Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
May 31, 2021 | Jul. 14, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | Loop Industries, Inc. | |
Entity Central Index Key | 0001504678 | |
Document Type | 10-Q | |
Document Period End Date | May 31, 2021 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --02-28 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 42,445,351 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Interactive Data Current? | Yes | |
Entity Incorporation State Country Code | NV | |
Entity File Number | 000-54768 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | May 31, 2021 | Feb. 28, 2021 |
Current assets | ||
Cash and cash equivalents | $ 18,037,062 | $ 35,221,951 |
Sales tax, tax credits and other receivables (Note 3) | 1,551,702 | 1,763,835 |
Prepaid expenses (Note 4) | 1,978,390 | 609,782 |
Total current assets | 21,567,154 | 37,595,568 |
Investment in joint venture | 1,500,000 | 1,500,000 |
Property, plant and equipment, net (Note 5) | 8,569,606 | 3,513,051 |
Intangible assets, net (Note 6) | 881,223 | 794,894 |
Total assets | 32,517,983 | 43,403,513 |
Current liabilities | ||
Accounts payable and accrued liabilities (Note 8) | 9,057,423 | 8,124,865 |
Current portion of long-term debt (Note 10) | 971,257 | 938,116 |
Total current liabilities | 10,028,680 | 9,062,981 |
Long-term debt (Note 10) | 1,614,971 | 1,516,008 |
Total liabilities | 11,643,651 | 10,578,989 |
Stockholders' Equity | ||
Series A Preferred stock par value $0.0001; 25,000,000 shares authorized; one share issued and outstanding (Note 12) | 0 | 0 |
Common stock par value $0.0001; 250,000,000 shares authorized; 42,433,320 shares issued and outstanding (February 28, 2021 – 42,413,691) (Note 12) | 4,244 | 4,242 |
Additional paid-in capital | 113,663,032 | 113,662,677 |
Additional paid-in capital - Warrants | 8,826,165 | 8,826,165 |
Accumulated deficit | (101,819,334) | (89,661,970) |
Accumulated other comprehensive loss | 200,225 | (6,590) |
Total stockholders' equity | 20,874,332 | 32,824,524 |
Total liabilities and stockholders' equity | $ 32,517,983 | $ 43,403,513 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | May 31, 2021 | Feb. 28, 2021 |
Stockholders' Equity | ||
Series A preferred stock, par value | $ .0001 | $ .0001 |
Series A preferred stock, share authorized | 25,000,000 | 25,000,000 |
Series A preferred stock, share issued | 1 | 1 |
Series A preferred stock, share outstanding | 1 | 1 |
Common stock, par value | $ .0001 | $ 0.0001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 42,433,320 | 42,413,691 |
Common stock, shares outstanding | 42,433,320 | 42,413,691 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | |
May 31, 2021 | May 31, 2020 | |
Income Statement [Abstract] | ||
Revenue | $ 0 | $ 0 |
Expenses | ||
Research and development, net (Note 13) | 8,637,905 | 1,480,588 |
General and administrative (Note 14) | 3,160,571 | 1,953,081 |
Depreciation and amortization (Notes 5 and 6) | 132,001 | 255,974 |
Interest and other financial expenses (Note 18) | 30,588 | 126,776 |
Interest income | (9,761) | (40,346) |
Foreign exchange loss (gain) | 206,060 | 76,641 |
Total expenses | 12,157,364 | 3,852,714 |
Net loss | (12,157,364) | (3,852,714) |
Other comprehensive income (loss) | ||
Foreign currency translation adjustment | 206,815 | (170,412) |
Comprehensive income (loss) | $ (11,950,549) | $ (4,023,126) |
Loss per share | ||
Basic and diluted | $ (0.29) | $ (0.1) |
Weighted average common shares outstanding | ||
Basic and diluted | 42,433,107 | 39,916,838 |
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 | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total |
Beginning balance, shares at Feb. 29, 2020 | 39,910,774 | 1 | |||||
Beginning balance, amount at Feb. 29, 2020 | $ 3,992 | $ 0 | $ 82,379,413 | $ 9,785,799 | $ (53,317,047) | $ (388,449) | $ 38,463,708 |
Issuance of shares upon vesting of restricted stock units (Note 15), shares | 6,131 | ||||||
Issuance of shares upon vesting of restricted stock units (Note 15), amount | $ 1 | (1) | 0 | ||||
Warrant issued for services (Note 17) | 84,442 | 84,442 | |||||
Stock options issued for services (Note 15) | 556,895 | 556,895 | |||||
Restricted stock units issued for services (Note 15) | 370,487 | 370,487 | |||||
Foreign currency translation | (170,412) | (170,412) | |||||
Net loss | (3,852,714) | (3,852,714) | |||||
Ending balance, shares at May. 31, 2020 | 39,916,905 | 1 | |||||
Ending balance, amount at May. 31, 2020 | $ 3,993 | $ 0 | 83,306,794 | 9,870,241 | (57,169,761) | (558,861) | 35,452,406 |
Beginning balance, shares at Feb. 28, 2021 | 42,413,691 | 1 | |||||
Beginning balance, amount at Feb. 28, 2021 | $ 4,242 | $ 0 | 113,662,677 | 8,826,165 | (89,661,970) | (6,590) | 32,824,524 |
Issuance of shares upon vesting of restricted stock units (Note 15), shares | 19,629 | ||||||
Issuance of shares upon vesting of restricted stock units (Note 15), amount | $ 2 | (2) | 0 | ||||
Stock options issued for services (Note 15) | 549,318 | 549,318 | |||||
Restricted stock units issued for services (Note 15) | (548,961) | (548,961) | |||||
Foreign currency translation | 206,815 | 206,815 | |||||
Net loss | (12,157,364) | (12,157,364) | |||||
Ending balance, shares at May. 31, 2021 | 42,433,320 | 1 | |||||
Ending balance, amount at May. 31, 2021 | $ 4,244 | $ 0 | $ 113,663,032 | $ 8,826,165 | $ (101,819,334) | $ 200,225 | $ 20,874,332 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
May 31, 2021 | May 31, 2020 | |
Cash Flows from Operating Activities | ||
Net loss | $ (12,157,364) | $ (3,852,714) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization (Notes 5 and 6) | 132,001 | 256,090 |
Stock-based compensation expense (Note 15) | 15,357 | 1,011,824 |
Accretion and accrued interest (Note 18) | 21,408 | 17,963 |
Loss on revaluation of foreign exchange contracts | 0 | 98,502 |
Changes in operating assets and liabilities: | ||
Sales tax, tax credits and other receivables (Note 3) | 287,116 | 76,410 |
Prepaid expenses (Note 4) | (1,326,519) | (1,865,216) |
Accounts payable and accrued liabilities (Note 8) | 622,443 | (720,759) |
Net cash used in operating activities | (12,405,558) | (4,977,900) |
Cash Flows from Investing Activities | ||
Investment in a joint venture (Note 9) | 0 | (650,000) |
Additions to property, plant and equipment (Note 5) | (4,867,007) | (394,403) |
Additions to intangible assets (Note 6) | (52,319) | (144,386) |
Net cash used in investing activities | (4,919,326) | (1,188,789) |
Cash Flows from Financing Activities | ||
Repayment of long-term debt (Note 10) | (14,496) | (12,693) |
Net cash provided from (used in) financing activities | (14,496) | (12,693) |
Effect of exchange rate changes | 154,491 | (29,534) |
Net change in cash and cash equivalents | (17,184,889) | (6,208,916) |
Cash and cash equivalents, beginning of period | 35,221,951 | 33,717,671 |
Cash and cash equivalents, end of period | 18,037,062 | 27,508,755 |
Supplemental Disclosure of Cash Flow Information: | ||
Income tax paid | 0 | 0 |
Interest paid | 9,178 | 10,311 |
Interest received | $ 9,761 | $ 40,346 |
The Company, Basis of Presentat
The Company, Basis of Presentation | 3 Months Ended |
