Cover
Cover - USD ($) | 12 Months Ended | ||
Feb. 28, 2022 | May 24, 2022 | Aug. 31, 2021 | |
Cover [Abstract] | |||
Entity Registrant Name | Loop Industries, Inc. | ||
Entity Central Index Key | 0001504678 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --02-28 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Current Reporting Status | Yes | ||
Document Period End Date | Feb. 28, 2022 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Entity Common Stock Shares Outstanding | 47,400,709 | ||
Entity Public Float | $ 172,940,955 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 000-54768 | ||
Entity Incorporation State Country Code | NV | ||
Entity Tax Identification Number | 27-2094706 | ||
Entity Interactive Data Current | Yes | ||
Icfr Auditor Attestation Flag | false | ||
Entity Address Address Line 1 | 480 Fernand-Poitras | ||
Entity Address Address Line 2 | Terrebonne | ||
Entity Address Country | CA | ||
Entity Address Postal Zip Code | J6Y 1Y4 | ||
Entity Address City Or Town | Québec | ||
Security 12g Title | Common Stock | ||
Trading Symbol | LOOP | ||
Security Exchange Name | NASDAQ | ||
City Area Code | 450 | ||
Local Phone Number | 951-8555 | ||
Auditor Name | PricewaterhouseCoopers LLP | ||
Auditor Firm Id | 271 | ||
Auditor Location | Montreal Canada |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Feb. 28, 2022 | Feb. 28, 2021 |
Current Assets | ||
Cash And Cash Equivalents | $ 44,061,427 | $ 35,221,951 |
Sales Tax, Tax Credits And Other Receivables (note 3) | 1,716,262 | 1,763,835 |
Prepaid expenses and deposits (Note 4) | 2,965,646 | 609,782 |
Assets Held For Sale (note 5) | 3,389,279 | 0 |
Total Current Assets | 52,132,614 | 37,595,568 |
Investment In Joint Venture (note 10) | 380,922 | 1,500,000 |
Property, Plant And Equipment, Net (note 6) | 5,692,862 | 3,513,051 |
Intangible Assets, Net (note 7) | 1,013,801 | 794,894 |
Total Assets | 59,220,199 | 43,403,513 |
Current Liabilities | ||
Accounts Payable And Accrued Liabilities (note 9) | 9,846,815 | 8,124,865 |
Current Portion Of Long-term Debt (note 11) | 0 | 938,116 |
Total Current Liabilities | 9,846,815 | 9,062,981 |
Long-term Debt (note 11) | 3,378,403 | 1,516,008 |
Total Liabilities | 13,225,218 | 10,578,989 |
Stockholders' Equity | ||
Series A Preferred Stock Par Value $0.0001; 25,000,000 Shares Authorized; One Share Issued And Outstanding (note 13) | 0 | 0 |
Common Stock Par Value $0.0001; 250,000,000 Shares Authorized; 47,388,056 Shares Issued And Outstanding (2021 - 42,413,691) (note 13) | 4,740 | 4,242 |
Additional Paid-in Capital | 150,396,704 | 113,662,677 |
Additional Paid-in Capital - Warrants (note 18) | 30,272,496 | 8,826,165 |
Accumulated Deficit | (134,582,926) | (89,661,970) |
Accumulated Other Comprehensive Loss | (96,033) | (6,590) |
Total Stockholders' Equity | 45,994,981 | 32,824,524 |
Total Liabilities And Stockholders' Equity | $ 59,220,199 | $ 43,403,513 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Feb. 28, 2022 | Feb. 28, 2021 |
Consolidated Balance Sheets | ||
Series A Preferred Stock, Par Value | $ 0.0001 | $ 0.0001 |
Series A Preferred Stock, Share Authorised | 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 | 47,388,056 | 42,413,691 |
Common Stock, Shares Outstanding | 47,388,056 | 42,413,691 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Feb. 28, 2022 | Feb. 28, 2021 | |
Consolidated Statements of Operations and Comprehensive Loss | ||
Revenue | $ 0 | $ 0 |
Expenses : | ||
Research And Development (notes 14 And 16) | 27,736,425 | 18,687,014 |
General And Administrative (notes 15 And 16) | 12,792,439 | 11,540,340 |
Contingency loss for legal settlement (Notes 21 and 22) | 2,519,220 | 0 |
Loss from equity investment (Note 10) | 1,119,078 | 0 |
Impairment of assets (Note 6) | 0 | 5,043,119 |
Depreciation And Amortization (notes 6 And 7) | 548,232 | 775,675 |
Interest And Other Financial Expenses (note 18) | 154,319 | 81,996 |
Interest Income | (58,976) | (93,043) |
Foreign Exchange Loss | 110,219 | 309,822 |
Total Expenses | 44,920,956 | 36,344,923 |
Net Loss | (44,920,956) | (36,344,923) |
Other Comprehensive Loss - | ||
Foreign Currency Translation Adjustment | (89,443) | 381,859 |
Comprehensive Loss | $ (45,010,399) | $ (35,963,064) |
Net Loss Per Share | ||
Basic And Diluted | $ (0.99) | $ (0.89) |
Weighted Average Common Shares Outstanding | ||
Basic And Diluted | 45,287,885 | 40,983,752 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders Equity - USD ($) | Total | Common Stock | Preferred Stock | Additional Paid-In Capital | Additional Paid-in Capital -Warrants | 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) |
Issuance Of Common Shares For Cash, Net Of Share Issuance Costs (note 13), Shares | 2,087,000 | ||||||
Issuance Of Common Shares For Cash, Net Of Share Issuance Costs (note 13), Amount | 24,996,628 | $ 209 | 0 | 24,996,419 | 0 | 0 | 0 |
Issuance Of Shares Upon The Vesting Of Restricted Stock Units (notes 13 And 16), Shares | 225,388 | ||||||
Issuance Of Shares Upon The Vesting Of Restricted Stock Units (notes 13 And 16), Amount | 0 | $ 22 | 0 | (22) | 0 | 0 | 0 |
Issuance Of Shares Upon Exercise Of Warrants (notes 16 And 18), Shares | 190,529 | ||||||
Issuance Of Shares Upon Exercise Of Warrants (notes 16 And 18), Amount | 1,652,626 | $ 19 | 0 | 2,046,852 | (394,245) | 0 | 0 |
Issuance Of Warrant For Services (note 18) | 84,442 | 0 | 0 | 0 | 84,442 | 0 | 0 |
Expiration Of Warrants (notes 16 And 18) | 0 | 0 | 0 | 649,831 | (649,831) | 0 | 0 |
Stock Options Granted For Services (note 16) | 2,212,078 | 0 | 0 | 2,212,078 | 0 | 0 | 0 |
Restricted Stock Units Granted For Services (note 16) | 1,378,106 | 0 | 0 | 1,378,106 | 0 | 0 | 0 |
Foreign Currency Translation | 381,859 | 0 | 0 | 0 | 0 | 0 | 381,859 |
Net Loss | (36,344,923) | $ 0 | $ 0 | 0 | 0 | (36,344,923) | 0 |
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 Common Shares For Cash, Net Of Share Issuance Costs (note 13), Shares | 4,714,813 | ||||||
Issuance Of Common Shares For Cash, Net Of Share Issuance Costs (note 13), Amount | 56,049,167 | $ 471 | 0 | 34,587,246 | 21,461,450 | 0 | 0 |
Issuance Of Shares Upon The Vesting Of Restricted Stock Units (notes 13 And 16), Shares | 231,660 | ||||||
Issuance Of Shares Upon The Vesting Of Restricted Stock Units (notes 13 And 16), Amount | 0 | $ 24 | 0 | (24) | 0 | 0 | 0 |
Stock Options Granted For Services (note 16) | 549,155 | 0 | 0 | 549,155 | 0 | 0 | 0 |
Restricted Stock Units Granted For Services (note 16) | 1,513,211 | 0 | 0 | 1,513,211 | 0 | ||
Foreign Currency Translation | (89,443) | (89,443) | |||||
Net Loss | (44,920,956) | (44,920,956) | |||||
Issuance Of Warrants For Financing Facility (notes 11 And 18) | 69,323 | $ 0 | 0 | 0 | 69,323 | 0 | 0 |
Issuance Of Shares Upon Exercise Of Warrants (notes 13 And 18), Shares | 11,666 | ||||||
Issuance Of Shares Upon Exercise Of Warrants (notes 13 And 18), Amount | 0 | $ 1 | 0 | 84,441 | (84,442) | 0 | 0 |
Issuance Of Shares Upon Exercise Of Options (notes 13 And 16), Shares | 16,226 | ||||||
Issuance Of Shares Upon Exercise Of Options (notes 13 And 16), Amount | 0 | $ 2 | $ 0 | (2) | 0 | 0 | 0 |
Balance, Shares at Feb. 28, 2022 | 47,388,056 | 1 | |||||
Balance, Amount at Feb. 28, 2022 | $ 45,994,981 | $ 4,740 | $ 150,396,704 | $ 30,272,496 | $ (134,582,926) | $ (96,033) |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 12 Months Ended | |
Feb. 28, 2022 | Feb. 28, 2021 | |
Cash Flows From Operating Activities | ||
Net Loss | $ (44,920,956) | $ (36,344,923) |
Adjustments To Reconcile Net Loss To Net Cash Used In Operating Activities: | ||
Depreciation And Amortization (notes 6 And 7) | 548,232 | 775,675 |
Stock-based Compensation (note 16) | 2,062,367 | 3,674,626 |
Contingency loss for legal settlement (Note 22) | 2,519,220 | 0 |
Loss from equity investment (Note 10) | 1,119,078 | 0 |
Write-down And Impairment Of Assets (note 6) | 0 | 5,043,120 |
Accretion, And Accrued Interest (note 19) | 121,240 | 76,446 |
Other, Net | 0 | (32,605) |
Changes In Operating Assets And Liabilities: | ||
Valued Added Tax And Tax Credits Receivable | 45,126 | (1,034,014) |
Prepaid expenses and deposits | (2,389,574) | (449,535) |
Accounts Payable And Accrued Liabilities | (2,089,679) | 5,800,575 |
Net Cash Used In Operating Activities | (42,984,946) | (22,490,636) |
Cash Flows From Investing Activities | ||
Investment In Joint Venture (note 10) | 0 | (650,000) |
Additions To Property, Plant And Equipment (note 6) | (4,815,847) | (1,735,079) |
Additions To Intangible Assets (note 7) | (294,955) | (592,285) |
Net Cash Used In Investing Activities | (5,110,802) | (2,977,364) |
Cash Flows From Financing Activities | ||
Proceeds From Sales Of Common Shares And Exercise Of Warrants, Net Of Share Issuance Costs (note 13) | 56,049,167 | 26,649,253 |
Proceeds From Issuance Of Long-term Debt (note 11) | 1,882,790 | 0 |
Repayment Of Long-term Debt (note 11) | (937,156) | (50,585) |
Net Cash Provided By Financing Activities | 56,994,801 | 26,598,668 |
Effect Of Exchange Rate Changes | (59,577) | 373,612 |
Net Change In Cash | 8,839,476 | 1,504,280 |
Cash And Cash Equivalents, Beginning Of Year | 35,221,951 | 33,717,671 |
Cash And Cash Equivalents, End Of Year | 44,061,427 | 35,221,951 |
Supplemental Disclosure Of Cash Flow Information: | ||
Income Tax Paid | 0 | 0 |
Interest Paid | 32,791 | 38,157 |
Interest Received | $ 53,995 | $ 93,043 |
The Company Basis of Presentati
The Company Basis of Presentation | 12 Months Ended |
Feb. 28, 2022 | |
The Company Basis of Presentation | |
1. The Company, Basis Of Presentation | 1. The Company and Basis of Presentation The Company Loop Industries, Inc. (the “Company,” “Loop,” “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. The Company is currently in the development stage with no revenues. Basis of presentation These consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“US GAAP”) and 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 consolidated financial statements of the Company have been prepared on a going concern basis, which contemplates the continuing of operations, the realization of assets and the settlement of liabilities in the normal course of business. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Feb. 28, 2022 | |
Summary of Significant Accounting Policies | |
2. Summary Of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Liquidity Risk Assessment From inception to February 28, 2022, the Company has been in the development stage with no revenues, and with its ongoing operations and commercialization plans financed primarily by raising equity. The Company has incurred net losses and negative cash flow from operating activities since its inception and expects to incur additional net losses while it continues to develop and plan for commercialization. As at February 28, 2022, the Company has cash and cash equivalents of $44.06 million. Management actively monitors the Company’s cash resources against the Company’s short-term cash commitments to ensure the Company has sufficient liquidity to fund its costs for at least twelve months from the financial statement issuance date. Management evaluates the Company’s liquidity to determine if there is substantial doubt about the Company’s ability to continue as a going concern. In preparing this liquidity assessment, management applies significant judgment in estimating future cash flow requirements of the Company based on budgets and forecasts, which includes developing assumptions related to: (i) estimation of amount and timing of future cash outflows and cash inflows and (ii) determining what future expenditures are committed and what could be considered discretionary. Based on this assessment, management believes that the Company will be able to realize its assets and discharge its liabilities in the normal course of operations as they become due for a period of no less than twelve months from the date of issuance of these consolidated financial statements. The company is currently evaluating financing options to move to the next stage of its strategic development and construct manufacturing plants in Canada, Europe and Asia. Our ability to successfully commercialize our business and generate future revenues depends on whether we can obtain the necessary financing through a combination of the issuance of debt, equity, and/or joint ventures and/or government incentive programs. We have committed a portion of our cash resources for certain long lead equipment in connection with the Bécancour project. We may enter into additional commitments to move the project ahead within our targeted construction timeframes. However, there is no assurance that the Company will be successful in attracting additional funding. Even if additional financing is available, it may not be available on terms favorable to us. Our failure to secure additional financing on favorable terms when it becomes required would have an adverse effect on our current operation and on our ability to execute our business plan. Use of estimates The preparation of financial statements in conformity with US GAAP requires management to use its judgment 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 the going concern assessment, 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. 