Cover
Cover - shares | 6 Months Ended | |
Aug. 31, 2021 | Oct. 13, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | Loop Industries, Inc | |
Entity Central Index Key | 0001504678 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Aug. 31, 2021 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2022 | |
Entity Common Stock Shares Outstanding | 47,160,164 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 000-54768 | |
Entity Incorporation State Country Code | NV | |
Entity Tax Identification Number | 27-2094706 | |
Entity Address Address Line 1 | 480 Fernand-Poitras | |
Entity Address City Or Town | Terrebonne | |
Entity Address Postal Zip Code | 00000 | |
City Area Code | 450 | |
Local Phone Number | 951-8555 | |
Security 12b Title | Common Stock | |
Trading Symbol | LOOP | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes | |
Entity Address Country | CA |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Aug. 31, 2021 | Feb. 28, 2021 |
Current assets | ||
Cash and cash equivalents | $ 65,561,362 | $ 35,221,951 |
Sales tax, tax credits and other receivables (Note 3) | 1,343,417 | 1,763,835 |
Prepaid expenses and deposits (Note 4) | 972,149 | 609,782 |
Assets held for sale (Note 5) | 3,411,037 | 0 |
Total current assets | 71,287,965 | 37,595,568 |
Investment in joint venture (Note 10) | 1,500,000 | 1,500,000 |
Property, plant and equipment, net (Note 6) | 4,818,028 | 3,513,051 |
Intangible assets, net (Note 7) | 871,050 | 794,894 |
Total assets | 78,477,043 | 43,403,513 |
Current liabilities | ||
Accounts payable and accrued liabilities (Note 9) | 5,234,367 | 8,124,865 |
Current portion of long-term debt (Note 11) | 915,432 | 938,116 |
Total current liabilities | 6,149,799 | 9,062,981 |
Long-term debt (Note 11) | 3,322,596 | 1,516,008 |
Total liabilities | 9,472,395 | 10,578,989 |
Stockholders' Equity | ||
Series A Preferred stock par value $0.0001; 25,000,000 shares authorized; one share issued and outstanding | 0 | 0 |
Common stock par value $0.0001: 250,000,000 shares authorized; 47,160,164 shares issued and outstanding (February 28, 2021 - 42,413,691) (Note 13) | 4,717 | 4,242 |
Additional paid-in capital | 149,008,231 | 113,662,677 |
Additional paid-in capital - Warrants (Note 18) | 30,356,938 | 8,826,165 |
Accumulated deficit | (110,211,750) | (89,661,970) |
Accumulated other comprehensive loss | (153,488) | (6,590) |
Total stockholders' equity | 69,004,648 | 32,824,524 |
Total liabilities and stockholders' equity | $ 78,477,043 | $ 43,403,513 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Aug. 31, 2021 | Feb. 28, 2021 |
Stockholders' Equity | ||
Series A preferred stock, par value | $ 0.0001 | $ 0.0001 |
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 | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 47,160,164 | 42,413,691 |
Common stock, shares outstanding | 47,160,164 | 42,413,691 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2021 | Aug. 31, 2020 | Aug. 31, 2021 | Aug. 31, 2020 | |
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) | ||||
Revenue | $ 0 | $ 0 | $ 0 | $ 0 |
Expenses | ||||
Research and development (Note 14) | 5,284,797 | 2,749,222 | 13,922,632 | 4,229,810 |
General and administrative (Note 15) | 3,116,226 | 2,049,241 | 6,276,797 | 4,002,323 |
Depreciation and amortization (Notes 6 and 7) | 140,770 | 302,587 | 272,770 | 558,561 |
Interest and other financial expenses (Note 19) | 33,102 | (58,905) | 63,689 | 67,871 |
Interest income | (8,413) | (18,039) | (18,174) | (58,386) |
Foreign exchange loss (gain) | (174,066) | 103,618 | 32,066 | 180,259 |
Total expenses | 8,392,416 | 5,127,724 | 20,549,780 | 8,980,438 |
Net Loss | (8,392,416) | (5,127,724) | (20,549,780) | (8,980,438) |
Other comprehensive income (loss) | ||||
Foreign currency translation adjustment | (353,713) | 402,812 | (146,898) | 232,400 |
Comprehensive income (loss) | $ (8,746,129) | $ (4,724,912) | $ (20,696,678) | $ (8,748,038) |
Loss per share | ||||
Basic and Diluted | $ (0.19) | $ (0.13) | $ (0.47) | $ (0.22) |
Weighted average common shares outstanding | ||||
Basic and Diluted | 44,132,872 | 39,928,047 | 43,282,989 | 39,922,443 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Changes in Stockholders Equity (Unaudited) - USD ($) | Total | Common Stock | Series A, Preferred Stock | Additional Paid-In Capital | Additional Paid-in Capital -Warrants [Member] | Retained Earnings (Accumulated Deficit) | Accumulated other comprehensive loss |
Balance, shares at Feb. 29, 2020 | 39,910,774 | 1 | |||||
Balance, amount at Feb. 29, 2020 | $ 38,463,708 | $ 3,992 | $ 0 | $ 82,379,413 | $ 9,785,799 | $ (53,317,047) | $ (388,449) |
Warrant issued for services (Note 18) | 84,442 | $ 0 | 0 | 0 | 84,442 | 0 | 0 |
Issuance of shares upon the vesting of restricted stock units (Note 16), shares | 24,436 | ||||||
Issuance of shares upon the vesting of restricted stock units (Note 16), amount | 0 | $ 2 | 0 | (2) | 0 | 0 | 0 |
Stock options issued for services (Note 16) | 1,110,435 | 0 | 0 | 1,110,435 | 0 | 0 | 0 |
Restricted stock units issued for services (Note 16) | 682,877 | 0 | 0 | 682,877 | 0 | 0 | 0 |
Foreign currency translation | 232,400 | 0 | 0 | 0 | 0 | 0 | 232,400 |
Net loss | (8,980,438) | $ 0 | $ 0 | 0 | 0 | (8,980,438) | 0 |
Balance, shares at Aug. 31, 2020 | 39,935,210 | 1 | |||||
Balance, amount at Aug. 31, 2020 | 31,593,424 | $ 3,994 | $ 0 | 84,172,723 | 9,870,241 | (62,297,485) | (156,049) |
Balance, shares at May. 31, 2020 | 39,916,905 | 1 | |||||
Balance, amount at May. 31, 2020 | 35,452,406 | $ 3,993 | $ 0 | 83,306,794 | 9,870,241 | (57,169,761) | (558,861) |
Issuance of shares upon the vesting of restricted stock units (Note 16), shares | 18,305 | ||||||
Issuance of shares upon the vesting of restricted stock units (Note 16), amount | 0 | $ 1 | 0 | (1) | 0 | 0 | 0 |
Stock options issued for services (Note 16) | 553,540 | 0 | 0 | 553,540 | 0 | 0 | 0 |
Restricted stock units issued for services (Note 16) | 312,390 | 0 | 0 | 312,390 | 0 | 0 | 0 |
Foreign currency translation | 402,812 | 0 | 0 | 0 | 0 | 0 | 402,812 |
Net loss | (5,127,724) | $ 0 | $ 0 | 0 | 0 | (5,127,724) | 0 |
Balance, shares at Aug. 31, 2020 | 39,935,210 | 1 | |||||
Balance, amount at Aug. 31, 2020 | 31,593,424 | $ 3,994 | $ 0 | 84,172,723 | 9,870,241 | (62,297,485) | (156,049) |
Balance, shares at Feb. 28, 2021 | 42,413,691 | 1 | |||||
Balance, amount at Feb. 28, 2021 | 32,824,524 | $ 4,242 | $ 0 | 113,662,677 | 8,826,165 | (89,661,970) | (6,590) |
Issuance of shares upon the vesting of restricted stock units (Note 16), shares | 31,660 | ||||||
Issuance of shares upon the vesting of restricted stock units (Note 16), amount | 0 | $ 4 | 0 | (4) | 0 | 0 | 0 |
Stock options issued for services (Note 16) | 892,971 | 0 | 0 | 892,971 | 0 | 0 | 0 |
Restricted stock units issued for services (Note 16) | (173,238) | 0 | 0 | (173,238) | 0 | 0 | 0 |
Foreign currency translation | (146,898) | 0 | 0 | 0 | 0 | 0 | (146,898) |
Net loss | (20,549,780) | $ 0 | 0 | 0 | 0 | (20,549,780) | 0 |
Issuance of common shares and warrants for cash, net of share issuance costs (Note 13), shares | 4,714,813 | ||||||
Issuance of common shares and warrants for cash, net of share issuance costs (Note 13), amount | 56,087,746 | $ 471 | 0 | 34,625,825 | 21,461,450 | 0 | 0 |
Issuance of warrants for financing facility (Notes 11 and 18) | 69,323 | $ 0 | $ 0 | 0 | 69,323 | 0 | 0 |
Balance, shares at Aug. 31, 2021 | 47,160,164 | 1 | |||||
Balance, amount at Aug. 31, 2021 | 69,004,648 | $ 4,717 | $ 0 | 149,008,231 | 30,356,938 | (110,211,750) | (153,488) |
Balance, shares at May. 31, 2021 | 42,433,320 | 1 | |||||