May 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company, Basis of Presentation | The Company Loop Industries, Inc. (the “Company,” “Loop Industries,” “we,” or “our”) is a technology company that 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 resin suitable for use in food-grade packaging and polyester fiber. On November 20, 2017, Loop Industries 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 have been prepared in conformity with generally accepted accounting principles in the United States of America (“US GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures included in these unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2021, filed with the SEC on June 1, 2021. The unaudited interim condensed consolidated financial statements comprise the consolidated financial position and results of operations of Loop Industries, Inc. and its subsidiaries, Loop Innovations, LLC and Loop Canada Inc. All subsidiaries are, either directly or indirectly, wholly owned subsidiaries of Loop Industries, Inc. (collectively, the “Company”). The Company also owns, through Loop Innovations, LLC, a 50% interest in a joint venture, Indorama Loop Technologies, LLC, which is accounted for under the equity method. Intercompany balances and transactions are eliminated on consolidation. The condensed consolidated balance sheet as of February 28, 2021, included herein, was derived from the audited financial statements as of that date, but does not include all disclosures including certain notes required by GAAP on an annual reporting basis. In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements present fairly the financial position, results of operations, comprehensive loss and cash flows for the interim periods. The results for the three months ended May 31, 2021 are not necessarily indicative of the results to be expected for any subsequent quarter, for the fiscal year ending February 28, 2022, or for any other period. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
May 31, 2021 | |
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 at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Those estimates and assumptions include estimates for depreciable lives of property, plant and equipment, intangible assets, analysis of impairments of long-lived assets and intangible assets as well as the carrying value of our joint venture investment, accruals for potential liabilities, assumptions made in calculating the fair value of stock-based compensation and other equity instruments, and the assessment of performance conditions for stock-based compensation awards and the judgment in the assessment. The COVID-19 pandemic has disrupted business operations for us and our customers, suppliers, vendors and other parties with whom we do business, and such disruptions are expected to continue for an indefinite period of time. The uncertain duration of these measures has had and may continue to have an effect on our development and commercialization efforts. In particular, as previously disclosed, the situation in the United States and the continued travel restrictions and quarantine requirements between Canada and the United States have caused disruptions in our timetable of our joint venture with Indorama in the development of our Spartanburg facility and commercialization of our technology. Although the Company continues to monitor the situation and may adjust the Company’s current policies as more information and public health guidance become available, the COVID-19 pandemic is ongoing, and its dynamic nature, including uncertainties relating to the ultimate spread of the virus, the severity of the disease, the duration of the outbreak and actions that may be taken by governmental authorities to contain the outbreak or to treat its impact, makes it difficult to assess whether there will be further impact on the development and commercialization of the Company’s technology which could have a material adverse effect on the Company’s results of operations and cash flows. Stock-based compensation The Company periodically issues stock options, warrants and restricted stock units to employees and non-employees in non-capital raising transactions for services and financing expenses. The Company accounts for stock options granted to employees based on the authoritative guidance provided by the FASB wherein the fair value of the award is measured on the grant date and 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 and warrants granted to non-employees in accordance with the authoritative guidance of the FASB wherein the fair value of the stock compensation is based upon the measurement date determined as the earlier of the date at which either a) a commitment is reached with the counterparty for performance or b) the counterparty completes its performance. The Company estimates the fair value of restricted stock unit awards to employees and directors based on the closing market price of its common stock on the date of grant. The fair value of the stock options granted 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 expenses recorded in the current and future periods. 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 expenses recorded during the three-month periods ended May 31, 2021 and 2020 amounted to $8,637,905 and $1,480,588, 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. Foreign currency translations and transactions The accompanying consolidated financial statements are presented in U.S. dollars, the reporting currency of the Company. Assets and liabilities of subsidiaries that have a functional currency other than that of the Company are translated to U.S. dollars at the exchange rate as at the balance sheet date. Income and expenses are translated at the average exchange rate of the period. The resulting translation adjustments are included in other comprehensive income (loss) (“OCI”). As a result, foreign currency exchange fluctuations may impact operating expenses. The Company currently is not engaged in any currency hedging activities. For transactions and balances, monetary assets and liabilities denominated in foreign currencies are translated into the functional currency of the entity at the prevailing exchange rate at the reporting date. Non-monetary assets and liabilities, and revenue and expense items denominated in foreign currencies are translated into the functional currency using the exchange rate prevailing at the dates of the respective transactions. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in the consolidated statements of operations and comprehensive loss, except for gains or losses arising from the translation of intercompany balances denominated in foreign currencies that forms part in the net investment in the subsidiary which are included in OCI. Net earnings (loss) per share The Company computes net loss per share in accordance with FASB ASC 260, Earnings Per Share For the three-month periods ended May 31, 2021 and 2020, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an antidilutive effect. As at May 31, 2021, the potentially dilutive securities consisted of 1,587,081 outstanding stock options (2020 – 1,587,081), 4,149,125 outstanding restricted stock units (2020 – 4,293,407), and 4,133,720 outstanding warrants (2020 – 5,084,331). |
Sales Tax, Tax Credits and Othe
Sales Tax, Tax Credits and Other Receivables | 3 Months Ended |
May 31, 2021 | |
Receivables [Abstract] | |
Sales Tax, Tax Credits and Other Receivables | Sales tax, research and development tax credits and other receivables as at May 31, 2021 and February 28, 2021 were as follows: May 31, 2021 February 28, 2021 Sales tax $ 935,883 $ 1,155,504 Research and development tax credits 500,345 435,467 Other receivables 115,474 172,864 $ 1,551,702 $ 1,763,835 |
Prepaid Expenses and Deposits
Prepaid Expenses and Deposits | 3 Months Ended |
May 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Deposits | Prepaid expenses and deposits as at May 31, 2021 and February 28, 2021 were as follows: May 31, 2021 February 28, 2021 Directors and officers insurance $ 812,455 $ - Deposits on machinery and equipment 965,670 379,395 Other 200,265 230,387 $ 1,978,390 $ 609,782 Non-refundable cash deposits on machinery and equipment that will be used in research and development activities will be expensed, and classified as research and development expenses, in the period the equipment is received and placed into use. |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
