Loop Industries, Inc.

Three and Six Months Ended August 31, 2025 and 2024

Notes to the Condensed Consolidated Financial Statements

1. The Company, Basis of Presentation and Liquidity Risk Assessment

The Company

Loop Industries, Inc. (the “Company,” “Loop,” “we,” or “our”) is a technology company that owns patented and proprietary technology that depolymerizesno and low-value waste polyethylene terephthalate (“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 pre-commercialization stage with limited revenues.

Basis of Presentation

These unaudited interim condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“US GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures included in these unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company's Annual Report on Form10-K for the fiscal year ended* February 28, 2025*, filed with the SEC on* May 29, 2025,as amended by the AmendmentNo.* 1 on Form10-K/A filed with the SEC on* May 30, 2025.*The unaudited interim condensed consolidated financial statements comprise the consolidated financial position and results of operations of Loop Industries, Inc. and its subsidiaries, Loop Innovations, LLC and Loop Canada Inc. All subsidiaries are, either directly or indirectly, wholly owned subsidiaries of Loop Industries, Inc. (collectively, the “Company”). The Company owns, through Loop Innovations, LLC, a 50% interest in a joint venture, Indorama Loop Technologies, LLC, which is accounted for under the equity method. The Company also owns a 50% interest in a joint venture, Ester Loop Infinite Technologies Private Limited ("India JV"), which is accounted for under the equity method.

Intercompany balances and transactions are eliminated on consolidation. The condensed consolidated balance sheet as of* February 28, 2025*, included herein, was derived from the audited financial statements as of that date, but doesnot include all disclosures including certain notes required by US GAAP on an annual reporting basis. In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements present fairly the financial position, results of operations, comprehensive loss and cash flows for the interim periods. The results for thethree- andsix-month periods ended* August 31, 2025* arenot necessarily indicative of the results to be expected for any subsequent quarter, for the fiscal year ending* February 28, 2026*, or for any other period.

All monetary amounts in these notes to the condensed consolidated financial statements are in thousands of U.S. dollars unless otherwise specified, except for per share data.

Liquidity Risk Assessment

Since its inception, the Company has been in the pre-commercialization stage withno recurring revenues, and its ongoing operations and commercialization plans have been financed primarily by raising equity and debt. The Company has recurring net losses, negative cash flow from operating activities since its inception, and has a net capital deficiency. As at* August 31, 2025*, the Company’s available liquidity was $9,857, consisting of cash and cash equivalents of*$7,310* and an undrawn amount on a senior loan facility from a Canadian bank of*$2,547*.

Management continuously monitors the Company's cash resources against its cash commitments to determine whether there is sufficient liquidity to fund its costs for at leasttwelve months from the financial statement issuance date. In preparing its going concern assessment in accordance with US GAAP, the Company included cash flows that meet the "probable" threshold under ASC205-40 in its liquidity assessment and has excluded forecasted cash flows that lack substantive support or binding commitments. Based on this assessment, management has determined that current available liquidity will be sufficient to meet the Company’s obligations, commitments and budgeted operating expenditures for at leasttwelve months from the issuance date of these unaudited interim condensed consolidated financial statements.

The Company's ability to move to the next stage of its strategic development and participate in the construction of manufacturing facilities through joint ventures is dependent on, among other factors, whether the Company can obtain the necessary funding through a combination of further technology licensing and engineering services arrangements, government incentive programs, and/or the issuance of debt and/or equity. Management is pursuing options to secure financing for Loop's equity contribution for the India JV and to cover ongoing cash requirements through to the start of commercial operations in India. There isno 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 the Company. Inability to secure additional financing on favorable terms, or to obtain such financing at all when required, would have an adverse effect on the Company’s financial position and on its ability to execute its business plan.

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2. Summary of Significant Accounting Policies

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 and intangible assets, recoverability of property, plant and equipment, recoverability of tax credits receivable, 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.

Net loss per share

The Company computes net loss per share in accordance with FASB ASC260, Earnings Per Share. Basic loss per share is computed by dividing the net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the year. The Company includes common stock issuable in its calculation. Diluted loss per share is computed by dividing the net loss applicable to common stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential common shares are excluded from the computation if their effect is antidilutive.

For thethree- andsix-month periods ended* August 31, 2025and2024*, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an antidilutive effect. As at* August 31, 2025*, the potentially dilutive securities consisted of 5,493,138 outstanding stock options (2024 –2,771,216),4,256,532 outstanding restricted stock units (2024 –4,461,818), andnil outstanding warrants (2024 –2,357,407)

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Recently adopted accounting pronouncements

In* August 2023,the Financial Accounting Standards Board (“FASB”) issued ASUNo.* 2023-05, Joint Venture Formations, which requires joint ventures to apply a new basis of accounting by measuring assets and liabilities at fair value upon formation. The amendments address diversity in practice by establishing requirements for recognition and measurement of net assets and liabilities on the formation date. The updated standard is effective for fiscal years beginning after* December 15, 2024,including interim periods within those fiscal years. The adoption of this accounting guidance for thesix*-month period ended* August 31, 2025* didnot impact the disclosures in our interim condensed consolidated financial statements.

Recently issued accounting pronouncementsnot* yet adopted*

In* December 2023,the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)2023-09—Income Taxes (Topic740*): Improvements to Income Tax Disclosures, which enhances the transparency and decision usefulness of income tax disclosures. The amendments in this Update address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information and includes certain other amendments to improve the effectiveness of income tax disclosures. The ASU is effective for our annual period beginning after* December 15, 2024and all joint ventures formed on or after January 1, 2025,which for the Company is the annual period ending February 28, 2026.*Early adoption is permitted. Management is currently evaluating the impact that the updated standard will have on our consolidated financial statements and related disclosures.

