Financing Activities | ||
Proceeds from sale of common shares (Note 11) | 40,273,751 | 0 |
Share issuance costs (Note 11) | (1,106,370) | 0 |
Proceeds from issuance of convertible debt | 0 | 2,450,000 |
Convertible debt subscriptions | 0 | 100,000 |
Repayment of long-term debt (Note 9) | (39,506) | (39,471) |
Net cash provided from (used in) financing activities | 39,127,875 | 2,510,529 |
Effect of exchange rate changes | (57,105) | (53,314) |
Net change in cash and cash equivalents | 29,658,101 | (4,521,455) |
Cash and cash equivalents, beginning of period | 5,833,390 | 8,149,713 |
Cash and cash equivalents, end of period | 35,491,491 | 3,628,258 |
Supplemental Disclosure of Cash Flow Information: | ||
Income tax paid | 0 | 0 |
Interest paid | 45,668 | 41,442 |
Interest received | $ 363,565 | $ 325 |
The Company, Basis of Presentat
The Company, Basis of Presentation and Going Concern | 9 Months Ended |
Nov. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company, Basis of Presentation and Going Concern | The Company Loop Industries, Inc. is a technology company who owns patented and proprietary technology that depolymerizes no and low value waste 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 plastic resin and polyester fiber suitable for use in food-grade packaging. On November 20, 2017, Loop Industries Inc. commenced trading on the NASDAQ Global Market under its new trading symbol, “LOOP.” From April 10, 2017 to November 19, 2017, our common stock was quoted on the OTCQX tier of the OTC Markets Group Inc. under the symbol “LLPP.” Basis of presentation The accompanying unaudited interim condensed consolidated financial statements of Loop Industries, Inc., its wholly-owned subsidiaries and joint venture (collectively, the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. The balance sheet information as at February 28, 2019 is derived from the Company’s audited consolidated financial statements and related notes for the fiscal year ended February 28, 2019, which is included in Item 8 of the Company’s 2019 Annual Report on Form 10-K filed with the Securities and Exchange Commission on May 8, 2019. These unaudited interim condensed consolidated financial statements should be read in conjunction with those financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair statement have been included. Operating results for the three and nine months ended November 30, 2019 are not necessarily indicative of the results that may be expected for the year ending February 28, 2020. Intercompany balances and transactions are eliminated on consolidation. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Nov. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Use of estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Those estimates and assumptions include estimates for depreciable lives of property, plant and equipment, intangible assets, analysis of impairments of recorded intangible assets, accruals for potential liabilities and assumptions made in calculating the fair value of stock-based compensation and other stock instruments. Foreign currency translations and transactions The accompanying unaudited condensed 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”). As a result, foreign currency exchange fluctuations may impact operating expenses. The Company currently has 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. Stock-based compensation The Company periodically issues stock options and restricted stock units to employees and directors. 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 where there are no performance conditions, recognized as compensation expense on the straight-line basis over the vesting period and where performance conditions exist, recognize compensation expense when it becomes probable that the performance condition will be met. Forfeitures on share-based payments are accounted for by recognizing forfeitures as they occur. The Company accounts for stock options 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 are estimated using the Black-Scholes-Merton Option Pricing (“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 expense recorded in the current and future periods. 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 Research and development expenses Research and development expenses relate primarily to the development, design, testing of preproduction samples, prototypes and models, compensation, and consulting fees, and are expensed as incurred. Total research and development costs recorded during the three- and nine-month periods ended November 30, 2019 and 2018 amounted to $1,278,172 and $3,246,246, respectively (2018 - $792,111 and $2,924,483), respectively, and are net of government research and development tax credits and government grants from the federal and provincial taxation authorities accrued and recorded based on qualifying expenditures incurred during the fiscal periods (See Note 3). Net loss per share The Company computes net loss per share in accordance with FASB ASC 260, Earnings Per Share For the three- and nine-month periods ended November 30, 2019 and 2018, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an antidilutive effect. As at November 30, 2019, the potentially dilutive securities consisted of 1,657,081 outstanding stock options (November 30, 2018 – 2,205,290), 4,219,753 outstanding restricted stock units (November 30, 2018 – 99,498), 5,040,267 outstanding warrants (November 30, 2018 – 140,667) and nil outstanding issuable common stock (November 30, 2018 – 1,000,000). Recently adopted accounting pronouncements In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Revenue from Contracts with Customers In July 2018, the FASB issued ASU 2018-09, Codification Improvements , Compensation – Stock Compensation – Income Taxes In February 2016, the FASB issued ASU 2016-02, “Leases,” amended in July by ASU 2018-10, “Codification Improvements to Topic 842, Leases,” ASU 2018-11, “Targeted Improvements,” and ASU 2018-20, “Narrow-Scope Improvements for Lessors,” which requires lessees to recognize leases on the balance sheet while continuing to recognize expenses in the income statement in a manner similar to current accounting standards. For lessors, the new standard modifies the classification criteria and the accounting for sales-type and direct financing leases. Enhanced disclosures will also be required to give financial statement users the ability to assess the amount, timing, and uncertainty of cash flows arising from leases. This ASU may either be adopted on a modified retrospective approach at the beginning of the earliest comparative period, or through a cumulative-effect adjustment at the adoption date. This update is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company adopted these standards effective March 1, 2019. The adoption of the standard had no impact on the consolidated financial statements of the Company. The Company elected to apply the package of practical expedients that allows us not to reassess whether expired or existing contracts contain leases, the classification of these leases and whether previously capitalized initial direct costs would qualify for capitalization under Accounting Standards Codification (or “ ASC |
Sales Tax, Tax Credits and Othe
Sales Tax, Tax Credits and Other Receivables | 9 Months Ended |
Nov. 30, 2019 | |
Receivables [Abstract] | |
Sales Tax, Tax Credits and Other Receivables | Sales tax, research and development tax credits and other receivables as at November 30, 2019 and February 28, 2019 were as follows: November 30, 2019 February 28, 2019 Sales tax $ 196,065 $ 82,992 Research and development tax credits 396,123 410,997 Other receivables 39,248 105,011 $ 631,436 $ 599,000 The Company is registered for the Canadian federal and provincial goods and services taxes. As such, the Company is obligated to collect, and is entitled to claim sale taxes paid on its expenses and capital expenditures incurred in Canada. 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 three- and nine-month periods ended November 30, 2019, the Company recorded $56,719 and $164,702, respectively, (2018 – nil and $76,503, respectively) as a reduction of research and development expenses. During the three- and nine-month periods ended November 30, 2019, research and development tax credits received by the Company from taxation authorities amounted to nil and $175,929, respectively (2018 – nil and nil, respectively). |
Property, Plant and Equipment
Property, Plant and Equipment | 9 Months Ended |
