Loop Industries Provides Commercialization Update and Reports Fourth Quarter and Fiscal Year 2021 Financial Results

• CONVERSION OF PILOT PLANT INTO INFINITE LOOP™ DEMONSTRATION AND TRAINING FACILITY
• OBTAINED NO-OBJECTION LETTER FROM THE FDA
• ADVANCED STAGES OF PRE-FEASIBILITY ENGINEERING DESIGN FOR INFINITE LOOP™ COMMERCIAL FACILITIES
• SITE PURCHASE IN BÉCANCOUR, QUÉBEC FOR PLANNED INFINITE LOOP™ PROJECT
• ADDITIONS TO LEADERSHIP TEAM TO EXECUTE COMMERCIALIZATION PLANS

MONTREAL, QC / ACCESSWIRE / June 1, 2021 / Loop Industries, Inc. (NASDAQ:LOOP) (the "Company" or "Loop"), a clean technology company focused on accelerating a circular plastics economy by manufacturing 100% recycled polyethylene terephthalate (« PET ») plastic and polyester fiber, today reported its consolidated financial results for the fourth quarter and fiscal year ended February 28, 2021 and provided an update on commercialization efforts.

Commercialization Update

Conversion of Pilot Plant into Infinite Loop™ Demonstration Facility

In Q3 2021, the Company decided to convert its Terrebonne, Québec pilot plant to an Infinite Loop^TM demonstration and training facility. This demonstration facility will showcase the Infinite Loop^TM end-to-end technology and manufacturing process for producing recycled PET resin to potential partners and customers. Additionally, the facility will provide operational training in advance of the commissioning of commercial plants. Significant equipment upgrades have been made to the facilities. PET polymerization equipment is expected to be ordered and installed by end of calendar year 2021. We expect this equipment to be operational in early 2022.

Regulatory Requirements for use in Food-Grade Applications

On March 1, 2021, Loop received a no-objection letter ("NOL") from the US Federal Food and Drug Administration ("FDA") to confirm the capability of Loop's tertiary recycling process in cleaning and producing post-industrial and post-consumer recycled PET for use in the manufacture of food-contact articles that contact all food types under all conditions of use for which PET is permitted. We believe obtaining the NOL, in addition to the European Union REACH registration confirmation obtained in Q3 2021, is an important milestone in addressing food packaging regulations, and supports our targeted market opportunity for commercializing Loop™ recycled PET resin.

Infinite Loop™ Engineering Update

In partnership with engineering, procurement and construction firm Worley, the Company continues to focus on the completion of the Infinite Loop^TM facility pre-feasibility engineering design for a target capacity of up to 70,000 metric ton/year facilities. This includes the integration of Loop's depolymerization technology with INVISTA/Chemtex's polymerization know-how. We intend to use this pre-feasibility design for the Bécancour, Québec Infinite Loop^TM facility.

Québec Project

We are in the planning phase for an Infinite Loop™manufacturing facility in the province of Québec (the "Québec Project"). On May 27, 2021, we acquired a 19 million square foot parcel of land in Bécancour, Québec for approximately $4.8 million. The site is located near existing industrial infrastructure, which reduces project costs, permitting time and does not result in the destruction of wetlands or forest. Loop will not exercise the purchase option which was agreed in January 2021 to acquire approximately 2 million square feet of land in Bécancour, Québec. Therefore, we will cease monthly payments for the option rights.

European Partnership

On September 10, 2020, we announced a strategic partnership with SUEZ GROUP ("Suez"), with the objective to build the first Infinite Loop™ manufacturing facility in Europe. With the combination of the Infinite Loop™ technology and the resource management expertise of Suez, this partnership seeks to respond to growth in demand in Europe from global beverage and consumer goods brand companies. We, together with Suez, have initiated the groundwork necessary to support an eventual final investment decision for the project. The current priorities are site selection, permitting, feedstock requirements and pre-feasibility engineering design. We are targeting final site selection during the summer of 2021.

Joint Venture with Indorama Ventures Limited

Ongoing COVID-19-related travel restrictions and quarantine requirements between Canada and the US continued to cause disruptions in our timetable. The joint venture partners continue to monitor the COVID-19 commercial and regulatory implications on the project.

Leadership Team

To support the Company on its upward trajectory, Loop is investing in building a commercialization team to integrate best-in-class processes and practices, while maintaining its entrepreneurial culture. In January 2021, Mr. Yves Perron joined Loop as Vice-President, Engineering and Construction. In his role, he is focused on building a strong engineering and construction team to execute Loop's commercialization plans.

Loop announced the retirement of Mr. Nelson Gentiletti as the Company's Chief Operating Officer and Chief Financial Officer ("CFO") and the appointment of Mr. Drew Hickey as the Company's CFO, both effective March 1, 2021. Mr. Hickey is responsible for Loop's corporate functions, including finance and legal, and will focus on capital markets activities to support the commercialization of Loop's technology.