May 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | As at May 31, 2021 Cost Accumulated depreciation, write-down and impairment Net book value Building $ 2,053,585 $ (228,932 ) $ 1,824,653 Land 5,173,641 - 5,173,641 Building Improvements 1,938,596 (594,078 ) 1,344,518 Machinery and equipment 6,514,252 (6,514,252 ) - Office equipment and furniture 342,258 (115,464 ) 226,794 $ 16,022,332 $ (7,452,726 ) $ 8,569,606 As at February 28, 2021 Cost Accumulated depreciation, write-down and impairment Net book value Building $ 1,954,345 $ (201,589 ) $ 1,752,756 Land 241,578 - 241,578 Building Improvements 1,804,872 (474,114 ) 1,330,758 Machinery and equipment 6,514,252 (6,514,252 ) - Office equipment and furniture 292,946 (104,987 ) 187,959 $ 10,807,993 $ (7,294,942 ) $ 3,513,051 During the three-month period ended May 31, 2021, the Company acquired a 19 million square foot parcel of land in Bécancour, Québec for $4.9 million (CDN $5.9 million). The Company intended use for the site is to construct a commercial facility to manufacture Loop™ branded PET resin using its Infinite Loop™ technology. Depreciation expense for the three-month periods ended May 31, 2021 and 2020 amounted to $115,057 and $248,199, respectively, and is recorded as an operating expense in the consolidated statements of operations and comprehensive loss. |
Intangible Assets
Intangible Assets | 3 Months Ended |
May 31, 2021 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Intangible Assets | As at May 31, As at February 28, 2021 2021 Patents, at cost - beginning of period $ 859,048 $ 225,174 Patents, accumulated depreciation – beginning of period (64,154 ) (22,310 )) Patents, net - beginning of period 794,894 202,864 Additions in the period - patents 52,319 623,811 Amortization of patents (16,944 ) (41,844 )) Foreign exchange effect 50,954 10,063 Patents, net - end of period $ 881,223 $ 794,894 Amortization expense for the three-month periods ended May 31, 2021 and 2020 amounted to $16,944 and $7,891, respectively, and is recorded as an operating expense in the unaudited condensed consolidated statements of operations and comprehensive loss. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
May 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | The following tables presents the fair value of the Company’s financial liabilities as at May 31, 2021 and February 28, 2021: Fair Value Measurements as at May 31, 2021 Carrying Amount Fair Value Level in the hierarchy Instruments measured at amortized cost: Long-term debt $ 2,586,227 $ 2,596,787 Level 2 Fair Value Measurements at February 28, 2021 Carrying Amount Fair Value Level in the hierarchy Instruments measured at amortized cost: Long-term debt $ 2,454,123 $ 2,464,540 Level 2 |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 3 Months Ended |
May 31, 2021 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities as at May 31, 2021 and February 28, 2021 were as follows: May 31, 2021 February 28, 2021 Trade accounts payable $ 5,279,857 $ 5,082,736 Accrued employee compensation 1,051,109 970,154 Accrued professional fees 1,040,791 1,270,628 Accrued engineering fees 862,645 535,359 Other accrued liabilities 823,021 265,988 $ 9,057,423 $ 8,124,865 |
Joint Venture
Joint Venture | 3 Months Ended |
May 31, 2021 | |
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 “Joint Venture Agreement”) with Indorama Ventures Holdings LP, USA, an indirect subsidiary of Indorama Ventures Public Company Limited, to manufacture and commercialize sustainable polyester resin. Each company has a 50/50 equity interest in Indorama Loop Technologies, LLC (“ILT”), which was specifically formed to operate and execute the joint venture. Under the Joint Venture Agreement, Indorama Ventures is contributing manufacturing knowledge and Loop Industries is required to contribute its proprietary science and technology. Specifically, the Company is contributing an exclusive worldwide 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 were no operations in ILT from the date of inception of September 24, 2018 to February 28, 2021 and, as at February 28, 2021, the carrying value of the equity investment was $1,500,000, which is the total of the cash contributions we have made to ILT. During the year ended February 28, 2021, we made contributions to ILT of $650,000 (2020 – $850,000). These contributions to ILT, which have been matched by Indorama Ventures, were used to fund engineering design costs which have been capitalized in ILT. See Note 20. Subsequent Events for the description of an amendment to the Joint Venture Agreement dated June 18, 2021. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
May 31, 2021 | |
Long-term Debt, Unclassified [Abstract] | |
Long-Term Debt | Long-term debt as of May 31, 2021 and February 28, 2021, was comprised of the following: May 31, 2021 February 28, 2021 Investissement Québec financing facility : Principal amount $ 1,830,048 $ 1,741,612 Unamortized discount (271,001 ) (268,192 ) Accrued interest 55,924 42,588 Total Investissement Québec financing facility 1,614,971 1,516,008 Term loan Principal amount 971,256 938,116 Less: current portion (971,256 ) (938,116 ) Total term loan, net of current portion - - Long-term debt, net of current portion $ 1,614,971 $ 1,516,008 Investissement Québec financing facility On February 21, 2020, the Company received $1,830,048 (CDN$2,209,234) from Investissement Québec as the first disbursement of our financing facility, out of a maximum of $3,810,471 (CDN$4,600,000) (the “Financing Facility”). The loan bears interest at 2.36% and there is a 36-month moratorium on both capital and interest repayments starting on the date of the first disbursement, after which capital and interest is repayable in 84 monthly installments. The Company established the fair value of the loan for the first disbursement at $1,354,408 based on a discount rate of 5.45%, which reflected a debt discount of $290,714. The discount rate used was based on the external financing from a Canadian bank. The Company, under the loan agreement, was required to pay fees representing 1% of the loan amount, $38,105 (CDN$46,000) to Investissment Québec which we deferred and recorded as a reduction of the Financing Facility. Debt discount and deferred financing expenses are amortized to “Interest and other financial expenses” in our Consolidated Statements of Operations and Comprehensive Loss. The Company recorded interest expense on the Investissement Québec loan for the three-month period ended May 31, 2021 in the amount of $10,882 (2020 – $9,416) and an accretion expense of $10,526 (2020 – $8,547). The Company has also agreed to issue to Investissement Québec warrants to purchase shares of common stock of the Company in an amount equal to 10% of each disbursement up to a maximum aggregate amount of $381,047 (CDN$460,000). The exercise price of the warrants is equal to the higher of (i) $11.00 per share and (ii) the ten-day weighted average closing price of Loop 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. In connection the first disbursement of the Financing Facility, the Company issued a warrant (“First Disbursement Warrant”) to acquire 15,153 shares of common stock at a strike price of $11.00 per share to Investissement Québec. The Company determined the fair value of the warrants using the Black-Scholes pricing formula. The fair value of the First Disbursement Warrant was determined to be $77,954 and is included in “Additional paid-in capital – Warrants” in our Condensed Consolidated Balance Sheets. The First Disbursement Warrant remains outstanding as at May 31, 2021. The remaining amount available under the financing facility is $1,980,422 (CDN$2,390,766) and relates to expenditures incurred up to June 30, 2021 in connection with our demonstration and training facility. Term Loan On January 24, 