Nov. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | As at November 30, 2019 Cost Accumulated depreciation Net book value Land $ 267,658 $ - $ 267,658 Building 1,865,518 (114,729 ) 1,750,789 Building Improvements 695,590 (189,644 ) 505,946 Machinery and equipment 5,143,880 (1,251,135 ) 3,892,745 Office equipment and furniture 137,194 (58,943 ) 78,251 $ 8,109,840 $ (1,614,451 ) $ 6,495,389 As at February 28, 2019 Cost Accumulated depreciation Net book value Land $ 232,699 $ - $ 232,699 Building 1,882,665 (68,596 ) 1,814,069 Building Improvements 383,985 (119,889 ) 264,096 Machinery and equipment 3,834,338 (841,236 ) 2,993,102 Office equipment and furniture 117,088 (49,791 ) 67,297 $ 6,450,775 $ (1,079,512 ) $ 5,371,263 Depreciation expense for the three- and nine-month periods ended November 30, 2019 amounted to $212,968 and $570,165, respectively (2018 – $135,426 and $309,095, respectively), and is recorded as an operating expense in the consolidated statements of operations and comprehensive loss. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Nov. 30, 2019 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Intangible Assets | On October 27, 2014, the Company entered into an Intellectual Property Assignment Agreement with Mr. Hatem Essaddam wherein the Company purchased a certain technique and method, which was used to develop the Generation I (“GEN I”) technology, for $445,050 allowing for the depolymerization of polyethylene terephthalate at ambient temperature and atmospheric pressure. The GEN I technology patent portfolio has two issued U.S. patents and an allowed U.S. application, all expected to expire on or around July 2035. Internationally, the Company has issued patents in Taiwan, South Africa, and in the members of the Gulf Cooperation Council, and pending patent applications in Argentina, Australia, Brazil, Canada, China, Eurasia, Europe, Hong Kong, Israel, India, Japan, Korea, Mexico, and the Philippines, all expected to expire, if granted, on or around July 2036. In addition to the $445,050 paid by the Company under the Intellectual Property Assignment Agreement, the Company is required to make four additional payments of CDN$200,000, totaling CDN$800,000, to Mr. Essaddam within sixty (60) days of attaining each of the following milestones: ● the average production of 20 metric tons of terephthalic acid by the Company, as a result of the GEN I technology, for 20 operating days; ● the average production of 30 metric tons of terephthalic acid by the Company, as a result of the GEN I technology, for 30 operating days; ● the average production of 60 metric tons of terephthalic acid by the Company, as a result of the GEN I technology, for 60 operating days; ● the average production of 100 metric tons of terephthalic acid by the Company, as a result of the GEN I technology, for 100 operating days. Additionally, the Company is obligated to make royalty payments of up to CDN$25,700,000, based on the GEN I technology, payable as follows: ● 10% of gross profits on the sale of all products derived by the Company from the technology; ● 10% of any license fee paid to the Company in respect of any licensing or other right to use the technology that was granted to a third party by the Company; and ● 5% of any royalty or other similar payment made to the Company by a third party to whom a license or sub-license or other right to use the technology has been granted by the Company or by the third party. The Company has no intention of commercializing the GEN I technology at this time. During the year ended February 28, 2019, the Company finalized the development of its next generation technology, referred to as Generation II (“GEN II”), and has filed various patents in jurisdictions around the world. The GEN II U.S. patent issued on April 9, 2019 and is expected to expire on or around September 2037. Concurrent with the GEN II development, in June 2018, the Company transitioned to its newly constructed GEN II industrial pilot plant. The GEN II technology forms the basis for the commercialization of the Company into the future. As a result of the strategic shift away from the GEN I technology, and the development of the GEN II technology during the year ended February 28, 2019, the Company considered the carrying value of its GEN I intangible asset to be impaired and wrote off the remaining balance of the intangible asset, which amounted to $298,694. Amortization expense for the three- and nine-month periods ended November 30, 2019 amounted to $6,660 and $15,202 respectively (2018 - $19,627 and $57,615, respectively), and is recorded as an operating expense in the unaudited condensed consolidated statements of operations and comprehensive loss. November 30, 2019 February 28, 2019 Intangible assets, at cost - beginning of period $ 127,672 $ 533,369 Intangible assets, accumulated depreciation – beginning of period - (200,629 ) 127,672 332,740 Add: Additions in the period 95,488 153,477 Deduct: Amortization of intangibles (15,202 ) (59,851 ) Deduct: Impairment of intangibles - (298,694 ) Deduct: Foreign exchange effect (1,127 ) - $ 206,831 $ 127,672 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Nov. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | The following tables present the fair value of the Company’s financial liabilities as at November 30, 2019 and February 28, 2019: Fair Value Measurements as at November 30, 2019 Carrying Amount Fair Value Level in the hierarchy Instruments measured at fair value on a recurring basis: - - - Financial liabilities measured at amortized cost: Long-term debt $ 956,932 $ 956,932 Level 2 Convertible notes (Second Issuance) 4,593,664 4,900,000 Level 2 Fair Value Measurements at February 28, 2019 Carrying Amount Fair Value Level in the hierarchy Financial liabilities measured at fair value on a recurring basis: Warrants (First Issuance) $ 219,531 $ 219,531 Level 3 Financial liabilities measured at amortized cost: Long-term debt 1,005,518 1,005,518 Level 2 Convertible notes (First Issuance) 2,495,636 2,650,000 Level 2 Convertible notes (Second Issuance) $ 3,126,886 $ 3,150,000 Level 2 The Warrants under the First Issuance of Convertible Notes represent a Level 3 in the fair value hierarchy. The Warrants were valued using a Monte Carlo simulation using a volatility of 71.5%. The Company recorded a loss on revaluation from the date of issuance to February 28, 2019 of $65,167. |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 9 Months Ended |
Nov. 30, 2019 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities as at November 30, 2019 and February 28, 2019 were as follows: November 30, 2019 February 28, 2019 Trade accounts payable $ 674,601 $ 1,784,362 Accrued liabilities 973,564 885,871 $ 1,648,165 $ 2,670,233 |
Joint Venture
Joint Venture | 9 Months Ended |
Nov. 30, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Joint Venture | 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 “Agreement”) with Indorama Ventures Holdings LP (“Indorama”), an indirect subsidiary of Indorama Ventures Public Company Limited, to retrofit their existing PET manufacturing facilities. The joint venture will manufacture and commercialize sustainable LoopTM branded PET resin and polyester fiber. The joint venture agreement details the establishment of an initial 20,700 metric tons per year facility. The joint venture decided to double the capacity of the facility to 40,000 metric tons per year thus increasing the engineering work required . Under the Agreement, Indorama is contributing manufacturing knowledge and Loop is required to contribute its proprietary science and technology. Specifically, the Company is contributing an exclusive world-wide royalty-free license to ILT to use its proprietary technology to produce 100% sustainably produced PET resin and polyester fiber. 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 was no activity in ILT from the date of inception of September 24, 2018 to February 28, 2019 and, as at February 28, 2019, the carrying value of the equity investment was nil. On April 18, 2019 and October 21, 2019, Loop Innovations, LLC, the Company’s wholly owned subsidiary, and Indorama, each contributed cash of $500,000 and $350,000, respectively, to ILT. As there were no other transactions during the nine-month period ended November 30, 2019, the carrying value of the equity investment as at November 30, 2019 was $850,000. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Nov. 30, 2019 | |
Long-term Debt, Unclassified [Abstract] | |
Long-Term Debt | November 30, 2019 February 28, 2019 Installment loan $ 956,932 $ 1,005,518 Less current portion 52,675 53,155 Non-current portion $ 904,257 $ 952,363 Principal repayments due on the Installment loan over the next five years are as follows: Years ending February 28, Amount 2020 $ 13,169 2021 52,675 2022 52,675 2023 52,675 2024 52,675 Thereafter 733,063 Total $ 956,932 Interest paid on the installment loan during the three- and nine-month periods ended November 30, 2019 amounted to $14,778 and $41,840, respectively (2018 - $13,825 and $40,305, respectively). As at November 30, 2019, the Company was in compliance with its financial covenants. |