Balance, amount at May. 31, 2021 | 20,874,332 | $ 4,244 | $ 0 | 113,663,032 | 8,826,165 | (101,819,334) | 200,225 |
Issuance of shares upon the vesting of restricted stock units (Note 16), shares | 12,031 | ||||||
Issuance of shares upon the vesting of restricted stock units (Note 16), amount | 0 | $ 2 | 0 | (2) | 0 | 0 | 0 |
Stock options issued for services (Note 16) | 343,653 | 0 | 0 | 343,653 | 0 | 0 | 0 |
Restricted stock units issued for services (Note 16) | 379,165 | 0 | 0 | 379,165 | 0 | 0 | 0 |
Foreign currency translation | (353,713) | 0 | 0 | 0 | 0 | 0 | (353,713) |
Net loss | (8,392,416) | $ 0 | 0 | 0 | 0 | (8,392,416) | 0 |
Issuance of common shares and warrants for cash, net of share issuance costs (Note 13), shares | 4,714,813 | ||||||
Issuance of common shares and warrants for cash, net of share issuance costs (Note 13), amount | 56,084,304 | $ 471 | 0 | 34,622,383 | 21,461,450 | 0 | 0 |
Issuance of warrants for financing facility (Notes 11 and 18) | 69,323 | $ 0 | $ 0 | 0 | 69,323 | 0 | 0 |
Balance, shares at Aug. 31, 2021 | 47,160,164 | 1 | |||||
Balance, amount at Aug. 31, 2021 | $ 69,004,648 | $ 4,717 | $ 0 | $ 149,008,231 | $ 30,356,938 | $ (110,211,750) | $ (153,488) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Cash Flows from Operating Activities | ||
Net loss | $ (20,549,780) | $ (8,980,438) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization (Notes 6 and 7) | 272,770 | 558,561 |
Stock-based compensation expense (Note 16) | 719,733 | 1,877,754 |
Accretion and accrued interest expenses (Note 19) | 43,967 | 36,949 |
Loss on revaluation of foreign exchange contracts (Note 19) | 0 | 11,482 |
Changes in operating assets and liabilities: | ||
Sales tax and tax credits receivable (Note 3) | 436,236 | 169,018 |
Prepaid expenses (Note 4) | (365,769) | (824,675) |
Accounts payable and accrued liabilities (Note 9) | (2,957,577) | (304,438) |
Net cash used in operating activities | (22,400,420) | (7,455,787) |
Cash Flows from Investing Activities | ||
Investment in joint venture (Note 10) | 0 | (650,000) |
Deposits on machinery and equipment (Note 4) | 0 | (1,305,010) |
Additions to property, plant and equipment (Notes 5 and 6) | (5,010,982) | (1,116,744) |
Additions to intangible assets (Note 7) | (90,591) | (160,484) |
Net cash used in investing activities | (5,101,573) | (3,232,238) |
Cash Flows from Financing Activities | ||
Proceeds from sale of common shares and warrants, net of share issuance costs (Note 13) | 56,087,746 | 0 |
Proceeds from issuance of long-term debt (Note 11) | 1,894,877 | 0 |
Repayment of long-term debt (Note 11) | (27,740) | (26,836) |
Net cash (used) provided by financing activities | 57,954,883 | (26,836) |
Effect of exchange rate changes | (113,479) | 125,433 |
Net increase (decrease) in cash | 30,339,411 | (10,589,428) |
Cash, beginning of period | 35,221,951 | 33,717,671 |
Cash, end of period | 65,561,362 | 23,128,243 |
Supplemental Disclosure of Cash Flow Information: | ||
Income tax paid | 0 | 0 |
Interest paid | 19,720 | 19,441 |
Interest received | $ 18,174 | $ 30,497 |
The Company, Basis of Presentat
The Company, Basis of Presentation | 6 Months Ended |
Aug. 31, 2021 | |
The Company, Basis of Presentation | |
1. The Company, Basis of Presentation | 1. 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. 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- and six-month periods ended August 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 | 6 Months Ended |
Aug. 31, 2021 | |
Summary of Significant Accounting Policies | |
2. Summary of Significant Accounting Policies | 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 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, assets held for sale, 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 is 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 process development and design, testing of preproduction samples, purchases of machinery and equipment for the small-scale production facility, compensation, and consulting fees, and are expensed as incurred. Total research and development expenses recorded during the six-month periods ended August 31, 2021 and 2020 amounted to $13,922,632 and $4,229,810, 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. Assets held for sale Assets are classified as held for sale when they met the criteria set out in ASC 360-10-45-9 Long-lived assets classified as held for sale · Management, having the authority to approve the action, commits to a plan to sell the asset; · The asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets; · An active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated; · The sale of the asset is probable, and transfer of the asset is expected to qualify for recognition as a completed sale, within one year; · The asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and · Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. When the criteria are met, the assets are presented at the lesser of fair market value, net of selling costs, and cost in current assets. 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 six-month periods ended August 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 August 31, 2021, the potentially dilutive securities consisted of 1,587,081 outstanding stock options (2020 – 1,587,081), 4,170,278 outstanding restricted stock units (2020 – 4,313,750), and 11,684,418 outstanding warrants (2020 – 4,884,331). |
Sales Tax, Tax Credits and Othe
Sales Tax, Tax Credits and Other Receivables | 6 Months Ended |
Aug. 31, 2021 | |
Sales Tax, Tax Credits and Other Receivables | |
3. Sales Tax, Tax Credits and Other Receivables | 3. Sales Tax, Tax Credits and Other Receivables Sales tax, research and development tax credits and other receivables as at August 31, 2021 and February 28, 2021 were as follows: August 31, 2021 February 28, 2021 Sales tax $ 599,706 $ 1,155,504 Research and development tax credits 588,843 435,467 Other receivables 154,868 172,864 $ 1,343,417 $ 1,763,835 |
Prepaid Expenses and Deposits
Prepaid Expenses and Deposits | 6 Months Ended |
Aug. 31, 2021 | |
Prepaid Expenses and Deposits | |
4. Prepaid Expenses and Deposits | 4. Prepaid Expenses and Deposits Prepaid expenses as at August 31, 2021 and February 28, 2021 were as follows: August 31, 2021 February 28, 2021 Deposits on machinery and equipment $ 733,586 $ 379,395 Other 238,563 230,387 $ 972,149 $ 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. During the six-month period ended August 31, 2020, the Company made non-refundable cash deposits on machinery and equipment of $1,305,010 which were classified as a cashflow from investing activities in the statement of cash flows as costs of machinery and equipment were previously capitalized. Starting in the third quarter of fiscal 2021, the Company treats costs of machinery and equipment as research and development expenses in the period they are incurred. |
Assets held for sale
Assets held for sale | 6 Months Ended |
Aug. 31, 2021 | |
Assets held for sale | |
5. Assets held for sale | 5. Assets held for sale On May 27, 2021, we acquired land in Bécancour, Québec for cash of $4.8 million (CDN $5.9 million). The site is part of our planning for an Infinite Loop™ manufacturing facility. We plan on using a portion of the land in connection with the construction of our Infinite Loop TM ASC 360 Property, plant and equipment The total purchase cost of the land has been allocated between the portion of land held for sale and the land to be used for the planned Infinite Loop™ manufacturing facility based on surface area. Description Balance sheet line item Cost Land held for sale Assets held for sale $ 3,411,037 Infinite Loop™ manufacturing facility Property, plant and equipment, net 1,410,858 $ 4,821,895 |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Aug. 31, 2021 | |