2018, the Company obtained a $1,159,708 (CDN$1,400,000) 20-year term installment loan (the “Loan”), from a Canadian bank. The Loan bears interest at the bank’s Canadian prime rate plus 1.5%. By agreement, the Loan is repayable in monthly payments of $4,832 (CDN$5,833) plus interest, until January 2022. It includes an option allowing for the prepayment of the Loan without penalty. In January 2021, the Company and the Canadian bank agreed to maintain the same repayment amount and interest rate until January 2022, at which time the monthly repayment amount and interest rate will be subject to renewal. During the three-month period ended May 31, 2021, we repaid $14,496 (2020 – $12,693) on the principal balance of the Loan and interest paid amounted to $9,178 (2020 – $10,311). The terms of the credit facility require the Company to comply with certain financial covenants. As at May 31, 2021 and 2020, the Company was in compliance with its financial covenants. Principal repayments due on the Company’s bank indebtedness over the next five years are as follows: Years ending Amount February 28, 2022 $ 45,560 February 28, 2023 57,985 February 29, 2024 319,417 February 28, 2025 319,417 February 28, 2026 319,417 Thereafter 1,727,084 Total $ 2,788,880 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
May 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Employment Agreement On June 29, 2015, the Company entered into an employment agreement with Mr. Daniel Solomita, the Company’s President and Chief Executive Officer (“CEO”). The employment agreement is for an indefinite term. On July 13, 2018, the Company and Mr. Solomita entered into an amendment and restatement of the employment agreement which provided for a long-term incentive grant of 4,000,000 shares of the Company’s common stock, in tranches of one million shares each, upon the achievement of four performance milestones. This was modified to provide a grant of 4,000,000 restricted stock units covering 4,000,000 shares of the Company’s common stock while the performance milestones remained the same. The grant of the restricted stock units became effective upon approval by the Company’s shareholders at the Company’s 2019 annual meeting, of an increase in the number of shares available for grant under the Plan. Such approval was granted by the Company’s shareholders at the Company’s 2019 annual meeting. On April 30, 2020, the Company and Mr. Solomita entered into an amendment of Mr. Solomita’s employment agreement. The amendment clarified the milestones consistent with the shift in the Company’s business from the production of terephthalate to the production of dimethyl terephthalate, another proven monomer of PET plastic that is simpler to purify. During the quarters ended May 31, 2021 and May 31, 2020, no outstanding milestones were probable of being met based on the authoritative guidance provided by the FASB and, accordingly, the Company did not record any additional compensation expense. When a milestone becomes probable, the corresponding expense will be valued based on the grant date fair value on April 30, 2020, the date of the last modification of Mr. Solomita’s employment agreement. The closing price of the Company’s common stock on the Nasdaq on April 30, 2020 was $7.74 per share. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
May 31, 2021 | |
Stockholders' Equity | |
Stockholders' Equity | Common Stock For the period ended May 31, 2021 Number of shares Amount Balance, February 28, 2021 42,413,691 $ 4,242 Issuance of shares upon settlement of restricted stock units 19,629 2 Balance, May 31, 2021 42,433,320 $ 4,244 For the period ended May 31, 2020 Number of shares Amount Balance, February 29, 2020 39,910,774 $ 3,992 Issuance of shares upon settlement of restricted stock units 6,131 1 Balance, May 31, 2020 39,916,905 $ 3,993 During the three months ended May 31, 2021, the Company recorded the following common stock transaction: (i) The Company issued 19,629 shares of the common stock to settle restricted stock units that vested in the period. During the three months ended May 31, 2020, the Company recorded the following common stock transaction: (i) The Company issued 6,131 shares of the common stock to settle restricted stock units that vested in the period. |
Research and Development Expens
Research and Development Expenses | 3 Months Ended |
May 31, 2021 | |
Research and Development [Abstract] | |
Research and development expenses | Research and development expenses for the three-month periods ended May 31, 2021 and 2020 were as follows: May 31, 2021 May 31, 2020 External engineering $ 2,903,448 $ 74,932 Employee compensation 2,086,128 819,048 Machinery and equipment expenditures 2,622,892 - Demonstration plant operating expenses 691,537 286,103 Other 333,900 300,505 $ 8,637,905 $ 1,480,588 |
General and Administrative Expe
General and Administrative Expenses | 3 Months Ended |
May 31, 2021 | |
General and Administrative Expense [Abstract] | |
General and Administrative Expenses | General and administrative expenses for the three-month periods ended May 31, 2021 and 2020 were as follows: May 31, 2021 May 31, 2020 Professional fees $ 1,631,451 $ 221,697 Employee compensation(1) 461,405 1,142,851 Directors and officers insurance 868,647 473,574 Other 199,068 114,959 $ 3,160,571 $ 1,953,081 (1) Includes stock-based compensation expense. In the three-month period ended May 31, 2021, the Company recorded RSU forfeitures for an amount of $935,837 (2020 – $4,005) as a net reversal of stock-based compensation. |
Share-Based Payments
Share-Based Payments | 3 Months Ended |
May 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Payments | Stock Options During the three-month period ended May 31, 2021, the Company granted no stock options (2020 – nil), no stock options were forfeited (2020 – nil) or exercised (2020 – nil) and no stock options expired (2020 – nil). 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. There were no new issuances of stock options for the three-month periods ended May 31, 2021 and 2020. The total number of stock options outstanding as at May 31, 2021 was 1,587,081 (2020 – 1,587,081) with a weighted average exercise price of $6.81 (2020 - $6.81), of which 1,229,998 were exercisable (2019 – 986,248) with a weighted average exercise price of $7.25 (2020 – $7.32). During the three-month periods ended May 31, 2021 and 2020, stock-based compensation expense attributable to stock options amounted to $549,318 and $556,895, respectively, and is included in operating expenses. Restricted Stock Units During the three-month period ended May 31, 2021, the Company granted 253,758 restricted stock units (“RSUs”) (2020 – 83,725) with a weighted average fair value of $8.85 (2020 – $8.71), settled 19,629 RSUs (2020 – 6,131) with a weighted average fair value of $9.02 (2020 – $9.55) and 295,524 RSUs were forfeited (2020 – 2,989) with a weighted average fair value of $7.93 (2020 – $8.78). 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. The total number of RSUs outstanding as at May 31, 2021 was 4,149,125 (2020 – 4,293,407), of which 696,327 were vested (2020 – 836,684). During the three-month periods ended May 31, 2021 and 2020, stock-based compensation attributable to RSUs amounted to ($533,961) and $370,487, respectively, and is included in operating expenses. The net reversal in expenses attributable to RSUs in the three-month period ended May 31, 2021 is due to forfeitures recorded in the period for a total of $935,837 (2020 – $4,005). During the three-month periods ended May 31, 2021 and 2020, stock-based compensation included in research and development expenses amounted to $395,545 and $352,007, respectively, and in general and administrative expenses amounted to ($380,188) and $659,817, respectively. The net reversal in stock-based compensation included in general and administrative expenses in the three-month period ended May 31, 2021 is due to forfeitures recorded in the period for a total of $935,837 (2020 – $4,005). |