Convertible Notes
Convertible Notes | 9 Months Ended |
Nov. 30, 2019 | |
Convertible Notes Payable [Abstract] | |
Convertible Notes | First Issuance On November 13, 2018, the Company issued convertible promissory notes (the “November 2018 Notes”), together with related warrants to acquire an additional 50% of the shares issued upon the conversion of the November 2018 Notes (the “November 2018 Warrants”), for an aggregate purchase price of $2,450,000 (the “November 2018 Private Placement”). On January 3, 2019, the Company issued additional convertible promissory notes from this issuance (the “November 2018 Notes”), together with related warrants to acquire an additional 50% of the shares issued upon the conversion of the November 2018 Notes (the “November 2018 Warrants”), for an aggregate purchase price of $200,000 (the “November 2018 Private Placement”). The November 2018 Notes were converted on April 5, 2019. The November 2018 Notes carried an interest rate of 8.00% per annum and had original maturity dates of May 13, 2019 and July 3, 2019 (the “November 2018 Maturity Date”), respectively, upon which date the outstanding principal amount of the November 2018 Notes and all accrued and unpaid interest would automatically convert into shares of the common stock of the Company at the price per share equal to the lesser of (i) $13.00 and (ii) the average closing price of the Company’s Common Stock on the Nasdaq stock market for the ten days preceding the day to the conversion of the November 2018 Notes (the “November 2018 Conversion Price”). The total number of shares of Common Stock to be issued upon automatic conversion at maturity would equal the outstanding principal amount of the November 2018 Notes and all accrued and unpaid interest on the November 2018 Notes, divided by the November 2018 Conversion Price. The November 2018 Warrants are exercisable for an additional fifty percent (50%) of the shares of Common Stock issued upon the conversion of the November 2018 Notes (the “November 2018 Warrant Shares”). The per share purchase price (the “November 2018 Exercise Price”) for each of the November 2018 Warrant Shares purchasable under the November 2018 Warrants was originally to be equal to the lesser of (i) $15.00 and (ii) the average closing price of the Company’s Common Stock on the Nasdaq stock market for the ten days preceding the day of the conversion of the November 2018 Notes. The November 2018 Warrants were issued upon conversion of the November 2018 Notes. The November 2018 Warrants expire eighteen (18) months from the date of the conversion of the November 2018 Notes (the “November 2018 Expiration Date”). The Investors may exercise the November 2018 Warrants at any time prior to the November 2018 Expiration Date. Due to the variable conversion price, the November 2018 Notes contain characteristics of a variable share-forward sales contracts (“VSF”) under the guidance of ASC 480-10. Management has determined that for the purpose of the accounting for the November 2018 Notes, it is more likely than not that the November 2018 Conversion Price will be below $13.00, resulting in the issuance of a variable number of shares, the November 2018 Notes are classified as a liability, and accounted for at amortized cost. Due to the variable number of warrants to be issued and the variable strike price of the November 2018 Warrants, these do not meet the “fixed-for-fixed” criteria under ASC 815-40. Accordingly, the November 2018 Warrants are classified as a derivative liability, initially measured at fair value and subsequently revalued at fair value through the income statement. The fair value was calculated using a Monte Carlo simulation. The transaction costs related to this issuance were split pro-rata between the November 2018 Notes and the November 2018 Warrants. The portion relating to the November 2018 Notes were deferred and are being amortized over the life of the convertible notes. The portion relating to the November 2018 Warrants was immediately expensed. The aggregate value of the November 2018 Notes and November 2018 Warrants as shown on the consolidated balance sheet are broken down as follows: November 30, 2019 February 28, 2019 Issue Date November 2018 Convertible Notes – Liability - $ 2,495,636 $ 2,495,636 Accrued interest – Liability - 60,793 - Deferred financing costs - (26,557 ) (63,738 ) Total - 2,529,872 2,431,898 November 2018 Warrants – Liability - $ 219,531 $ 154,364 On April 5, 2019, the Company and the Investors that purchased the November 2018 Notes from the Company pursuant to the Note and Warrant Purchase Agreement dated as of November 13, 2018 or January 3, 2019, executed an Amendment, Surrender and Conversion Agreement (“Conversion Agreement”) whereby the parties agreed to convert the November 2018 Notes, and all accrued and unpaid interest, into shares of the common stock of the Company at a newly agreed conversion price per share equal to $8.55 (the “New Conversion Price”), replacing the previous formula which converted the November 2018 Notes and accrued and unpaid interest into shares of the common stock of the Company at the price per share equal to the lesser of (i) $13.00 and (ii) the average closing price of the Company’s Common Stock on the Nasdaq stock market for the ten days preceding the day to the conversion of the November 2018 Notes. The Conversion Agreement stipulates that the interest on the November 2018 Notes would be paid up to and including April 3, 2019. Pursuant to the 2018 Note Purchase Agreement, the Investors also received related warrants to acquire an additional 50% of the shares issued upon the conversion of the November 2018 Notes. As part of the Conversion Agreement, the exercise price of the November 2018 Warrants will also be the New Conversion Price, replacing the previous formula which established the conversion price for the November 2018 Warrants as the lesser of (i) $15.00 and (ii) the average closing price of the Company’s Common Stock on the Nasdaq stock market for the ten days preceding the day of the conversion of the November 2018 Notes. As a result of the Conversion Agreement, the Company issued 319,326 shares of common stock of the Company and issued 159,663 warrants. The November 2018 Warrants expire eighteen (18) months from the date of the conversion of the November 2018 Notes, on October 5, 2020. The Company recorded an expense upon revaluation of the warrants for the period from March 1, 2019 to April 5, 2019 in the amount of $8,483 (2018 – nil) and is included in operating expenses. The Company recorded accretion interest expense on the November 2018 Notes from March 1, 2019 to April 5, 2019 in the amount of $154,364 and is included in operating expenses. The Company recorded interest expense on the November 2018 Notes for the period from March 1, 2019 to April 3, 2019 in the amount of $19,433 (2018 – nil). The value of the 159,633 warrants issued as part of the conversion was determined using the Black-Scholes pricing formula and amounted to $316,929 and is included in additional paid-in capital – warrants. Also, the conversion of the November 2018 Notes into common stock resulted in a gain of $232,565 and has been offset against operating expenses. Second Issuance On January 15, 2019, the Company issued convertible promissory notes (the “January 2019 Notes”), together with related warrants to acquire an additional 50% of the shares issuable upon the conversion of the January 2019 Notes (the “January 2019 Warrants”), for an aggregate purchase price of $4,500,000 (the “January 2019 Private Placement”). On January 21, 2019, the Company issued additional convertible promissory notes from this issuance, together with related warrants to acquire an additional 50% of the shares issuable upon the conversion of the January 2019 Notes, for an aggregate purchase price of $400,000. The January 2019 Notes carry an interest rate of 8.00% per annum and mature on January 15, 2020 and January 21, 2020 (the “January 2020 Maturity Date”), respectively. At the January 2020 Maturity Date, the outstanding principal amount of the January 2019 Notes shall automatically convert into shares of the common stock of the Company at the price per share equal to $8.10 (the “January 2020 Conversion Price”). The January 2020 Conversion Price may be adjusted in the event that the Company issues common shares in a private sale or offering at a lower price per share than $8.10 within 180 days of the closing date. The lower price would become the new conversion price of the January 2019 Notes, which would impact the number of shares that would be issued. The total number of shares of Common Stock to be issued upon automatic conversion shall equal the outstanding principal amount of the January 2019 Notes divided by the January 2020 Conversion Price. With