Property, Plant and Equipment | |
6. Property, Plant and Equipment | 6. Property, Plant and Equipment Property, plant and equipment as at August 31, 2021 and February 28, 2021 were as follows: As at August 31, 2021 Cost Accumulated depreciation, write-down and impairment Net book value Building $ 1,964,878 $ (235,410 ) $ 1,729,468 Land 1,653,737 - 1,653,737 Building and Land Improvements 1,921,952 (666,509 ) 1,255,443 Machinery and equipment 6,514,252 (6,514,252 ) - Office equipment and furniture 295,474 (116,094 ) 179,380 $ 12,350,293 $ (7,532,265 ) $ 4,818,028 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 and Land 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 six-month period ended August 31, 2021, the Company acquired a parcel of land in Bécancour, Québec for $4.8 million (CDN $5.9 million). The Company intends to use a portion of the property for the construction of a commercial facility to manufacture Loop™ branded PET resin using its Infinite Loop™ technology. The excess land is classified as held for sale, as described in Note 5. Depreciation expense for the three- and six-month periods ended August 31, 2021 amounted to $121,733 and $236,790, respectively (2020– $291,498 and $539,697, respectively), and is recorded as an operating expense in the consolidated statements of operations and comprehensive loss. |
Intangible Assets
Intangible Assets | 6 Months Ended |
Aug. 31, 2021 | |
Intangible Assets | |
7. Intangible Assets | 7. Intangible Assets Intangible assets as at August 31, 2021 and February 28, 2021 were $871,050 and $794,894, respectively. During the six-months periods ended August 31, 2021 and 2020, we made additions to intangible assets of $90,591 and $160,484, respectively. Amortization expense for the three- and six-month periods ended August 31, 2021 amounted to $19,036 and $35,980, respectively (2020 - $11,088 and $18,864, 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 | 6 Months Ended |
Aug. 31, 2021 | |
Fair Value of Financial Instruments | |
8. Fair Value of Financial Instruments | 8. Fair value of financial instruments The following tables present the fair value of the Company’s financial liabilities as at August 31, 2021 and February 28, 2021: Fair Value Measurements as at August 31, 2021 Carrying Amount Fair Value Level in the hierarchy Instruments measured at amortized cost: Long-term debt $ 4,238,028 $ 4,253,605 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 | 6 Months Ended |
Aug. 31, 2021 | |
Accounts Payable and Accrued Liabilities | |
9. Accounts Payable and Accrued Liabilities | 9. Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities as at August 31, 2021 and February 28, 2021 were as follows: August 31, 2021 February 28, 2021 Trade accounts payable $ 3,577,365 $ 5,082,736 Accrued engineering fees 96,865 535,359 Accrued employee compensation 765,103 970,154 Accrued professional fees 448,567 1,270,628 Other accrued liabilities 346,467 265,988 $ 5,234,367 $ 8,124,865 |
Joint Venture
Joint Venture | 6 Months Ended |
Aug. 31, 2021 | |
Joint Venture | |
10. Joint Venture | 10. 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 August 31, 2021 and, as at August 31, 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 six-month period ended August 31, 2021, we made no contributions to ILT (2020 – $650,000). These contributions to ILT, which have been matched by Indorama Ventures, were used to fund engineering design costs which have been capitalized in ILT. In conjunction with the SK strategic partnership described in Note 13, 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. |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Aug. 31, 2021 | |
Long-Term Debt | |
11. Long-Term Debt | 11. Long-Term Debt August 31, 2021 February 28, 2021 Investissement Québec financing facility : Principal amount $ 3,645,875 $ 1,741,612 Unamortized discount (388,155 ) (268,192 ) Accrued interest 64,876 42,588 Total Investissement Québec financing facility 3,322,596 1,516,008 Term loan Principal amount 915,432 938,116 Less: current portion (915,432 ) (938,116 ) Total term loan, net of current portion - - Long-term debt, net of current portion $ 3,322,596 $ 1,516,008 Investissement Québec financing facility On February 21, 2020, the Company received $1,750,998 (CDN$2,209,234) from Investissement Québec as the first disbursement of our financing facility, out of a maximum of $3,645,875 (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, $36,459 (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. On August 26, 2021, the Company received $1,894,877 (CDN$2,390,766) from Investissement Québec as the second disbursement of our financing facility, the balance of the total amount available under the financing facility of $3,645,875 (CDN$4,600,000) (the “Financing Facility”). The second disbursement bears the same interest rate and repayment terms as the first disbursement. The Company established the fair value of the loan for the first disbursement at $1,750,395 based on a discount rate of 3.95%, which reflected a debt discount of $139,390. The discount rate used was based on the external financing from a Canadian bank. There were no fees associated with the second disbursement. 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- and six-month periods ended August 31, 2021 in the amount of $11,512 and $22,394 respectively (2020 – $9,875 and $19,291) and an accretion expense of $11,046 and $21,573 respectively (2020 – $9,112 and $17,658). The Company 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 $364,587 (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 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 with 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 August 31, 2021. In connection with the second disbursement of the Financing Facility, the Company issued a warrant (“Second Disbursement Warrant”) to acquire 17,180 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 $69,323 and is included in “Additional paid-in capital – Warrants” in our Condensed Consolidated Balance Sheets. The Second Disbursement Warrant remains outstanding as at August 31, 2021. Term loan On January 24, 2018, the Company obtained a $1,109,614 (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 $4,623 (CDN$5,833) plus interest, until January 2022, at which time the monthly repayment amount and interest rate are subject to renewal. It includes an option allowing for the prepayment of the Loan without penalty. During the three- and six-month periods ended August 31, 2021, we repaid $13,870 and $27,740 respectively (2020 – $14,143 and $26,836) on the principal balance of the Loan and interest paid amounted to $10,543 and $19,496 and (2020 – $9,130 and $19,441). The terms of the credit facility require the Company to comply with certain financial covenants. As at August 31, 2021 and 2020, the Company was in compliance with its financial covenants. Principal repayments due on the Company’s long-term debt over the next five years are as follows: Years ending Amount February 28, 2022 $ 915,432 February 28, 2023 - February 29, 2024 520,831 February 28, 2025 520,831 February 28, 2026 520,831 Thereafter 2,083,382 Total $ 4,561,307 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Aug. 31, 2021 | |
Related Party Transactions | |
12. Related Party Transactions | 12. 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 far simpler to purify. During the quarters ended August 31, 2021 and 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 | 6 Months Ended |