Equity Incentive Plan
Equity Incentive Plan | 3 Months Ended |
May 31, 2021 | |
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. On March 1, 2021 and 2020, the Board of Directors opted to waive the annual share reserve increase. 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 three-month periods ended May 31, 2021 and 2020: 2021 2020 Number of units Number of units Outstanding, beginning of period 1,083,412 1,300,518 Automatic share reserve increase - - Units granted (253,758 ) (87,114 ) Units forfeited 295,524 2,989 Units expired - - Outstanding, end of period 1,125,178 1,216,393 |
Warrants
Warrants | 3 Months Ended |
May 31, 2021 | |
Warrants Abstract | |
Warrants | During the three-month period ended May 31, 2021, no warrants were granted, were forfeited, were exercised nor expired. During the three-month period ended May 31, 2020, the Company issued, in exchange for consulting services, a warrant to purchase 25,000 shares of our common stock at the price of $9.43 per share expiring May 12, 2022. No warrants were exercised or expired in the three-month period ended May 31, 2021. |
Interest and Other Finance Cost
Interest and Other Finance Costs | 3 Months Ended |
May 31, 2021 | |
Interest And Other Finance Costs | |
Interest and Other Finance Costs | Interest and other financial expenses for the three-month periods ended May 31, 2021 and 2020 are as follows: 2021 2020 Interest on long-term debt $ 20,059 $ 19,727 Accretion expense 10,529 8,547 Loss on revaluation of foreign exchange contracts - 98,502 $ 30,588 $ 126,776 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
May 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commercial Commitments On September 2, 2020, the Company entered into a know-how and engineering agreement (the “Chemtex Agreement”) with Chemtex Global Corporation (“Chemtex”) to license the PET plastic and polyester polymer for fiber manufacturing know-how of INVISTA’s technology and licensing group, INVISTA Performance Technologies (IPT) (“INVISTA”). The total amount of the Chemtex Agreement is $4,300,000 and covers the know-how and design of two Infinite Loop™ facilities. Payment terms are based on the completion of certain milestones and total $2,150,000 for each facility. As at May 31, 2021, the cumulative amount paid was $900,000 and during the three-month period ended May 31, 2021, no additional amount was paid by the Company related to this agreement and included in research and development expenses. Contingencies On October 13, 2020, the Company and certain of its officers were named as defendants in a proposed class-action lawsuit filed in the United States District Court for the Southern District of New York, captioned Olivier Tremblay, Individually and on Behalf of All Other Similarly Situated v. Loop Industries, Inc., Daniel Solomita, and Nelson Gentiletti On October 28, 2020, the Company and certain of its officers were named as defendants in a second proposed class-action lawsuit filed in the United States District Court for the Southern District of New York, captioned Michelle Bazzini, Individually and on Behalf of All Other Similarly Situated v. Loop Industries, Inc., Daniel Solomita, and Nelson Gentiletti On January 4, 2021, the United States District Court for the Southern District of New York rendered a stipulation and order granting the consolidation of the two class-action lawsuits filed in New York as In re Loop Industries, Inc. Securities Litigation Plaintiffs served a consolidated amended complaint on February 18, 2021 which alleges defendants violated Sections 10(b) and 20(a) and Rule 10b-5 of the Securities Exchange Act of 1934 by making materially false and/or misleading statements, as well as allegedly failing to disclose material adverse facts about the Company’s business, operations, and prospects, which caused the Company’s securities to trade at artificially inflated prices. The consolidated amended complaint relies on the October 13, 2020 report published by a third party regarding the Company to support their allegations. Defendants served a motion to dismiss the consolidated amended complaint on April 27, 2021. Plaintiffs’ opposition to the motion to Dismiss was served on May 27, 2021 and Defendants’ reply in support of the motion to dismiss was served on June 11, 2021. On October 13, 2020, the Company, Loop Canada Inc. and certain of their officers and directors were named as defendants in a proposed securities class action filed in the Superior Court of Québec (District of Terrebonne, Province of Québec, Canada), in file no. 700-06-000012-205. The Application for authorization of a class action and for authorization to bring an action pursuant to section 225.4 of the Québec Securities Act Management believes that these cases lack merit and intends to defend them vigorously. No amounts have been provided for in the consolidated financial statements with respect to these claims. Management has not yet determined what effect these lawsuits may have on its financial position or results of operations as they are still in the preliminary stages. |
Subsequent Events
Subsequent Events | 3 Months Ended |
May 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Strategic Partnership On June 22, 2021, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) by and between the Company and SK global chemical Co., Ltd, an accredited investor (the “Purchaser”). Pursuant to the Purchase Agreement, the Company has agreed to issue and sell to the Purchaser the following securities for an aggregate purchase price of approximately $56.5 million (collectively, the “Investment”): ● an aggregate of 4,714,813 shares (the “Shares”) of the Company’s common stock (the “Common Stock”); ● warrants to purchase 4,714,813 shares of Common Stock for an exercise price of $15.00 (the “First Tranche Warrants”), with an expiration date of the third anniversary of the issue date; ● warrants to purchase 2,357,407 shares of Common Stock for an exercise price of $20.00 (the “Second Tranche Warrants”), with an expiration date of the earlier of (A) the date that is the third anniversary of the First Plant Milestone (as defined in the Second Tranche Warrants), (B) the expiration of the JV Negotiation Period (as defined in the Second Tranche Warrants), provided that the Joint Venture Transaction Agreements (as defined in the Second Tranche Warrants) have not been executed by the expiration of the JV Negotiation Period and (C) the third anniversary of the Date of approval of the basic engineering package for the facilities constructed by the JV, provided that the First Plant Milestone has not occurred as of such date; and ● warrants to purchase 461,298 shares of Common Stock for an exercise price of $11.00 (the “Third Tranche Warrants,” and together with First Tranche Warrants and the Second Tranche Warrants, the “Warrants”), with an expiration date of June 14, 2022. The Purchaser may exercise the First Tranche Warrant and the Third Tranche Warrant at any time prior to their applicable expiration dates. The Purchaser may exercise the Second Tranche Warrant at any time on or after the first business day following the First Plant Milestone (as defined in the Second Tranche Warrant) prior to its expiration date. After the closing of the Investment, the Purchaser is expected to own approximately 10.0% of the issued and outstanding Common Stock as of that date. Simultaneous with the execution of the Purchase Agreement, the Company and the Purchaser entered into a Joint Venture Memorandum of Understanding (“JV MOU”) with respect to a potential joint venture to commercialize the Company’s plastic recycling technology in Asia (“Proposed Asia