respect to accrued and unpaid interest at the January 2020 Maturity Date, the Investors have the option of receiving cash or common stock of the Company at that date. Upon the January 2020 Maturity Date, where the Investor elects payment of accrued and unpaid interest on the January 2019 Notes in common stock, the price per share shall be equal to the trading price of the common stock at the close of the market on the date immediately preceding the January 2020 Maturity Date. The January 2019 Warrants are exercisable for an additional fifty percent (50%) of the shares of Common Stock issuable upon the conversion of the January 2019 Notes (the “January 2019 Warrant Shares”). The per share purchase price (the “January 2019 Exercise Price”) for each of the January 2019 Warrant Shares purchasable under the January 2019 Warrants shall be equal to 115% of the January 2020 Conversion Price. The January 2019 Warrants will be calculated and issued upon the closing date of the January 2019 Notes, based upon the initial $8.10 conversion price. As such, the Company issued 302,469 warrants at the closing dates of the January 2019 Notes. If the Investor elects to take accrued and unpaid interest on the January 2019 Notes in common stock, additional warrants will be issued to acquire 50% of the shares issued in connection with the accrued and unpaid interest (also referred to as the “January 2019 Warrants”). The January 2019 Warrants expire twenty-four (24) months from the date of their issuance (the “January 2019 Expiration Date”). The Investors may exercise the January 2019 Warrants at any time prior to the January 2019 Expiration Date. A beneficial conversion feature (“BCF”) of a convertible note is normally characterized as the convertible portion feature that provides a rate of conversion that is below market value or “in-the-money” when issued. The BCF related to the issuance of the January 2019 Notes was recorded at the issuance date. The BCF was measured using the intrinsic value method and is shown as a discount to the carrying amount of the convertible note and is credited to additional paid-in capital. The intrinsic value of the BCF at the issuance date of the January 2019 Notes was determined to be $1,200,915. In connection with the January 2019 Warrants issued along with the January 2019 Notes, they meet the requirements of the scope exemptions in ASC 815-10-15-74 and are thus classified as equity upon issuance. The Company determined the fair value of the warrants using the Black-Scholes pricing formula and is recognized as a discount on the carrying amount of the January 2019 Notes and is credited to additional paid-in capital. The fair value of the warrants at the issuance date was determined to be $757,704. The allocated fair values of the BCF and the warrants was recorded as a debt discount from the face amount of the January 2019 Notes and such discount is being accreted over the expected term of the January 2019 Notes and is charged to interest expense. The aggregate values of the January 2019 Warrants, the January 2019 Notes and the related BCF are as follows: November 30, 2019 February 28, 2019 Issue Date January 2019 Convertible Notes – Liability $ 4,593,664 $ 3,126,886 $ 2,941,381 Accrued interest – Liability 343,011 49,011 - Deferred financing costs (9,941 ) (69,597 ) (79,539 ) 4,926,734 3,106,300 2,861,842 January 2019 Beneficial Conversion Option – Equity 1,200,915 1,200,915 1,200,915 January 2019 Warrants – Equity $ 719,404 $ 757,704 $ 757,704 The transaction costs relating to this issuance were split pro-rata between the January 2019 Notes, the BCF and the January 2019 Warrants. The portion relating to the January 2019 Notes were deferred and are being amortized over the life of the January 2019 Notes. The portion relating to the BCF and the January 2019 Warrants were recorded as share issuance expenses and offset against additional paid-in capital. The Company recorded accretion interest expense on the January 2019 Notes for the three- and nine-month periods ended November 30, 2019 of $549,090 and $1,584,977, respectively (2018 – nil and nil, respectively) and is included in operating expenses. The Company also recorded interest expense on the January 2019 Notes for the three- and nine-month periods ended November 30, 2019 in the amount of $98,000 and $313,433, respectively (2018 – nil and nil, respectively). The Company also recorded amortization of deferred finance costs for the three- and nine-month periods ended November 30, 2019 in the amount of $19,885 and $86,212, respectively (2018 – nil and nil, respectively). |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Nov. 30, 2019 | |
Stockholders' Equity | |
Stockholders' Equity | Series A Preferred Stock Mr. Solomita’s amended employment agreement July 13, 2018 provides 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 agreement. The agreement 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. Subsequently, the Company issued one share of Series A Preferred Stock to Mr. Solomita. 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 issued and outstanding shares of common stock of the Company, 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. Currently, Mr. Solomita’s ownership of 18,800,000 shares of common stock and 1 share of Series A Preferred Stock provides him with 78.1% of the voting control of the Company. Additionally, the one share of Series A Preferred Stock issued to Mr. Solomita contains protective provisions, which precludes 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 Bylaws; (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 Bylaws 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). Common Stock For the period ended November 30, 2019 Number of shares Amount Balance, February 28, 2019 33,805,706 $ 3,381 Issuance of shares for cash 4,693,567 469 Issuance of shares upon vesting of restricted stock units 243,932 24 Issuance of shares upon the cashless exercise of stock options 4,565 1 Issuance of shares upon the exercise of warrants 15,432 1 Issuance of shares upon settlement of legal matter 150,000 15 Issuance of shares upon conversion of Convertible notes 319,326 32 Balance, November 30, 2019 39,232,528 $ 3,923 For the period ended November 30, 2018 Number of shares Amount Balance, February 28, 2018 33,751,088 $ 3,376 Cashless exercise of stock options 18,821 2 Issuance of shares upon vesting of restricted stock units 35,797 3 Balance, November 30, 2018 33,805,706 $ 3,381 During the nine months ended November 30, 2019, the Company recorded the following common stock transactions: (i) On March 1, 2019, the Company sold 600,000 shares of its common stock at an offering price of $8.55 per share in a registered direct offering, for gross proceeds of $5,130,000; (ii) On March 8, 2019 and March 11, 2019, the Company issued 150,000 shares of its common stock in settlement of a legal matter; (iii) On April 9, 2019, the Company converted Convertible notes with a face value of $2,650,000 plus accrued interest of $80,241 at a conversion price of $8.55, into 319,326 common shares. (iv) On June 14, 2019, the Company sold 4,093,567 shares of its common stock at an offering price of $8.55 per share in a registered direct offering, for gross proceeds of $35,000,000; (v) On June 21, 2019, the Company issued 7,043 shares of common stock upon the vesting of restricted stock units related to an employee. (vi) On July 2, 2019 and July 3, 2019, the Company issued 23,547 shares of common stock upon the vesting of restricted stock units related to current and former Directors. (vii) On July 12, 2019, the Company issued 4,565 shares of common stock upon the cashless exercise of stock options related to an employee. (viii) On July 15, 2019, the Company issued 13,342 shares of common stock upon the vesting of restricted stock units related to a former Director. (ix) On July 17, 2019, the Company issued 15,432 shares of common stock upon the exercise of warrants. (x) On October 15, 2019, the Company issued 200,000 shares of common stock upon the vesting of restricted stock units related to the President and Chief Executive Officer. During the nine months ended November 30, 2018, the Company recorded the following common stock transactions: (i) the Company issued 18,821 shares of common stock upon the cashless exercise of stock options. (ii) the Company issued 35,797 shares of common stock upon the vesting of restricted stock units. |
Share-based Payments
Share-based Payments | 9 Months Ended |
