Loop Industries (LOOP) 10-Q 10 Oct 18 2019 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Aug. 31, 2018	Oct. 09, 2018
Document And Entity Information
Entity Registrant Name	Loop Industries, Inc.
Entity Central Index Key	1,504,678
Document Type	10-Q
Document Period End Date	Aug. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--02-28
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		33,805,706
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,019
Entity Emerging Growth Company	false
Entity Small Business	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Aug. 31, 2018	Feb. 28, 2018
Current assets
Cash	$ 2,917,466	$ 8,149,713
Sales tax and tax credits receivable	316,909	364,634
Prepaid expenses	152,501	511,573
Total current assets	3,386,876	9,025,920
Property, plant and equipment, net	5,146,920	4,036,903
Intangible assets, net	409,559	332,740
Total assets	8,943,355	13,395,563
Current liabilities
Accounts payable and accrued liabilities	2,566,572	1,983,072
Current portion of long-term debt	53,619	54,649
Total current liabilities	2,620,191	2,037,721
Long-term debt	987,489	1,033,777
Total liabilities	3,607,680	3,071,498
Stockholders' Equity
Common stock par value $0.0001: 250,000,000 shares authorized; 33,805,706 shares issued and outstanding (February 28, 2018 - 33,751,088)	3,381	3,376
Additional paid-in capital	33,156,104	30,964,970
Common stock issuable, 1,000,000 shares	800,000	800,000
Accumulated deficit	(28,343,121)	(21,275,181)
Accumulated other comprehensive loss	(280,689)	(169,100)
Total stockholders' equity	5,335,675	10,324,065
Total liabilities and stockholders' equity	8,943,355	13,395,563
Series A Preferred Stock [Member]
Stockholders' Equity
Preferred stock, value

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Aug. 31, 2018	Feb. 28, 2018
Stockholders' Equity
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares issued	33,805,706	33,751,088
Common stock, shares outstanding	33,805,706	33,751,088
Common stock issuable	1,000,000	1,000,000
Series A Preferred Stock [Member]
Stockholders' Equity
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, share authorised	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		6 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2018	Aug. 31, 2017
Condensed Consolidated Statements Of Operations And Comprehensive Loss
Revenue
Operating Expenses -
Research and development	1,066,292	950,775	2,132,371	1,447,309
General and administrative	2,394,398	1,081,634	4,749,948	1,971,216
Depreciation and amortization	110,589	91,774	211,658	182,261
Interest expense	13,321		26,234
Foreign exchange (gain) loss	(46,190)	52,529	(52,271)	98,268
Total operating expenses	3,538,410	2,176,712	7,067,940	3,699,054
Net loss	(3,538,410)	(2,176,712)	(7,067,940)	(3,699,054)
Other comprehensive loss -
Foreign currency translation adjustment	(59,322)	(167,398)	(111,589)	(157,422)
Comprehensive Loss	$ (3,597,732)	$ (2,344,110)	$ (7,179,529)	$ (3,856,476)
Loss per share- Basic and Diluted	$ (0.10)	$ (0.07)	$ (0.21)	$ (0.11)
Weighted average common shares outstanding- Basic and Diluted	33,805,706	32,625,928	33,768,516	31,830,628

Condensed Consolidated Statem_2

Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Preferred Stock	Additional Paid-In Capital	Common Stock Issuable	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)	Total
Beginning Balance, Shares at Feb. 28, 2017	31,451,973	1
Beginning Balance, Amount at Feb. 28, 2017	$ 3,146		$ 8,723,390	$ 800,000	$ (7,237,803)	$ (151,211)	$ 2,137,522
Issuance of common shares for cash, net of share issuance costs, Shares	1,123,266
Issuance of common shares for cash, net of share issuance costs, Amount	$ 112		5,897,076				5,897,188
Warrants issued for services			920,373				920,373
Issuance of shares upon exercise of warrant, net of share issuance costs, Shares	193,770
Issuance of shares upon exercise of warrant, net of share issuance costs, Amount	$ 19		1,142,147				1,142,166
Issuance of shares upon cashless exercise of warrants, Shares	20,000
Issuance of shares upon cashless exercise of warrants, Amount	$ 2		(2)
Foreign currency translation						157,422	157,422
Net Loss					(3,699,054)		(3,699,054)
Ending balance, Shares at Aug. 31, 2017	32,789,009	1
Ending Balance, Amount at Aug. 31, 2017	$ 3,279		16,682,984	800,000	(10,936,857)	6,211	6,555,617
Beginning Balance, Shares at Feb. 28, 2018	33,751,088	1
Beginning Balance, Amount at Feb. 28, 2018	$ 3,376		30,964,970	800,000	(21,275,181)	(169,100)	10,324,065
Warrants issued for services			1,802,003				1,802,003
Issuance of shares upon cashless exercise of warrants, Shares	18,821
Issuance of shares upon cashless exercise of warrants, Amount	$ 2		(2)
Foreign currency translation						(111,589)	(111,589)
Issuance of shares upon vesting of restricted stock units, Shares	35,797
Issuance of shares upon vesting of restricted stock units, Amount	$ 3		(3)
Restricted stock units issued for services			389,136				389,136
Net Loss					(7,067,940)		(7,067,940)
Ending balance, Shares at Aug. 31, 2018	33,805,706	1
Ending Balance, Amount at Aug. 31, 2018	$ 3,381		$ 33,156,104	$ 800,000	$ (28,343,121)	$ (280,689)	$ 5,335,675