Aug. 31, 2021 | |
Stockholders Equity Abstract | |
13. Stockholders' Equity | 13. Stockholders’ Equity Common Stock For the period ended August 31, 2021 Number of shares Amount Balance, February 28, 2021 42,413,691 $ 4,242 Issuance of shares upon settlement of restricted stock units 31,660 4 Issuance of shares for cash 4,714,813 471 Balance, August 31, 2021 47,160,164 $ 4,717 For the period ended August 31, 2020 Number of shares Amount Balance, February 29, 2020 39,910,774 $ 3,992 Issuance of shares upon settlement of restricted stock units 24,436 2 Balance, August 31, 2020 39,935,210 $ 3,994 During the six months ended August 31, 2021, the Company recorded the following common stock transactions: (i) The Company issued 31,660 shares of the common stock to settle restricted stock units that vested in the period. (ii) The Company issued 4,714,813 shares of its common stock, with warrants, at an aggregate offering price of $12.00 per share for total gross proceeds of $56,577,756 and net proceeds of $56,084,304. During the six months ended August 31, 2020, the Company recorded the following common stock transaction: (i) The Company issued 24,436 shares of its common stock to settle restricted stock units that vested in the period. 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 sold to the Purchaser the following securities on July 29, 2021 for an aggregate purchase price of $56.5 million (collectively, the “SKGC 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 BDP Date (as defined in the Second Tranche Warrants), 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, with an expiration date of June 14, 2022 (the “Third Tranche Warrants,” and together with First Tranche Warrants and the Second Tranche Warrants, the “Warrants”). The Purchaser may exercise the First Tranche Warrant at any time beginning on January 29, 2022 and the Second Tranche Warrant at any time on or after the later to occur of (i) January 29, 2022 and (ii) the first business day following the First Plant Milestone (as defined in the Second Tranche Warrant) prior to its expiration date. The Purchaser may exercise the Third Tranche Warrant at any time prior to June 14, 2022. The table below summarizes the allocation of the aggregate purchase price, net of issuance costs, based on the relative fair-value of the components at the grant date: Common stock $ 34,622,854 First Tranche Warrants 13,158,981 Second Tranche Warrants 7,167,195 Third Tranche Warrants 1,135,274 $ 56,084,304 The fair value of the warrants was determined using the Black-Scholes model. After the closing of the SKGC Investment, the Purchaser owns approximately 10.0% of the issued and outstanding Common Stock as of that date. |
Research and Development Expens
Research and Development Expenses | 6 Months Ended |
Aug. 31, 2021 | |
Research and Development Expenses | |
14. Research and development expenses | 14. Research and Development Expenses Research and development expenses for the three-month periods ended August 31, 2021 and 2020 were as follows: August 31, 2021 August 31, 2020 Machinery and equipment expenditures $ 2,485,232 $ - Employee compensation 1,492,688 1,060,669 External engineering 551,381 942,117 Plant and laboratory operating expenses 707,043 584,394 Other 48,453 162,042 $ 5,284,797 $ 2,749,222 Research and development expenses for the six-month periods ended August 31, 2021 and 2020 were as follows: August 31, 2021 August 31, 2020 Machinery and equipment expenditures $ 5,108,125 $ - Employee compensation 3,578,816 1,879,717 External engineering 3,454,829 1,017,049 Plant and laboratory operating expenses 1,398,510 870,497 Other 382,352 462,547 $ 13,922,632 $ 4,229,810 During the six-month period ended August 31, 2021, we recorded research and development tax credits of $152,391 as a reduction of research and development expenses and an expense of $267,743 in the six-month period ended August 31, 2020. The expense in the six-month period ended August 31, 2020 was due to a revision of research and development tax credits by Canadian tax authorities. During the six-month period ended August 31, 2021, we recorded no government grants as a reduction of research and development expenses (2020 – $191,439). |
General and Administrative Expe
General and Administrative Expenses | 6 Months Ended |
Aug. 31, 2021 | |
General and Administrative Expenses | |
15. General and Administrative Expenses | 15. General and Administrative Expenses General and administrative expenses for the three-month periods ended August 31, 2021 and 2020 were as follows: August 31, 2021 August 31, 2020 Professional fees $ 856,997 $ 420,434 Employee compensation 868,122 1,002,473 Directors and officers insurance 1,059,153 502,368 Other 331,954 123,966 $ 3,116,226 $ 2,049,241 General and administrative expenses for the six-month periods ended August 31, 2021 and 2020 were as follows: August 31, 2021 August 31, 2020 Professional fees $ 2,488,447 $ 642,131 Employee compensation (1) 1,329,527 2,145,325 Directors and officers insurance 1,927,799 975,941 Other 531,024 238,926 $ 6,276,797 $ 4,002,323 ______________ (1) Includes stock-based compensation expense. In the six-month period ended August 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 | 6 Months Ended |
Aug. 31, 2021 | |
Share-Based Payments | |
16. Share-Based Payments | 16. Share-based Payments Stock Options During the three-month period ended August 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). During the six-month period ended August 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- and six-month periods ended August 31, 2021 and 2020. The total number of stock options outstanding as at August 31, 2021 was 1,587,081 (2020 – 1,587,081) with a weighted average exercise price of $6.81 (2020 - $6.81), of which 1,278,748 were exercisable (2020 – 1,083,748) with a weighted average exercise price of $7.30 (2020 – $7.05). During the three-month periods ended August 31, 2021 and 2020, stock-based compensation expense attributable to stock options amounted to $343,653 and $553,540, respectively, and is included in operating expenses. During the six-month periods ended August 31, 2021 and 2020, stock-based compensation expense attributable to stock options amounted to $892,971 and $1,110,435, respectively, and is included in operating expenses. Restricted Stock Units During the three-month period ended August 31, 2021, the Company granted 33,184 restricted stock units (“RSUs”) (2020 – 38,648) with a weighted average fair value of $13.05 (2020 – $9.20), settled 12,031 RSUs (2020 – 18,305) with a weighted average fair value of $8.48 (2020 – $9.85) and no RSUs were forfeited (2020 – nil). During the six-month period ended August 31, 2021, the Company granted 286,942 restricted stock units (“RSUs”) (2020 – 122,373) with a weighted average fair value of $9.41 (2020 – $8.86), settled 31,660 RSUs (2020 – 24,436) with a weighted average fair value of $8.82 (2020 – $9.78) 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 August 31, 2021 was 4,170,278 (2020 – 4,313,750), of which 725,313 were vested (2020 – 891,327). During the three-month periods ended August 31, 2021 and 2020, stock-based compensation attributable to RSUs amounted to $379,165 and $312,390, respectively, and is included in expenses. During the six-month periods ended August 31, 2021 and 2020, stock-based compensation attributable to RSUs amounted to ($173,238) and $682,877, respectively, and is included in operating expenses. The net reversal in expenses attributable to RSUs in the three-month period ended August 31, 2021 is due to forfeitures recorded in the period for a total of $935,837 (2020 – $4,005). Stock-Based Compensation Expenses During the three-month periods ended August 31, 2021 and 2020, stock-based compensation included in research and development expenses amounted to $394,527 and $352,282, respectively, and in general and administrative expenses amounted to $313,282 and $513,649, respectively. During the six-month periods ended August 31, 2021 and 2020, stock-based compensation included in research and development expenses amounted to $790,072 and $704,289, respectively, and in general and administrative expenses amounted to ($70,338) and $1,173,466, respectively. The net reversal in stock-based compensation included in general and administrative expenses in the six-month period ended August 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 | 6 Months Ended |