JV”). The JV MOU, which is non-binding, outlines certain principal terms for the Proposed Asia JV. The Purchase Agreement provides that the parties will negotiate exclusively with one another from the date of the Purchase Agreement until the date which is six months from the BDP Date (as defined in the Purchase Agreement) with respect to the Proposed Asia JV (subject to extension in accordance with the terms and conditions of the Purchase Agreement), with the objective of executing definitive agreements for the Proposed Asia JV. Joint Venture Amendment In conjunction with the SK strategic partnership described above, on June 18, 2021, the Company, Loop Innovations, LLC, a wholly-owned subsidiary of the Company (“Loop Innovations”), Indorama Ventures Holdings LP (“Indorama”) and Indorama Loop Technologies, LLC (the “Indorama Joint Venture Company”) amended (i) the Limited Liability Company Agreement between Loop Innovations, LLC and Indorama Ventures Holdings LP (the “LLC Agreement”), (ii) the Marketing Agreement between the Company and Indorama Loop Technologies, LLC (the “Marketing Agreement”) and (iii) the License Agreement between the Company and the Indorama Joint Venture Company (the “License Agreement”), each dated September 24, 2018 (collectively such amendments, the “Indorama Joint Venture Amendments”). Under the Indorama Joint Venture Amendments, the Company, Indorama and the Indorama Joint Venture Company agreed to: ● terminate Indorama’s right of first refusal under the LLC Agreement over any facility to produce products utilizing any waste-to-resin technology applying the PET depolymerization process of the Company; ● amend the non-compete obligations under the LLC Agreement to solely apply to the Company; ● limit the scope of the Company’s grant of intellectual property rights and the scope of the exclusivity rights of the Indorama Joint Venture Company for the retrofit of existing facilities under the License Agreement to North America and Europe; and ● limit the scope of the Indorama Joint Venture Company’s permitted marketing rights under the Marketing Agreement to North America and Europe. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
May 31, 2021 | |
Accounting Policies [Abstract] | |
Use of estimates | 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 at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Those estimates and assumptions include estimates for depreciable lives of property, plant and equipment, intangible assets, analysis of impairments of long-lived assets and intangible assets as well as the carrying value of our joint venture investment, accruals for potential liabilities, assumptions made in calculating the fair value of stock-based compensation and other equity instruments, and the assessment of performance conditions for stock-based compensation awards and the judgment in the assessment. The COVID-19 pandemic has disrupted business operations for us and our customers, suppliers, vendors and other parties with whom we do business, and such disruptions are expected to continue for an indefinite period of time. The uncertain duration of these measures has had and may continue to have an effect on our development and commercialization efforts. In particular, as previously disclosed, the situation in the United States and the continued travel restrictions and quarantine requirements between Canada and the United States have caused disruptions in our timetable of our joint venture with Indorama in the development of our Spartanburg facility and commercialization of our technology. Although the Company continues to monitor the situation and may adjust the Company’s current policies as more information and public health guidance become available, the COVID-19 pandemic is ongoing, and its dynamic nature, including uncertainties relating to the ultimate spread of the virus, the severity of the disease, the duration of the outbreak and actions that may be taken by governmental authorities to contain the outbreak or to treat its impact, makes it difficult to assess whether there will be further impact on the development and commercialization of the Company’s technology which could have a material adverse effect on the Company’s results of operations and cash flows. |
Stock-based compensation | The Company periodically issues stock options, warrants and restricted stock units to employees and non-employees in non-capital raising transactions for services and financing expenses. The Company accounts for stock options granted to employees based on the authoritative guidance provided by the FASB wherein the fair value of the award is measured on the grant date and 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 and warrants granted to non-employees in accordance with the authoritative guidance of the FASB wherein the fair value of the stock compensation is based upon the measurement date determined as the earlier of the date at which either a) a commitment is reached with the counterparty for performance or b) the counterparty completes its performance. The Company estimates the fair value of restricted stock unit awards to employees and directors based on the closing market price of its common stock on the date of grant. The fair value of the stock options granted 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 expenses recorded in the current and future periods. |
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 expenses recorded during the three-month periods ended May 31, 2021 and 2020 amounted to $8,637,905 and $1,480,588, 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. |
Foreign currency translations and transactions | The accompanying consolidated financial statements are presented in U.S. dollars, the reporting currency of the Company. Assets and liabilities of subsidiaries that have a functional currency other than that of the Company are translated to U.S. dollars at the exchange rate as at the balance sheet date. Income and expenses are translated at the average exchange rate of the period. The resulting translation adjustments are included in other comprehensive income (loss) (“OCI”). As a result, foreign currency exchange fluctuations may impact operating expenses. The Company currently is not engaged in any currency hedging activities. For transactions and balances, monetary assets and liabilities denominated in foreign currencies are translated into the functional currency of the entity at the prevailing exchange rate at the reporting date. Non-monetary assets and liabilities, and revenue and expense items denominated in foreign currencies are translated into the functional currency using the exchange rate prevailing at the dates of the respective transactions. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in the consolidated statements of operations and comprehensive loss, except for gains or losses arising from the translation of intercompany balances denominated in foreign currencies that forms part in the net investment in the subsidiary which are included in OCI. |
Net earnings (loss) per share | The Company computes net loss per share in accordance with FASB ASC 260, Earnings Per Share For the three-month periods ended May 31, 2021 and 2020, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an antidilutive effect. As at May 31, 2021, the potentially dilutive securities consisted of 1,587,081 outstanding stock options (2020 – 1,587,081), 4,149,125 outstanding restricted stock units (2020 – 4,293,407), and 4,133,720 outstanding warrants (2020 – 5,084,331). |
Sales Tax, Tax Credits and Ot_2
Sales Tax, Tax Credits and Other Receivables (Tables) | 3 Months Ended |
May 31, 2021 | |
Receivables [Abstract] | |
Sales tax, tax credits and other receivables | May 31, 2021 February 28, 2021 Sales tax $ 935,883 $ 1,155,504 Research and development tax credits 500,345 435,467 Other receivables 115,474 172,864 $ 1,551,702 $ 1,763,835 |