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Aug. 31, 2018	Aug. 31, 2017
Cash Flows from Operating Activities
Net loss	$ (7,067,940)	$ (3,699,054)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	211,658	182,261
Stock-based compensation expense	2,191,139	920,373
Changes in operating assets and liabilities:
Sales tax and tax credits receivable	47,725	45,333
Prepaid expenses	359,072	(15,954)
Accounts payable and accrued liabilities	349,723	657,426
Advances from majority stockholder		(360,000)
Net cash used in operating activities	(3,908,623)	(2,269,615)
Cash Flows from Investing Activities
Additions to property, plant and equipment	(1,038,775)	(168,002)
Additions to intangible assets	(66,195)
Net cash used in investing activities	(1,104,970)	(168,002)
Cash Flows from Financing Activities
Repayment of long-term debt	(26,808)
Proceeds from sales of common shares and exercise of warrants, net of share issuance costs		7,039,354
Repayment of advances from majority stockholder		(249,762)
Stock subscriptions		54,780
Net cash (used) provided by financing activities	(26,808)	6,844,372
Effect of exchange rate changes	(191,846)	60,409
Net change in cash	(5,232,247)	4,467,164
Cash, beginning of period	8,149,713	916,487
Cash, end of period	2,917,466	5,383,651
Supplemental Disclosure of Cash Flow Information:
Income tax paid
Interest paid	$ 26,234	$ 0

The Company, Basis of Presentat

The Company, Basis of Presentation and Going Concern	6 Months Ended
	Aug. 31, 2018
Notes to Financial Statements
Note 1. The Company, Basis of Presentation and Going Concern	The Company Loop Industries, Inc. and its wholly-owned subsidiaries (“Loop” or the “Company”) is a technology company focused on sustainability. Its mission is to accelerate the world’s shift toward sustainable plastic and away from dependence on fossil fuels. Loop has created a technology poised to disrupt the plastics industry. This technology decouples plastic from fossil fuels by depolymerizing waste polyester plastic to its base building blocks (monomers). The monomers are then repolymerized to create virgin-quality polyester plastic that meets FDA requirements for use in food-grade plastic packaging and to produce polyester fiber for textile applications. Loop branded polyester resin is designed to allow consumer packaged goods companies to meet and exceed their stated sustainability goals and circular ambitions. Common shares of the Company are listed on the NASDAQ Global Market under the symbol “LOOP.” Basis of presentation The accompanying unaudited interim condensed consolidated financial statements of the Company has 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, 2018 is derived from the Company’s audited consolidated financial statements and related notes for the fiscal year ended February 28, 2018, which is included in Item 8 of the Company’s 2018 Annual Report on Form 10-K filed with the Securities and Exchange Commission on May 14, 2018. 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 presentation have been included. Operating results for the three and six months ended August 31, 2018 are not necessarily indicative of the results that may be expected for the year ending February 28, 2019. Intercompany balances and transactions are eliminated on consolidation. Going Concern The accompanying unaudited interim condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the unaudited interim condensed consolidated financial statements, the Company has not yet begun commercial operations and does not yet have a recurring source of revenue. Since inception, the Company has accumulated a deficit of $28.3 million and during the six months ended August 31, 2018, the Company incurred a net loss of $7.1 million and used cash in operations of $3.9 million, which raises substantial doubt about the Company’s ability to continue as a going concern. At the current stage of its development, Loop is a pre-revenue company, with its ongoing operations being financed by raising new equity capital. To date, the Company has been successful in raising capital to finance its ongoing operations. As at August 31, 2018, the Company had cash on hand of $2.9 million. Management is evaluating its plans to continue to raise financing, the proceeds from which would be used to finance the start-up of its commercial operations and fund the further development of its ongoing pre-revenue operations. There can be no assurance that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. The accompanying unaudited interim condensed consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and balance sheet classifications that would be necessary if the Company were unable to realize its assets and discharge its liabilities as a going concern in the normal course of operations. Such adjustments could be material.