Aug. 31, 2021 | |
Equity Incentive Plan | |
17. Equity Incentive Plan | 17. 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 six-month periods ended August 31, 2021 and 2020: 2021 2020 Number of units Number of units Outstanding, beginning of period 1,083,412 1,300,518 Share reserve increase - - Units granted (286,942 ) (125,762 ) Units forfeited 295,524 2,989 Units expired - - Outstanding, end of period 1,091,994 1,177,745 |
Warrants
Warrants | 6 Months Ended |
Aug. 31, 2021 | |
Warrants | |
18. Warrants | 18. Warrants During the six-month period ended August 31, 2021, the Company issued warrants to purchase 7,550,698 shares of our common stock. No warrants were exercised, were forfeited, nor expired in the six-month period ended August 31, 2021. The table below summarizes the warrants granted during the six-month period ended August 31, 2021: Number of warrants Exercise Price Expiration date 4,714,813 $ 15.00 July 29, 2024 2,357,407 20.00 (1) 461,298 11.00 June 14, 2022 17,180 $ 11.00 August 26, 2024 _______________ (1) Expiration date is 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 BDP Date (as defined in the Second Tranche Warrants), provided that the First Plant Milestone has not occurred as of such date. During the six-month period ended August 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 and warrants to issue 200,000 shares of our common stock with an exercise price of $11.00 expired. No warrants were exercised or forfeited in the six-month period ended August 31, 2021. |
Interest and Other Finance Cost
Interest and Other Finance Costs | 6 Months Ended |
Aug. 31, 2021 | |
Interest and Other Finance Costs | |
19. Interest and Other Finance Costs | 19. Interest and Other Finance Costs Interest and other finance costs for the three-month periods ended August 31, 2021 and 2020 are as follows: 2021 2020 Interest on long-term debt $ 22,056 $ 19,005 Accretion expense 11,046 9,112 Loss (gain) on revaluation of foreign exchange contracts - (87,022 ) $ 33,102 $ (58,905 ) Interest and other finance costs for the six-month periods ended August 31, 2021 and 2020 are as follows: 2021 2020 Interest on long-term debt $ 41,890 $ 38,732 Accretion expense 21,573 17,658 Loss (gain) on revaluation of foreign exchange contracts - 11,481 Other 226 - $ 63,689 $ 67,871 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Aug. 31, 2021 | |
Commitments and Contingencies | |
20. Commitments and Contingencies | 20. 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 August 31, 2021, the cumulative amount paid was $900,000 and during the six-month period ended August 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. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Aug. 31, 2021 | |
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, assets held for sale, 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. |
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 is 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 process development and design, testing of preproduction samples, purchases of machinery and equipment for the small-scale production facility, compensation, and consulting fees, and are expensed as incurred. Total research and development expenses recorded during the six-month periods ended August 31, 2021 and 2020 amounted to $13,922,632 and $4,229,810, 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. |
Assets held for sale | Assets are classified as held for sale when they met the criteria set out in ASC 360-10-45-9 Long-lived assets classified as held for sale · Management, having the authority to approve the action, commits to a plan to sell the asset; · The asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets; · An active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated; · The sale of the asset is probable, and transfer of the asset is expected to qualify for recognition as a completed sale, within one year; · The asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and · Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. When the criteria are met, the assets are presented at the lesser of fair market value, net of selling costs, and cost in current assets. |
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 six-month periods ended August 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 August 31, 2021, the potentially dilutive securities consisted of 1,587,081 outstanding stock options (2020 – 1,587,081), 4,170,278 outstanding restricted stock units (2020 – 4,313,750), and 11,684,418 outstanding warrants (2020 – 4,884,331). |
Sales Tax, Tax Credits and Ot_2
Sales Tax, Tax Credits and Other Receivables (Tables) | 6 Months Ended |
Aug. 31, 2021 | |
Sales Tax, Tax Credits and Other Receivables | |
Sales tax, tax credits and other receivables | August 31, 2021 February 28, 2021 Sales tax $ 599,706 $ 1,155,504 Research and development tax credits 588,843 435,467 Other receivables 154,868 172,864 $ 1,343,417 $ 1,763,835 |
Prepaid Expenses and Deposits (
Prepaid Expenses and Deposits (Tables) | 6 Months Ended |
Aug. 31, 2021 | |
Prepaid Expenses and Deposits | |
Prepaid expenses | August 31, 2021 February 28, 2021 Deposits on machinery and equipment $ 733,586 $ 379,395 Other 238,563 230,387 $ 972,149 $ 609,782 |
Assets held for sale (Tables)
Assets held for sale (Tables) | 6 Months Ended |
Aug. 31, 2021 | |
Assets held for sale | |
Summarizes cost of assets held for sale | Description Balance sheet line item Cost Land held for sale Assets held for sale $ 3,411,037 Infinite Loop™ manufacturing facility Property, plant and equipment, net 1,410,858 $ 4,821,895 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 6 Months Ended |
Aug. 31, 2021 | |
Property, Plant and Equipment | |
Property, plant and equipment | As at August 31, 2021 Cost Accumulated depreciation, write-down and impairment Net book value Building $ 1,964,878 $ (235,410 ) $ 1,729,468 Land 1,653,737 - 1,653,737 Building and Land Improvements 1,921,952 (666,509 ) 1,255,443 Machinery and equipment 6,514,252 (6,514,252 ) - Office equipment and furniture 295,474 (116,094 ) 179,380 $ 12,350,293 $ (7,532,265 ) $ 4,818,028 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 and Land 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 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Aug. 31, 2021 | |
Fair Value of Financial Instruments | |
Fair value of financial instruments | Fair Value Measurements as at August 31, 2021 Carrying Amount Fair Value Level in the hierarchy Instruments measured at amortized cost: Long-term debt $ 4,238,028 $ 4,253,605 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) | 6 Months Ended |
Aug. 31, 2021 | |
Accounts Payable and Accrued Liabilities | |