Prepaid Expenses and Deposits (
Prepaid Expenses and Deposits (Tables) | 3 Months Ended |
May 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid expenses | Prepaid expenses and deposits as at May 31, 2021 and February 28, 2021 were as follows: May 31, 2021 February 28, 2021 Directors and officers insurance $ 812,455 $ - Deposits on machinery and equipment 965,670 379,395 Other 200,265 230,387 $ 1,978,390 $ 609,782 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
May 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property, plant and equipment | As at May 31, 2021 Cost Accumulated depreciation, write-down and impairment Net book value Building $ 2,053,585 $ (228,932 ) $ 1,824,653 Land 5,173,641 - 5,173,641 Building Improvements 1,938,596 (594,078 ) 1,344,518 Machinery and equipment 6,514,252 (6,514,252 ) - Office equipment and furniture 342,258 (115,464 ) 226,794 $ 16,022,332 $ (7,452,726 ) $ 8,569,606 As at February 28, 2021 Cost Accumulated depreciation, write-down and impairment Net book value Building $ 1,954,345 $ (201,589 ) $ 1,752,756 Land 241,578 - 241,578 Building Improvements 1,804,872 (474,114 ) 1,330,758 Machinery and equipment 6,514,252 (6,514,252 ) - Office equipment and furniture 292,946 (104,987 ) 187,959 $ 10,807,993 $ (7,294,942 ) $ 3,513,051 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
May 31, 2021 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Intangible assets | As at May 31, As at February 28, 2021 2021 Patents, at cost - beginning of period $ 859,048 $ 225,174 Patents, accumulated depreciation – beginning of period (64,154 ) (22,310 )) Patents, net - beginning of period 794,894 202,864 Additions in the period - patents 52,319 623,811 Amortization of patents (16,944 ) (41,844 )) Foreign exchange effect 50,954 10,063 Patents, net - end of period $ 881,223 $ 794,894 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
May 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair value of financial instruments | Fair Value Measurements as at May 31, 2021 Carrying Amount Fair Value Level in the hierarchy Instruments measured at amortized cost: Long-term debt $ 2,586,227 $ 2,596,787 Level 2 Fair Value Measurements at February 28, 2021 Carrying Amount Fair Value Level in the hierarchy Instruments measured at amortized cost: Long-term debt $ 2,454,123 $ 2,464,540 Level 2 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 3 Months Ended |
May 31, 2021 | |
Payables and Accruals [Abstract] | |
Accounts payable and accrued liabilities | May 31, 2021 February 28, 2021 Trade accounts payable $ 5,279,857 $ 5,082,736 Accrued employee compensation 1,051,109 970,154 Accrued professional fees 1,040,791 1,270,628 Accrued engineering fees 862,645 535,359 Other accrued liabilities 823,021 265,988 $ 9,057,423 $ 8,124,865 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
May 31, 2021 | |
Long-term Debt, Unclassified [Abstract] | |
Long-term debt | May 31, 2021 February 28, 2021 Investissement Québec financing facility : Principal amount $ 1,830,048 $ 1,741,612 Unamortized discount (271,001 ) (268,192 ) Accrued interest 55,924 42,588 Total Investissement Québec financing facility 1,614,971 1,516,008 Term loan Principal amount 971,256 938,116 Less: current portion (971,256 ) (938,116 ) Total term loan, net of current portion - - Long-term debt, net of current portion $ 1,614,971 $ 1,516,008 |
Principal repayments | Years ending Amount February 28, 2022 $ 45,560 February 28, 2023 57,985 February 29, 2024 319,417 February 28, 2025 319,417 February 28, 2026 319,417 Thereafter 1,727,084 Total $ 2,788,880 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
May 31, 2021 | |
Stockholders' Equity | |
Common stock | For the period ended May 31, 2021 Number of shares Amount Balance, February 28, 2021 42,413,691 $ 4,242 Issuance of shares upon settlement of restricted stock units 19,629 2 Balance, May 31, 2021 42,433,320 $ 4,244 For the period ended May 31, 2020 Number of shares Amount Balance, February 29, 2020 39,910,774 $ 3,992 Issuance of shares upon settlement of restricted stock units 6,131 1 Balance, May 31, 2020 39,916,905 $ 3,993 |
Research and Development Expe_2
Research and Development Expenses (Tables) | 3 Months Ended |
May 31, 2021 | |
Research and Development [Abstract] | |
Research and development expenses | Research and development expenses for the three-month periods ended May 31, 2021 and 2020 were as follows: May 31, 2021 May 31, 2020 External engineering $ 2,903,448 $ 74,932 Employee compensation 2,086,128 819,048 Machinery and equipment expenditures 2,622,892 - Demonstration plant operating expenses 691,537 286,103 Other 333,900 300,505 $ 8,637,905 $ 1,480,588 |
General and Administrative Ex_2
General and Administrative Expenses (Tables) | 3 Months Ended |
May 31, 2021 | |
General and Administrative Expense [Abstract] | |
General and Administrative expenses | May 31, 2021 May 31, 2020 Professional fees $ 1,631,451 $ 221,697 Employee compensation(1) 461,405 1,142,851 Directors and officers insurance 868,647 473,574 Other 199,068 114,959 $ 3,160,571 $ 1,953,081 |
Equity Incentive Plan (Tables)
Equity Incentive Plan (Tables) | 3 Months Ended |
May 31, 2021 | |
Equity [Abstract] | |
Equity incentive plan | 2021 2020 Number of units Number of units Outstanding, beginning of period 1,083,412 1,300,518 Automatic share reserve increase - - Units granted (253,758 ) (87,114 ) Units forfeited 295,524 2,989 Units expired - - Outstanding, end of period 1,125,178 1,216,393 |
Interest and Other Financial Co
Interest and Other Financial Costs (Tables) | 3 Months Ended |
May 31, 2021 | |
Interest And Other Finance Costs | |
Interest and other financial costs | 2021 2020 Interest on long-term debt $ 20,059 $ 19,727 Accretion expense 10,529 8,547 Loss on revaluation of foreign exchange contracts - 98,502 $ 30,588 $ 126,776 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | |
May 31, 2021 | May 31, 2020 | |
Research and development expenses | $ 8,637,905 | $ 1,480,588 |
Stock Options | ||
Antidilutive securities | 1,587,081 | 1,587,081 |
Restricted Stock Units | ||
Antidilutive securities | 4,149,125 | 4,293,407 |
Warrants | ||
Antidilutive securities | 4,133,720 | 5,084,331 |
Sales Tax, Tax Credits and Ot_3
Sales Tax, Tax Credits and Other Receivables (Details) - USD ($) | May 31, 2021 | Feb. 28, 2021 |
Receivables [Abstract] | ||
Sales tax | $ 935,883 | $ 1,155,504 |
Research and development tax credits | 500,345 | 435,467 |
Other receivables | 115,474 | 172,864 |
Sales tax, research and development tax credits and other receivables | $ 1,551,702 | $ 1,763,835 |
Prepaid Expenses and Deposits_2
Prepaid Expenses and Deposits (Details) - USD ($) | May 31, 2021 | Feb. 28, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Directors and officers insurance | $ 812,455 | $ 0 |
Deposits on machinery and equipment | 965,670 | 379,395 |
Other | 200,265 | 230,387 |
Prepaid expenses | $ 1,978,390 | $ 609,782 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) | May 31, 2021 | Feb. 28, 2021 |
Property, plant and equipment, gross | $ 16,022,332 | $ 10,807,993 |
Less: accumulated depreciation, write-down and impairment | (7,452,726) | (7,294,942) |
Property, plant and equipment, net | 8,569,606 | 3,513,051 |
Building | ||
Property, plant and equipment, gross | 2,053,585 | 1,954,345 |
Less: accumulated depreciation, write-down and impairment | (228,932) | (201,589) |
Property, plant and equipment, net | 1,824,653 | 1,752,756 |
Land | ||
Property, plant and equipment, gross | 5,173,641 | 241,578 |
Less: accumulated depreciation, write-down and impairment | 0 | 0 |
Property, plant and equipment, net | 5,173,641 | 241,578 |
Building and Land Improvements | ||
Property, plant and equipment, gross | 1,938,596 | 1,804,872 |