Nov. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Payments | Stock Options The following tables summarize the continuity of the Company’s stock options during the nine-month periods ended November 30: 2019 2018 Number of stock options Weighted average exercise price Number of stock options Weighted average exercise price Outstanding, beginning of period 1,962,400 $ 7.53 2,374,581 $ 7.99 Granted - - 13,209 11.52 Exercised (5,000 ) 0.80 (20,000 ) 0.80 Forfeited (39,902 ) 9.67 (100,000 ) 5.25 Expired (260,417 ) 13.59 (62,500 ) 4.80 Outstanding, end of period 1,657,081 $ 6.55 2,205,290 $ 8.29 Exercisable, end of period 1,007,498 $ 6.38 1,065,414 $ 7.60 2019 2018 Exercise price Number of stock options outstanding Weighted average remaining life (yrs.) Number of stock options outstanding Weighted average remaining life (yrs.) $0.80 577,081 6.00 582,081 7.00 $3.00 - - - - $5.25 380,000 7.74 380,000 8.74 $8.75 - - - - $11.52 - - 13,209 9.61 $12.00 700,000 7.79 700,000 8.79 $13.49 - - 250,000 8.88 $13.89 - - 280,000 0.07 Outstanding, end of period 1,657,081 7.16 2,205,290 7.22 Exercisable, end of period 1,007,498 7.11 1,065,414 7.62 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 following table shows key inputs into the valuation model for the nine months ended November 30: 2018 Exercise price $ 11.52 Risk-free interest rate 2.82 % Expected dividend yield 0 % Expected volatility 78 % Expected life 6.5 years There were no new issuances of stock options for the nine-month period ended November 30, 2019. During the three- and nine-month periods ended November 30, 2019, stock-based compensation expense attributable to stock options amounted to $549,810 and $1,628,897, respectively (2018 - $789,260 and $2,591,263, respectively), and is included in operating expenses. Restricted Stock Units The following table summarizes the continuity of the restricted stock units (“RSUs”) during the nine-month periods ended November 30, 2019 and 2018: 2019 2018 Number of units Weighted average fair value price Number of units Weighted average fair value price Outstanding, beginning of period 402,868 $ 8.77 34,102 $ 13.00 Granted 4,114,567 1.06 102,818 11.54 Issued as common stock (243,932 ) 2.52 (35,797 ) 13.06 Forfeited (53,750 ) 9.82 (1,625 ) 12.31 Outstanding, end of period 4,219,753 $ 1.60 99,498 $ 11.48 Outstanding vested, end of period 831,684 $ 1.19 - $ - 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 closing share price at grant date multiplied by the number of restricted stock unit awards granted. During the three- and nine-month periods ended November 30, 2019, stock-based compensation attributable to RSUs amounted to $326,983 and $981,914, respectively (2018 - $181,646 and $570,782, respectively), and is included in operating expenses. During the three- and nine-month periods ended November 30, 2019, stock-based compensation included in research and development expenses amounted to $311,353 and $941,142, respectively (2018 - $249,548 and $910,004, respectively), and in General and administrative expenses amounted to $565,440 and $1,669,669, respectively (2018 - $721,358 and $2,252,041, respectively). |
Equity Incentive Plan
Equity Incentive Plan | 9 Months Ended |
Nov. 30, 2019 | |
Equity [Abstract] | |
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) or such number of shares determined by the Administrator of the Plan, effective March 1, 2018. 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 Company’s Equity Incentive Plan units during the nine-month periods ended November 30, 2019 and 2018: 2019 2018 Number of units Number of units Outstanding, beginning of period 3,223,516 1,735,898 Share reserve increase 2,000,000 1,500,000 Units granted (4,114,567 ) (116,027 ) Units forfeited 93,652 101,625 Units expired 260,417 50,000 Outstanding, end of period 1,463,018 3,271,496 |
Warrants
Warrants | 9 Months Ended |
Nov. 30, 2019 | |
Warrants Abstract | |
Warrants | The following table summarizes the continuity of warrants during the nine-month periods ended November 30, 2019 and 2018: 2019 2018 Number of warrants Weighted average exercise price Number of warrants Weighted average exercise price Outstanding, beginning of period 802,469 $ 10.74 140,667 $ 12.00 Issued 4,253,230 10.91 - - Exercised (15,432 ) 9.32 - - Expired - - - - Outstanding, end of period 5,040,267 $ 10.89 140,667 $ 12.00 The expiration dates of the warrants outstanding as at November 30, 2019 are as follows: 2019 Number of warrants Weighted average exercise price August 25, 2020 200,000 $ 11.00 October 5, 2020 159,663 8.55 January 15, 2021 277,778 9.32 January 21, 2021 9,259 9.32 February 25, 2021 300,000 12.00 June 14, 2022 4,093,567 11.00 Outstanding, end of period 5,040,267 $ 10.89 |
Interest and Other Finance Cost
Interest and Other Finance Costs | 9 Months Ended |
Nov. 30, 2019 | |
Interest And Other Finance Costs | |
Interest and Other Finance Costs | Interest and other finance costs for the three- and nine-month periods ended November 30, 2019 and 2018 are as follows: Three Months Ended November 30 Nine Months Ended November 30 2019 2018 2019 2018 Interest on long-term debt $ 14,778 $ 13,825 $ 41,840 $ 40,305 Interest on convertible notes 98,000 - 313,433 - Accretion expense 549,090 - 1,584,977 - Amortization of deferred finance costs 19,885 - 86,212 - Revaluation of warrants - - 8,483 - Loss on revaluation of foreign exchange contracts 10,881 - 10,881 - Gain on conversion of November 2018 Notes - - (232,565 ) - Other 393 1,058 3,830 812 $ 693,027 $ 14,883 $ 1,817,091 $ 41,117 |
Commitments
Commitments | 9 Months Ended |
Nov. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | The Company has entered into multi-year supply agreements with PepsiCo, Coca-Cola’s Cross Enterprise Procurement Group, Danone SA and L’OCCITANE en Provence that will enable them to purchase production capacity from the Company’s joint venture facility with Indorama in the United States and incorporate Loop™ PET resin into its product packaging. On July 24, 2019, the Company signed an agreement with Investissement Quebec providing it with a financing facility equal to 63.45% of all eligible expenses incurred for the expansion of its Pilot Plant up to a maximum CDN$4,600,000. There is a 36-month moratorium on both capital and interest repayments beginning as of the first disbursement date. At the end of the 36-month moratorium, capital and interest will be repayable in 84 monthly installments. The loan will bear interest at 2.36%. The Company has also agreed to issue to Investissement Quebec warrants to purchase common shares of the Company in an amount equal to 10% of each disbursement up to a maximum aggregate amount of CDN$460,000. The warrants will be issued at a price per share equal to the higher of (i) $11.00 per share and (ii) the ten-day weighted average closing price of Loop Industries’ 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 will have a term of three years from the date of issuance. The loan can be repaid at any time by the Company without penalty. No disbursements have yet been made under the agreement. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Nov. 30, 2019 | |
Accounting Policies [Abstract] | |
Use of estimates | The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Those estimates and assumptions include estimates for depreciable lives of property, plant and equipment, intangible assets, analysis of impairments of recorded intangible assets, accruals for potential liabilities and assumptions made in calculating the fair value of stock-based compensation and other stock instruments. |
Foreign currency translations and transactions | The accompanying unaudited condensed 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”). As a result, foreign currency exchange fluctuations may impact operating expenses. The Company currently has 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. |
Stock-based compensation | The Company periodically issues stock options and restricted stock units to employees and directors. 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 where there are no performance conditions, recognized as compensation expense on the straight-line basis over the vesting period and where performance conditions exist, recognize compensation expense when it becomes probable that the performance condition will be met. Forfeitures on share-based payments are accounted for by recognizing forfeitures as they occur. The Company accounts for stock options 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 are estimated using the Black-Scholes-Merton Option Pricing (“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 expense recorded in the current and future periods. |
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 |
Research and development expenses | Research and development expenses relate primarily to the development, design, testing of preproduction samples, prototypes and models, compensation, and consulting fees, and are expensed as incurred. Total research and development costs recorded during the three- and nine-month periods ended November 30, 2019 and 2018 amounted to $1,278,172 and $3,246,246, respectively (2018 - $792,111 and $2,924,483), respectively, and are net of government research and development tax credits and government grants from the federal and provincial taxation authorities accrued and recorded based on qualifying expenditures incurred during the fiscal periods (See Note 3). |