Accounts payable and accrued liabilities | August 31, 2021 February 28, 2021 Trade accounts payable $ 3,577,365 $ 5,082,736 Accrued engineering fees 96,865 535,359 Accrued employee compensation 765,103 970,154 Accrued professional fees 448,567 1,270,628 Other accrued liabilities 346,467 265,988 $ 5,234,367 $ 8,124,865 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Aug. 31, 2021 | |
Long-Term Debt | |
Long-term debt | August 31, 2021 February 28, 2021 Investissement Québec financing facility : Principal amount $ 3,645,875 $ 1,741,612 Unamortized discount (388,155 ) (268,192 ) Accrued interest 64,876 42,588 Total Investissement Québec financing facility 3,322,596 1,516,008 Term loan Principal amount 915,432 938,116 Less: current portion (915,432 ) (938,116 ) Total term loan, net of current portion - - Long-term debt, net of current portion $ 3,322,596 $ 1,516,008 |
Principal repayments | Years ending Amount February 28, 2022 $ 915,432 February 28, 2023 - February 29, 2024 520,831 February 28, 2025 520,831 February 28, 2026 520,831 Thereafter 2,083,382 Total $ 4,561,307 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Aug. 31, 2021 | |
Stockholders Equity Abstract | |
Common stock | For the period ended August 31, 2021 Number of shares Amount Balance, February 28, 2021 42,413,691 $ 4,242 Issuance of shares upon settlement of restricted stock units 31,660 4 Issuance of shares for cash 4,714,813 471 Balance, August 31, 2021 47,160,164 $ 4,717 For the period ended August 31, 2020 Number of shares Amount Balance, February 29, 2020 39,910,774 $ 3,992 Issuance of shares upon settlement of restricted stock units 24,436 2 Balance, August 31, 2020 39,935,210 $ 3,994 |
Summarizes the allocation of the aggregate purchase price | Common stock $ 34,622,854 First Tranche Warrants 13,158,981 Second Tranche Warrants 7,167,195 Third Tranche Warrants 1,135,274 $ 56,084,304 |
Research and Development Expe_2
Research and Development Expenses (Tables) | 6 Months Ended |
Aug. 31, 2021 | |
Research and Development Expenses | |
Research and development expenses | August 31, 2021 August 31, 2020 Machinery and equipment expenditures $ 2,485,232 $ - Employee compensation 1,492,688 1,060,669 External engineering 551,381 942,117 Plant and laboratory operating expenses 707,043 584,394 Other 48,453 162,042 $ 5,284,797 $ 2,749,222 August 31, 2021 August 31, 2020 Machinery and equipment expenditures $ 5,108,125 $ - Employee compensation 3,578,816 1,879,717 External engineering 3,454,829 1,017,049 Plant and laboratory operating expenses 1,398,510 870,497 Other 382,352 462,547 $ 13,922,632 $ 4,229,810 |
General and Administrative Ex_2
General and Administrative Expenses (Tables) | 6 Months Ended |
Aug. 31, 2021 | |
General and Administrative Expenses | |
General and Administrative expenses | August 31, 2021 August 31, 2020 Professional fees $ 856,997 $ 420,434 Employee compensation 868,122 1,002,473 Directors and officers insurance 1,059,153 502,368 Other 331,954 123,966 $ 3,116,226 $ 2,049,241 General and administrative expenses for the six-month periods ended August 31, 2021 and 2020 were as follows: August 31, 2021 August 31, 2020 Professional fees $ 2,488,447 $ 642,131 Employee compensation (1) 1,329,527 2,145,325 Directors and officers insurance 1,927,799 975,941 Other 531,024 238,926 $ 6,276,797 $ 4,002,323 |
Equity Incentive Plan (Tables)
Equity Incentive Plan (Tables) | 6 Months Ended |
Aug. 31, 2021 | |
Equity Incentive Plan | |
Equity incentive plan | 2021 2020 Number of units Number of units Outstanding, beginning of period 1,083,412 1,300,518 Share reserve increase - - Units granted (286,942 ) (125,762 ) Units forfeited 295,524 2,989 Units expired - - Outstanding, end of period 1,091,994 1,177,745 |
Warrants (Tables)
Warrants (Tables) | 6 Months Ended |
Aug. 31, 2021 | |
Accounts Payable and Accrued Liabilities | |
Summarizes the warrants of granted | Number of warrants Exercise Price Expiration date 4,714,813 $ 15.00 July 29, 2024 2,357,407 20.00 (1) 461,298 11.00 June 14, 2022 17,180 $ 11.00 August 26, 2024 |
Interest and Other Financial Co
Interest and Other Financial Costs (Tables) | 3 Months Ended |
Aug. 31, 2021 | |
Sales Tax, Tax Credits and Other Receivables | |
Interest and other financial costs | 2021 2020 Interest on long-term debt $ 22,056 $ 19,005 Accretion expense 11,046 9,112 Loss (gain) on revaluation of foreign exchange contracts - (87,022 ) $ 33,102 $ (58,905 ) Interest and other finance costs for the six-month periods ended August 31, 2021 and 2020 are as follows: 2021 2020 Interest on long-term debt $ 41,890 $ 38,732 Accretion expense 21,573 17,658 Loss (gain) on revaluation of foreign exchange contracts - 11,481 Other 226 - $ 63,689 $ 67,871 |
The Company Basis of Presentati
The Company Basis of Presentation (Details Narrative) | Aug. 31, 2021 |
Indorama Loop Technologies, LLC [Member] | |
Ownership, percentage | 50.00% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 6 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Research and development expenses | $ 13,922,632 | $ 267,743 |
Restricted Stock Units | ||
Antidilutive securities | 4,170,278 | 4,313,750 |
Warrants | ||
Antidilutive securities | 11,684,418 | 4,884,331 |
Stock Options [Member] | ||
Antidilutive securities | 1,587,081 | 1,587,081 |
Sales Tax Tax Credits and Other
Sales Tax Tax Credits and Other Receivables (Details) - USD ($) | Aug. 31, 2021 | Feb. 28, 2021 |
Sales Tax, Tax Credits and Other Receivables | ||
Sales tax | $ 599,706 | $ 1,155,504 |
Research and development tax credits | 588,843 | 435,467 |
Other receivables | 154,868 | 172,864 |
Sales tax, research and development tax credits and other receivables | $ 1,343,417 | $ 1,763,835 |
Prepaid Expenses and Deposits_2
Prepaid Expenses and Deposits (Details) - USD ($) | Aug. 31, 2021 | Feb. 28, 2021 |
Prepaid Expenses and Deposits | ||
Deposits on machinery and equipment | $ 733,586 | $ 379,395 |
Other | 238,563 | 230,387 |
Prepaid expenses | $ 972,149 | $ 609,782 |
Prepaid Expenses and Deposits_3
Prepaid Expenses and Deposits (Details Narrative) | 6 Months Ended |
Aug. 31, 2020USD ($) | |
Prepaid Expenses and Deposits | |
Non refundable deposits on machinery and equipment | $ 1,305,010 |
Assets held for sale (Details)
Assets held for sale (Details) | 6 Months Ended |
Aug. 31, 2021USD ($) | |
Total Assets held for sale | $ 4,821,895 |
Property, plant and equipment, net [Member] | |
Total Assets held for sale | $ 1,410,858 |
Assets Held-for-sale, Description | Assets held for sale |
Assets held for sale [Member] | |
Total Assets held for sale | $ 3,411,037 |
Assets Held-for-sale, Description | Property, plant and equipment, net |
Assets held for sale (Details N
Assets held for sale (Details Narrative) $ in Millions | 6 Months Ended |
Aug. 31, 2021USD ($) | |
Assets held for sale (Details) | |
Land acquired descriprtion | On May 27, 2021, we acquired land in Bécancour, Québec for cash of $ million (CDN $5.9 million). The site is part of our planning for an Infinite LoopTM manufacturing facility. We plan on using a portion of the land in connection with the construction of our Infinite LoopTM manufacturing facility and selling the excess land |
Land acquired for cash, amount | $ 4.8 |
Property Plant and Equipment (D
Property Plant and Equipment (Details) - USD ($) | Aug. 31, 2021 | Feb. 28, 2021 |
Property, plant and equipment, gross | $ 12,350,293 | $ 10,807,993 |
Less: accumulated depreciation, write-down and impairment | (7,532,265) | (7,294,942) |
Property, plant and equipment, net | 4,818,028 | 3,513,051 |
Land [Member] | ||
Property, plant and equipment, gross | 1,653,737 | 241,578 |
Less: accumulated depreciation, write-down and impairment | 0 | 0 |
Property, plant and equipment, net | 1,653,737 | 241,578 |
Building [Member] | ||