Less: accumulated depreciation, write-down and impairment | (594,078) | (474,114) |
Property, plant and equipment, net | 1,344,518 | 1,330,758 |
Machinery and Equipment | ||
Property, plant and equipment, gross | 6,514,252 | 6,514,252 |
Less: accumulated depreciation, write-down and impairment | (6,514,252) | (6,514,252) |
Property, plant and equipment, net | 0 | 0 |
Office Equipment and Furniture | ||
Property, plant and equipment, gross | 342,258 | 292,946 |
Less: accumulated depreciation, write-down and impairment | (115,464) | (104,987) |
Property, plant and equipment, net | $ 226,794 | $ 187,959 |
Property, Plant and Equipment_3
Property, Plant and Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
May 31, 2021 | May 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 115,057 | $ 248,199 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
May 31, 2021 | May 31, 2020 | Feb. 28, 2021 | |
Finite-Lived Intangible Assets, Net [Abstract] | |||
Patents, at cost - beginning of period | $ 859,048 | $ 225,174 | |
Patents, accumulated depreciation | (64,154) | (22,310) | |
Patents, net - beginning of period | 794,894 | 202,864 | |
Additions in the year - patents | 52,319 | 623,811 | |
Amortization of patents | (16,944) | $ (7,891) | (41,844) |
Foreign exchange effect | 50,954 | 10,063 | |
Patents, net - end of period | $ 881,223 | $ 794,894 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
May 31, 2021 | May 31, 2020 | Feb. 28, 2021 | |
Finite-Lived Intangible Assets, Net [Abstract] | |||
Amortization expense | $ 16,944 | $ 7,891 | $ 41,844 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) | May 31, 2021 | Feb. 28, 2021 |
Carrying amount | $ 11,643,651 | $ 10,578,989 |
Long-Term Debt | Level 2 | ||
Carrying amount | 2,586,227 | 2,454,123 |
Fair value | $ 2,596,787 | $ 2,464,540 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities (Details) - USD ($) | May 31, 2021 | Feb. 28, 2021 |
Payables and Accruals [Abstract] | ||
Trade accounts payable | $ 5,279,857 | $ 5,082,736 |
Accrued employee compensation | 1,051,109 | 970,154 |
Accrued professional fees | 1,040,791 | 1,270,628 |
Accrued engineering fees | 862,645 | 535,359 |
Other accrued liabilities | 823,021 | 265,988 |
Accounts payable and accrued liabilities | $ 9,057,423 | $ 8,124,865 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) | May 31, 2021 | Feb. 28, 2021 |
Principal amount | $ 2,788,880 | |
Less: current portion | (971,257) | $ (938,116) |
Long-term debt, net of current portion | 1,614,971 | 1,516,008 |
Investissement Québec Financing Facility | ||
Principal amount | 1,830,048 | 1,741,612 |
Unamortized discount | (271,001) | (268,192) |
Accrued interest | 55,924 | 42,588 |
Long-term debt, net of current portion | 1,614,971 | 1,516,008 |
Term Loan | ||
Principal amount | 971,256 | 938,116 |
Less: current portion | (971,256) | (938,116) |
Long-term debt, net of current portion | $ 0 | $ 0 |
Long-Term Debt (Details 1)
Long-Term Debt (Details 1) | May 31, 2021USD ($) |
Long-term Debt, Unclassified [Abstract] | |
February 28, 2022 | $ 45,560 |
February 28, 2023 | 57,985 |
February 29, 2024 | 319,417 |
February 28, 2025 | 319,417 |
February 28, 2026 | 319,417 |
Thereafter | 1,727,084 |
Total | $ 2,788,880 |
Long-Term Debt (Details Narrati
Long-Term Debt (Details Narrative) - USD ($) | 3 Months Ended | |
May 31, 2021 | May 31, 2020 | |
Repayment | $ 14,496 | $ 12,693 |
Investissement Québec Financing Facility | ||
Interest expense | 10,882 | 9,416 |
Accretion expense | 10,526 | 8,547 |
Term Loan | ||
Repayment | 14,496 | 12,693 |
Interest paid | $ 9,178 | $ 10,311 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 3 Months Ended | |
May 31, 2021 | May 31, 2020 | |
Beginning balance, amount | $ 32,824,524 | $ 38,463,708 |
Issuance of shares upon vesting of restricted stock units (Note 13), amount | 0 | 0 |
Ending balance, amount | $ 20,874,332 | $ 35,452,406 |
Common Stock | ||
Beginning balance, shares | 42,413,691 | 39,910,774 |
Beginning balance, amount | $ 4,242 | $ 3,992 |
Issuance of shares upon vesting of restricted stock units (Note 13), shares | 19,629 | 6,131 |
Issuance of shares upon vesting of restricted stock units (Note 13), amount | $ 2 | $ 1 |
Ending balance, shares | 42,433,320 | 39,916,905 |
Ending balance, amount | $ 4,244 | $ 3,993 |
Research and Development Expe_3
Research and Development Expenses (Details) - USD ($) | 3 Months Ended | |
May 31, 2021 | May 31, 2020 | |
Research and development expenses | $ 8,637,905 | $ 1,480,588 |
External Engineering | ||
Research and development expenses | 2,903,448 | 74,932 |
Employee Compensation | ||
Research and development expenses | 2,086,128 | 819,048 |
Machinery and Equipment | ||
Research and development expenses | 2,622,892 | 0 |
Demonstration Plant Operating Expenses | ||
Research and development expenses | 691,537 | 286,103 |
Other | ||
Research and development expenses | $ 333,900 | $ 300,505 |
General and Administrative Ex_3
General and Administrative Expenses (Details) - USD ($) | 3 Months Ended | |
May 31, 2021 | May 31, 2020 | |
General and administrative expenses | $ 3,160,571 | $ 1,953,081 |
Professional fees | ||
General and administrative expenses | 1,631,451 | 221,697 |
Employee Compensation | ||
General and administrative expenses | 461,405 | 1,142,851 |
Directors and officers insurance | ||
General and administrative expenses | 868,647 | 473,574 |
Other | ||
General and administrative expenses | $ 199,068 | $ 114,959 |
Share-Based Payments (Details N
Share-Based Payments (Details Narrative) - USD ($) | 3 Months Ended | |
May 31, 2021 | May 31, 2020 | |
Stock options granted | 0 | 0 |
Stock options forfeited | 0 | 0 |
Stock options exercised | 0 | 0 |
Stock options outstanding | 1,587,081 | 1,587,081 |
Stock options outstanding, weighted average exercise price | $ 6.81 | $ 6.81 |
Stock options exercisable | 1,229,998 | 986,248 |
Stock options exercisable, weighted average exercise price | $ 7.25 | $ 7.32 |
Stock-based compensation expense | $ 15,357 | $ 1,011,824 |
Research and Development Expenses | ||
Restricted stock unit expense | 395,545 | 352,007 |
General and Administrative Expenses | ||
Restricted stock unit expense | (380,188) | 659,817 |
Stock Options | ||
Stock-based compensation expense | $ 549,318 | $ 556,895 |
Restricted Stock Units | ||
Restricted stock units granted | 253,758 | 83,725 |
Restricted stock units granted, weighted average exercise price | $ 8.85 | $ 8.71 |
Restricted stock units settled | 19,629 | 6,131 |
Restricted stock units settled, weighted average exercise price | $ 9.02 | $ 9.55 |
Restricted stock units forfeited | 295,524 | 2,989 |
Restricted stock units forfeited, weighted average exercise price | $ 7.93 | $ 8.78 |
Restricted stock units outstanding | 4,149,125 | 4,293,407 |
Restricted stock units vested | 696,327 | 836,684 |
Restricted stock unit expense | $ (533,961) | $ 370,487 |
Equity Incentive Plan (Details)
Equity Incentive Plan (Details) - Equity Incentive Plan - shares | 3 Months Ended | |
May 31, 2021 | May 31, 2020 | |
Outstanding, beginning | 1,083,412 | 1,300,518 |
Share reserve increase | 0 | 0 |
Units granted | (253,758) | (87,114) |
Units forfeited | 295,524 | 2,989 |
Units expired | 0 | 0 |
Outstanding, ending | 1,125,178 | 1,216,393 |
Warrants (Details Narrative)
Warrants (Details Narrative) - Warrants | 3 Months Ended |
May 31, 2020$ / sharesshares | |
Warrants issued | shares | 25,000 |
Warrants issued, weighted average exercise price | $ / shares | $ 9.43 |
Interest and Other Financial _2
Interest and Other Financial Costs (Details) - USD ($) | 3 Months Ended | |
May 31, 2021 | May 31, 2020 | |
Interest And Other Finance Costs | ||
Interest on long-term debt | $ 20,059 | $ 19,727 |
Accretion expense | 10,529 | 8,547 |
Loss on revaluation of foreign exchange contracts | 0 | 98,502 |
Interest and other finance costs | $ 30,588 | $ 126,776 |