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Aug. 31, 2018
Notes to Financial Statements
Note 2. 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 interim 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. The following table summarizes the exchange rates used: Three Months Ended August 31, Six Months Ended August 31, 2018 2017 2018 2017 Period-end Canadian $: US dollar exchange rate $ 0.77 $ 0.80 $ 0.77 $ 0.80 Average period Canadian $: US dollar exchange rate $ 0.77 $ 0.76 $ 0.77 $ 0.76 Expenditures are translated at the average exchange rate for the period presented. Sales tax and tax credits receivable 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 sales taxes paid on its expenses and capital expenditures incurred in Canada. As at August 31, 2018 and February 28, 2018, the computed recoverable sales taxes amounted to $122,589 and $177,903, respectively. 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 six months ended August 31, 2018 amounted to $1.1 million and $2.1 million, respectively (2017 – $1.0 million and $1.4 million, respectively). Net earnings (loss) per share The Company computes net loss per share in accordance with FASB ASC 260, Earnings Per Share For the three and six months ended August 31, 2018 and 2017, the calculations of basic and diluted loss per share are the same as potential dilutive securities would have an antidilutive effect. The potentially dilutive securities consisted of 2,345,957 outstanding warrants as at August 31, 2018 (2017 – 2,004,582). Recently adopted accounting pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers In January 2016, the FASB issued ASU 2016-01 , Financial Instruments – Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities 1. Equity investments that do not result in consolidation and are not accounted for under the equity method would be measured at fair value through net income, unless they qualify for the proposed practicability exception for investments that do not have readily determinable fair values. 2. Changes in instrument-specific credit risk for financial liabilities that are measured under the fair value option would be recognized in other comprehensive income. 3. Entities would make the assessment of the realizability of a deferred tax asset (“DTA”) related to an available-for-sale (“AFS”) debt security in combination with the entity’s other DTAs. The guidance would eliminate one method that is currently acceptable for assessing the realizability of DTAs related to AFS debt securities. That is, an entity would no longer be able to consider its intent and ability to hold debt securities with unrealized losses until recovery. 4. Disclosure of the fair value of financial instruments measured at amortized cost would no longer be required for entities that are not public business entities. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of this Statement has not had an impact on the Company’s consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718) Scope of Modification Accounting a. The fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the modified award is the same as the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the original award immediately before the original award is modified. If the modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification. b. The vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified. c. The classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The company adopted ASU 2017-09 on March 1, 2018. The adoption of the standard had no impact on the consolidated financial statements. Recently issued 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

Property, Plant and Equipment,

Property, Plant and Equipment, Net	6 Months Ended
	Aug. 31, 2018
Notes to Financial Statements
Note 3. Property, Plant and Equipment, Net	Estimated Useful Life August 31, 2018 February 28, 2018 (years) Building 30 $ 1,899,105 $ 1,935,423 Land indefinite 234,731 239,239 Building improvements 5 336,554 377,253 Machinery and equipment 3 – 8 3,386,904 2,189,195 Office equipment and furniture 8 118,110 101,756 Property, plant and equipment, gross 5,975,404 4,842,866 Less: accumulated depreciation (828,484 ) (805,963 ) Property, plant and equipment, net $ 5,146,920 $ 4,036,903 Depreciation expense is recorded as an operating expense in the unaudited interim condensed consolidated statements of operations and comprehensive loss and amounted to $89 thousand and $174 thousand for the three and six months ended August 31, 2018 (2017 – $75 thousand and $150 thousand, respectively).

Intangible Assets, Net

Intangible Assets, Net	6 Months Ended
	Aug. 31, 2018
Notes to Financial Statements
Note 4. Intangible Assets, Net	Estimated Useful Life August 31, 2018 February 28, 2018 (years) Intellectual property 7 $ 648,167 $ 533,369 Less: accumulated amortization (238,608 ) (200,629 ) Intangible assets, net $ 409,559 $ 332,740 Amortization expense is recorded as an operating expense in the consolidated statements of operations and comprehensive loss and amounted to $22 thousand and $38 thousand for the three and six months ended August 31, 2018, respectively (2017 – $16 thousand and $32 thousand, respectively).

Long Term Debt

Long Term Debt	6 Months Ended
	Aug. 31, 2018
Notes to Financial Statements
Note 5. Long Term Debt	August 31, 2018 February 28, 2018 Instalment loan $ 1,041,108 $ 1,088,426 Less current portion 53,619 54,649 Non-current portion $ 987,489 $ 1,033,777 Interest paid on the instalment loan during the three and six months ended August 31, 2018 amounted to $13,321 and $26,234, respectively (2017 – nil). As at August 31, 2018, the Company was in compliance with its financial covenants.