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. Although the Company continues to monitor the situation and may adjust the Company’s current policies as more information and public health guidance continues to evolve, 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. Fair value of financial instruments The Company applies Financial Accounting Standards Board (“FASB”) Codification (“ASC”) 820, Fair Value Measurement There are three levels within the hierarchy that may be used to measure fair value: Level 1 – A quoted price in an active market for identical assets or liabilities. Level 2 – Significant pricing inputs are observable inputs, which are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Level 3 – Significant pricing inputs are unobservable inputs, which are inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value measurements level of an asset or liability within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used should maximize the use of observable inputs and minimize the use of unobservable inputs. The valuation methodologies described above may produce a fair value calculation that may not be indicative of future net realizable value or reflective of future fair values. The fair value of cash and accounts payable and accrued liabilities approximate their carrying values due to their short-term maturity. Government grants US GAAP for profit-oriented entities does not define government grants; nor is there specific guidance applicable to government grants. Under the Company’s accounting policy for government grants and consistent with non-authoritative guidance, grants are recognized on a systematic basis over the periods in which the entity recognizes as expenses the related costs for which the grants are intended to compensate. Grants that relate to the acquisition of an asset are recognized as a reduction of the cost of the asset and in the statement of operations and comprehensive loss as the asset is depreciated or amortized. A grant that is compensation for expenses or losses already incurred, or for which there are no future related costs, is recognized in the statement of operations and comprehensive loss in the period in which it becomes receivable. Low-interest loans or interest-free loans from a government are initially measured at fair value and interest expense is recognized on the loan subsequently under the effective interest method, with the difference recognized as a government grant. Deferred financing costs and other transaction costs Deferred financing costs represent commitment fees, legal fees and other costs associated with obtaining commitments for financing. These fees are amortized as a component of interest expense over the terms of the respective financing agreements on a straight-line basis. Unamortized deferred financing fees are expensed in full when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined that the financing will not be successful. Transaction costs associated with issuing equity are reflected as a reduction of accumulated paid-in-capital. 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. Property, plant and equipment Property, plant and equipment are recorded at cost, net of accumulated amortization and impairment, and are amortized over their estimated useful lives, unless the useful life is indefinite, using the straight-line method over the following periods: Building 30 years Land Indefinite Office equipment and furniture 8 years Machinery and equipment 3-8 years Building and land improvements 5-10 years Costs related to repairs and maintenance of property, plant and equipment are expensed in the period in which they are incurred. Upon sale or disposal, the Company writes off the cost of the asset and the related amount of accumulated depreciation. The resulting gain or loss is included in the consolidated statement of operations and comprehensive loss. Management reviews the carrying values of its property, plant and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group might not be recoverable. Assets are grouped at the lowest level for which identifiable cash flows are largely independent when testing for, and measuring for, impairment. In performing its review of recoverability, the Company estimates the future cash flows expected to result from the use of the asset or asset group and its eventual disposition. If the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset or asset group, an impairment loss is recognized in the consolidated statements of operations. Measurement of the impairment loss is based on the excess of the carrying amount of the asset or asset group over the fair value calculated using discounted expected future cash flows. Research and development expenses Research and development costs are charged to expense as costs are incurred in performing research and development activities. Research and development expenses relate primarily to process development and design, testing of pre production samples, machinery and equipment expenditures for use in the small-scale production facility in Terrebonne, Québec (the “Terrebonne Facility”), compensation, and consulting and engineering fees. 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. 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 recognized as compensation expense on the straight-line basis over the vesting period. When performance conditions exist, the Company recognizes 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. Intangible assets Intangible assets are recorded at cost, net of accumulated amortization and impairment, and are amortized over their estimated useful lives, unless the useful life is indefinite, using the straight-line method over 7 years. The Company reviews the carrying value of intangible assets subject to amortization whenever events or changes in circumstances indicate that the carrying amount of an intangible asset might not be recoverable or a change in the remaining useful life of an intangible asset. If the carrying value of an asset exceeds its undiscounted cash flows, the Company writes down the carrying value of the intangible asset to its fair value in the period identified. If the carrying value of assets is determined not to be recoverable, the Company records an impairment loss equal to the excess of the carrying value over the fair value of the assets. The Company’s estimate of fair value is based on the best information available, in the absence of quoted market prices. The Company generally calculates fair value as the present value of estimated future cash flows that the Company expects to generate from the asset. If the estimate of an intangible asset’s remaining useful life is changed, the Company amortizes the remaining carrying value of the intangible asset prospectively over the revised remaining useful life. Income taxes The Company calculates its provision for income tax on the basis of the tax laws enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income, in accordance with FASB ASC 740, Income Taxes Net loss per share The Company computes net loss per share in accordance with FASB ASC 260, Earnings Per Share For the years ended February 28, 2022 and February 28, 2021, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an antidilutive effect. As at February 28, 2022, the potentially dilutive securities consisted of 1,570,000 outstanding stock options (2021 – 1,587,081), 4,018,567 outstanding restricted stock units (2021 – 4,210,520), and 11,659,418 outstanding warrants (2021 – 4,133,720). Recently adopted accounting pronouncements In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes”, which removes specific exceptions to the general principles in ASC 740, “Income Taxes,” and clarifies certain aspects of the existing guidance. This update is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years, with early adoption being permitted as of the beginning of an interim or annual reporting period. All amendments to this ASU must be adopted in the same period on a prospective basis, with certain exceptions. The adoption of this accounting guidance did not impact our Consolidated Financial Statements and disclosures. Recently issued accounting pronouncements not yet adopted In November 2021, the FASB issued ASU 2021-10, “Disclosures by Business Entities about Government Assistance”. This ASU provided guidance to increase the transparency of government assistance including the disclosure of (1) the types of assistance, (2) an entity’s accounting for the assistance, and (3) the effect of the assistance on an entity’s financial statements. Under the new guidance, an entity is required to provide the following annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy: (1) information about the nature of the transactions and the related accounting policy used to account for the transactions, (2) the line items on the balance sheet and income statement that are affected by the transactions, and the amounts applicable to each financial statement line item and, (3) significant terms and conditions of the transactions, including commitments and contingencies. This update is effective for fiscal years beginning after December 15, 2021. We are currently evaluating this accounting guidance, which may have disclosure impact only. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses”. This ASU added a new impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes an allowance for its estimate of expected credit losses and applies to most debt instruments, trade receivables, lease receivables, financial guarantee contracts, and other loan commitments. The CECL model does not have a minimum threshold for recognition of impairment losses and entities will need to measure expected credit losses on assets that have a low risk of loss. This update is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years for smaller reporting companies. We are still evaluating the impact of this accounting guidance on our results of operations and financial position. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform,” which was amended in January 2021 by ASU 2021-01, “Reference Rate Reform - Scope” and provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. This update provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate or another reference rate expected to be discontinued because of reference rate reform. This update is effective as of March 12, 2020, through December 31, 2022. We are currently evaluating this accounting guidance and have not elected an adoption date. |
Sales Tax Tax Credits and Other
Sales Tax Tax Credits and Other Receivables | 12 Months Ended |
Feb. 28, 2022 | |
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 February 28, 2022 and February 28, 2021 were as follows: February 28, 2022 February 28, 2021 Sales tax $ 1,337,783 $ 1,155,504 Research and development tax credits 313,599 435,467 Other receivables 64,880 172,864 $ 1,716,262 $ 1,763,835 The Company is registered for the Canadian federal and provincial goods and services taxes. As such, the Company is obligated to collect from third parties, and is entitled to claim sales taxes paid on its expenses and capital expenditures incurred in Canada. In addition, Loop Canada Inc. is entitled to receive government assistance in the form of refundable and non-refundable research and development tax credits from the federal and provincial taxation authorities, based on qualifying expenditures incurred during the fiscal year. The refundable credits are from the provincial taxation authorities and are not dependent on its ongoing tax status or tax position and accordingly are not considered part of income taxes. The Company records refundable tax credits as a reduction of research and development expenses when the Company can reasonably estimate the amounts and it is more likely than not, they will be received. During the year ended February 28, 2022, the Company recorded tax credits of $91,960 as a reduction of research and development expenses and received $216,300 from taxation authorities for research and development tax credits, net of fees. During the year ended February 28, 2021, the Company recorded a $115,566 net expense included in research and development expenses due to adjustments made to prior year estimates of refundable tax credits. This adjustment was related to a re-assessment by tax authorities, reducing our research and development tax credits and resulted in the Company repaying $93,249 during the year ended February 28, 2021 for research and development tax credits previously received by the Company from taxation authorities. The Company is also eligible for non-refundable research and development tax credits from the federal taxation authorities which can be used as a reduction of income tax expense in any given year to the extent the Company has taxable income. The Company has not had taxable income since inception and has not been able to use these non-refundable federal research and development tax credits. During the year ended February 28, 2022, the Company was eligible for non-cash research and development tax credits in the amount of $442,943 (2021 – $272,206). These non-cash tax credits, which have an unlimited carry forward period are not recognized in the Company’s consolidated financial statements. As at February 28, 2022, the carry forward balance of non-cash research and development tax credits was $1,589,580 (2021 - $1,090,691). We received during the year ended February 28, 2021 a wage subsidy from the Canadian federal government related to a COVID-19 relief program that amounted to $259,273 (2022 - nil), of which $221,603 was recorded against research and development expenses and $37,670 against general and administrative expenses. There were no government grants receivable at February 28, 2022 and 2021. |
Prepaid Expenses and Deposits
Prepaid Expenses and Deposits | 12 Months Ended |
Feb. 28, 2022 | |
Prepaid Expenses and Deposits | |
4. Prepaid Expenses And Deposits | 4. Prepaid Expenses and Deposits As at February 28, 2022, the Company had $2,801,680 of non-refundable cash deposits on machinery and equipment. $672,713 (2021 – $379,395) of the prepayments are on machinery and equipment that will be used in connection with the research and development activities at the Terrebonne Facility and will be expensed, and classified as research and development expenses in the period the equipment is received. The remainder of the prepayments of $2,128,967 (2021 – nil) are non-refundable cash deposits on long-lead machinery and equipment that will be used in the planned Infinite Loop ™ |
Assets held for sale
Assets held for sale | 12 Months Ended |
Feb. 28, 2022 | |
Assets held for sale | |
5. Assets Held For Sale | 5. Asset held for sale On May 27, 2021, we acquired land in Bécancour, Québec for cash of $4.8 million (CDN $5.9 million), for which a portion of the land is the site of our planned Infinite Loop ™ The total purchase cost of the land has been allocated between the portion of land held for sale and the land being used for the Infinite Loop ™ Description Balance sheet line item Cost Land held for sale Asset held for sale $ 3,389,278 Infinite Loop ™ Property, plant and equipment, net 1,401,858 $ 4,791,136 |
Property Plant and Equipment
Property Plant and Equipment | 12 Months Ended |
Feb. 28, 2022 | |
Property Plant and Equipment | |
