Loop Industries, Inc. Common Stock 2027 Q2 Earnings Call

Before we begin, please note that today's discussion will include forward-looking statements within the meaning of U.S. securities laws. These statements relate to our expectations, projections, beliefs, future plans and strategies, anticipated events, and other performance matters. Forward-looking statements involve known and unknown risks and uncertainties that may cause actual results to differ materially from those expressed or implied. For a complete discussion of these risks and uncertainties, please refer to risk factors and forward-looking statement sections in our most recent Form 10-K and Form 10-Q and other filings within the Securities and Exchange Commission. These documents, along with yesterday's earnings release, are available on the SEC's website and through investor relations section of the Loop Industries website. The company undertakes no obligation to update or revise any forward-looking statements except as required by law.

With that, I would like to now turn the call over to Loop Industries founder and Chief Executive Officer, Daniel Solomita. Daniel, please go ahead. My name is Daniel Solomita.

I am the founder and CEO of Loop Industries. I will cover the continuing progress of our major commercialization project in India, and our CFO, Spencer Hart, will provide an update to the company's liquidity, financing situation, and the activities of the recently formed special committee. Our Indian joint venture with Ester Industries has made the decision to reduce the capacity of the first facility in India from 70,000 kilotonnes to 45,000 kilotonnes per annum. This change will significantly lower the capital cost of the facility and the resulting debt and equity financing needs. Toyo Engineering is currently completing its detailed work to finalize the new cost estimate. The change will also allow for a faster construction timeline. If we are successful in raising our capital, we would expect to begin construction in Q1 calendar of 2027 and complete construction by the end of 2028.

The smaller facility is expected to provide attractive economic returns due to the advantages of Loop's low temperature and no pressure added technology, which produces virgin quality PET resin and polyester fiber at very low operating costs, together with being located in a low-cost environment in India, which also offers access to plentiful textile waste. The Indian facility is still contemplated to be the first of two facilities on the same site. The second facility is planned to be substantially larger than the first one and would follow after a successful start-up of the first facility. We are engaged in positive discussions with a major bank in India, which is a long-term relationship of our Indian joint venture partner regarding the project debt facility. These discussions are progressing well. The team from the bank in India started the TDD study, which is the technical due diligence portion.

There was a team from India that came to visit our facility in Montreal a few weeks ago. We successfully completed the technology assessment of the TDD study, and that will be used by the debt lender as documentation for their loan for the debt piece in India. We are fortunate that our strategic partners in India and Europe are committed to their relationships with Loop and to the success of our commercialization projects in their respective geographical areas. I will now hand over to Spencer and then revert with a closing comment.

Thanks, Daniel. We have maintained a strong focus on cost control, and that's allowed us to reduce our overhead. Our cash operating expenses for the quarter were $1.6 million, a year-over-year reduction of $800,000. Our run rate has continued to decline into the third quarter. These savings reflect targeted reductions in personnel, insurance, and other operating expenses, as well as the waiver of cash compensation by our outside directors. As of August 31st, we reported total available liquidity of $1.9 million. To address our capital needs and secure funding for Loop's equity contribution to our India joint venture, our board formed a special committee in September of 2026. The committee is actively working with advisors to evaluate a full range of financing alternatives, including equity, debt, and non-dilutive options.

Importantly, rescaling our first commercial facility in India will reduce the project's overall capital requirements, directly lowering our required equity contribution. All key elements of the project in India are in place, including an experienced joint venture partner, secured land, advanced engineering designs, reliable feedstock sourcing, and strong customer demand. The final step before reaching the construction stage is securing the financing. Together with the equity contribution from Ester, our 50/50 joint venture partner, and the project debt currently being syndicated, we are actively working towards fully funding the facility. With that, I'll turn the call back to Daniel for closing remarks.

Thank you, Spencer. I would like to close by saying, notwithstanding the current low stock price and our efforts on raising the capital required for the facility, both our management team, board of directors, and partners continue to strongly believe in Loop's potential for significant long-term value creation based on our technology, our commercialization projects in India and Europe, and the needs of the apparel and global consumer packaging good brands' consumers for high-quality recycled product at a competitive price. With that, we will open the call to questions.

The Toyo Engineering group that has been hired to complete the final cost estimate will be completing that in the coming weeks. We don't have the final number yet, but as soon as we do have the final number, we'll be able to share that. But it will be significantly lower than the 70,000 ton plant that we had initially- Okay designed.

The time for construction, startup, and commissioning is a total of 20 months. Therefore, if the funding is secured and we start the project in beginning of 2027 calendar year, we would have the plant up and running commercially producing material by the end of 2028.