Net loss per share | The Company computes net loss per share in accordance with FASB ASC 260, Earnings Per Share For the three- and nine-month periods ended November 30, 2019 and 2018, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an antidilutive effect. As at November 30, 2019, the potentially dilutive securities consisted of 1,657,081 outstanding stock options (November 30, 2018 – 2,205,290), 4,219,753 outstanding restricted stock units (November 30, 2018 – 99,498), 5,040,267 outstanding warrants (November 30, 2018 – 140,667) and nil outstanding issuable common stock (November 30, 2018 – 1,000,000). |
Recently adopted accounting pronouncements | In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Revenue from Contracts with Customers In July 2018, the FASB issued ASU 2018-09, Codification Improvements , Compensation – Stock Compensation – Income Taxes In February 2016, the FASB issued ASU 2016-02, “Leases,” amended in July by ASU 2018-10, “Codification Improvements to Topic 842, Leases,” ASU 2018-11, “Targeted Improvements,” and ASU 2018-20, “Narrow-Scope Improvements for Lessors,” which requires lessees to recognize leases on the balance sheet while continuing to recognize expenses in the income statement in a manner similar to current accounting standards. For lessors, the new standard modifies the classification criteria and the accounting for sales-type and direct financing leases. Enhanced disclosures will also be required to give financial statement users the ability to assess the amount, timing, and uncertainty of cash flows arising from leases. This ASU may either be adopted on a modified retrospective approach at the beginning of the earliest comparative period, or through a cumulative-effect adjustment at the adoption date. This update is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company adopted these standards effective March 1, 2019. The adoption of the standard had no impact on the consolidated financial statements of the Company. The Company elected to apply the package of practical expedients that allows us not to reassess whether expired or existing contracts contain leases, the classification of these leases and whether previously capitalized initial direct costs would qualify for capitalization under Accounting Standards Codification (or “ ASC |
Sales Tax, Tax Credits and Ot_2
Sales Tax, Tax Credits and Other Receivables (Tables) | 9 Months Ended |
Nov. 30, 2019 | |
Receivables [Abstract] | |
Sales tax, tax credits and other receivables | November 30, 2019 February 28, 2019 Sales tax $ 196,065 $ 82,992 Research and development tax credits 396,123 410,997 Other receivables 39,248 105,011 $ 631,436 $ 599,000 |
Property, Plant and Equipment,
Property, Plant and Equipment, Net (Tables) | 9 Months Ended |
Nov. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, plant and equipment | As at November 30, 2019 Cost Accumulated depreciation Net book value Land $ 267,658 $ - $ 267,658 Building 1,865,518 (114,729 ) 1,750,789 Building Improvements 695,590 (189,644 ) 505,946 Machinery and equipment 5,143,880 (1,251,135 ) 3,892,745 Office equipment and furniture 137,194 (58,943 ) 78,251 $ 8,109,840 $ (1,614,451 ) $ 6,495,389 As at February 28, 2019 Cost Accumulated depreciation Net book value Land $ 232,699 $ - $ 232,699 Building 1,882,665 (68,596 ) 1,814,069 Building Improvements 383,985 (119,889 ) 264,096 Machinery and equipment 3,834,338 (841,236 ) 2,993,102 Office equipment and furniture 117,088 (49,791 ) 67,297 $ 6,450,775 $ (1,079,512 ) $ 5,371,263 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 9 Months Ended |
Nov. 30, 2019 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Schedule of intangible assets | November 30, 2019 February 28, 2019 Intangible assets, at cost - beginning of period $ 127,672 $ 533,369 Intangible assets, accumulated depreciation – beginning of period - (200,629 ) 127,672 332,740 Add: Additions in the period 95,488 153,477 Deduct: Amortization of intangibles (15,202 ) (59,851 ) Deduct: Impairment of intangibles - (298,694 ) Deduct: Foreign exchange effect (1,127 ) - $ 206,831 $ 127,672 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Nov. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value of financial instruments | Fair Value Measurements as at November 30, 2019 Carrying Amount Fair Value Level in the hierarchy Instruments measured at fair value on a recurring basis: - - - Financial liabilities measured at amortized cost: Long-term debt $ 956,932 $ 956,932 Level 2 Convertible notes (Second Issuance) 4,593,664 4,900,000 Level 2 Fair Value Measurements at February 28, 2019 Carrying Amount Fair Value Level in the hierarchy Financial liabilities measured at fair value on a recurring basis: Warrants (First Issuance) $ 219,531 $ 219,531 Level 3 Financial liabilities measured at amortized cost: Long-term debt 1,005,518 1,005,518 Level 2 Convertible notes (First Issuance) 2,495,636 2,650,000 Level 2 Convertible notes (Second Issuance) $ 3,126,886 $ 3,150,000 Level 2 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 9 Months Ended |
Nov. 30, 2019 | |
Payables and Accruals [Abstract] | |
Accounts payable and accrued liabilities | November 30, 2019 February 28, 2019 Trade accounts payable $ 674,601 $ 1,784,362 Accrued liabilities 973,564 885,871 $ 1,648,165 $ 2,670,233 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Nov. 30, 2019 | |
Long-term Debt, Unclassified [Abstract] | |
Schedule of long-term debt | November 30, 2019 February 28, 2019 Installment loan $ 956,932 $ 1,005,518 Less current portion 52,675 53,155 Non-current portion $ 904,257 $ 952,363 |
Principal repayments | Years ending February 28, Amount 2020 $ 13,169 2021 52,675 2022 52,675 2023 52,675 2024 52,675 Thereafter 733,063 Total $ 956,932 |
Convertible Notes (Tables)
Convertible Notes (Tables) | 9 Months Ended |
Nov. 30, 2019 | |
Convertible Notes Payable [Abstract] | |
Schedule of convertible notes | November 30, 2019 February 28, 2019 Issue Date November 2018 Convertible Notes – Liability - $ 2,495,636 $ 2,495,636 Accrued interest – Liability - 60,793 - Deferred financing costs - (26,557 ) (63,738 ) Total - 2,529,872 2,431,898 November 2018 Warrants – Liability - $ 219,531 $ 154,364 November 30, 2019 February 28, 2019 Issue Date January 2019 Convertible Notes – Liability $ 4,593,664 $ 3,126,886 $ 2,941,381 Accrued interest – Liability 343,011 49,011 - Deferred financing costs (9,941 ) (69,597 ) (79,539 ) 4,926,734 3,106,300 2,861,842 January 2019 Beneficial Conversion Option – Equity 1,200,915 1,200,915 1,200,915 January 2019 Warrants – Equity $ 719,404 $ 757,704 $ 757,704 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Nov. 30, 2019 | |
Stockholders' Equity | |
Schedule of common stock | For the period ended November 30, 2019 Number of shares Amount Balance, February 28, 2019 33,805,706 $ 3,381 Issuance of shares for cash 4,693,567 469 Issuance of shares upon vesting of restricted stock units 243,932 24 Issuance of shares upon the cashless exercise of stock options 4,565 1 Issuance of shares upon the exercise of warrants 15,432 1 Issuance of shares upon settlement of legal matter 150,000 15 Issuance of shares upon conversion of Convertible notes 319,326 32 Balance, November 30, 2019 39,232,528 $ 3,923 For the period ended November 30, 2018 Number of shares Amount Balance, February 28, 2018 33,751,088 $ 3,376 Cashless exercise of stock options 18,821 2 Issuance of shares upon vesting of restricted stock units 35,797 3 Balance, November 30, 2018 33,805,706 $ 3,381 |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 9 Months Ended |
Nov. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock option activity | 2019 2018 Number of stock options Weighted average exercise price Number of stock options Weighted average exercise price Outstanding, beginning of period 1,962,400 $ 7.53 2,374,581 $ 7.99 Granted - - 13,209 11.52 Exercised (5,000 ) 0.80 (20,000 ) 0.80 Forfeited (39,902 ) 9.67 (100,000 ) 5.25 Expired (260,417 ) 13.59 (62,500 ) 4.80 Outstanding, end of period 1,657,081 $ 6.55 2,205,290 $ 8.29 Exercisable, end of period 1,007,498 $ 6.38 1,065,414 $ 7.60 |
Stock options outstanding | 2019 2018 Exercise price Number of stock options outstanding Weighted average remaining life (yrs.) Number of stock options outstanding Weighted average remaining life (yrs.) $0.80 577,081 6.00 582,081 7.00 $3.00 - - - - $5.25 380,000 7.74 380,000 8.74 $8.75 - - - - $11.52 - - 13,209 9.61 $12.00 700,000 7.79 700,000 8.79 $13.49 - - 250,000 8.88 $13.89 - - 280,000 0.07 Outstanding, end of period 1,657,081 7.16 2,205,290 7.22 Exercisable, end of period 1,007,498 7.11 1,065,414 7.62 |