6. Property, Plant And Equipment | 6. Property, Plant and Equipment As at February 28, 2022 Cost Accumulated depreciation, write-down and impairment Net book value Building $ 1,952,345 $ (266,434 ) $ 1,685,911 Land 1,644,084 - 1,644,084 Building and Land Improvements 3,049,892 (858,342 ) 2,191,550 Office equipment and furniture 298,141 (126,824 ) 171,317 $ 6,944,462 $ (1,251,600 ) $ 5,692,862 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 Depreciation expense amounted to $478,581 for the year ended February 28, 2022 (2021 - $733,831). On May 27, 2021, the Company acquired a parcel of land in Bécancour, Québec for $4.8 million (CDN $5.9 million). The Company is using 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 asset held for sale, as described in Note 5. During the year ended February 28, 2022, the Company incurred civil construction costs of $1,138,947 for site preparation on the Bécancour land for the planned commercial facility. During the year ended February 28, 2021, the Company recorded write-down and impairment expenses of $5,043,119, due to the decision to dedicate the Terrebonne Facility to brand activation, initial customer volumes and Infinite Loop™ demonstration, research and development activities, therefore foregoing any alternative future use of its machinery and equipment assets contained within the Terrebonne Facility. As such, the carrying value of the machinery and equipment was written off resulting in an expense of $5,034,606 being recognized in the year ended February 28, 2021. With the decision to dedicate the Terrebonne Facility to research and development activities, future costs associated with operating and maintaining the Terrebonne Facility are in the scope of ASC 730, Research and Development Costs, and are recognized as a research and development expense in the consolidated statements of operations and comprehensive loss in the period they are incurred. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Feb. 28, 2022 | |
Intangible Assets | |
7. Intangible Assets | 7. Intangible Assets As at February 28, As at February 28, 2022 2021 Patents, at cost – beginning of year $ 859,048 $ 225,174 Patents, accumulated depreciation – beginning of year (64,154 ) (22,310 ) Patents, net – beginning of year 794,894 202,864 Additions in the year – patents 294,955 623,811 Amortization of patents (76,214 ) (41,844 ) Foreign exchange effect 166 10,063 Patents, net – end of year $ 1,013,801 $ 794,894 During the year ending February 28, 2022, the Company continued to develop its next Generation II (“GEN II”) technology and filed various patents in jurisdictions around the world. On April 9, 2019, the first GEN II U.S. patent was issued. Amortization expense is recorded as an operating expense in the consolidated statements of operations and comprehensive loss and amounted to $76,214 for the year ended February 28, 2022 (2021 - $41,844). |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Feb. 28, 2022 | |
Fair Value of Financial Instruments | |
8. Financial Instruments And Management Of Financial Risk | 8. Financial Instruments and Management of Financial Risk Carrying values and fair values The following table presents the fair value of the Company’s financial liabilities at February 28, 2022 and February 28, 2021: Fair Value as at February 28, 2022 Carrying Amount Fair Value Level in the hierarchy Financial liabilities measured at amortized cost: Long-term debt $ 3,378,403 $ 3,392,600 Level 2 Fair Value at February 28, 2021 Carrying Amount Fair Value Level in the hierarchy Financial liabilities measured at amortized cost: Long-term debt $ 2,454,123 $ 2,464,540 Level 2 The fair value of cash, sales tax, tax credits and other receivables, and accounts payable and accrued liabilities approximate their carrying values due to their short-term maturity. Currency Risk We are subject to risks associated with currency fluctuations, and changes in foreign currency exchange rates could impact our results of operations. We operate mainly through two entities, Loop Industries, Inc., which is a Nevada corporation and has a U.S. dollar functional currency, and our wholly-owned subsidiary, Loop Canada Inc. (“Loop Canada”), which is based in Terrebonne, Québec, Canada and has a Canadian dollar functional currency. Our reporting currency is the U.S. dollar. We mainly finance our operations through the sale and issuance of shares of common stock of Loop Industries, Inc. in U.S. dollars while our operations are concentrated in our wholly-owned subsidiary, Loop Canada. Additionally, we are planning a commercial development project in Bécancour, Québec which is expected to involve the purchase of various equipment primarily in Canadian dollars and U.S. dollars. Accordingly, we are exposed to foreign exchange risk as we maintain bank accounts in U.S. dollars and a significant portion of our operational costs (including payroll, site costs, costs of locally sourced supplies and income taxes) are denominated in Canadian dollars. Significant fluctuations in U.S. dollar to Canadian dollar exchange rates could materially affect our result of operations, cash position and funding requirements. To the extent that fluctuations in currency exchange rates cause our results of operations to differ materially from our expectations or the expectations of our investors, the trading price of our common stock could be adversely affected. From time to time, we may engage in exchange rate hedging activities in an effort to mitigate the impact of exchange rate fluctuations. As part of our risk management program, we may enter into foreign exchange forward contracts to lock in the exchange rates for future foreign currency transactions, which is intended to reduce the variability of our operating costs and future cash flows denominated in currencies that differ from our functional currencies. We do not enter into these contracts for trading purposes or speculation, and our management believes all such contracts are entered into as hedges of underlying transactions. Nonetheless, these instruments involve costs and have risks of their own in the form of transaction costs, credit requirements and counterparty risk. If our hedging program is not successful, or if we change our hedging activities in the future, we may experience significant unexpected expenses from fluctuations in exchange rates. Any hedging technique we implement may fail to be effective. If our hedging activities are not effective, changes in currency exchange rates may have a more significant impact on the trading price of our common stock. |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 12 Months Ended |
Feb. 28, 2022 | |
Accounts Payable and Accrued Liabilities | |
9. Accounts Payable And Accrued Liabilities | 9. Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities as at February 28, 2022 and February 28, 2021 were as follows: February 28, 2022 February 28, 2021 Trade accounts payable $ 4,397,499 $ 5,082,736 Accrued loss contingency for legal settlement (Note 22) 2,519,220 - Accrued employee compensation 1,254,685 970,154 Accrued engineering fees 774,423 535,359 Accrued professional fees 526,685 1,270,628 Other accrued liabilities 374,303 265,988 $ 9,846,815 $ 8,124,865 |
Joint Venture
Joint Venture | 12 Months Ended |
Feb. 28, 2022 | |
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 is required to contribute its proprietary technology. Specifically, the Company contributed an exclusive worldwide royalty-free license to ILT to use its proprietary technology to produce 100% sustainably produced PET resin and polyester fiber. ILT meets the accounting definition of a joint venture where neither party has control of the joint venture entity and both parties have joint control over the decision-making process in ILT. As such, the Company uses the equity method of accounting to account for its share of the investment in ILT. There were no operations in ILT from the date of inception of September 24, 2018 to February 28, 2022. During the year ended February 28, 2022, we made no contributions to ILT (2021 – $650,000). These contributions to ILT, which have been matched by Indorama Ventures, were used to fund engineering design costs which were capitalized in ILT. In the years ended February 28, 2021 and 2022, the Company achieved significant advancements in its engineering design independently from that which was accomplished in ILT. Due to these advancements, during the fourth quarter of fiscal 2022, the Company assessed that the value of the engineering design costs capitalized in ILT were obsolete and no longer recoverable. Therefore, the Company recorded a loss of $1,119,078 on its investment in ILT during the year ended February 28, 2022, representing the Company’s 50% portion of the impairment of engineering design costs capitalized in ILT. As at February 28, 2022, the carrying value of the equity investment was $380,922 (2021 – $1,500,000), which represents 50% of the cash balance in ILT. To conform with the terms of 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. Although the Company remains committed to the project, the joint venture made a decision in July 2020 that due to the COVID-19 situation it would delay work. Since then, no expenditures have been incurred by the joint venture. |
LongTerm Debt
LongTerm Debt | 12 Months Ended |
Feb. 28, 2022 | |
LongTerm Debt | |
11. Long-term Debt | 11. Long-Term Debt February 28, 2022 February 28, 2021 Investissement Québec financing facility: Principal amount $ 3,622,618 $ 1,741,612 Unamortized discount (352,038 ) (268,192 ) Accrued interest 107,823 42,588 Total Investissement Québec financing facility 3,378,403 1,516,008 Term loan Principal amount - 938,116 Less: current portion - (938,116 ) Total term loan, net of current portion - - Long-term debt, net of current portion $ 3,378,403 $ 1,516,008 Investissement Québec financing facility On February 21, 2020, the Company received $1,739,828 (CDN$2,209,234) from Investissement Québec as the first disbursement of our financing facility, out of a maximum of $3,622,618 (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, $36,226 (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 $1,882,789 (CDN$2,390,766) from Investissement Québec as the second disbursement of the Financing Facility, the balance of the total amount available under 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 year ended February 28, 2022 in the amount of $65,908 respectively (2021 – $39,599) and an accretion expense of $55,332 (2021 – $36,847). 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 $362,262 (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 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. 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 First and Second Disbursement Warrants remain outstanding as at February 28, 2022. Term Loan On January 24, 2018, the Company obtained a $1,102,536 (CDN$1,400,000) 20-year term instalment loan (the “Loan”), from a Canadian bank. The Loan bore interest at the bank’s Canadian prime rate plus 1.5%. By agreement, the Loan was repayable in monthly payments of $4,594 (CDN$5,833) plus interest. In January 2022, the Company repaid the remaining balance of the Loan in full. During the year ended February 28, 2022, we repaid $937,156 (2021 – $50,585) on the principal balance of the Loan and interest paid amounted to $32,791 (2021 – $38,157). Principal repayments due on the Company’s indebtedness over the next five years are as follows: Years ending Amount February 28, 2023 $ - February 29, 2024 517,508 February 28, 2025 517,508 February 29, 2026 517,508 February 28, 2027 517,508 Thereafter 1,552,586 Total $ 3,622,618 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Feb. 28, 2022 | |
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. The restricted stock units vest upon the achievement of applicable performance milestones, as follows: i) 1,000,000 shares of common stock shall be issued to Mr. Solomita when the Company’s securities are listed on an exchange or the OTCQX tier of the OTC Markets; ii) 1,000,000 shares of common stock shall be issued to Mr. Solomita when the Company executes a contract for a minimum quantity of 25,000 M/T of DMT/MEG or a PET; iii) 1,000,000 shares of common stock shall be issued to Mr. Solomita when the Company’s first full-scale production facility is in commercial operation; and iv) 1,000,000 shares of common stock shall be issued to Mr. Solomita when the Company’s second full-scale production facility is in commercial operation. During the year ended February 28, 2017, it became probable that the first milestone would be met. Accordingly, 1,000,000 performance incentive shares of common stock with a fair value of $800,000 were earned and issuable to Mr. Solomita. This amount was reflected as stock-based compensation expense during the year ended February 28, 2017 based on the grant date fair value. The 1,000,000 performance incentive shares of common stock were replaced by vested restricted stock units, of which 200,000 were settled in October 2019, 2020 and 2021, each. On April 30, 2020, the Company and Mr. Solomita entered into an amendment of Mr. Solomita’s employment agreement. The amendment clarified the milestones consistent with the shift in the Company’s business from the production of terephthalate to the production of dimethyl terephthalate, another proven monomer of PET plastic that is simpler to purify. As at February 28, 2022, 3,400,000 (2021 – 3,600,000) of Mr. Solomita’s RSUs were outstanding of which 400,000 were vested (2021 – 600,000). The vested units are settled annually in tranches of 200,000 units. The unvested 3,000,000 RSUs would be forfeited if Mr. Solomita left the Company, except in the case of termination without cause or resignation for good reason, in which case he would receive 50% of the unvested RSUs at the time of termination, or 100% in the case of termination without cause or resignation for good reason within 24 months after a change in control. During the years ended February 28, 2022 and February 28, 2021, no outstanding milestones were probable of being met and, accordingly, the Company did not record any additional stock-based 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 | 12 Months Ended |
Feb. 28, 2022 | |
Stockholders' Equity | |