Board of Directors

On April 8, 2021, Loop announced the appointment of Ms. Louise Sams to its Board of Directors. An experienced executive with a proven record of leadership and governance, Ms. Sams retired in 2019 from a successful career as Executive Vice President and General Counsel of Turner Broadcasting, Inc, where she oversaw the whole gamut of the Company's legal activities and played a valued role on its executive leadership team. Since her retirement, Ms. Sams has joined the boards of two US publicly listed companies and currently serves as the Chair of the Board of Trustees of Princeton University.

Fourth Quarter Ended February 28, 2021
The following table summarizes our operating results for the three-month periods ended February 28, 2021 and February 29, 2020, in U.S. Dollars.

The net loss for the three-month period ended February 28, 2021 increased $9.44 million to $13.19 million, as compared to the net loss for the three-month period ended February 29, 2020 which was $3.76 million. The increase is primarily due to increased research and development expenses of $6.71 million, increased general and administrative expenses of $3.05 million and a decrease in interest income of $0.12 million, partially offset by lower interest and other financial expenses of $0.35 million, an increased foreign exchange loss of $0.03 million and by lower depreciation and amortization expenses of $0.12 million.

The $6.71 million increase in research and development for the three-month period ended February 28, 2021 was primarily attributable to the following:

• $3.82 million increase in purchases of research and development machinery and equipment, including two new recently installed depolymerization reactors. Starting in Q3 of fiscal 2021, the Company expensed research and development machinery and equipment in accordance with ASC 730, Research and Development Costs, and no longer capitalizes these costs. The timing of this accounting treatment is related to management's decision to convert our pilot plant to exclusively a demonstration and training facility for our future Infinite Loop™ manufacturing facilities, therefore foregoing any alternative future use of its machinery and equipment assets in other applications. ;
• $2.35 million increase in external engineering expenses for ongoing design work for our Infinite Loop^TM manufacturing process;
• $0.23 million increase in employee compensation expenses; and
• $0.19 million increase in pilot plant and laboratory operating expenses.

The $3.05 million increase in general and administrative expenses for the three-month period ended February 28, 2021 was primarily attributable to the following:

• $2.53 million increase in expenses for legal and professional fees due to costs principally associated with the ongoing SEC investigation and class action suits;
• $0.38 million increase in employee compensation expenses; and
• $0.27 million increase in insurance expenses mainly due to directors and officers ("D&O") insurance renewal costs.

The $0.12 million decrease in depreciation and amortization expenses for the three-month period ended February 28, 2021 is mainly attributable to the write-down of machinery and equipment assets related to the decision in the third quarter of fiscal 2021 to dedicate the demonstration and training facility to research and development activities. Although the machinery and equipment will continue to be utilized at our demonstration and training facility as it is an integral part of supporting the commercialization of our technology, application of ASC 730, Research and Development Costs requires machinery and equipment assets to be written off and all future costs associated with the demonstration and training facility to be recognized as a research and development expense in the consolidated statements of operations and comprehensive loss.

The decrease in interest and other financial expenses of $0.35 million for the three-month period ended February 28, 2021 is mainly attributable to a decrease in interest expense and accretion expense relating to the convertible notes converted in fiscal 2020 in the amount of $0.31 million and $0.05 million, respectively, offset by increased interest and accretion expenses related to the Investissement Québec loan totaling $0.02 million.

Fiscal Year Ended February 28, 2021
The following table summarizes our operating results for the years ended February 28, 2021 and February 29, 2020, in U.S. Dollars.

The net loss for the year ended February 28, 2021 increased $21.84 million to $36.34 million, as compared to the net loss for the year ended February 29, 2020 which was $14.51 million. The increase is primarily due to increased research and development expenses of $13.97 million, increased expense for impairment of property, plant and equipment of $5.02 million, increased general and administrative expenses of $4.32 million, a decrease in interest income of $0.41 million and an increased foreign loss of $0.29 million, partially offset by lower interest and other financial expenses of $2.14 million and by lower depreciation and amortization expenses of $0.03 million.

The $13.97 million increase in research and development for the year ended February 28, 2021 was primarily attributable to the following:

• $6.15 million increase in purchases of research and development machinery and equipment, including two new recently installed depolymerization reactors. The Company expensed research and development machinery and equipment in accordance with ASC 730, Research and Development Costs, and no longer capitalizes these costs. The timing of this accounting treatment is related to management's decision to convert our pilot plant to exclusively a demonstration and training facility for our future Infinite Loop™ manufacturing facilities, therefore foregoing any alternative future use of its machinery and equipment assets in other applications;
• $5.51 million increase in external engineering expenses for ongoing design work for our Infinite Loop^TM manufacturing process;
• $0.95 million increase in pilot plant and laboratory operating expenses; and
• $0.76 million increase in employee compensation expenses.