Related Party Transactions

Related Party Transactions	6 Months Ended
	Aug. 31, 2018
Notes to Financial Statements
Note 6. Related Party Transactions	Advances from majority stockholder Mr. Daniel Solomita, or companies controlled by him, previously made advances to the Company, which were unsecured, non-interest bearing with no formal terms of repayment. During the six months ended August 31, 2017, the Company repaid to Mr. Solomita or companies controlled by him, as applicable, an aggregate amount of $249,762. A balance of $28,710 was due as at August 31, 2017. Additionally, accrued compensation due to Mr. Solomita of $360,000 was paid during the six months ended August 31, 2017. 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. The employment agreement is for an indefinite term. The Company and Mr. Solomita entered into an amendment and restatement of the employment agreement on July 13, 2018. The amended and restated employment agreement provides for an increase in Mr. Solomita’s base salary and eligibility to participate in an annual cash bonus subject to performance measures. Mr. Solomita’s base salary and bonus opportunity are deemed retroactively effective to March 1, 2018. For the three and six months ended August 31, 2018, compensation expense for the Company’s CEO amounted to $116 thousand and $234 thousand, respectively, inclusive of the retroactive adjustment in accordance with the employment agreement as amended and restated on July 13, 2018. For the three and six months ended August 31, 2017, compensation expense was $45 thousand and $90 thousand, respectively. In addition, the employment agreement provided for a long-term incentive grant of 4,000,000 shares of the Company’s common stock, upon the achievement of certain 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 Company’s board of directors approved the grant of the restricted stock units, effective and contingent 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. The restricted stock units vest upon the achievement of applicable performance milestones. During the six months ended August 31, 2018 and 2017, no milestones were deemed probable of being met and, accordingly, the Company did not record any compensation expense in relation to the restricted stock units.

Stockholders' Equity

Stockholders' Equity	6 Months Ended
	Aug. 31, 2018
Notes to Financial Statements
Note 7. Stockholders' Equity	Common Stock For the six months ended August 31, 2018 Number of shares Amount Balance, February 28, 2018 33,751,088 $ 3,376 Cashless exercise of warrants 18,821 2 Issuance of shares upon vesting of restricted stock units 35,797 3 Balance, August 31, 2018 33,805,706 $ 3,381 During the six months ended August 31, 2018, the Company issued 18,821 shares of common stock upon the cashless exercise of 20,000 warrants and 35,797 shares of common stock upon issuance of restricted stock units. During the six months ended August 31, 2017, the Company sold 1,123,266 shares of its common stock at an offering price of $5.25, resulting in net proceeds to the Company of $5,897,188. During the six months ended August 31, 2017, the Company issued 20,000 shares of common stock upon the cashless exercise of 22,919 warrants and 193,770 shares of its common stock upon the exercise of warrants at an offering price of $6.00 per share, resulting in proceeds of $1,163,016.

Stock-based Compensation Plans

Stock-based Compensation Plans	6 Months Ended
	Aug. 31, 2018
Notes to Financial Statements
Note 8. Stock-based Compensation Plans	Equity Incentive Plan On July 6, 2017, the Company adopted the 2017 Equity Incentive Plan (the “Plan”). A total of 3,000,000 shares of common stock were reserved for issuance under the Plan with annual automatic share reserve increases 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. On March 1, 2018, in accordance with the provisions of the Plan, the number of shares available for issuance were increased by 1,500,000 to a total of 3,235,898. At August 31, 2018, total number of shares available for issuance, net of shared issued, forfeited and expired amounted to 3,271,496. Warrants The following table summarizes the continuity of the Company’s warrants during the six months ended August 31: 2018 2017 Number of warrants Weighted average exercise price Number of warrants Weighted average exercise price Outstanding, beginning of period 2,515,248 $ 8.21 1,647,670 $ 2.91 Granted 13,209 11.52 1,080,000 5.25 Exercised (20,000 ) 0.80 (213,770 ) 5.52 Forfeited (100,000 ) 5.25 (65,418 ) 2.90 Expired (62,500 ) 4.80 (443,900 ) 6.00 Outstanding, end of period 2,345,957 $ 8.44 2,004,582 $ 3.21 Exercisable, end of period 1,071,915 $ 7.67 616,457 $ 1.19 The following table summarizes information concerning outstanding warrants as at August 31: 2018 2017 Exercise price Number of warrants outstanding Weighted average remaining life Number of warrants outstanding Weighted average remaining life $ 0.80 582,081 7.25 912,082 6.50 $ 3.00 - - 12,500 0.76 $ 5.25 380,000 8.99 1,080,000 9.93 $ 11.52 13,209 9.86 - - $ 12.00 840,667 7.59 - - $ 13.49 250,000 9.13 - - $ 13.89 280,000 9.19 - - Outstanding, end of period 2,345,957 8.10 2,004,582 8.31 Exercisable, end of period 1,071,915 7.22 616,457 6.66 Warrants were valued using the Black-Scholes pricing model. The following table shows key inputs into the valuation model for the six months ended August 31: 2018 2017 Exercise price $ 11.52 $ 5.25 Risk-free interest rate 2.82 % 1.60 to 2.02 % Expected dividend yield 0 % 0 % Expected volatility 78 % 82% to 84 % Expected life 6.5 years 4 to 6 years During the three and six months ended August 31, 2018, an expense of $0.8 million and $1.8 million, respectively (2017 – $0.7 million and $0.9 million, respectively) was recorded in the condensed consolidated statement of operations in relation to warrants. Restricted Stock Units The following table summarizes the continuity of the restricted stock units (“RSUs”) during the three months ended August 31: 2018 2017 Number of RSUs Number of RSUs Outstanding, beginning of period 34,102 - Granted 102,818 - Vested (35,797 ) - Forfeited (1,625 ) - Outstanding, end of period 99,498 - Weighted average remaining life (in years) 2.21 - During the three and six months ended August 31, 2018, an expense of $0.2 million and $0.4 million, respectively (2017 – $nil) was recorded in the condensed consolidated statement of operations in relation to RSUs.