13. Stockholders' Equity | 13. Stockholders’ Equity Series A Preferred Stock Mr. Solomita’s amended employment agreement of February 15, 2016 provides that the Company shall issue to Mr. Solomita one share of the Company’s Series A Preferred Stock in exchange for Mr. Solomita agreeing not to terminate his employment with the Company for a period of five years from the date of the agreement. The agreement effectively provides Mr. Solomita with a “change of control” provision over the Company in the event that his ownership of the issued and outstanding shares of common stock of the Company is diluted to less than a majority. In order to issue Mr. Solomita his one share of Series A Preferred Stock under the amendment, the Company created a “blank check” preferred stock. Subsequently, the board of directors of the Company approved a Certificate of Designation creating the Series A Preferred Stock. Subsequently, the Company issued one share of Series A Preferred Stock to Mr. Solomita. The one share of Series A Preferred Stock issued to Mr. Solomita holds a majority of the total voting power so long as Mr. Solomita holds not less than 7.5% of the issued and outstanding shares of common stock of the Company, assuring Mr. Solomita of control of the Company in the event that his ownership of the issued and outstanding shares of common stock of the Company is diluted to a level below a majority. Currently, Mr. Solomita’s ownership of 19,210,000 shares of common stock and 1 share of Series A Preferred Stock provides him with 75.8% of the voting control of the Company. Additionally, the one share of Series A Preferred Stock issued to Mr. Solomita contains protective provisions, which precludes the Company from taking certain actions without Mr. Solomita’s (or that of any person to whom the one share of Series A Preferred Stock is transferred) approval. More specifically, so long as any shares of Series A Preferred Stock are outstanding, the Company shall not, without first obtaining the approval (by vote or written consent, as provided by law) of the holders of at least a majority of the then outstanding shares of Series A Preferred Stock, voting as a separate class: (a) amend the Articles of Incorporation or, unless approved by the Board of Directors, including by the Series A Director, amend the Company’s By-laws; (b) change or modify the rights, preferences or other terms of the Series A Preferred Stock, or increase or decrease the number of authorized shares of Series A Preferred Stock; (c) reclassify or recapitalize any outstanding equity securities, or, unless approved by the Board of Directors, including by the Series A Director, authorize or issue, or undertake an obligation to authorize or issue, any equity securities or any debt securities convertible into or exercisable for any equity securities (other than the issuance of stock-options or securities under any employee option or benefit plan); (d) authorize or effect any transaction constituting a Deemed Liquidation (as defined in this subparagraph) under the Articles, or any other merger or consolidation of the Company; (e) increase or decrease the size of the Board of Directors as provided in the By-laws of the Company or remove the Series A Director (unless approved by the Board of Directors, including the Series A Director); (f) declare or pay any dividends or make any other distribution with respect to any class or series of capital stock (unless approved by the Board of Directors, including the Series A Director); (g) redeem, repurchase or otherwise acquire (or pay into or set aside for a sinking fund for such purpose) any outstanding shares of capital stock (other than the repurchase of shares of common stock from employees, consultants or other service providers pursuant to agreements approved by the Board of Directors under which the Company has the option to repurchase such shares at no greater than original cost upon the occurrence of certain events, such as the termination of employment) (unless approved by the Board of Directors, including the Series A Director); (h) create or amend any stock option plan of the Company, if any (other than amendments that do not require approval of the stockholders under the terms of the plan or applicable law) or approve any new equity incentive plan; (i) replace the President and/or Chief Executive Officer of the Company (unless approved by the Board of Directors, including the Series A Director); (j) transfer assets to any subsidiary or other affiliated entity (unless approved by the Board of Directors, including the Series A Director); (k) issue, or cause any subsidiary of the Company to issue, any indebtedness or debt security, other than trade accounts payable and/or letters of credit, performance bonds or other similar credit support incurred in the ordinary course of business, or amend, renew, increase or otherwise alter in any material respect the terms of any indebtedness previously approved or required to be approved by the holders of the Series A Preferred Stock (unless approved by the Board of Directors, including the Series A Director); (l) modify or change the nature of the Company’s business; (m) acquire, or cause a Subsidiary of the Company to acquire, in any transaction or series of related transactions, the stock or any material assets of another person, or enter into any joint venture with any other person (unless approved by the Board of Directors, including the Series A Director); or (n) sell, transfer, license, lease or otherwise dispose of, in any transaction or series of related transactions, any material assets of the Company or any Subsidiary outside the ordinary course of business (unless approved by the Board of Directors, including the Series A Director). Common Stock For the year ended February 28, 2022 Number of shares Amount Balance, February 28, 2021 42,413,691 $ 4,242 Issuance of shares upon settlement of restricted stock units 231,660 24 Issuance of shares for cash 4,714,813 471 Issuance of shares upon exercise of warrants 11,666 1 Issuance of shares upon exercise of options 16,226 2 Balance, February 28, 2022 47,388,056 $ 4,740 For the year ended February 28, 2021 Number of shares Amount Balance, February 29, 2020 39,910,774 $ 3,992 Issuance of shares for cash 2,087,000 209 Issuance of shares upon the exercise of warrants 190,529 19 Issuance of shares upon settlement of restricted stock units 225,388 22 Balance, February 28, 2021 42,413,691 $ 4,242 During the year ended February 28, 2022, the Company recorded the following common stock transactions: (i) The Company issued 231,660 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 $56,049,167. (iii) The Company issued 11,666 shares of its common stock upon the exercise of a warrant. (iv) The Company issued 16,226 shares of its common stock upon the exercise of stock options. During the year ended February 28, 2021, the Company recorded the following common stock transactions: (i) On September 23, 2020 and October 1, 2020, the Company sold 1,880,000 and 207,000 shares, respectively of its common stock at an offering price of $12.75 per share in a registered direct offering, for total gross proceeds of $26,609,250. (ii) The company issued 190,529 shares of its common stock upon the exercise of warrants. (iii) On October 15, 2020, the Company issued 200,000 shares of common stock to settle restricted stock units related to the President and Chief Executive Officer. (iv) The Company issued 25,388 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 geo centric, 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 start of construction of the JV’s first facility, (B) 18 months after the date both parties have approved the basic design package to be used for the JV facilities, provided that the agreements to form the JV have not been executed by that date, and (C) the third anniversary of the date that both parties approved the basic design package to be used for the JV facilities, provided that the start of construction of the JV’s first facility 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. Please see Note 18 for further details related to outstanding warrants. 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. The principal components of the pricing model were as follows: First Tranche Warrants Second Tranche Warrants Third Tranche Warrants Exercise price $ 15 $ 20 $ 11 Risk-free interest rate 0.37 % 0.60 % 0.07 % Expected dividend yield 0 % 0 % 0 % Expected volatility 78.08 % 74.35 % 93.34 % Expected life 2.5 years 4.09 years 0.88 years 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 | 12 Months Ended |
Feb. 28, 2022 | |
Research and Development Expenses | |
14. Research And Development Expenses | 14. Research and Development Expenses Research and development expenses for the years ended February 28, 2022 and February 28, 2021 were as follows: February 28, 2022 February 28, 2021 Machinery and equipment expenditures $ 9,549,802 $ 6,149,075 Employee compensation 7,259,640 4,457,125 External engineering 7,307,363 5,655,997 Plant and laboratory operating expenses 2,649,133 1,852,615 Other 970,487 572,202 $ 27,736,425 $ 18,687,014 |
General and Administrative Expe
General and Administrative Expenses | 12 Months Ended |
Feb. 28, 2022 | |
General and Administrative Expenses | |
15. General And Administrative Expenses | 15. General and Administrative Expenses General and administrative expenses for the years ended February 28, 2022 and February 28, 2021 were as follows: February 28, 2022 February 28, 2021 Professional fees $ 4,247,859 $ 4,613,717 Employee compensation (1) 3,298,610 4,389,219 Insurance 4,267,927 2,072,647 Other 978,043 464,757 $ 12,792,439 $ 11,540,340 (1) Includes stock-based compensation expense. In the year ended February 28, 2022, the Company accounted for RSU forfeitures for an amount of $935,837 (2021 – $4,005), which was recorded as a reversal of stock-based compensation expense. |
ShareBased Payments
ShareBased Payments | 12 Months Ended |
Feb. 28, 2022 | |
ShareBased Payments | |
16. Share-based Payments | 16. Share-Based Payments Stock Options The following tables summarizes the continuity of the Company’s stock options during the years ended February 28, 2022 and February 28, 2021: 2022 2021 Number of stock options Weighted average exercise price Number of stock options Weighted average exercise price Outstanding, beginning of year 1,587,081 $ 6.81 1,587,081 $ 6.81 Granted - - - - Exercised (17,081 ) - - - Forfeited - - - - Expired - - - - Outstanding, end of year 1,570,000 $ 6.87 1,587,081 $ 6.81 Exercisable, end of year 1,311,667 $ 7.57 1,181,248 $ 7.19 2022 2021 Exercise price Number of stock options outstanding Weighted average remaining life (years) Number of stock options outstanding Weighted average remaining life (years) $ 0.80 490,000 3.75 507,081 4.75 $ 5.25 380,000 5.49 380,000 6.49 $ 12.00 700,000 5.54 700,000 6.54 Outstanding, end of year 1,570,000 4.97 1,587,081 5.96 Exercisable, end of year 1,311,667 5.13 1,181,248 6.06 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 years ended February 28, 2022 and February 28, 2021. During the year ended February 28, 2022, stock-based compensation expense attributable to stock options amounted to $1,513,211 (2021 – $2,212,078). Restricted Stock Units The following table summarizes the continuity of the restricted stock units (“RSUs”) during the years February 28, 2022 and February 28, 2021: 2022 2021 Number of units Weighted average fair value price Number of units Weighted average fair value price Outstanding, beginning of year 4,210,520 $ 1.98 4,218,802 $ 1.60 Granted 353,219 10.15 239,611 9.74 Settled (231,660 ) 1.90 (225,388 ) 1.80 Forfeited (313,512 ) 7.97 (22,505 ) 12.27 Outstanding, end of year 4,018,567 $ 7.42 4,210,520 $ 1.98 Outstanding vested, end of year 537,966 $ 3.28 691,327 $ 2.07 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 closing share price at grant date multiplied by the number of restricted stock unit awards granted. During the year ended February 28, 2022, stock-based compensation attributable to RSUs amounted to $549,155 (2021 - $1,378,106). During the year ended February 28, 2022, the Company recorded a reversal of expenses for forfeitures for a total of $963,022 (2021 – $4,005). Stock-Based Compensation Expense During the years ended February 28, 2022 and February 28, 2021, stock-based compensation included in research and development expenses amounted to $1,536,734 and $1,417,004 respectively, and in general and administrative expenses amounted to $525,632 and $2,257,622 respectively. |
Equity Incentive Plan
Equity Incentive Plan | 12 Months Ended |
Feb. 28, 2022 | |
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 years ended February 28, 2022 and February 28, 2021: 2022 2021 Number of units Number of units Outstanding, beginning of year 1,083,412 1,300,518 Share reserve increase - - Units granted (353,219 ) (239,611 ) Units forfeited 313,512 22,505 Units expired - - Outstanding, end of year 1,043,705 1,083,412 |
Warrants
Warrants | 12 Months Ended |
Feb. 28, 2022 | |
Warrants | |
18. Warrants | 18. Warrants The following table summarizes the continuity of warrants during the years February 28, 2022 and February 28, 2021: 2022 2021 Number of warrants Weighted average exercise price Number of warrants Weighted average exercise price Outstanding, beginning of year 4,133,720 $ 10.99 5,059,331 $ 10.89 Issued 7,550,698 16.31 25,000 9.43 Exercised (25,000 ) 9.43 (190,529 ) 8.68 Expired - - (760,082 ) 10.83 Outstanding, end of year 11,659,418 $ 14.44 4,133,720 $ 10.99 The expiration dates of the warrants outstanding as at February 28, 2022 are as follows: 2022 Number of warrants Weighted average exercise price June 14, 2022 4,554,865 $ 11.00 February 21, 2023 15,153 11.00 July 29, 2024 4,714,813 15.00 (1) 2,357,407 20.00 February 21, 2023 17,180 11.00 Outstanding, end of year 11,659,418 $ 14.44 (1) Warrant granted to SK geo centric, Ltd. in the transaction described in Note 13: Expiration date is the earlier of (A) the date that is the third anniversary of the start of construction of the JV’s first facility, (B) 18 months after the date both parties have approved the basic design package to be used for the JV facilities, provided that the agreements to form the JV have not been executed by that date, and (C) the third anniversary of the date that both parties approved the basic design package to be used for the JV facilities, provided that the start of construction of the JV’s first facility has not occurred as of such date. |
Interest and Other Finance Cost
Interest and Other Finance Costs | 12 Months Ended |
Feb. 28, 2022 | |
Interest and Other Finance Costs | |
19. Interest And Other Finance Costs | 19. Interest and Other Finance Costs Interest and other finance costs for the years ended February 28, 2022 and February 28, 2021 are as follows: 2022 2021 Interest on long-term debt $ 98,700 $ 77,756 Accretion expense 55,332 36,847 Other 287 (32,607 ) $ 154,319 $ 81,996 |
Income Taxes
Income Taxes | 12 Months Ended |
Feb. 28, 2022 | |
Income Taxes | |