The $4.32 million increase in general and administrative expenses for the year ended February 28, 2021 was primarily attributable to the following:

• $3.42 million increase in expenses for legal and professional fees due to costs principally associated with the ongoing SEC investigation and class action suits; and
• $1.31 million increase in insurance expenses mainly due to D&O insurance renewal costs.

The $0.32 million decrease in depreciation and amortization expenses for the three-month period ended February 28, 2021 is mainly attributable to the write-down of machinery and equipment assets related to the decision in the third quarter of fiscal 2021 to dedicate the demonstration and training facility to research and development activities. Although the machinery and equipment will continue to be utilized at our demonstration and training facility as it is an integral part of supporting the commercialization of our technology, application of ASC 730, Research and Development Costs requires machinery and equipment assets for a total of $5.04 million to be written off and all future costs associated with the demonstration and training facility to be recognized as a research and development expense in the consolidated statements of operations and comprehensive loss.

The decrease in interest and other financial expenses of $2.14 million for the three-month period ended February 28, 2021 is mainly attributable to a decrease in interest expense and accretion expense relating to the convertible notes converted in fiscal 2020 in the amount of $1.89 million and $0.36 million, respectively, offset by increased interest and accretion expenses related to the Investissement Québec loan totaling $0.08 million.

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About Loop Industries

Loop Industries is a technology company whose mission is to accelerate the world's shift toward sustainable PET plastic and polyester fiber and away from our dependence on fossil fuels. Loop Industries owns patented and proprietary technology that depolymerizes no and low-value waste PET plastic and polyester fiber, including plastic bottles and packaging, carpets and textiles of any color, transparency or condition and even ocean plastics that have been degraded by the sun and salt, 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, thus enabling our customers to meet their sustainability objectives. Loop Industries is contributing to the global movement towards a circular economy by reducing plastic waste and recovering waste plastic for a sustainable future.

Common shares of the Company are listed on the NASDAQ Global Market under the symbol "LOOP."

For more information, please visit www.loopindustries.com. Follow Loop on Twitter: @loopindustries, Instagram: loopindustries, Facebook: Loop Industries and LinkedIn: Loop Industries

Forward-Looking Statements

This news release contains "forward-looking statements" as defined in the U.S. Private Securities Litigation Reform Act of 1995. Such statements may be preceded by the words "intends," "may," "will," "plans," "expects," "anticipates," "should," "could," "projects," "predicts," "estimates," "aims," "believes," "hopes," "potential" or "continute" the negative of such terms or similar words. These forward-looking statements include, without limitation, statements about our market opportunity, our strategies, ability to improve and expand our capabilities, competition, expected activities and expenditures as we pursue our business plan, the adequacy of our available cash resources, regulatory compliance, plans for future growth and future operations, the size of our addressable market, market trends, and the effectiveness of the Company's internal control over financial reporting. Forward-looking statements are not guarantees of future performance, are based on certain assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond Loop's control, and cannot be predicted or quantified and consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with among other things: (i) commercialization of our technology and products, (ii) our status of relationship with partners, (iii) development and protection of our intellectual property and products, (iv) industry competition, (v) our need for and ability to obtain additional funding, (vi) building our manufacturing facility, (vii) our ability to scale, manufacture and sell our products in order to generate revenues, (viii) our proposed business model and our ability to execute thereon, (ix) adverse effects on the Company's business and operations as a result of increased regulatory, media or financial reporting scrutiny and practices, rumors or otherwise, (x) disease epidemics and health related concerns, such as the current outbreak of a novel strain of coronavirus (COVID-19), which could result in (and, in the case of the COVID-19 outbreak, has resulted in some of the following) reduced access to capital markets, supply chain disruptions and scrutiny or embargoing of goods produced in affected areas, government-imposed mandatory business closures and resulting furloughs of our employees, government employment subsidy programs, travel restrictions or the like to prevent the spread of disease, and market or other changes that could result in noncash impairments of our intangible assets, and property, plant and equipment, (xi) the outcome of the current SEC investigation or recent class action litigation filed against us, (xii) our ability to hire and/or retain qualified employees and consultants and (xiii) other factors discussed in our subsequent filings with the SEC. More detailed information about Loop and the risk factors that may affect the realization of forward-looking statements is set forth in our filings with the Securities and Exchange Commission ("SEC"). Investors and security holders are urged to read these documents free of charge on the SEC's web site at http://www.sec.gov. Loop assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise.

For More Information:

Media Inquiries:

Stephanie Corrente
Loop Industries, Inc.
+1 (450) 951-8555 ext. 226
[email protected]

Investor Inquiries:

Greg Falesnik
MZ Group-MZ North America
+1 949-259-4987
[email protected]
www.mzgroup.us

SOURCE: Loop Industries, Inc.