Key inputs into the valuation model | 2018 Exercise price $ 11.52 Risk-free interest rate 2.82 % Expected dividend yield 0 % Expected volatility 78 % Expected life 6.5 years |
RSU activity | 2019 2018 Number of units Weighted average fair value price Number of units Weighted average fair value price Outstanding, beginning of period 402,868 $ 8.77 34,102 $ 13.00 Granted 4,114,567 1.06 102,818 11.54 Issued as common stock (243,932 ) 2.52 (35,797 ) 13.06 Forfeited (53,750 ) 9.82 (1,625 ) 12.31 Outstanding, end of period 4,219,753 $ 1.60 99,498 $ 11.48 Outstanding vested, end of period 831,684 $ 1.19 - $ - |
Equity Incentive Plan (Tables)
Equity Incentive Plan (Tables) | 9 Months Ended |
Nov. 30, 2019 | |
Equity [Abstract] | |
Equity incentive plan | 2019 2018 Number of units Number of units Outstanding, beginning of period 3,223,516 1,735,898 Share reserve increase 2,000,000 1,500,000 Units granted (4,114,567 ) (116,027 ) Units forfeited 93,652 101,625 Units expired 260,417 50,000 Outstanding, end of period 1,463,018 3,271,496 |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended |
Nov. 30, 2019 | |
Warrants Abstract | |
Warrant activity | 2019 2018 Number of warrants Weighted average exercise price Number of warrants Weighted average exercise price Outstanding, beginning of period 802,469 $ 10.74 140,667 $ 12.00 Issued 4,253,230 10.91 - - Exercised (15,432 ) 9.32 - - Expired - - - - Outstanding, end of period 5,040,267 $ 10.89 140,667 $ 12.00 |
Warrants outstanding | 2019 Number of warrants Weighted average exercise price August 25, 2020 200,000 $ 11.00 October 5, 2020 159,663 8.55 January 15, 2021 277,778 9.32 January 21, 2021 9,259 9.32 February 25, 2021 300,000 12.00 June 14, 2022 4,093,567 11.00 Outstanding, end of period 5,040,267 $ 10.89 |
Interest and Other Finance Co_2
Interest and Other Finance Costs (Tables) | 9 Months Ended |
Nov. 30, 2019 | |
Interest And Other Finance Costs | |
Interest and other finance costs | Three Months Ended November 30 Nine Months Ended November 30 2019 2018 2019 2018 Interest on long-term debt $ 14,778 $ 13,825 $ 41,840 $ 40,305 Interest on convertible notes 98,000 - 313,433 - Accretion expense 549,090 - 1,584,977 - Amortization of deferred finance costs 19,885 - 86,212 - Revaluation of warrants - - 8,483 - Loss on revaluation of foreign exchange contracts 10,881 - 10,881 - Gain on conversion of November 2018 Notes - - (232,565 ) - Other 393 1,058 3,830 812 $ 693,027 $ 14,883 $ 1,817,091 $ 41,117 |
Sales Tax, Tax Credits and Ot_3
Sales Tax, Tax Credits and Other Receivables (Details) - USD ($) | Nov. 30, 2019 | Feb. 28, 2019 |
Receivables [Abstract] | ||
Sales tax | $ 196,065 | $ 82,992 |
Research and development tax credits | 396,123 | 410,997 |
Other receivables | 39,248 | 105,011 |
Sales tax, research and development tax credits and other receivables | $ 631,436 | $ 599,000 |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Details) - USD ($) | Nov. 30, 2019 | Feb. 28, 2019 |
Property, plant and equipment, gross | $ 8,109,840 | $ 6,450,775 |
Less: accumulated depreciation | (1,614,451) | (1,079,512) |
Property, plant and equipment, net | 6,495,389 | 5,371,263 |
Land | ||
Property, plant and equipment, gross | 267,658 | 232,699 |
Less: accumulated depreciation | 0 | 0 |
Property, plant and equipment, net | 267,658 | 232,699 |
Building | ||
Property, plant and equipment, gross | 1,865,518 | 1,882,665 |
Less: accumulated depreciation | (114,729) | (68,596) |
Property, plant and equipment, net | 1,750,789 | 1,814,069 |
Building Improvements | ||
Property, plant and equipment, gross | 695,590 | 383,985 |
Less: accumulated depreciation | (189,644) | (119,889) |
Property, plant and equipment, net | 505,946 | 264,096 |
Machinery and Equipment | ||
Property, plant and equipment, gross | 5,143,880 | 3,834,338 |
Less: accumulated depreciation | (1,251,135) | (841,236) |
Property, plant and equipment, net | 3,892,745 | 2,993,102 |
Office Equipment and Furniture | ||
Property, plant and equipment, gross | 137,194 | 117,088 |
Less: accumulated depreciation | (58,943) | (49,791) |
Property, plant and equipment, net | $ 78,251 | $ 67,297 |
Property, Plant and Equipment_3
Property, Plant and Equipment, Net (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2019 | Nov. 30, 2018 | Nov. 30, 2019 | Nov. 30, 2018 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 212,968 | $ 135,426 | $ 570,165 | $ 309,095 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) | Nov. 30, 2019 | Feb. 28, 2019 | Feb. 28, 2018 |
Finite-Lived Intangible Assets, Net [Abstract] | |||
Intangible assets, at cost - beginning of period | $ 127,672 | $ 533,369 | |
Intangible assets, accumulated depreciation - beginning of period | 0 | (200,629) | |
Intangible assets, net | $ 206,831 | $ 127,672 | $ 533,369 |
Intangible Assets, Net (Detai_2
Intangible Assets, Net (Details 1) - USD ($) | 9 Months Ended | 12 Months Ended |
Nov. 30, 2019 | Feb. 28, 2019 | |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Intangible assets, net beginning | $ 127,672 | $ 533,369 |
Add: additions in the period | 95,488 | 153,477 |
Deduct: amortization of intangibles | (15,202) | (59,851) |
Deduct: impairment of intangibles | 0 | (298,694) |
Deduct: foreign exchange effect | (1,127) | 0 |
Intangible assets, net ending | $ 206,831 | $ 127,672 |
Intangible Assets, Net (Detai_3
Intangible Assets, Net (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2019 | Nov. 30, 2018 | Nov. 30, 2019 | Nov. 30, 2018 | |
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Amortization expense | $ 6,660 | $ 19,627 | $ 15,202 | $ 57,615 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) | Nov. 30, 2019 | Feb. 28, 2019 |
Fair Value Disclosures [Abstract] | ||
Warrants (First Issuance), carrying amount | $ 219,531 | |
Warrants (First Issuance), fair value | 219,531 | |
Long-term debt, carrying amount | $ 956,932 | 1,005,518 |
Long-term debt, fair value | 956,932 | 1,005,518 |
Convertible notes (First Issuance), carrying amount | 2,495,636 | |
Convertible notes (First Issuance), fair value | 2,650,000 | |
Convertible notes (Second Issuance), carrying amount | 4,593,664 | 3,126,886 |
Convertible notes (Second Issuance), fair value | $ 4,900,000 | $ 3,150,000 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities (Details) - USD ($) | Nov. 30, 2019 | Feb. 28, 2019 |
Payables and Accruals [Abstract] | ||
Trade accounts payable | $ 674,601 | $ 1,784,362 |
Accrued liabilities | 973,564 | 885,871 |
Accounts payable and accrued liabilities | $ 1,648,165 | $ 2,670,233 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) | Nov. 30, 2019 | Feb. 28, 2019 |
Long-term Debt, Unclassified [Abstract] | ||
Installment loan | $ 956,932 | $ 1,005,518 |
Less current portion | 52,675 | 53,155 |
Non-current portion | $ 904,257 | $ 952,363 |
Long-Term Debt (Details 1)
Long-Term Debt (Details 1) - USD ($) | Nov. 30, 2019 | Feb. 28, 2019 |
Long-term Debt, Unclassified [Abstract] | ||
2020 | $ 13,169 | |
2021 | 52,675 | |
2022 | 52,675 | |
2023 | 52,675 | |
2024 | 52,675 | |
Thereafter | 733,063 | |
Total | $ 956,932 | $ 1,005,518 |
Long-Term Debt (Details Narrati
Long-Term Debt (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2019 | Nov. 30, 2018 | Nov. 30, 2019 | Nov. 30, 2018 | |
Long-term Debt, Unclassified [Abstract] | ||||
Interest paid | $ 14,778 | $ 13,825 | $ 41,840 | $ 40,305 |
Convertible Notes (Details)
Convertible Notes (Details) - USD ($) | Nov. 30, 2019 | Feb. 28, 2019 |
Warrants - liability | $ 0 | $ 219,531 |
Beneficial conversion option - equity | 1,200,915 | 1,200,915 |
November 2018 | ||
Convertible notes - liability | 0 | 2,495,636 |
Accrued interest - liability | 0 | 60,793 |
Deferred financing costs | 0 | (26,557) |
Total | 0 | 2,529,872 |
Warrants - liability | 0 | 219,531 |
November 2018 | Issue Date | ||
Convertible notes - liability | 2,495,636 | |
Accrued interest - liability | 0 | |
Deferred financing costs | (63,738) | |
Total | 2,431,898 | |
Warrants - liability | 154,364 | |
January 2019 | ||
Convertible notes - liability | 4,593,664 | 3,126,886 |
Accrued interest - liability | 343,011 | 49,011 |
Deferred financing costs | (9,941) | (69,597) |
Total | 4,926,734 | 3,106,300 |
Beneficial conversion option - equity | 1,200,915 | 1,200,915 |
Warrants - equity | 719,404 | $ 757,704 |
January 2019 | Issue Date | ||
Convertible notes - liability | 2,941,381 | |
Accrued interest - liability | 0 | |
Deferred financing costs | (79,539) | |
Total | 2,861,842 | |
Beneficial conversion option - equity | 1,200,915 | |
Warrants - equity | $ 757,704 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 9 Months Ended | |
Nov. 30, 2019 | Nov. 30, 2018 | |
Beginning balance, amount | $ 2,626,392 | $ 10,324,065 |
Issuance of common shares for cash, amount | 39,023,632 | |
Issuance of shares upon the cashless exercise of stock options, amount | 0 | |