Contingencies

Contingencies	6 Months Ended
	Aug. 31, 2018
Notes to Financial Statements
Note 9. Contingencies	In connection with a claim filed against the Company by two individuals (the “Plaintiffs’), in the Los Angeles Superior Court, seeking damages for breach of implied covenant of good faith and fair dealing, and promissory fraud, asserting entitlement to two million shares of our common stock the Plaintiffs filed a motion to further amend their complaint., The motion was granted on July 25, 2018 which has delayed the trial date from September 12, 2018 to May 8, 2019 in the Los Angeles Superior Court. Management believes that this case lacks merit and intends to continue to defend it vigorously. As such, no amounts have been provided for in the consolidated financial statements with respect to this claim. Management has not yet determined what effect, if any, this lawsuit could have on its financial position or results of operations.

Subsequent Events

Subsequent Events	6 Months Ended
	Aug. 31, 2018
Notes to Financial Statements
Note 10. Subsequent Events	Joint Venture Agreement The Company, through its wholly-owned subsidiary Loop Innovations, LLC, a Delaware limited liability company, entered into a Joint Venture Agreement with Indorama Holdings LP, USA, an indirect subsidiary of Indorama Ventures Public Company Limited, on September 24, 2018 to form a 50:50 joint venture limited liability company by the name of Indorama Loop Technologies, LLC (“ILT”). ILT will manufacture and commercialize polyester resin for beverage and consumer packaged goods companies and will have an exclusive license to use the Company’s proprietary technology to retrofit existing manufacturing facilities.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies and Restatement of Previously Issued Financial Statements (Policies)	6 Months Ended
	Aug. 31, 2018
Significant Accounting Policies 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 interim 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. The following table summarizes the exchange rates used: Three Months Ended August 31, Six Months Ended August 31, 2018 2017 2018 2017 Period-end Canadian $: US dollar exchange rate $ 0.77 $ 0.80 $ 0.77 $ 0.80 Average period Canadian $: US dollar exchange rate $ 0.77 $ 0.76 $ 0.77 $ 0.76 Expenditures are translated at the average exchange rate for the period presented.
Sales tax and tax credits receivable	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 sales taxes paid on its expenses and capital expenditures incurred in Canada. As at August 31, 2018 and February 28, 2018, the computed recoverable sales taxes amounted to $122,589 and $177,903, respectively.
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 six months ended August 31, 2018 amounted to $1.1 million and $2.1 million, respectively (2017 – $1.0 million and $1.4 million, respectively).
Net earnings (loss) per share	The Company computes net loss per share in accordance with FASB ASC 260, Earnings Per Share For the three and six months ended August 31, 2018 and 2017, the calculations of basic and diluted loss per share are the same as potential dilutive securities would have an antidilutive effect. The potentially dilutive securities consisted of 2,345,957 outstanding warrants as at August 31, 2018 (2017 – 2,004,582).
Recently adopted accounting pronouncements	In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers In January 2016, the FASB issued ASU 2016-01 , Financial Instruments – Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities 1. Equity investments that do not result in consolidation and are not accounted for under the equity method would be measured at fair value through net income, unless they qualify for the proposed practicability exception for investments that do not have readily determinable fair values. 2. Changes in instrument-specific credit risk for financial liabilities that are measured under the fair value option would be recognized in other comprehensive income. 3. Entities would make the assessment of the realizability of a deferred tax asset (“DTA”) related to an available-for-sale (“AFS”) debt security in combination with the entity’s other DTAs. The guidance would eliminate one method that is currently acceptable for assessing the realizability of DTAs related to AFS debt securities. That is, an entity would no longer be able to consider its intent and ability to hold debt securities with unrealized losses until recovery. 4. Disclosure of the fair value of financial instruments measured at amortized cost would no longer be required for entities that are not public business entities. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of this Statement has not had an impact on the Company’s consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718) Scope of Modification Accounting a. The fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the modified award is the same as the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the original award immediately before the original award is modified. If the modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification. b. The vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified. c. The classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The company adopted ASU 2017-09 on March 1, 2018. The adoption of the standard had no impact on the consolidated financial statements.
Recently issued 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

Summary of Significant Accoun_3

Summary of Significant Accounting Policies and Restatement of Previously Issued Financial Statements (Tables)	6 Months Ended
	Aug. 31, 2018
Summary Of Significant Accounting Policies And Restatement Of Previously Issued Financial Statements
Summary of Foreign currency translations and transactions	Three Months Ended August 31, Six Months Ended August 31, 2018 2017 2018 2017 Period-end Canadian $: US dollar exchange rate $ 0.77 $ 0.80 $ 0.77 $ 0.80 Average period Canadian $: US dollar exchange rate $ 0.77 $ 0.76 $ 0.77 $ 0.76