Property, plant and equipment, gross | 1,964,878 | 1,954,345 |
Less: accumulated depreciation, write-down and impairment | (235,410) | (201,589) |
Property, plant and equipment, net | 1,729,468 | 1,752,756 |
Building and Land Improvements [Member] | ||
Property, plant and equipment, gross | 1,921,952 | 1,804,872 |
Less: accumulated depreciation, write-down and impairment | (666,509) | (474,114) |
Property, plant and equipment, net | 1,255,443 | 1,330,758 |
Machinery and Equipment [Member] | ||
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 [Member] | ||
Property, plant and equipment, gross | 295,474 | 292,946 |
Less: accumulated depreciation, write-down and impairment | (116,094) | (104,987) |
Property, plant and equipment, net | $ 179,380 | $ 187,959 |
Property Plant and Equipment _2
Property Plant and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2021 | Aug. 31, 2020 | Aug. 31, 2021 | Aug. 31, 2020 | |
Property, Plant and Equipment | ||||
Depreciation expense | $ 121,733 | $ 291,498 | $ 236,790 | $ 539,697 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Aug. 31, 2021 | Aug. 31, 2020 | Aug. 31, 2021 | Aug. 31, 2020 | Feb. 28, 2021 | |
Intangible Assets | |||||
Intangible assets | $ 871,050 | $ 871,050 | $ 794,894 | ||
Additions to intangible assets | 90,591 | $ 160,484 | |||
Amortization expense | $ 19,036 | $ 11,088 | $ 35,980 | $ 18,864 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) | Aug. 31, 2021 | Feb. 28, 2021 |
Total liabilities | $ 9,472,395 | $ 10,578,989 |
Long-term Debt [Member] | Level 2 [Member] | ||
Total liabilities | 4,238,028 | 2,454,123 |
Fair value | $ 4,253,605 | $ 2,464,540 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities (Details) - USD ($) | Aug. 31, 2021 | Feb. 28, 2021 |
Accounts Payable and Accrued Liabilities | ||
Trade accounts payable | $ 3,577,365 | $ 5,082,736 |
Accrued engineering fees | 96,865 | 535,359 |
Accrued employee compensation | 765,103 | 970,154 |
Accrued professional fees | 448,567 | 1,270,628 |
Other accrued liabilities | 346,467 | 265,988 |
Accounts payable and accrued liabilities | $ 5,234,367 | $ 8,124,865 |
Joint Venture (Details Narrativ
Joint Venture (Details Narrative) - USD ($) | 6 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Joint Venture | ||
Investment in joint venture | $ 0 | $ 650,000 |
Equity method investment, carrying value | $ 1,500,000 |
LongTerm Debt (Details)
LongTerm Debt (Details) - USD ($) | Aug. 31, 2021 | Feb. 28, 2021 |
Long-term debt, net of current portion | $ 3,322,596 | $ 1,516,008 |
Principal amount | 4,561,307 | |
Less: current portion | (915,432) | (938,116) |
Investissement Qu?bec Financing Facility [Member] | ||
Long-term debt, net of current portion | 3,322,596 | 1,516,008 |
Principal amount | 3,645,875 | 1,741,612 |
Unamortized discount | (388,155) | (268,192) |
Accrued interest | 64,876 | 42,588 |
Term Loan [Member] | ||
Long-term debt, net of current portion | 0 | 0 |
Principal amount | 915,432 | 938,116 |
Less: current portion | $ (915,432) | $ (938,116) |
LongTerm Debt (Details 1)
LongTerm Debt (Details 1) | Aug. 31, 2021USD ($) |
Long-Term Debt | |
February 28, 2022 | $ 915,432 |
February 28, 2023 | 0 |
February 29, 2024 | 520,831 |
February 28, 2025 | 520,831 |
February 28, 2026 | 520,831 |
Thereafter | 2,083,382 |
Total | $ 4,561,307 |
LongTerm Debt (Details Narrativ
LongTerm Debt (Details Narrative) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Jan. 24, 2018USD ($) | Aug. 31, 2021USD ($)$ / sharesshares | Aug. 31, 2020USD ($) | Aug. 31, 2021USD ($)$ / shares | Aug. 31, 2020USD ($) | Aug. 26, 2021USD ($) | Feb. 21, 2020USD ($)integer | |
Repayment of long-term debt | $ 27,740 | $ 26,836 | |||||
Investissement Qu?bec Financing Facility [Member] | |||||||
Ramaining financing facility | $ 3,645,875 | ||||||
Interest expense | $ 11,512 | $ 9,875 | 22,394 | 19,291 | |||
Mximum financing facility | $ 3,645,875 | ||||||
Disbursement from financing facility | 1,894,877 | $ 1,750,998 | |||||
Interest rate on loan | 2.36% | ||||||
Number of monthly installments | integer | 84 | ||||||
Fair value of the loan for the disbursement | $ 1,750,395 | $ 1,354,408 | |||||
Discount rate | 3.95% | 5.45% | |||||
Loan fees | $ 36,459 | ||||||
Debt discount | $ 139,390 | $ 290,714 | |||||
Accretion expense | $ 11,046 | 9,112 | $ 21,573 | 17,658 | |||
Investissement Qu?bec Financing Facility [Member] | Warrants | |||||||
Warrant exercise price | $ / shares | $ 11 | $ 11 | |||||
Warrants issued to purchase common stock, amount | $ 364,587 | ||||||
Warrant term | 3 years | ||||||
Investissement Qu?bec Financing Facility [Member] | First Disbursement Warrant [Member] | |||||||
Warrant exercise price | $ / shares | $ 11 | $ 11 | |||||
Warrants issued to purchase common stock, shares | shares | 15,153 | ||||||
Fair value of warrant | $ 77,954 | $ 77,954 | |||||
Investissement Qu?bec Financing Facility [Member] | Second Disbursement Warrant [Member] | |||||||
Warrant exercise price | $ / shares | $ 11 | $ 11 | |||||
Warrants issued to purchase common stock, shares | shares | 17,180 | ||||||
Fair value of warrant | $ 69,323 | $ 69,323 | |||||
Term Loan [Member] | |||||||
Repayment of long-term debt | 13,870 | 14,143 | 27,740 | 26,836 | |||
Loan amount | $ 1,109,614 | ||||||
Loan, term | 20 years | ||||||
Loan, interest rate description | prime rate plus 1.5% | ||||||
Monthly repayment of loan | $ 4,623 | ||||||
Interest paid | $ 10,543 | $ 9,130 | $ 19,496 | $ 19,441 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - $ / shares | Jul. 13, 2018 | Aug. 31, 2021 | Aug. 31, 2021 | Apr. 30, 2020 |
Shares granted | 0 | 0 | ||
President and Chief Executive Officer | ||||
Shares granted | 4,000,000 | |||
Closing price per share | $ 7.74 | |||
President and Chief Executive Officer | Restricted Stock Units | ||||
Shares granted | 4,000,000 |
Stockholders Equity (Details)
Stockholders Equity (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2021 | Aug. 31, 2020 | Aug. 31, 2021 | Aug. 31, 2020 | |
Balance, amount | $ 20,874,332 | $ 35,452,406 | $ 32,824,524 | $ 38,463,708 |
Issuance of shares upon settlement of restricted stock units, shares | 31,660 | 24,436 | ||
Issuance of shares for cash, shares | 4,714,813 | |||
Balance, amount | $ 69,004,648 | $ 31,593,424 | $ 69,004,648 | $ 31,593,424 |
Common Stock [Member] | ||||
Balance, shares | 42,413,691 | 39,910,774 | ||
Balance, amount | $ 4,242 | $ 3,992 | ||
Issuance of shares upon settlement of restricted stock units, shares | 31,660 | 24,436 | ||
Issuance of shares upon settlement of restricted stock units, amount | $ 4 | $ 2 | ||
Issuance of shares for cash, shares | 4,714,813 | |||
Issuance of shares for cash, amount | $ 471 | |||
Balance, shares | 47,160,164 | 39,935,210 | 47,160,164 | 39,935,210 |
Balance, amount | $ 4,717 | $ 3,994 | $ 4,717 | $ 3,994 |
Stockholders' Equity (Details 1
Stockholders' Equity (Details 1) | Aug. 31, 2021USD ($) |
Aggregate purchase price, net of issuance costs | $ 56,084,304 |
Common Stock [Member] | |
Aggregate purchase price, net of issuance costs | 34,622,854 |
First Tranche Warrants [Member] | |
Aggregate purchase price, net of issuance costs | 13,158,981 |
Second Tranche Warrants [Member] | |
Aggregate purchase price, net of issuance costs | 7,167,195 |
Third Tranche Warrants [Member] | |
Aggregate purchase price, net of issuance costs | $ 1,135,274 |
Stockholders Equity (Details Na
Stockholders Equity (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | |
Jul. 29, 2021 | Aug. 31, 2021 | Aug. 31, 2020 | |
Offering price per share | $ 12 | ||
Issuance of shares upon the vesting of restricted stock units | 31,660 | 24,436 | |