Issuance of shares upon exercise of warrants, amount | 143,749 | 0 |
Issuance of shares upon settlement of legal matter, amount | 0 | |
Issuance of shares upon conversion of convertible notes, amount | 2,689,510 | |
Ending balance, amount | $ 36,316,469 | $ 3,301,570 |
Common Stock | ||
Beginning balance, shares | 33,805,706 | 33,751,088 |
Beginning balance, amount | $ 3,381 | $ 3,376 |
Issuance of common shares for cash, shares | 4,693,567 | |
Issuance of common shares for cash, amount | $ 469 | |
Issuance of shares upon the cashless exercise of stock options, shares | 4,565 | |
Issuance of shares upon the cashless exercise of stock options, amount | $ 1 | |
Issuance of shares upon exercise of warrants, shares | 15,432 | 18,821 |
Issuance of shares upon exercise of warrants, amount | $ 1 | $ 2 |
Issuance of shares upon settlement of legal matter, shares | 150,000 | |
Issuance of shares upon settlement of legal matter, amount | $ 15 | |
Issuance of shares upon conversion of convertible notes, shares | 319,326 | |
Issuance of shares upon conversion of convertible notes, amount | $ 32 | |
Issuance of shares upon vesting of restricted stock units, shares | 243,932 | 35,797 |
Issuance of shares upon vesting of restricted stock units, amount | $ 24 | $ 3 |
Ending balance, shares | 39,232,528 | 33,805,706 |
Ending balance, amount | $ 3,923 | $ 3,381 |
Share-Based Payments (Details)
Share-Based Payments (Details) - $ / shares | 9 Months Ended | |
Nov. 30, 2019 | Nov. 30, 2018 | |
Share-based Payment Arrangement [Abstract] | ||
Number of options outstanding, beginning | 1,962,400 | 2,374,581 |
Number of options, granted | 0 | 13,209 |
Number of options, exercised | (5,000) | (20,000) |
Number of options, forfeited | (39,902) | (100,000) |
Number of options, expired | (260,417) | (62,500) |
Number of options outstanding, ending | 1,657,081 | 2,205,290 |
Number of options outstanding, exercisable | 1,007,498 | 1,065,414 |
Weighted average exercise price outstanding, beginning | $ 7.53 | $ 7.99 |
Weighted average exercise price, granted | .00 | 11.52 |
Weighted average exercise price, exercised | .80 | .80 |
Weighted average exercise price, forfeited | 9.67 | 5.25 |
Weighted average exercise price, expired | 13.59 | 4.80 |
Weighted average exercise price outstanding, ending | 6.55 | 8.29 |
Weighted average exercise price outstanding, exercisable | $ 6.38 | $ 7.60 |
Share-Based Payments (Details 1
Share-Based Payments (Details 1) - $ / shares | 9 Months Ended | |||
Nov. 30, 2019 | Nov. 30, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | |
Exercise price | $ 6.55 | $ 8.29 | $ 7.53 | $ 7.99 |
Number of stock options, outstanding | 1,657,081 | 2,205,290 | 1,962,400 | 2,374,581 |
Number of stock options, exercisable | 1,007,498 | 1,065,414 | ||
Weighted average remaining life, outstanding | 7 years 1 month 28 days | 7 years 2 months 19 days | ||
Weighted average remaining life, exercisable | 7 years 1 month 10 days | 7 years 7 months 13 days | ||
Stock Option 1 | ||||
Exercise price | $ .80 | $ .80 | ||
Number of stock options, outstanding | 577,081 | 582,081 | ||
Weighted average remaining life, outstanding | 6 years | 7 years | ||
Stock Option 2 | ||||
Exercise price | $ 3 | $ 3 | ||
Number of stock options, outstanding | 0 | 0 | ||
Weighted average remaining life, outstanding | 0 years | 0 years | ||
Stock Option 3 | ||||
Exercise price | $ 5.25 | $ 5.25 | ||
Number of stock options, outstanding | 380,000 | 380,000 | ||
Weighted average remaining life, outstanding | 7 years 8 months 27 days | 8 years 8 months 27 days | ||
Stock Option 4 | ||||
Exercise price | $ 8.75 | $ 8.75 | ||
Number of stock options, outstanding | 0 | 0 | ||
Weighted average remaining life, outstanding | 0 years | 0 years | ||
Stock Option 5 | ||||
Exercise price | $ 11.52 | $ 11.52 | ||
Number of stock options, outstanding | 0 | 13,209 | ||
Weighted average remaining life, outstanding | 0 years | 9 years 7 months 10 days | ||
Stock Option 6 | ||||
Exercise price | $ 12 | $ 12 | ||
Number of stock options, outstanding | 700,000 | 700,000 | ||
Weighted average remaining life, outstanding | 7 years 9 months 15 days | 8 years 9 months 15 days | ||
Stock Option 7 | ||||
Exercise price | $ 13.49 | $ 13.49 | ||
Number of stock options, outstanding | 0 | 250,000 | ||
Weighted average remaining life, outstanding | 0 years | 8 years 10 months 17 days | ||
Stock Option 8 | ||||
Exercise price | $ 13.89 | $ 13.89 | ||
Number of stock options, outstanding | 0 | 280,000 | ||
Weighted average remaining life, outstanding | 0 years | 25 days |
Share-Based Payments (Details 2
Share-Based Payments (Details 2) | 9 Months Ended |
Nov. 30, 2018$ / shares | |
Share-based Payment Arrangement [Abstract] | |
Exercise price | $ 11.52 |
Risk-free interest rate | 2.82% |
Expected dividend yield | 0.00% |
Expected volatility | 78.00% |
Expected life | 6 years 6 months |
Share-Based Payments (Details 3
Share-Based Payments (Details 3) - Restricted Stock Units (RSUs) - $ / shares | 9 Months Ended | |
Nov. 30, 2019 | Nov. 30, 2018 | |
Number of units outstanding, beginning | 402,868 | 34,102 |
Number of units, granted | 4,114,567 | 102,818 |
Number of units, issued as common stock | (243,932) | (35,797) |
Number of units, forfeited | (53,750) | (1,625) |
Number of units outstanding, ending | 4,219,753 | 99,498 |
Number of units outstanding, vested | 831,684 | 0 |
Weighted average exercise price outstanding, beginning | $ 8.77 | $ 13 |
Weighted average exercise price, granted | 1.06 | 11.54 |
Weighted average exercise price, issued as common stock | 2.52 | 13.06 |
Weighted average exercise price, forfeited | 9.82 | 12.31 |
Weighted average exercise price outstanding, ending | 1.60 | 11.48 |
Weighted average exercise price outstanding, vested | $ 1.19 | $ 0 |
Equity Incentive Plan (Details)
Equity Incentive Plan (Details) - Equity Incentive Plan - shares | 9 Months Ended | |
Nov. 30, 2019 | Nov. 30, 2018 | |
Number of units outstanding, beginning | 3,223,516 | 1,735,898 |
Share reserve increase | 2,000,000 | 1,500,000 |
Number of units, granted | (4,114,567) | (116,027) |
Number of units, forfeited | 93,652 | 101,625 |
Number of units, expired | 260,417 | 50,000 |
Number of units outstanding, ending | 1,463,018 | 3,271,496 |
Warrants (Details)
Warrants (Details) - Warrants - $ / shares | 9 Months Ended | |
Nov. 30, 2019 | Nov. 30, 2018 | |
Number of units outstanding, beginning | 802,469 | 140,667 |
Number of units, issued | 4,253,230 | 0 |
Number of units, exercised | (15,432) | 0 |
Number of units, expired | 0 | 0 |
Number of units outstanding, ending | 5,040,267 | 140,667 |
Weighted average exercise price outstanding, beginning | $ 10.74 | $ 12 |
Weighted average exercise price, issued | 10.91 | .00 |
Weighted average exercise price, exercised | 9.32 | .00 |
Weighted average exercise price, expired | .00 | .00 |
Weighted average exercise price outstanding, ending | $ 10.89 | $ 12 |
Warrants (Details 1)
Warrants (Details 1) | 9 Months Ended |
Nov. 30, 2019$ / sharesshares | |
Number of warrants outstanding | shares | 5,040,267 |
Weighted average exercise price | $ / shares | $ 10.89 |
Warrants 1 | |
Expiration date | Aug. 25, 2020 |
Number of warrants outstanding | shares | 200,000 |
Weighted average exercise price | $ / shares | $ 11 |
Warrants 2 | |
Expiration date | Oct. 5, 2020 |
Number of warrants outstanding | shares | 159,663 |
Weighted average exercise price | $ / shares | $ 8.55 |
Warrants 3 | |
Expiration date | Jan. 15, 2021 |
Number of warrants outstanding | shares | 277,778 |
Weighted average exercise price | $ / shares | $ 9.32 |
Warrants 4 | |
Expiration date | Jan. 21, 2021 |
Number of warrants outstanding | shares | 9,259 |
Weighted average exercise price | $ / shares | $ 9.32 |
Warrants 5 | |
Expiration date | Feb. 25, 2021 |
Number of warrants outstanding | shares | 300,000 |
Weighted average exercise price | $ / shares | $ 12 |
Warrants 6 | |
Expiration date | Jun. 14, 2022 |
Number of warrants outstanding | shares | 4,093,567 |
Weighted average exercise price | $ / shares | $ 11 |
Interest and Other Finance Co_3
Interest and Other Finance Costs (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2019 | Nov. 30, 2018 | Nov. 30, 2019 | Nov. 30, 2018 | |
Interest And Other Finance Costs | ||||
Interest on long-term debt | $ 14,778 | $ 13,825 | $ 41,840 | $ 40,305 |
Interest on convertible notes | 98,000 | 0 | 313,433 | 0 |
Accretion expense | 549,090 | 0 | 1,584,977 | 0 |
Amortization of deferred finance costs | 19,885 | 0 | 86,212 | 0 |
Revaluation of warrants | 0 | 0 | 8,483 | 0 |
Loss on revaluation of foreign exchange contracts | 10,881 | 0 | 10,881 | 0 |
Gain on conversion of November 2018 Notes | 0 | 0 | (232,565) | 0 |
Other | 393 | 1,058 | 3,830 | 812 |
Interest and other finance costs | $ 693,027 | $ 14,883 | $ 1,817,091 | $ 41,117 |