20. Income Taxes | 20. Income Taxes The components of the Company’s loss before taxes are summarized below: February 28, 2022 February 28, 2021 U.S. operations $ (12,690,909 ) $ (7,126,988 ) Foreign operations (32,230,047 ) (29,217,935 ) Loss before taxes $ (44,920,956 ) $ (36,344,923 ) A reconciliation from the statutory U.S. income tax rate and the Company’s effective income tax rate, as computed on loss before taxes, is as follows: February 28, 2022 February 28, 2021 Statutory Federal rate 21 % 21 % Federal income tax at statutory rate $ (9,433,405 ) $ (7,632,436 ) Effect of foreign jurisdiction (1,803,016 ) (1,433,653 ) Non-deductible expenses 329,054 695,941 Tax credits related to research and development expenditures (76,327 ) (302,703 ) Unrecognized tax benefit of net operating losses and other available deductions 10,983,694 8,672,851 Effective income tax expense $ - $ - Current $ - $ - Deferred $ - $ - On March 27, 2020, the US government signed the Coronavirus Aid, Relief and Economic Security (“CARES”) Act into law, a relief package to provide support to individuals, businesses and government organizations during the COVID-19 pandemic. The income tax provisions contained in the CARES Act are not likely to have an impact for the Company. The Company has net operating loss carry forwards of approximately $30,316,049 (2021 – $22,043,030) for U.S. Federal income tax purposes expiring between 2035 and 2038, post 2018 net operating losses may be carried forward indefinitely. The Company has net operating loss carry forwards for Canadian Federal and Québec tax purposes of approximately $59,310,541 (CDN$74,288,683), 2021 – $34,715,320 (CDN$43,953,067), and $61,353,534 (CDN$76,847,608), 2021 – $35,224,105 (CDN$44,597,239), respectively, expiring between 2037 and 2042. Realization of future tax assets is dependent on future earnings, the timing and amount of which are uncertain. Accordingly, the net future tax assets have been fully offset by a valuation allowance. The valuation allowance increased by $11,241,297 and $8,860,563, respectively, for the years ended February 28, 2022 and February 28, 2021. The Company has provided a full valuation allowance on the deferred tax assets as a result of the uncertainty regarding the probability of its realization. The Company has approximately $5,998,338 (CDN$7,616,689), 2021 - $3,678,832 (CDN$4,657,769), of research and development expenditures for Canadian Federal and Québec provincial purposes that are available to reduce taxable income in future years and have an unlimited carry forward period, the benefit of which has not been reflected in these financial statements. Research and development expenditures are subject to audit by the taxation authorities and accordingly, these amounts may vary. The tax effect of temporary differences between US GAAP accounting and federal income tax accounting creating deferred income tax assets and liabilities were as follows: As at February 28, 2022 February 28, 2021 Deferred tax assets Canada net operating loss carry forward $ 15,735,374 $ 9,258,070 U.S. net operating loss carry forward 6,366,370 4,629,036 Accrual and reserves 938,918 335,742 Intangibles 175,077 123,711 Property, plant and equipment 3,599,781 2,482,633 Research and development expenditures and credits 2,711,560 1,778,078 Basis in partnership 235,006 - Other 698 698 Deferred tax assets 29,762,784 18,607,968 Deferred tax liabilities Property, plant and equipment - - Intangibles (267,813 ) (211,049 ) Accrual and reserves (64,112 ) Research and Development and Investment tax credits - - Unrealized foreign exchange - - Other (165,778 ) (244,911 ) Deferred tax liabilities (433,591 ) (520,072 ) Deferred tax assets, net 29,329,193 18,087,896 Valuation allowance (29,329,193 ) (18,087,896 ) Deferred tax assets, net $ - $ - Assessment of the amount of value assigned to the Company’s deferred tax assets under the applicable accounting rules is judgmental. The Company is required to consider all available positive and negative evidence in evaluating the likelihood that the Company will be able to realize the benefit of its deferred tax assets in the future. Such evidence includes scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and the results of recent operations. Since this evaluation requires consideration of events that may occur some years into the future, there is an element of judgment involved. Realization of the Company’s deferred tax assets is dependent on generating sufficient taxable income in future periods. Management does not believe that it is more likely than not that future taxable income will be sufficient to allow it to recover substantially all of the value assigned to its deferred tax assets. Accordingly, the Company has provided for a valuation allowance of the Company’s deferred tax asset. The tax years subject to examination by major tax jurisdiction include the years ended February 28, 2018 and forward by the U.S. Internal Revenue Service and most state jurisdictions, and the years ended February 29, 2018 and forward for the Canadian jurisdiction. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Feb. 28, 2022 | |
Commitments and Contingencies | |
21. Commitments And Contingencies | 21. Commitments and Contingencies Agreement to purchase of machinery and equipment In December 2021, the Company entered into an agreement for the purchase of long lead machinery and equipment in connection with the construction of our Infinite Loop ™ 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 consolidated the two proposed class-action lawsuits as In re Loop Industries, Inc. Securities Litigation Plaintiffs served a consolidated amended complaint on February 18, 2021, which alleges that the defendants violated Sections 10(b) and 20(a) and Rule 10b-5 of the Securities Exchange Act of 1934 by allegedly 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. As discussed in Note 22, On March 1, 2022, the Company and the current and former officer defendants entered into an agreement for the settlement of the consolidated class action lawsuit, and recorded a contingency loss of $2,519,220 in the year ended February 28, 2022. 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 this case lacks merit and intends to defend it vigorously. No amounts have been provided for in the consolidated financial statements with respect to this claim. Management has not yet determined what effect this lawsuit may have on its financial position or results of operations as it is still in the preliminary stages. |
Subsequent event
Subsequent event | 12 Months Ended |
Feb. 28, 2022 | |
Subsequent event | |
21. Subsequent Event | 22. Subsequent Events On March 1, 2022, the Company and the current and former officer defendants entered into an agreement for the settlement of the Tremblay Class Action described in Note 21 above, and, on March 4, 2022, advised the Court of the agreement to settle. The agreement, which is subject to certain conditions, including court approval, requires the Company to pay $3.1 million to the plaintiff class. The Company’s total cash contribution to the settlement and outstanding legal fees related to the lawsuit, combined, will be approximately $2.52 million. The remainder of the settlement will be paid by the Company’s D&O insurance carriers. As a result, the Company recorded a contingency loss of $2,519,220 which was included in accounts payable and accrued liabilities at February 28, 2022. The settlement agreement does not constitute an admission, concession, or finding of any fault, liability, or wrongdoing by the Company or any defendant. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Feb. 28, 2022 | |
Summary of Significant Accounting Policies | |
Liquidity Risk Assessment | From inception to February 28, 2022, the Company has been in the development stage with no revenues, and with its ongoing operations and commercialization plans financed primarily by raising equity. The Company has incurred net losses and negative cash flow from operating activities since its inception and expects to incur additional net losses while it continues to develop and plan for commercialization. As at February 28, 2022, the Company has cash and cash equivalents of $44.06 million. Management actively monitors the Company’s cash resources against the Company’s short-term cash commitments to ensure the Company has sufficient liquidity to fund its costs for at least twelve months from the financial statement issuance date. Management evaluates the Company’s liquidity to determine if there is substantial doubt about the Company’s ability to continue as a going concern. In preparing this liquidity assessment, management applies significant judgment in estimating future cash flow requirements of the Company based on budgets and forecasts, which includes developing assumptions related to: (i) estimation of amount and timing of future cash outflows and cash inflows and (ii) determining what future expenditures are committed and what could be considered discretionary. Based on this assessment, management believes that the Company will be able to realize its assets and discharge its liabilities in the normal course of operations as they become due for a period of no less than twelve months from the date of issuance of these consolidated financial statements. The company is currently evaluating financing options to move to the next stage of its strategic development and construct manufacturing plants in Canada, Europe and Asia. Our ability to successfully commercialize our business and generate future revenues depends on whether we can obtain the necessary financing through a combination of the issuance of debt, equity, and/or joint ventures and/or government incentive programs. We have committed a portion of our cash resources for certain long lead equipment in connection with the Bécancour project. We may enter into additional commitments to move the project ahead within our targeted construction timeframes. However, there is no assurance that the Company will be successful in attracting additional funding. Even if additional financing is available, it may not be available on terms favorable to us. Our failure to secure additional financing on favorable terms when it becomes required would have an adverse effect on our current operation and on our ability to execute our business plan. |
Use Of Estimates | The preparation of financial statements in conformity with US GAAP requires management to use its judgment 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 the going concern assessment, 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. 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. Although the Company continues to monitor the situation and may adjust the Company’s current policies as more information and public health guidance continues to evolve, 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. |
Fair Value Of Financial Instruments | The Company applies Financial Accounting Standards Board (“FASB”) Codification (“ASC”) 820, Fair Value Measurement There are three levels within the hierarchy that may be used to measure fair value: Level 1 – A quoted price in an active market for identical assets or liabilities. Level 2 – Significant pricing inputs are observable inputs, which are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Level 3 – Significant pricing inputs are unobservable inputs, which are inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value measurements level of an asset or liability within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used should maximize the use of observable inputs and minimize the use of unobservable inputs. The valuation methodologies described above may produce a fair value calculation that may not be indicative of future net realizable value or reflective of future fair values. The fair value of cash and accounts payable and accrued liabilities approximate their carrying values due to their short-term maturity. |
Government Grants | US GAAP for profit-oriented entities does not define government grants; nor is there specific guidance applicable to government grants. Under the Company’s accounting policy for government grants and consistent with non-authoritative guidance, grants are recognized on a systematic basis over the periods in which the entity recognizes as expenses the related costs for which the grants are intended to compensate. Grants that relate to the acquisition of an asset are recognized as a reduction of the cost of the asset and in the statement of operations and comprehensive loss as the asset is depreciated or amortized. A grant that is compensation for expenses or losses already incurred, or for which there are no future related costs, is recognized in the statement of operations and comprehensive loss in the period in which it becomes receivable. Low-interest loans or interest-free loans from a government are initially measured at fair value and interest expense is recognized on the loan subsequently under the effective interest method, with the difference recognized as a government grant. |
Deferred Financing Costs And Other Transaction Costs | Deferred financing costs represent commitment fees, legal fees and other costs associated with obtaining commitments for financing. These fees are amortized as a component of interest expense over the terms of the respective financing agreements on a straight-line basis. Unamortized deferred financing fees are expensed in full when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined that the financing will not be successful. Transaction costs associated with issuing equity are reflected as a reduction of accumulated paid-in-capital. |
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. |
Property, Plant And Equipment | Property, plant and equipment are recorded at cost, net of accumulated amortization and impairment, and are amortized over their estimated useful lives, unless the useful life is indefinite, using the straight-line method over the following periods: Building 30 years Land Indefinite Office equipment and furniture 8 years Machinery and equipment 3-8 years Building and land improvements 5-10 years Costs related to repairs and maintenance of property, plant and equipment are expensed in the period in which they are incurred. Upon sale or disposal, the Company writes off the cost of the asset and the related amount of accumulated depreciation. The resulting gain or loss is included in the consolidated statement of operations and comprehensive loss. Management reviews the carrying values of its property, plant and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group might not be recoverable. Assets are grouped at the lowest level for which identifiable cash flows are largely independent when testing for, and measuring for, impairment. In performing its review of recoverability, the Company estimates the future cash flows expected to result from the use of the asset or asset group and its eventual disposition. If the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset or asset group, an impairment loss is recognized in the consolidated statements of operations. Measurement of the impairment loss is based on the excess of the carrying amount of the asset or asset group over the fair value calculated using discounted expected future cash flows. |