Property, Plant and Equipment_2

Property, Plant and Equipment, Net (Tables)	6 Months Ended
	Aug. 31, 2018
Property Plant And Equipment Net
Property and Equipment	Estimated Useful Life August 31, 2018 February 28, 2018 (years) Building 30 $ 1,899,105 $ 1,935,423 Land indefinite 234,731 239,239 Building improvements 5 336,554 377,253 Machinery and equipment 3 – 8 3,386,904 2,189,195 Office equipment and furniture 8 118,110 101,756 Property, plant and equipment, gross 5,975,404 4,842,866 Less: accumulated depreciation (828,484 ) (805,963 ) Property, plant and equipment, net $ 5,146,920 $ 4,036,903

Intangible Assets, Net (Tables)

Intangible Assets, Net (Tables)	6 Months Ended
	Aug. 31, 2018
Intangible Assets Net
Schedule of intangible assets	Estimated Useful Life August 31, 2018 February 28, 2018 (years) Intellectual property 7 $ 648,167 $ 533,369 Less: accumulated amortization (238,608 ) (200,629 ) Intangible assets, net $ 409,559 $ 332,740

Long-Term Debt (Tables)

Long-Term Debt (Tables)	6 Months Ended
	Aug. 31, 2018
Long-term Debt
Schedule of Long term debt	August 31, 2018 February 28, 2018 Instalment loan $ 1,041,108 $ 1,088,426 Less current portion 53,619 54,649 Non-current portion $ 987,489 $ 1,033,777

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	6 Months Ended
	Aug. 31, 2018
Stockholders Equity
Schedule of common stock	For the six months ended August 31, 2018 Number of shares Amount Balance, February 28, 2018 33,751,088 $ 3,376 Cashless exercise of warrants 18,821 2 Issuance of shares upon vesting of restricted stock units 35,797 3 Balance, August 31, 2018 33,805,706 $ 3,381

Stock-based Compensation Plans

Stock-based Compensation Plans (Tables)	6 Months Ended
	Aug. 31, 2018
Stockholders Equity
Warrants activities	2018 2017 Number of warrants Weighted average exercise price Number of warrants Weighted average exercise price Outstanding, beginning of period 2,515,248 $ 8.21 1,647,670 $ 2.91 Granted 13,209 11.52 1,080,000 5.25 Exercised (20,000 ) 0.80 (213,770 ) 5.52 Forfeited (100,000 ) 5.25 (65,418 ) 2.90 Expired (62,500 ) 4.80 (443,900 ) 6.00 Outstanding, end of period 2,345,957 $ 8.44 2,004,582 $ 3.21 Exercisable, end of period 1,071,915 $ 7.67 616,457 $ 1.19
Outstanding and exercisable warrants	2018 2017 Exercise price Number of warrants outstanding Weighted average remaining life Number of warrants outstanding Weighted average remaining life $ 0.80 582,081 7.25 912,082 6.50 $ 3.00 - - 12,500 0.76 $ 5.25 380,000 8.99 1,080,000 9.93 $ 11.52 13,209 9.86 - - $ 12.00 840,667 7.59 - - $ 13.49 250,000 9.13 - - $ 13.89 280,000 9.19 - - Outstanding, end of period 2,345,957 8.10 2,004,582 8.31 Exercisable, end of period 1,071,915 7.22 616,457 6.66
Estimated fair value of warrants on grant date	2018 2017 Exercise price $ 11.52 $ 5.25 Risk-free interest rate 2.82 % 1.60 to 2.02 % Expected dividend yield 0 % 0 % Expected volatility 78 % 82% to 84 % Expected life 6.5 years 4 to 6 years
Summarizes of restricted stock units	2018 2017 Number of RSUs Number of RSUs Outstanding, beginning of period 34,102 - Granted 102,818 - Vested (35,797 ) - Forfeited (1,625 ) - Outstanding, end of period 99,498 - Weighted average remaining life (in years) 2.21 -

The Company, Basis of Present_2

The Company, Basis of Presentation and Going Concern (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2018	Aug. 31, 2017	Feb. 28, 2018
Fair value of Warrants issued for services
Net Loss	$ (3,538,410)	$ (2,176,712)	$ (7,067,940)	$ (3,699,054)
Cash	2,917,466		2,917,466		$ 8,149,713
Net cash used in operating activities			(3,908,623)	$ (2,269,615)
Accumulated deficit	$ (28,343,121)		$ (28,343,121)		$ (21,275,181)

Summary of Significant Accoun_4

Summary of Significant Accounting Policies (Details)	3 Months Ended		6 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2018	Aug. 31, 2017
Summary Of Significant Accounting Policies Details
Period-end Canadian $: US dollar exchange rate	0.77	0.80	0.77	0.80
Average period Canadian $: US dollar exchange rate	0.77	0.76	0.77	0.76