Issuance of shares for cash, shares | 4,714,813 | ||
Gross proceeds from issuance of shares with warrants | $ 56,577,756 | ||
Net proceeds from issuance of shares with warrant | $ 56,084,304 | ||
Warrant exercise price | $ 7.30 | $ 7.05 | |
SKGC Investment [Member] | |||
Aggregate purchase price | $ 56,500,000 | ||
Shares of common stock sold | 4,714,813 | ||
Issued and outstanding common stock, contribution | 10.00% | ||
SKGC Investment [Member] | First Tranche Warrants [Member] | |||
Issuance of shares for cash, shares | 4,714,813 | ||
Warrant exercise price | $ 15 | ||
SKGC Investment [Member] | Second Tranche Warrants [Member] | |||
Issuance of shares for cash, shares | 2,357,407 | ||
Warrant exercise price | $ 20 | ||
SKGC Investment [Member] | Third Tranche Warrants [Member] | |||
Issuance of shares for cash, shares | 461,298 | ||
Warrant exercise price | $ 11 |
Research and Development Expe_3
Research and Development Expenses (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2021 | Aug. 31, 2020 | Aug. 31, 2021 | Aug. 31, 2020 | |
Research and development expenses | $ 5,284,797 | $ 2,749,222 | $ 13,922,632 | $ 267,743 |
Employee Compensation [Member] | ||||
Research and development expenses | 1,492,688 | 1,060,669 | 3,578,816 | 1,879,717 |
External Engineering [Member] | ||||
Research and development expenses | 551,381 | 942,117 | 3,454,829 | 1,017,049 |
Plant and Laboratory Operating Expenses [Member] | ||||
Research and development expenses | 707,043 | 584,394 | 1,398,510 | 870,497 |
Other [Member] | ||||
Research and development expenses | 48,453 | 162,042 | 382,352 | 462,547 |
Machinery and Equipment [Member] | ||||
Research and development expenses | $ 2,485,232 | $ 0 | $ 5,108,125 | $ 0 |
Research and Development Expe_4
Research and Development Expenses (Details Narrative) - USD ($) | 6 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Summary of Significant Accounting Policies | ||
Research and development, tax credits | $ 152,391 | $ 267,743 |
Research and development, government grants | $ 191,439 |
General and Administrative Ex_3
General and Administrative Expenses (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2021 | Aug. 31, 2020 | Aug. 31, 2021 | Aug. 31, 2020 | |
General and administrative expenses | $ 3,116,226 | $ 2,049,241 | $ 6,276,797 | $ 4,002,323 |
Employee Compensation [Member] | ||||
General and administrative expenses | 868,122 | 1,002,473 | 1,329,527 | 2,145,325 |
Professional fees [Member] | ||||
General and administrative expenses | 856,997 | 420,434 | 2,488,447 | 642,131 |
Directors and officers insurance [Member] | ||||
General and administrative expenses | 1,059,153 | 502,368 | 1,927,799 | 975,941 |
Other [Member] | ||||
General and administrative expenses | $ 331,954 | $ 123,966 | $ 531,024 | $ 238,926 |
General and Administrative Ex_4
General and Administrative Expenses (Details Narrative) - USD ($) | 6 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Net reversal of stock-based compensation | $ 719,733 | $ 1,877,754 |
Restricted Stock Units | ||
Net reversal of stock-based compensation | $ 935,837 | $ 4,005 |
Share-based Payments (Details N
Share-based Payments (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2021 | Aug. 31, 2020 | Aug. 31, 2021 | Aug. 31, 2020 | |
Stock options granted | 0 | 0 | ||
Stock options forfeited | 0 | 0 | ||
Stock options expired | 0 | 0 | ||
Issuances of stock options | 0 | 0 | 0 | 0 |
Stock options outstanding | 1,587,081 | 1,587,081 | 1,587,081 | 1,587,081 |
Stock options outstanding, weighted average exercise price | $ 6.81 | $ 6.81 | $ 6.81 | $ 6.81 |
Stock options exercisable | 1,278,748 | 1,083,748 | 1,278,748 | 1,083,748 |
Stock options exercisable, weighted average exercise price | $ 7.30 | $ 7.05 | $ 7.30 | $ 7.05 |
Stock-based compensation expense | $ 343,653 | $ 553,540 | $ 892,971 | $ 1,110,435 |
Research and Development Expenses | ||||
Restricted stock unit expense | 394,527 | 352,282 | 790,072 | 704,289 |
General and Administrative Expenses | ||||
Restricted stock unit expense | $ 313,282 | $ 513,649 | 70,338 | 1,173,466 |
Net reversal in stock-based compensation | $ 935,837 | $ 4,005 | ||
Restricted Stock Units | ||||
Restricted stock units granted | 33,184 | 38,648 | 286,942 | 122,373 |
Restricted stock units granted, weighted average exercise price | $ 13.05 | $ 9.20 | $ 9.41 | $ 8.86 |
Restricted stock units settled | 12,031 | 18,305 | 31,660 | 24,436 |
Restricted stock units settled, weighted average exercise price | $ 8.48 | $ 9.85 | $ 8.82 | $ 9.78 |
Restricted stock units forfeited | 0 | 0 | 295,524 | 2,989 |
Restricted stock units forfeited, weighted average exercise price | $ 7.93 | $ 8.78 | ||
Restricted stock units outstanding | 4,170,278 | 4,313,750 | 4,170,278 | 4,313,750 |
Restricted stock units vested | 891,327 | 725,313 | ||
Restricted stock unit expense | $ 379,165 | $ 312,390 | $ 173,238 | $ 682,877 |
Net reversal in expenses attributable to RSUs | $ 935,837 | $ 4,005 |
Equity Incentive Plan (Details)
Equity Incentive Plan (Details) - Equity Incentive Plan - shares | 6 Months Ended | |
Aug. 31, 2021 | Aug. 31, 2020 | |
Outstanding, beginning of period | 1,083,412 | 1,300,518 |
Share reserve increase | 0 | 0 |
Units granted | 286,942 | 125,762 |
Units forfeited | 295,524 | 2,989 |
Units expired | 0 | 0 |
Outstanding, end of period | 1,091,994 | 1,177,745 |
Equity Incentive Plan (Details
Equity Incentive Plan (Details Narrative) - 2017 Equity Incentive Plan - shares | Jul. 06, 2017 | Aug. 31, 2021 |
Common stock shares reserved for future issuance | 3,000,000 | |
Common stock shares reserved for future issuance annual increase | 1,500,000 | |
Expected life | 10 years | |
Voting power percentage | 10 | |
Life of option | 5 years | |
Common stock outstanding shares percentage | 5 |
Warrants (Details)
Warrants (Details) | 6 Months Ended |
Aug. 31, 2021USD ($)$ / shares | |
Warrants 1 | |
Number of warrants | $ | $ 4,714,813 |
Exercise Price | $ / shares | $ 15 |
Expiration date | Jul. 29, 2024 |
Warrants 2 | |
Number of warrants | $ | $ 2,357,407 |
Exercise Price | $ / shares | $ 20 |
Warrants 3 | |
Number of warrants | $ | $ 461,298 |
Exercise Price | $ / shares | $ 11 |
Expiration date | Jun. 14, 2022 |
Warrants 4 | |
Number of warrants | $ | $ 17,180 |
Exercise Price | $ / shares | $ 11 |
Expiration date | Aug. 26, 2024 |
Warrants (Details Narrative)
Warrants (Details Narrative) - Warrants | 6 Months Ended |
Aug. 31, 2021$ / sharesshares | |
Warrants to issue shares of common stock | 200,000 |
Warrants to issue shares of common stock exercise price | $ / shares | $ 11 |
Warrant to purchase common stock shares for for consulting services | 25,000 |
Warrant to purchase common stock shares for for consulting services, per share price | $ / shares | $ 9.43 |
Warrants issued | 7,550,698 |
Interest and Other Financial _2
Interest and Other Financial Costs (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2021 | Aug. 31, 2020 | Aug. 31, 2021 | Aug. 31, 2020 | |
Interest and Other Finance Costs | ||||
Interest on long-term debt | $ 22,056 | $ 19,005 | $ 41,890 | $ 38,732 |
Accretion expense | 11,046 | 9,112 | 21,573 | 17,658 |
Loss (gain) on revaluation of foreign exchange contracts | 0 | (87,022) | 0 | 11,481 |
Other Interest and finance costs | 0 | 0 | 226 | 0 |
Interest and other finance costs | $ 33,102 | $ (58,905) | $ 63,689 | $ 67,871 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 6 Months Ended | |
Aug. 31, 2021 | Sep. 02, 2020 | |
Commitments and Contingencies | ||
Cumulative amount paid | $ 900,000 | |
Total amount of Chemtex Agreement | $ 4,300,000 | |
Milestones payments facility | $ 2,150,000 |