Research And Development Expenses | Research and development costs are charged to expense as costs are incurred in performing research and development activities. Research and development expenses relate primarily to process development and design, testing of pre production samples, machinery and equipment expenditures for use in the small-scale production facility in Terrebonne, Québec (the “Terrebonne Facility”), compensation, and consulting and engineering fees. |
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. |
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 recognized as compensation expense on the straight-line basis over the vesting period. When performance conditions exist, the Company recognizes 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. |
Intangible Assets | Intangible assets are recorded at cost, net of accumulated amortization and impairment, and are amortized over their estimated useful lives, unless the useful life is indefinite, using the straight-line method over 7 years. The Company reviews the carrying value of intangible assets subject to amortization whenever events or changes in circumstances indicate that the carrying amount of an intangible asset might not be recoverable or a change in the remaining useful life of an intangible asset. If the carrying value of an asset exceeds its undiscounted cash flows, the Company writes down the carrying value of the intangible asset to its fair value in the period identified. If the carrying value of assets is determined not to be recoverable, the Company records an impairment loss equal to the excess of the carrying value over the fair value of the assets. The Company’s estimate of fair value is based on the best information available, in the absence of quoted market prices. The Company generally calculates fair value as the present value of estimated future cash flows that the Company expects to generate from the asset. If the estimate of an intangible asset’s remaining useful life is changed, the Company amortizes the remaining carrying value of the intangible asset prospectively over the revised remaining useful life. |
Income Taxes | The Company calculates its provision for income tax on the basis of the tax laws enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income, in accordance with FASB ASC 740, Income Taxes |
Net Earnings (loss) Per Share | The Company computes net loss per share in accordance with FASB ASC 260, Earnings Per Share For the years ended February 28, 2022 and February 28, 2021, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an antidilutive effect. As at February 28, 2022, the potentially dilutive securities consisted of 1,570,000 outstanding stock options (2021 – 1,587,081), 4,018,567 outstanding restricted stock units (2021 – 4,210,520), and 11,659,418 outstanding warrants (2021 – 4,133,720). |
Recently Issued Accounting Pronouncements Not Yet Adopted | In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes”, which removes specific exceptions to the general principles in ASC 740, “Income Taxes,” and clarifies certain aspects of the existing guidance. This update is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years, with early adoption being permitted as of the beginning of an interim or annual reporting period. All amendments to this ASU must be adopted in the same period on a prospective basis, with certain exceptions. The adoption of this accounting guidance did not impact our Consolidated Financial Statements and disclosures. Recently issued accounting pronouncements not yet adopted In November 2021, the FASB issued ASU 2021-10, “Disclosures by Business Entities about Government Assistance”. This ASU provided guidance to increase the transparency of government assistance including the disclosure of (1) the types of assistance, (2) an entity’s accounting for the assistance, and (3) the effect of the assistance on an entity’s financial statements. Under the new guidance, an entity is required to provide the following annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy: (1) information about the nature of the transactions and the related accounting policy used to account for the transactions, (2) the line items on the balance sheet and income statement that are affected by the transactions, and the amounts applicable to each financial statement line item and, (3) significant terms and conditions of the transactions, including commitments and contingencies. This update is effective for fiscal years beginning after December 15, 2021. We are currently evaluating this accounting guidance, which may have disclosure impact only. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses”. This ASU added a new impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes an allowance for its estimate of expected credit losses and applies to most debt instruments, trade receivables, lease receivables, financial guarantee contracts, and other loan commitments. The CECL model does not have a minimum threshold for recognition of impairment losses and entities will need to measure expected credit losses on assets that have a low risk of loss. This update is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years for smaller reporting companies. We are still evaluating the impact of this accounting guidance on our results of operations and financial position. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform,” which was amended in January 2021 by ASU 2021-01, “Reference Rate Reform - Scope” and provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. This update provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate or another reference rate expected to be discontinued because of reference rate reform. This update is effective as of March 12, 2020, through December 31, 2022. We are currently evaluating this accounting guidance and have not elected an adoption date. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Feb. 28, 2022 | |
Common Stock | |
Property And Equipment Estimated Useful Lives | Building 30 years Land Indefinite Office equipment and furniture 8 years Machinery and equipment 3-8 years Building and land improvements 5-10 years |
Sales Tax, Tax Credits and Othe
Sales Tax, Tax Credits and Other Receivables (Tables) | 12 Months Ended |
Feb. 28, 2022 | |
Sales Tax Tax Credits and Other Receivables | |
Sales Tax, Tax Credits And Other Receivables | February 28, 2022 February 28, 2021 Sales tax $ 1,337,783 $ 1,155,504 Research and development tax credits 313,599 435,467 Other receivables 64,880 172,864 $ 1,716,262 $ 1,763,835 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Feb. 28, 2022 | |
Property Plant and Equipment | |
Property, Plant And Equipment | As at February 28, 2022 Cost Accumulated depreciation, write-down and impairment Net book value Building $ 1,952,345 $ (266,434 ) $ 1,685,911 Land 1,644,084 - 1,644,084 Building and Land Improvements 3,049,892 (858,342 ) 2,191,550 Office equipment and furniture 298,141 (126,824 ) 171,317 $ 6,944,462 $ (1,251,600 ) $ 5,692,862 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 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Feb. 28, 2022 | |
Intangible Assets | |
Intangible Assets | As at February 28, As at February 28, 2022 2021 Patents, at cost – beginning of year $ 859,048 $ 225,174 Patents, accumulated depreciation – beginning of year (64,154 ) (22,310 ) Patents, net – beginning of year 794,894 202,864 Additions in the year – patents 294,955 623,811 Amortization of patents (76,214 ) (41,844 ) Foreign exchange effect 166 10,063 Patents, net – end of year $ 1,013,801 $ 794,894 |
Financial Instruments and Manag
Financial Instruments and Management of Financial Risk (Tables) | 12 Months Ended |
Feb. 28, 2022 | |
Fair Value of Financial Instruments | |
Fair Value Of Financial Liabilities | Fair Value as at February 28, 2022 Carrying Amount Fair Value Level in the hierarchy Financial liabilities measured at amortized cost: Long-term debt $ 3,378,403 $ 3,392,600 Level 2 Fair Value at February 28, 2021 Carrying Amount Fair Value Level in the hierarchy Financial liabilities 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) | 12 Months Ended |
Feb. 28, 2022 | |
Accounts Payable and Accrued Liabilities | |
Accounts Payable And Accrued Liabilities | February 28, 2022 February 28, 2021 Trade accounts payable $ 4,397,499 $ 5,082,736 Accrued loss contingency for legal settlement (Note 22) 2,519,220 - Accrued employee compensation 1,254,685 970,154 Accrued engineering fees 774,423 535,359 Accrued professional fees 526,685 1,270,628 Other accrued liabilities 374,303 265,988 $ 9,846,815 $ 8,124,865 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Feb. 28, 2022 | |
Interest and Other Finance Costs | |
Long-term Debt | February 28, 2022 February 28, 2021 Investissement Québec financing facility: Principal amount $ 3,622,618 $ 1,741,612 Unamortized discount (352,038 ) (268,192 ) Accrued interest 107,823 42,588 Total Investissement Québec financing facility 3,378,403 1,516,008 Term loan Principal amount - 938,116 Less: current portion - (938,116 ) Total term loan, net of current portion - - Long-term debt, net of current portion $ 3,378,403 $ 1,516,008 |
Principal Repayments | Years ending Amount February 28, 2023 $ - February 29, 2024 517,508 February 28, 2025 517,508 February 29, 2026 517,508 February 28, 2027 517,508 Thereafter 1,552,586 Total $ 3,622,618 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Feb. 28, 2022 | |
Stockholders' Equity | |
Common Stock | For the year ended February 28, 2022 Number of shares Amount Balance, February 28, 2021 42,413,691 $ 4,242 Issuance of shares upon settlement of restricted stock units 231,660 24 Issuance of shares for cash 4,714,813 471 Issuance of shares upon exercise of warrants 11,666 1 Issuance of shares upon exercise of options 16,226 2 Balance, February 28, 2022 47,388,056 $ 4,740 For the year ended February 28, 2021 Number of shares Amount Balance, February 29, 2020 39,910,774 $ 3,992 Issuance of shares for cash 2,087,000 209 Issuance of shares upon the exercise of warrants 190,529 19 Issuance of shares upon settlement of restricted stock units 225,388 22 Balance, February 28, 2021 42,413,691 $ 4,242 |
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 |
Fair Value Of Warrant Determind Using Black-shole Model | First Tranche Warrants Second Tranche Warrants Third Tranche Warrants Exercise price $ 15 $ 20 $ 11 Risk-free interest rate 0.37 % 0.60 % 0.07 % Expected dividend yield 0 % 0 % 0 % Expected volatility 78.08 % 74.35 % 93.34 % Expected life 2.5 years 4.09 years 0.88 years |
Research and Development Expe_2
Research and Development Expenses (Tables) | 12 Months Ended |
Feb. 28, 2022 | |
Research and Development Expenses (Tables) | |
Research And Development Expenses | February 28, 2022 February 28, 2021 Machinery and equipment expenditures $ 9,549,802 $ 6,149,075 Employee compensation 7,259,640 4,457,125 External engineering 7,307,363 5,655,997 Plant and laboratory operating expenses 2,649,133 1,852,615 Other 970,487 572,202 $ 27,736,425 $ 18,687,014 |
General and Administrative Ex_2
General and Administrative Expenses (Tables) | 12 Months Ended |
Feb. 28, 2022 | |
General and Administrative Expenses | |
General And Administrative Expenses | February 28, 2022 February 28, 2021 Professional fees $ 4,247,859 $ 4,613,717 Employee compensation (1) 3,298,610 4,389,219 Insurance 4,267,927 2,072,647 Other 978,043 464,757 $ 12,792,439 $ 11,540,340 |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 12 Months Ended |
Feb. 28, 2022 | |
ShareBased Payments | |
Stock Option Activity | 2022 2021 Number of stock options Weighted average exercise price Number of stock options Weighted average exercise price Outstanding, beginning of year 1,587,081 $ 6.81 1,587,081 $ 6.81 Granted - - - - Exercised (17,081 ) - - - Forfeited - - - - Expired - - - - Outstanding, end of year 1,570,000 $ 6.87 1,587,081 $ 6.81 Exercisable, end of year 1,311,667 $ 7.57 1,181,248 $ 7.19 |
Stock Options Outstanding | 2022 2021 Exercise price Number of stock options outstanding Weighted average remaining life (years) Number of stock options outstanding Weighted average remaining life (years) $ 0.80 490,000 3.75 507,081 4.75 $ 5.25 380,000 5.49 380,000 6.49 $ 12.00 700,000 5.54 700,000 6.54 Outstanding, end of year 1,570,000 4.97 1,587,081 5.96 Exercisable, end of year 1,311,667 5.13 1,181,248 6.06 |
Rsu Activity | 2022 2021 Number of units Weighted average fair value price Number of units Weighted average fair value price Outstanding, beginning of year 4,210,520 $ 1.98 4,218,802 $ 1.60 Granted 353,219 10.15 239,611 9.74 Settled (231,660 ) 1.90 (225,388 ) 1.80 Forfeited (313,512 ) 7.97 (22,505 ) 12.27 Outstanding, end of year 4,018,567 $ 7.42 4,210,520 $ 1.98 Outstanding vested, end of year 537,966 $ 3.28 691,327 $ 2.07 |
Equity Incentive Plan (Tables)
Equity Incentive Plan (Tables) | 12 Months Ended |
Feb. 28, 2022 | |
Equity Incentive Plan | |
Equity Incentive Plan | 2022 2021 Number of units Number of units Outstanding, beginning of year 1,083,412 1,300,518 Share reserve increase - - Units granted (353,219 ) (239,611 ) Units forfeited 313,512 22,505 Units expired - - Outstanding, end of year 1,043,705 1,083,412 |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Feb. 28, 2022 | |
Equity Incentive Plan | |
Warrant Activity | 2022 2021 Number of warrants Weighted average exercise price Number of warrants Weighted average exercise price Outstanding, beginning of year 4,133,720 $ 10.99 5,059,331 $ 10.89 Issued 7,550,698 16.31 25,000 9.43 Exercised (25,000 ) 9.43 (190,529 ) 8.68 Expired - - (760,082 ) 10.83 Outstanding, end of year 11,659,418 $ 14.44 4,133,720 $ 10.99 |
Warrants Outstanding | 2022 Number of warrants Weighted average exercise price June 14, 2022 4,554,865 $ 11.00 February 21, 2023 15,153 11.00 July 29, 2024 4,714,813 15.00 (1) 2,357,407 20.00 February 21, 2023 17,180 11.00 Outstanding, end of year 11,659,418 $ 14.44 |
Interest and Other Finance Co_2
Interest and Other Finance Costs (Tables) | 12 Months Ended |
Feb. 28, 2022 | |
Interest and Other Finance Costs (Tables) | |
Interest And Other Finance Costs | 2022 2021 Interest on long-term debt $ 98,700 $ 77,756 Accretion expense 55,332 36,847 Other 287 (32,607 ) $ 154,319 $ 81,996 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Feb. 28, 2022 | |
Income Taxes | |