Summary of Significant Accoun_5

Summary of Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2018	Aug. 31, 2017	Feb. 28, 2018	Feb. 28, 2017
Summary Of Significant Accounting Policies
Sales tax receivables	$ 122,589		$ 122,589		$ 177,903
Research and development expenses	$ 1,066,292	$ 950,775	$ 2,132,371	$ 1,447,309
Warrants outstanding	2,345,957	2,004,582	2,345,957	2,004,582	2,515,248	1,647,670

Property, Plant and Equipment_3

Property, Plant and Equipment, Net (Details) - USD ($)	6 Months Ended
	Aug. 31, 2018	Feb. 28, 2018
Property, plant and equipment, gross	$ 5,975,404	$ 4,842,866
Less: accumulated depreciation	(828,484)	(805,963)
Property, plant and equipment, net	$ 5,146,920	4,036,903
Building [Member]
Estimated Useful Life (Years)	30 years
Property, plant and equipment, gross	$ 1,899,105	1,935,423
Land [Member]
Estimated Useful Life (Years)	0 years
Property, plant and equipment, gross	$ 234,731	239,239
Building Improvements [Member]
Estimated Useful Life (Years)	5 years
Property, plant and equipment, gross	$ 336,554	377,253
Machinery and equipment [Member]
Property, plant and equipment, gross	$ 3,386,904	2,189,195
Machinery and equipment [Member] | Minimum [Member]
Estimated Useful Life (Years)	3 years
Machinery and equipment [Member] | Maximum [Member]
Estimated Useful Life (Years)	8 years
Office equipment and furniture [Member]
Estimated Useful Life (Years)	8 years
Property, plant and equipment, gross	$ 118,110	$ 101,756

Property, Plant and Equipment_4

Property, Plant and Equipment, Net (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2018	Aug. 31, 2017
Property And Equipment Details Narrative Abstract
Depreciation expense	$ 89,000	$ 75,000	$ 174,000	$ 150,000

Intangible Assets, Net (Details

Intangible Assets, Net (Details) - USD ($)	6 Months Ended
	Aug. 31, 2018	Feb. 28, 2018
Intellectual property	$ 648,167	$ 533,369
Less: accumulated amortization	(238,608)	(200,629)
Intangible assets, net	$ 409,559	$ 332,740
Intellectual Property [Member]
Estimated Useful Life (Years)	7 years

Intangible Assets, Net (Detai_2

Intangible Assets, Net (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2018	Aug. 31, 2017
Weighted Average Exercise Price
Amortization expense	$ 22,000	$ 16,000	$ 38,000	$ 32,000

Long-Term Debt (Details)

Long-Term Debt (Details) - USD ($)	Aug. 31, 2018	Feb. 28, 2018
Credit Facility And Longterm Debt Details Narrative Abstract
Installment loan	$ 1,041,108	$ 1,088,426
Less current portion	53,619	54,649
Non-current portion	$ 987,489	$ 1,033,777

Long-Term Debt (Details Narrati

Long-Term Debt (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2018	Aug. 31, 2017
Credit Facility Details Narrative Abstract
Interest paid	$ 13,321	$ 0	$ 26,234	$ 0

Related Party Transactions (Det

Related Party Transactions (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended		6 Months Ended
	Jun. 29, 2015	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2018	Aug. 31, 2017
Repayment of related party debt					$ 249,762
Advances from majority stockholder					(360,000)
Employment Agreement [Member]
Number of shares available for grant	4,000,000
Restricted stock units	4,000,000
Chief Executive Officer [Member]
Compensation expense		$ 116,000	$ 45,000	$ 234,000	90,000
Mr. Solomita [Member]
Repayment of related party debt					28,710
Advances from majority stockholder					360,000
Repayment of advances from majority stockholder					$ 249,762

Stockholders' Equity (Details)

Stockholders' Equity (Details)	6 Months Ended
	Aug. 31, 2018USD ($)shares
Beginning Balance, Amount	$ 10,324,065
Issuance of shares upon vesting of restricted stock units, Amount
Ending Balance, Amount	$ 5,335,675
Common Stock [Member]
Beginning Balance, Shares | shares	33,751,088
Beginning Balance, Amount	$ 3,376
Cashless exercise of warrants, Shares | shares	18,821
Cashless exercise of warrants, Amount	$ 2
Issuance of shares upon vesting of restricted stock units, Shares | shares	35,797
Issuance of shares upon vesting of restricted stock units, Amount	$ 3
Ending balance, Shares | shares	33,805,706
Ending Balance, Amount	$ 3,381

Stockholders' Equity (Details N

Stockholders' Equity (Details Narrative) - USD ($)	6 Months Ended
	Aug. 31, 2018	Aug. 31, 2017
Common Stock [Member]
Issuance of shares upon cashless exercise of warrants, Shares	18,821	20,000
Issuance of shares upon vesting of restricted stock units, Shares	35,797
Sale of common stock		1,123,266
Common stock offering price per share		$ 5.25
Proceeds from issuance of common stock		$ 5,897,188
Warrants	20,000	22,919
Proceeds from issuance of common stock		1,123,266
Common Stock One [Member]
Common stock offering price per share		$ 6
Proceeds from issuance of common stock		$ 1,163,016
Proceeds from issuance of common stock		193,770