Components Of Loss Before Taxes | February 28, 2022 February 28, 2021 U.S. operations $ (12,690,909 ) $ (7,126,988 ) Foreign operations (32,230,047 ) (29,217,935 ) Loss before taxes $ (44,920,956 ) $ (36,344,923 ) |
Income Tax Rate Reconciliation | February 28, 2022 February 28, 2021 Statutory Federal rate 21 % 21 % Federal income tax at statutory rate $ (9,433,405 ) $ (7,632,436 ) Effect of foreign jurisdiction (1,803,016 ) (1,433,653 ) Non-deductible expenses 329,054 695,941 Tax credits related to research and development expenditures (76,327 ) (302,703 ) Unrecognized tax benefit of net operating losses and other available deductions 10,983,694 8,672,851 Effective income tax expense $ - $ - Current $ - $ - Deferred $ - $ - |
Deferred Income Tax Assets And Liabilities | As at February 28, 2022 February 28, 2021 Deferred tax assets Canada net operating loss carry forward $ 15,735,374 $ 9,258,070 U.S. net operating loss carry forward 6,366,370 4,629,036 Accrual and reserves 938,918 335,742 Intangibles 175,077 123,711 Property, plant and equipment 3,599,781 2,482,633 Research and development expenditures and credits 2,711,560 1,778,078 Basis in partnership 235,006 - Other 698 698 Deferred tax assets 29,762,784 18,607,968 Deferred tax liabilities Property, plant and equipment - - Intangibles (267,813 ) (211,049 ) Accrual and reserves (64,112 ) Research and Development and Investment tax credits - - Unrealized foreign exchange - - Other (165,778 ) (244,911 ) Deferred tax liabilities (433,591 ) (520,072 ) Deferred tax assets, net 29,329,193 18,087,896 Valuation allowance (29,329,193 ) (18,087,896 ) Deferred tax assets, net $ - $ - |
The Company Basis of Presenta_2
The Company Basis of Presentation (Details Narrative) | Feb. 28, 2022 |
Office Equipment and Furniture | |
Ownership, Percentage | 50.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Feb. 28, 2022 | |
Office Equipment and Furniture | |
Estimated Useful Life | 8 |
Building | |
Estimated Useful Life | 30 |
Land | |
Estimated Useful Life | Indefinite |
Building And Land Improvements | |
Estimated Useful Life | 5-10 years |
Machinery and Equipments [Member] | |
Estimated Useful Life | 3-8 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Narrative) - shares | 12 Months Ended | |
Feb. 28, 2022 | Feb. 28, 2021 | |
Warrants | ||
Dilutive Securities | 11,659,418 | 4,133,720 |
Restricted Stock Units | ||
Dilutive Securities | 4,018,567 | 4,210,520 |
Equity Option [Member] | ||
Dilutive Securities | 1,570,000 | 1,587,081 |
Sales Tax Tax Credits and Oth_2
Sales Tax Tax Credits and Other Receivables (Details) - USD ($) | Feb. 28, 2022 | Feb. 28, 2021 |
Sales Tax Tax Credits and Other Receivables | ||
Sales Tax | $ 1,337,783 | $ 1,155,504 |
Research And Development Tax Credits | 313,599 | 435,467 |
Other Receivables | 64,880 | 172,864 |
Sales Tax, Research And Development Tax Credits And Other Receivables | $ 1,716,262 | $ 1,763,835 |
Sales Tax Tax Credits and Oth_3
Sales Tax Tax Credits and Other Receivables (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2022 | Feb. 28, 2021 | |
Sales Tax Tax Credits and Other Receivables | ||
Adjustments Made To Prior Year Estimates Of Refundable Tax Credits | $ 115,566 | |
Non-cash Research And Development Tax Credits, Carry Forward | 1,589,580 | $ 1,090,691 |
General And Administrative Expenses | 37,670 | |
Reduction Of Research And Development Expenses | (91,960) | 115,566 |
Recieve Of Research And Development Tax Credit | 216,300 | 93,249 |
Wage Subsidy | (259,273) | 0 |
Government Grants | 0 | 0 |
Non-cash Research And Development Tax Credits | 442,943 | $ 272,206 |
Research And Development Expenses | $ 221,603 |
Prepaid Expenses and Deposits (
Prepaid Expenses and Deposits (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2022 | Feb. 28, 2021 | |
Prepaid Expenses and Deposits | ||
Cash Deposits On Machinery And Equipment | $ 2,801,680 | |
Non Refundable Deposits On Machinery And Equipment | 2,128,967 | $ 0 |
Prepayments On Machinery And Equipment | $ 672,713 | $ 379,395 |
Assets held for sale (Details)
Assets held for sale (Details) - USD ($) | 12 Months Ended | |
Feb. 28, 2022 | Nov. 30, 2021 | |
Total Assets | $ 4,791,136 | |
Assets held for sale [Member] | ||
Total Assets Held For Sale | 3,389,278 | |
Assets Held-for-sale, Description | Property, plant and equipment, net | |
Property, plant and equipment, net [Member] | ||
Total Assets Held For Sale | $ 1,401,858 | |
Assets Held-for-sale, Description | Asset held for sale |
Assets held for sale (Details N
Assets held for sale (Details Narrative) $ in Millions | 1 Months Ended |
May 27, 2021USD ($) | |
Assets held for sale (Details) | |
Land Acquired Descriprtion | On May 27, 2021, we acquired land in Bécancour, Québec for cash of $4.8 million (CDN $5.9 million) |
Land Acquired For Cash, Amount | $ 4.8 |
Property Plant and Equipment (D
Property Plant and Equipment (Details) - USD ($) | Feb. 28, 2022 | Feb. 28, 2021 |
Property, Plant And Equipment, Gross | $ 6,944,462 | $ 10,807,993 |
Less: Accumulated Depreciation, Write-down And Impairment | (1,251,600) | (7,294,942) |
Property, Plant And Equipment, Net | 5,692,862 | 3,513,051 |
Office Equipment and Furniture | ||
Property, Plant And Equipment, Gross | 298,141 | 292,946 |
Less: Accumulated Depreciation, Write-down And Impairment | (126,824) | (104,987) |
Property, Plant And Equipment, Net | 171,317 | 187,959 |
Building | ||
Property, Plant And Equipment, Gross | 1,952,345 | 1,954,345 |
Less: Accumulated Depreciation, Write-down And Impairment | (266,434) | (201,589) |
Property, Plant And Equipment, Net | 1,685,911 | 1,752,756 |
Land | ||
Property, Plant And Equipment, Gross | 1,644,084 | 241,578 |
Less: Accumulated Depreciation, Write-down And Impairment | 0 | 0 |
Property, Plant And Equipment, Net | 1,644,084 | 241,578 |
Building And Land Improvements | ||
Property, Plant And Equipment, Gross | 3,049,892 | 1,804,872 |
Less: Accumulated Depreciation, Write-down And Impairment | (858,342) | (474,114) |
Property, Plant And Equipment, Net | $ 2,191,550 | 1,330,758 |
Machinery and Equipments [Member] | ||
Property, Plant And Equipment, Gross | 6,514,252 | |
Less: Accumulated Depreciation, Write-down And Impairment | (6,514,252) | |
Property, Plant And Equipment, Net | $ 0 |
Property Plant and Equipment _2
Property Plant and Equipment (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
May 27, 2021 | Feb. 28, 2022 | Feb. 28, 2021 | |
Property Plant and Equipment | |||
Depreciation Expense | $ 478,581 | $ 733,831 | |
Cost Of Incurred Civil Construction | $ 1,138,947 | ||
Land Acquired For Cash, Amount | $ 4,800,000 | ||
Impairment Expenses | 5,043,119 | ||
Carrying Value Of Machinery And Equipment Written Off | $ 5,034,606 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Feb. 28, 2022 | Feb. 28, 2021 | |
Intangible Assets | ||
Intangible Assets, Cost | $ 859,048 | $ 225,174 |
Intangible Assets, Accumulated Depreciation | (64,154) | (22,310) |
Total | 794,894 | 202,864 |
Add: Additions In The Year | 294,955 | 623,811 |
Deduct: Amortization Of Intangibles | (76,214) | (41,844) |
Deduct: Foreign Exchange Effect | 166 | 10,063 |
Total | $ 1,013,801 | $ 794,894 |
Intangible Assets (Details 1)
Intangible Assets (Details 1) - USD ($) | Feb. 28, 2022 | Feb. 28, 2021 |
Intangible Assets | ||
Future Estimated Patent Amortization Costs, February 28, 2023 | $ 0 | |
Future Estimated Patent Amortization Costs, February 29, 2024 | 0 | |
Future Estimated Patent Amortization Costs, February 28, 2025 | 0 | |
Future Estimated Patent Amortization Costs, February 28, 2026 | 0 | |
Future Estimated Patent Amortization Costs, February 28, 2027 | 0 | |
Future Estimated Patent Amortization Costs, Thereafter | 0 | |
Future Estimated Patent Amortization Costs, Total | $ 1,013,801 | $ 794,894 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2022 | Feb. 28, 2021 | |
Intangible Assets | ||
Deduct: Amortization Of Intangibles | $ 76,214 | $ 41,844 |
Financial Instruments and Man_2
Financial Instruments and Management of Financial Risk (Details) - Long-term Debt - Level 2 - USD ($) | Feb. 28, 2022 | Feb. 28, 2021 |
Carrying Amount | $ 3,378,403 | $ 2,454,123 |
Fair Value | $ 3,392,600 | $ 2,464,540 |
Financial Instruments and Man_3
Financial Instruments and Management of Financial Risk (Details Narrative) | Feb. 28, 2022USD ($) |
Fair Value of Financial Instruments | |
Cash and cash equivalents on hand | $ 44,060,000 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities (Details) - USD ($) | Feb. 28, 2022 | Feb. 28, 2021 |
Accounts Payable and Accrued Liabilities | ||
Trade Accounts Payable | $ 4,397,499 | $ 5,082,736 |
Accrued loss contingency for legal settlement | 2,519,220 | 0 |
Accrued Employee Compensation | 1,254,685 | 970,154 |
Accrued Engineering Fees | 774,423 | 535,359 |
Accrued Professional Fees | 526,685 | 1,270,628 |
Other Accrued Liabilities | 374,303 | 265,988 |
Accounts Payable And Accrued Liabilities | $ 9,846,815 | $ 8,124,865 |
Joint Venture (Details Narrativ
Joint Venture (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2022 | Feb. 28, 2021 | |
Joint Venture | ||
Investment In Joint Venture | $ 0 | $ 650,000 |
Equity Method Investment, Carrying Value | 380,922 | $ 1,500,000 |
Impairment | $ 1,119,078 | |
Capitalized Portion | 50.00% | |
Cash balance percentage | 50.00% |
LongTerm Debt (Details)
LongTerm Debt (Details) - USD ($) | Feb. 28, 2022 | Feb. 28, 2021 |
Long-term Debt, Net Of Current Portion | $ 3,378,403 | $ 1,516,008 |
Principal Amount | 3,622,618 | |
Less: Current Portion | 0 | (938,116) |
Investissement Qu?bec Financing Facility | ||
Long-term Debt, Net Of Current Portion | 3,378,403 | 1,516,008 |
Principal Amount | 3,622,618 | 1,741,612 |
Unamortized Discount | (352,038) | (268,192) |
Accrued Interest | 107,823 | 42,588 |
Less: Current Portion | 0 | |
Term Loan | ||
Long-term Debt, Net Of Current Portion | 3,378,403 | 1,516,008 |
Principal Amount | 0 | 938,116 |
Less: Current Portion | 0 | (938,116) |
Total Term Loan, Net Of Current Portion | $ 0 | $ 0 |
LongTerm Debt (Details 1)
LongTerm Debt (Details 1) | Feb. 28, 2022USD ($) |
Interest and Other Finance Costs | |
February 28, 2023 | $ 0 |
February 28, 2024 | 517,508 |
February 28, 2025 | 517,508 |
February 29, 2026 | 517,508 |
February 28, 2027 | 517,508 |
Thereafter | 1,552,586 |
Total | $ 3,622,618 |
LongTerm Debt (Details Narrativ
LongTerm Debt (Details Narrative) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Jan. 24, 2018USD ($) | Nov. 30, 2021USD ($)$ / sharesshares | Feb. 28, 2022USD ($)$ / shares | Feb. 28, 2021USD ($) | Aug. 26, 2021USD ($) | Feb. 21, 2020USD ($)integer | |
Warrant Exercise Price | $ / shares | $ 14.44 | |||||
Repayment Of Long-term Debt | $ 937,156 | $ 50,585 | ||||
Warrants | ||||||
Warrant Exercise Price | $ / shares | $ 9.43 | |||||
Investissement Qu?bec Financing Facility | ||||||
Interest Expense | 65,908 | 39,599 | ||||
Maximum Financing Facility | $ 3,622,618 | |||||
Disbursement From Financing Facility | $ 1,882,789 | $ 1,739,828 | ||||
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 | $ 36,226 | |||||
Debt Discount | $ 139,390 | $ 290,714 | ||||
Accretion Expense | $ 55,332 | 36,847 | ||||
Investissement Qu?bec Financing Facility | Warrants | ||||||
Warrant Exercise Price | $ / shares | $ 11 | $ 11 | ||||
Warrants Issued To Purchase Common Stock, Amount | $ 362,262 | |||||
Warrant Term | 3 years | |||||
Investissement Qu?bec Financing Facility | First Disbursement Warrant [Member] | ||||||
Warrant Exercise Price | $ / shares | $ 11 | |||||
Warrants Issued To Purchase Common Stock, Shares | shares | 15,153 | |||||
Fair Value Of Warrant | $ 77,954 | |||||
Investissement Qu?bec Financing Facility | Second Disbursement Warrant [Member] | ||||||
Warrant Exercise Price | $ / shares | $ 11 | |||||
Warrants Issued To Purchase Common Stock, Shares | shares | 17,180 | |||||
Fair Value Of Warrant | $ 69,323 | |||||
Term Loan | ||||||
Repayment Of Long-term Debt | 937,156 | 50,585 | ||||
Loan Amount | $ 1,102,536 | |||||
Loan, Term | 20 years | |||||
Loan, Interest Rate Description | prime rate plus 1.5% | |||||
Monthly Repayment Of Loan | $ 4,594 | |||||
Interest Paid | $ 32,791 | $ 38,157 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Jul. 13, 2018 | Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2019 | Feb. 28, 2022 | Feb. 28, 2021 | Feb. 28, 2017 | Apr. 30, 2020 |
Restricted Stock Units Outstanding | 3,400,000 | 3,600,000 | ||||||
Restricted Stock Units Vested | 400,000 | 600,000 | ||||||
Vested Units Settled Annually In Tranches | 200,000 | |||||||
Unvested Restricted Stock Units Forfeited | 3,000,000 | |||||||
Termination Description | in which case he would receive 50% of the unvested RSUs at the time of termination, or 100% in the case of termination without cause or resignation for good reason within 24 months after a change in control | |||||||
Vested Restricted Stock Units | 200,000 | 200,000 | 200,000 | |||||
Shares Of Common Stock Issued | 1,000,000 | |||||||
Common Stock With A Fair Value | $ 800,000 | |||||||
Performance Incentive Shares | 1,000,000 | |||||||
Shares Granted | 0 | 0 | ||||||
President and Chief Executive Officer | Restricted Stock Units | ||||||||
Shares Granted | 4,000,000 | |||||||
President and Chief Executive Officer | First Full Scale Production | ||||||||
Shares Of Common Stock Issued | 1,000,000 | |||||||
President and Chief Executive Officer | DMT/MEG | ||||||||
Shares Of Common Stock Issued | 1,000,000 | |||||||
President and Chief Executive Officer | OTC Markets | ||||||||
Shares Of Common Stock Issued | 1,000,000 | |||||||
President and Chief Executive Officers | ||||||||
Shares Granted | 4,000,000 | |||||||
Closing Price Per Share | $ 7.74 |
Stockholders Equity (Details)
Stockholders Equity (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2020 | Feb. 28, 2022 | Feb. 28, 2021 | |
Balance, Amount | $ 38,463,708 | $ 32,824,524 | $ 38,463,708 | |
Issuance Of Shares Upon Settlement Of Restricted Stock Units, Shares | 25,388 | 231,660 | ||
Issuance Of Shares For Cash, Shares | 4,714,813 | |||
Issuance Of Shares Upon Exercise Of Warrants, Shares | 190,529 | 11,666 | ||
Issuance Of Shares Upon Exercise Of Options, Shares | 0 | 0 | 16,226 | |
Common Stock [Member] | ||||
Balance, Shares | 39,910,774 | 42,413,691 | 39,910,774 | |
Balance, Amount | $ 3,992 | $ 4,242 | $ 3,992 | |
Issuance Of Shares Upon Settlement Of Restricted Stock Units, Shares | 231,660 | 225,388 | ||
Issuance Of Shares Upon Settlement Of Restricted Stock Units, Amount | $ 24 | $ 22 | ||
Issuance Of Shares For Cash, Shares | 4,714,813 | 2,087,000 | ||
Issuance Of Shares For Cash, Amount | $ 471 | $ 209 | ||
Issuance Of Shares Upon Exercise Of Warrants, Shares | 11,666 | 190,529 | ||
Issuance Of Shares Upon Exercise Of Warrants, Amount | $ 1 | $ 19 | ||
Issuance Of Shares Upon Exercise Of Options, Shares | 16,226 | |||
Issuance Of Shares Upon Exercise Of Options, Amount | $ 2 | |||
Balance, Share | 47,388,056 | 42,413,691 | ||
Balance, Amounts | $ 4,740 | $ 4,242 |
Stockholders Equity (Details 1)
Stockholders Equity (Details 1) | Feb. 28, 2022USD ($) |
Aggregate Purchase Price, Net Of Issuance Costs | $ 56,084,304 |
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 |
Common Stock [Member] | |
Aggregate Purchase Price, Net Of Issuance Costs | $ 34,622,854 |
Stockholders Equity (Details 2)
Stockholders Equity (Details 2) | 12 Months Ended |
Feb. 28, 2022$ / shares | |
First Tranche Warrants [Member] | |
Exercise Price | $ 15 |
Risk-free Interest Rate | 0.37% |
Expected Dividend Yield | 0.00% |
Expected Volatility | 78.08% |
Expected Life | 2 years 6 months |
Second Tranche Warrants [Member] | |
Exercise Price | $ 20 |
Risk-free Interest Rate | 0.60% |
Expected Dividend Yield | 0.00% |
Expected Volatility | 74.35% |
Expected Life | 4 years 1 month 2 days |
Third Tranche Warrants [Member] | |
Exercise Price | $ 11 |
Risk-free Interest Rate | 0.07% |
Expected Dividend Yield | 0.00% |
Expected Volatility | 93.34% |
Expected Life | 10 months 17 days |
Stockholders Equity (Details Na
Stockholders Equity (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jul. 29, 2021 | Oct. 31, 2020 | Nov. 30, 2020 | Nov. 30, 2020 | Feb. 28, 2022 | Feb. 28, 2021 | Oct. 02, 2020 | Sep. 23, 2020 | |
Offering Price Per Share | $ 12 | |||||||
Issuance Of Shares Upon The Vesting Of Restricted Stock Units | 25,388 | 231,660 | ||||||
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 | $ 56,049,167 | |||||||
Issuance Of Shares Upon Exercise Of Warrants, Shares | 190,529 | 11,666 | ||||||
Issuance Of Shares Upon Exercise Of Options, Shares | 0 | 0 | 16,226 | |||||
Common Stock Issued | 47,388,056 | 42,413,691 | 207,000 | 1,880,000 | ||||
Offering Price Of Common Stock | $ 0.0001 | $ 0.0001 | $ 12.75 | $ 12.75 | ||||
Proceeds From Issuance Of Common Stock | $ 26,609,250 | |||||||
Equity Description | Mr. Solomita holds not less than 7.5% of the issued and outstanding shares of common stock of the Company, assuring Mr. Solomita of control of the Company in the event that his ownership of the issued and outstanding shares of common stock of the Company is diluted to a level below a majority. Currently, Mr. Solomita’s ownership of 19,210,000 shares of common stock and 1 share of Series A Preferred Stock provides him with 75.8% of the voting control of the Company | |||||||
Warrant Exercise Price | $ 7.05 | $ 7.05 | $ 7.30 | |||||
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% | |||||||
First Tranche Warrants [Member] | SKGC Investment [Member] | ||||||||
Issuance Of Shares For Cash, Shares | 4,714,813 | |||||||
Warrant Exercise Price | $ 15 | |||||||
Second Tranche Warrants [Member] | SKGC Investment [Member] | ||||||||
Issuance Of Shares For Cash, Shares | 2,357,407 | |||||||
Warrant Exercise Price | $ 20 | |||||||
Third Tranche Warrants [Member] | SKGC Investment [Member] | ||||||||
Issuance Of Shares For Cash, Shares | 461,298 | |||||||
Warrant Exercise Price | $ 11 |
Research and Development Expe_3
Research and Development Expenses (Details) - USD ($) | 12 Months Ended | |
Feb. 28, 2022 | Feb. 28, 2021 | |
Research And Development Expenses | $ 27,736,425 | $ 18,687,014 |
Employee Compensation [Member] | ||
Research And Development Expenses | 7,259,640 | 4,457,125 |
External Engineering [Member] | ||
Research And Development Expenses | 7,307,363 | 5,655,997 |
Plant and Laboratory Operating Expenses [Member] | ||
Research And Development Expenses | 2,649,133 | 1,852,615 |
Other [Member] | ||
Research And Development Expenses | 970,487 | 572,202 |
Machinery and Equipment [Member] | ||
Research And Development Expenses | $ 9,549,802 | $ 6,149,075 |
General and Administrative Ex_3
General and Administrative Expenses (Details) - USD ($) | 12 Months Ended | |
Feb. 28, 2022 | Feb. 28, 2021 | |
General And Administrative Expenses | $ 12,792,439 | $ 11,540,340 |
Employee Compensation [Member] | ||
General And Administrative Expenses | 3,298,610 | 4,389,219 |
Professional Fees | ||
General And Administrative Expenses | 4,247,859 | 4,613,717 |
Insurance [Member] | ||
General And Administrative Expenses | 4,267,927 | 2,072,647 |
Other [Member] | ||
General And Administrative Expenses | $ 978,043 | $ 464,757 |
General and Administrative Ex_4
General and Administrative Expenses (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2022 | Feb. 28, 2021 | |
Restricted Stock Units | ||
Net Reversal Of Stock-based Compensation | $ 935,837 | $ 4,005 |
ShareBased Payments (Details)
ShareBased Payments (Details) - $ / shares | 12 Months Ended | |
Feb. 28, 2022 | Feb. 28, 2021 | |
ShareBased Payments | ||
Number Of Options Outstanding, Beginning | 1,587,081 | 1,587,081 |
Number Of Options, Granted | 0 | 0 |
Number Of Options, Exercised | 17,081 | 0 |
Number Of Options, Forfeited | 0 | 0 |
Number Of Options, Expired | 0 | 0 |
Number Of Options Outstanding, Ending | 1,570,000 | 1,587,081 |
Exercisable, End Of Year | 1,311,667 | 1,181,248 |
Weighted Average Exercise Price Outstanding, Beginning | $ 6.81 | $ 6.81 |
Weighted Average Exercise Price, Granted | 0 | 0 |
Weighted Average Exercise Price, Exercised | 0 | 0 |
Weighted Average Exercise Price, Forfeited | 0 | 0 |
Weighted Average Exercise Price, Expired | 0 | 0 |
Weighted Average Outstanding, End Of Year | 6.87 | 6.81 |
Weighted Average Exercise Price Outstanding, Ending | $ 7.57 | $ 7.19 |
ShareBased Payments (Details 1)
ShareBased Payments (Details 1) - $ / shares | 12 Months Ended | ||
Feb. 28, 2022 | Feb. 28, 2021 | Feb. 29, 2020 | |
Number Of Options Outstanding, Beginning | 1,570,000 | 1,587,081 | 1,587,081 |
Number Of Stock Options, Exercisable | 1,311,667 | 1,181,248 | |
Weighted Average Remaining Life, Outstanding | 4 years 11 months 19 days | 5 years 1 month 17 days | |
Weighted Average Remaining Life, Exercisable | 5 years 11 months 15 days | 6 years 21 days | |
Weighted Average Exercise Price Outstanding, Beginning | $ 6.81 | $ 6.81 | |
Stock Option 1 | |||
Number Of Options Outstanding, Beginning | 490,000 | 507,081 | |
Weighted Average Remaining Life, Outstanding | 3 years 9 months | 4 years 9 months | |
Weighted Average Exercise Price Outstanding, Beginning | $ 0.80 | $ 0.80 | |
Stock Option 2 | |||
Number Of Options Outstanding, Beginning | 380,000 | 380,000 | |
Weighted Average Remaining Life, Outstanding | 5 years 5 months 26 days | 6 years 5 months 26 days | |
Weighted Average Exercise Price Outstanding, Beginning | $ 5.25 | $ 5.25 | |
Stock Option 3 | |||
Number Of Options Outstanding, Beginning | 700,000 | 700,000 | |
Weighted Average Remaining Life, Outstanding | 5 years 6 months 14 days | 6 years 6 months 14 days | |
Weighted Average Exercise Price Outstanding, Beginning | $ 12 | $ 12 |
ShareBased Payments (Details 2)
ShareBased Payments (Details 2) - Restricted Stock Units - $ / shares | 12 Months Ended | |
Feb. 28, 2022 | Feb. 28, 2021 | |
Number Of Units Outstanding, Beginning | 4,210,520 | 4,218,802 |
Number Of Units, Granted | 353,219 | 239,611 |
Number Of Units, Vested | (231,660) | (225,388) |
Number Of Units, Forfeited | (313,512) | (22,505) |
Number Of Units Outstanding, Ending | 4,018,567 | 4,210,520 |
Number Of Units Outstanding Vested, Ending | 537,966 | 691,327 |
Weighted Average Exercise Price Outstanding, Beginning | $ 1.98 | $ 1.60 |
Weighted Average Exercise Price, Granted | 10.15 | 9.74 |
Weighted Average Exercise Price, Vested | 1.90 | 1.80 |
Weighted Average Exercise Price, Forfeited | 7.97 | 12.27 |
Weighted Average Exercise Price Outstanding, Ending | 7.42 | 1.98 |
Weighted Average Exercise Price Outstanding Vested, Ending | $ 3.28 | $ 2.07 |
ShareBased Payments (Details Na
ShareBased Payments (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2022 | Feb. 28, 2021 | |
Stock-based Compensation Expense Attributable To Stock Options | $ 1,513,211 | $ 2,212,078 |
Stock-based Compensation Attributable To Rsus | 549,155 | 1,378,106 |
Stock-based Compensation Expense | 963,022 | 4,005 |
Research and Development Expenses | ||
Stock-based Compensation Expense | 1,536,734 | 1,417,004 |
General and Administrative Expenses | ||
Stock-based Compensation Expense | $ 525,632 | $ 2,257,622 |
Equity Incentive Plan (Details)
Equity Incentive Plan (Details) - Equity Incentive Plan - shares | 12 Months Ended | |
Feb. 28, 2022 | Feb. 28, 2021 | |
Number Of Units Outstanding, Beginning | 1,083,412 | 1,300,518 |
Share Reserve Increase | 0 | 0 |
Units Granted | (353,219) | (239,611) |
Number Of Units, Forfeited | 313,512 | 22,505 |
Units Expired | 0 | 0 |
Number Of Units Outstanding, Ending | 1,043,705 | 1,083,412 |
Equity Incentive Plan (Details
Equity Incentive Plan (Details Narrative) - 2017 Equity Incentive Plan - shares | Jul. 06, 2017 | Feb. 28, 2022 |
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) - Warrants - $ / shares | 12 Months Ended | |
Feb. 28, 2022 | Feb. 28, 2021 | |
Number Of Units Outstanding, Beginning | 4,133,720 | 5,059,331 |
Number Of Units, Issued | 7,550,698 | 25,000 |
Number Of Units, Exercised | (25,000) | (190,529) |
Number Of Units, Expired | 0 | (760,082) |
Number Of Units Outstanding, Ending | 11,659,418 | 4,133,720 |
Weighted Average Exercise Price Outstanding, Beginning | $ 10.99 | $ 10.89 |
Weighted Average Exercise Price, Granted | 16.31 | 9.43 |
Weighted Average Exercise Price, Exercised | 9.43 | 8.68 |
Weighted Average Exercise Price, Expired | 0 | 10.83 |
Weighted Average Exercise Price Outstanding, Ending | $ 14.44 | $ 10.99 |
Warrants (Details 1)
Warrants (Details 1) | 12 Months Ended |
Feb. 28, 2022$ / sharesshares | |
Number Of Warrants Outstanding | shares | 11,659,418 |
Weighted Average Exercise Price | $ / shares | $ 14.44 |
Warrants 1 | |
Number Of Warrants Outstanding | shares | 4,554,865 |
Weighted Average Exercise Price | $ / shares | $ 11 |
Expiration Date | Jun. 14, 2022 |
Warrants 2 | |
Number Of Warrants Outstanding | shares | 15,153 |
Weighted Average Exercise Price | $ / shares | $ 11 |
Expiration Date | Feb. 21, 2023 |
Warrants 5 | |
Number Of Warrants Outstanding | shares | 17,180 |
Weighted Average Exercise Price | $ / shares | $ 11 |
Expiration Date | Feb. 21, 2023 |
Warrants 3 | |
Number Of Warrants Outstanding | shares | 4,714,813 |
Weighted Average Exercise Price | $ / shares | $ 15 |
Expiration Date | Jul. 29, 2024 |
Warrants 4 | |
Number Of Warrants Outstanding | shares | 2,357,407 |
Weighted Average Exercise Price | $ / shares | $ 20 |
Warrants (Details Narrative)
Warrants (Details Narrative) - USD ($) | 12 Months Ended | ||
Feb. 28, 2022 | Feb. 28, 2021 | Nov. 30, 2021 | |
Warrants To Issue Shares Of Common Stock Exercise Price | $ 0 | $ 0 | |
Exercise Price | 14.44 | ||
Warrants | |||
Warrants To Issue Shares Of Common Stock | 200,000 | ||
Warrants To Issue Shares Of Common Stock Exercise Price | 11 | ||
Warrant To Purchase Common Stock Shares For For Consulting Services | 25,000 | ||
Weighted Average Exercise Price, Granted | $ 16.31 | $ 9.43 | |
Warrants Issued | 7,550,698 | 25,000 | |
Exercise Price | $ 9.43 | ||
Number Of Warrants | $ 25,000 | ||
Warrants | Investissement Qu?bec Financing Facility | |||
Exercise Price | $ 11 | $ 11 |
Interest and Other Finance Co_3
Interest and Other Finance Costs (Details) - USD ($) | 12 Months Ended | |
Feb. 28, 2022 | Feb. 28, 2021 | |
Interest and Other Finance Costs (Tables) | ||
Interest On Long-term Debt | $ 98,700 | $ 77,756 |
Accretion Expense | 55,332 | 36,847 |
Other | (287) | 32,607 |
Interest And Other Finance Costs | $ 154,319 | $ 81,996 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Feb. 28, 2022 | Feb. 28, 2021 | |
Income Taxes | ||
U.s. Operations | $ (12,690,909) | $ (7,126,988) |
Foreign Operations | (32,230,047) | (29,217,935) |
Loss Before Taxes | $ (44,920,956) | $ (36,344,923) |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 12 Months Ended | |
Feb. 28, 2022 | Feb. 28, 2021 | |
Income Taxes | ||
Statutory Federal Rate | 21.00% | 21.00% |
Federal Income Tax At Statutory Rate | $ (9,433,405) | $ (7,632,436) |
Effect Of Foreign Jurisdiction | (1,803,016) | (1,433,653) |
Non-deductible Expenses | 329,054 | 695,941 |
Tax Credits Related To Research And Development Expenditures | (76,327) | (302,703) |
Unrecognized Tax Benefit Of Net Operating Losses And Other Available Deductions | (10,983,694) | (8,672,851) |
Effective Income Tax Expense | 0 | 0 |
Current | 0 | 0 |
Deferred | $ 0 | $ 0 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Feb. 28, 2022 | Feb. 28, 2021 |
Deferred Tax Assets | ||
Canada Net Operating Loss Carry Forward | $ 15,735,374 | $ 9,258,070 |
U.s. Net Operating Loss Carry Forward | 6,366,370 | 4,629,036 |
Accrual And Reserves | 938,918 | 335,742 |
Intangibles | 175,077 | 123,711 |
Property, Plant And Equipment | 3,599,781 | 2,482,633 |
Research And Development Expenditures And Credits | 2,711,560 | 1,778,078 |
Basis In Partnership | 235,006 | 0 |
Other | 698 | 698 |
Deferred Tax Assets | 29,762,784 | 18,607,968 |
Deferred Tax Liabilities | ||
Property, Plant And Equipment | 0 | 0 |
Intangibles | (267,813) | (211,049) |
Accrual And Reserves | 0 | 64,112 |
Investment Tax Credits | 0 | 0 |
Unrealized Foreign Exchange | 0 | 0 |
Other | 165,778 | 244,911 |
Deferred Tax Liabilities | (433,591) | (520,072) |
Deferred Tax Asset | 29,329,193 | 18,087,896 |
Valuation Allowance | (29,329,193) | (18,087,896) |
Deferred Tax Asset, Net | $ 0 | $ 0 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2022 | Feb. 28, 2021 | |
Net Operating Loss Carry Forwards | $ 30,316,049 | $ 22,043,030 |
Increase In Valuation Allowance | 11,241,297 | 8,860,563 |
Canada | ||
Net Operating Loss Carry Forwards | 59,310,541 | 34,715,320 |
Qu?bec | ||
Net Operating Loss Carry Forwards | 61,353,534 | 35,224,105 |
Canada and Qu?bec | ||
Research And Development Expenditures | $ 5,998,338 | $ 3,678,832 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 12 Months Ended | ||
Feb. 28, 2022 | Dec. 31, 2021 | Feb. 28, 2021 | |
Commitments and Contingencies | |||
Purchase Of Long Lead Machinery | $ 8,546,000 | ||
Cash Deposit | $ 2,136,500 | ||
Agreement Term | 9 years | ||
Contingency loss for legal settlement (Notes 21 and 22) | $ 2,519,220 | $ 0 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Mar. 02, 2022 | Feb. 28, 2022 | Feb. 28, 2021 | Mar. 01, 2022 |
Contingency loss for legal settlement (Notes 21 and 22) | $ 2,519,220 | $ 0 | ||
Subsequent Event [Member] | ||||
Legal Fees | $ 2,520,000 | |||
Conditions Amount Pay | $ 3,100,000 |