Stock-based Compensation Plan_2

Stock-based Compensation Plans (Details) - $ / shares	6 Months Ended
	Aug. 31, 2018	Aug. 31, 2017
Number of Warrant Shares
Outstanding, beginning of period	2,515,248	1,647,670
Granted	13,209	1,080,000
Exercised	(20,000)	(213,770)
Forfeited	(100,000)	(65,418)
Expired	(62,500)	(443,900)
Outstanding, end of period	2,345,957	2,004,582
Exercisable, end of period	1,071,915	616,457
Weighted Average Exercise Price
Outstanding, beginning of period	$ 8.21	$ 2.91
Granted	11.52	5.25
Exercised	0.80	5.52
Forfeited	5.25	2.90
Expired	4.80	6
Outstanding, end of period	8.44	3.21
Exercisable, end of period	$ 7.67	$ 1.19

Stock-based Compensation Plan_3

Stock-based Compensation Plans (Details 1) - shares	6 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	Feb. 28, 2018	Feb. 28, 2017
Number of warrants outstanding	2,345,957	2,004,582	2,515,248	1,647,670
Warrants exercisable	1,071,915	616,457
Warrants outstanding, weighted average remaining life	8 years 1 month 6 days	8 years 3 months 22 days
Warrant exercisable, weighted average remaining life	7 years 2 months 19 days	6 years 7 months 28 days
Exercise Prices 0.80 [Member]
Number of warrants outstanding	582,081	912,082
Warrants outstanding, weighted average remaining life	7 years 2 months 30 days	6 years 6 months
Exercise Prices 3.00 [Member]
Number of warrants outstanding		12,500
Warrants outstanding, weighted average remaining life	0 years	9 months 3 days
Exercise Prices 5.25 [Member]
Number of warrants outstanding	380,000	1,080,000
Warrants outstanding, weighted average remaining life	8 years 11 months 26 days	9 years 11 months 4 days
Exercise Prices 11.52 [Member]
Number of warrants outstanding	13,209
Warrants outstanding, weighted average remaining life	9 years 10 months 10 days	0 years
Exercise Prices 12.00 [Member]
Number of warrants outstanding	840,667
Warrants outstanding, weighted average remaining life	7 years 7 months 2 days	0 years
Exercise Prices 13.49 [Member]
Number of warrants outstanding	250,000
Warrants outstanding, weighted average remaining life	9 years 1 month 16 days	0 years
Exercise Prices 13.89 [Member]
Number of warrants outstanding	280,000
Warrants outstanding, weighted average remaining life	9 years 2 months 8 days	0 years

Stock-based Compensation Plan_4

Stock-based Compensation Plans (Details 2) - $ / shares	6 Months Ended
	Aug. 31, 2018	Aug. 31, 2017
Exercise price	$ 11.52	$ 5.25
Risk-free interest rate	2.82%
Expected dividend yield	0.00%	0.00%
Expected volatility	78.00%
Expected life years	6 years 6 months
Minimum [Member]
Risk-free interest rate		1.60%
Expected volatility		82.00%
Expected life years		4 years
Maximum [Member]
Risk-free interest rate		2.02%
Expected volatility		84.00%
Expected life years		6 years

Stock-based Compensation Plan_5

Stock-based Compensation Plans (Details 3) - shares	6 Months Ended
	Aug. 31, 2018	Aug. 31, 2017
Number of RSUs
Granted	13,209	1,080,000
Forfeited	100,000	65,418
Restricted Stock Units (RSUs) [Member]
Number of RSUs
Outstanding, beginning of period	34,102
Granted	102,818
Vested	(35,797)
Forfeited	(1,625)
Outstanding, end of period	99,498
Weighted average remaining life (in years)	2 years 2 months 16 days	0 years

Stock-based Compensation Plan_6

Stock-based Compensation Plans (Details Narrative) - USD ($)	Jul. 06, 2017	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2018	Aug. 31, 2017
Share-based compensation expense		$ 800,000	$ 700,000	$ 1,800,000	$ 900,000
Number of shares available for issuance forfeited and expired				3,271,496
Restricted Stock Units (RSUs) [Member]
Share-based compensation expense		$ 200,000		$ 400,000
Equity Incentive plan [Member]
Common stock shares reserved for future issuance	3,000,000
Description of provision for plan	On March 1, 2018, in accordance with the provisions of the Plan, the number of shares available for issuance were increased by 1,500,000 to a total of 3,235,898.
Equity incentive plan description	Common stock were reserved for issuance under the Plan with annual automatic share reserve increases 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.

Subsequent Events (Details Narr

Subsequent Events (Details Narrative)	1 Months Ended
	Sep. 24, 2018
Subsequent Event [Member] | Joint Venture Agreement [Member]
Joint venture agreement description	On September 24, 2018 to form a 50:50 joint venture limited liability company by the name of Indorama Loop Technologies, LLC (“ILT”).