In* November 2024,the Financial Accounting Standards Board (“FASB”) issued ASUNo.* 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic220-40): Disaggregation of Income Statement Expenses, which requires public business entities to disclose, in interim and annual reporting periods, additional information about certain expenses in the notes to financial statements. The updated standard is effective for annual reporting periods beginning after* December 15, 2026,and interim reporting periods within annual reporting periods beginning after December 15, 2027.*Early adoption is permitted. Management is currently evaluating the impact that the updated standard will have on our consolidated financial statements and related disclosures.

In* November 2024,the Financial Accounting Standards Board (“FASB”) issued ASUNo.* 2024-04, Debt—Debt with Conversion and Other Options (Subtopic470-20): Induced Conversions of Convertible Debt Instruments, which clarifies the accounting for settlements of convertible debt instruments that occur on terms different from the original contractual conversion terms. The amendments introduce a "preexisting contract approach," requiring that, to qualify for induced conversion accounting, the inducement offer must preserve the form of consideration and provide an amount of consideration that isno less than what was issuable under the original conversion privileges. This guidance applies to convertible debt instruments with cash conversion features and to instruments that arenot currently convertible but had substantive conversion features at issuance and at the time the inducement offer is accepted. The updated standard is effective for annual reporting periods beginning after* December 15, 2025,including interim periods within those fiscal years. Early adoption is permitted for entities that have adopted the amendments in ASU2020*-06. Management is currently evaluating the impact that the updated standard will have on our consolidated financial statements and related disclosures.

In* January 2025,the Financial Accounting Standards Board (FASB) issued ASU2025*-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic220-40): Clarifying the Effective Date. This update clarifies the effective date of ASU2024-03, which requires public business entities to provide disaggregated disclosures of certain income statement expenses. Specifically, ASU2025-01 confirms that the guidance in ASU2024-03 is effective for annual reporting periods beginning after* December 15, 2026,and for interim periods within annual reporting periods beginning after December 15, 2027.*Early adoption is permitted. Management is currently evaluating the impact that the updated standard will have on our consolidated financial statements and related disclosures.

In* July 2025,the FASB issued ASU2025*-05, Financial Instruments—Credit Losses (Topic326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic606, including those assets acquired in a business combination. The practical expedient permits an entity to assume that current conditions as of the balance sheet date donot change for the remaining life of the current accounts receivable and current contract assets. This guidance is effective for the Company for its fiscal year and all interim periods beginning* February 1, 2026*on a prospective basis. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this guidance on its condensed consolidated financial statements.

3. Accounts Receivable and Other

Accounts Receivable and Other as at* August 31, 2025* and* February 28, 2025* are comprised of the following:

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4. Prepaid Expenses

Prepaid expenses as at* August 31, 2025* and* February 28, 2025* were as follows:

5. Property, Plant and Equipment, Net

Depreciation expense for thethree- andsix-month periods ended* August 31, 2025* amounted to$36 and$70, respectively (2024 –$79 and$170).

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6. Intangible Assets, Net

Intangible assets as at* August 31, 2025* and* February 28, 2025* were $1,800 and $1,708, respectively.

During thesix-month periods ended* August 31, 2025and2024*, we made additions relating to patent application costs to intangible assets of $133 and $325, respectively.

Amortization expense for thethree- andsix-month periods ended* August 31, 2025* amounted to$61 and$126, respectively (2024 –$50 and$96).

7. Fair Value of Financial Instruments

The following tables presents the fair value of the Company's financial liabilities as at* August 31, 2025* and* February 28, 2025*:

The fair value of cash, restricted cash, accounts receivable and other, and accounts payable and accrued liabilities approximate their carrying values due to their short-term maturity.

8. Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities as at* August 31, 2025* and* February 28, 2025* were as follows:

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9. Investments in Joint Ventures

Joint Venture with Ester

On* May 1, 2024,the Company entered into an agreement with Ester Industries Ltd. (“Ester”), a manufacturer of polyester films and specialty polymers in India, to form a50/50* joint venture based in India (“India JV”). The purpose of the India JV is to build and operate an Infinite Loop™ manufacturing facility in India which will produce lower carbon footprint rDMT, rMEG and specialty polymers, using the Infinite Loop™ Technology. During the year ended* February 28, 2025,*Ester Loop Infinite Technologies Private Limited (“ELITe”) was incorporated as the India JV.

ELITe 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. As such, the Company uses the equity method of accounting to account for its share of the investment in ELITe.

During thesix-month period ended* August 31, 2025*, Loop and Ester madeno contributions (2024 –nil) to ELITe. During thethree- andsix-month periods ended* August 31, 2025*, ELITe incurred losses of $86 and $689, respectively (2024 –nil), resulting in the Company recording its share of the loss on equity accounted investment of $43 and $345 (2024 –nil) for the respective periods. As at* August 31, 2025*, and* February 28, 2025* the carrying value of the Company's investment in ELITe was $923 and $1,267, respectively.

10. Series B Convertible Preferred Stock

The balance of Series B Convertible Preferred Stock as at* August 31, 2025* and* February 28, 2025* was as follows:

During thethree- andsix-month periods ended* August 31, 2025*, the Company recorded PIK dividends of$341 and$681 respectively, (2024 –nil), which were recorded in “Interest and other financial expenses” in our Consolidated Statements of Operations and Comprehensive Loss.

11. Long‑Term Debt

Long-term debt as of* August 31, 2025* and* February 28, 2025*, was comprised of the following:

Investissement Québec financing facility

The Company recorded interest expense on the Investissement Québec loan for thethree- andsix-month periods ended* August 31, 2025* in the amount of$36 and$72, respectively (2024 –$29 and$59) and an accretion expense of$11 and$23, respectively (2024 –$14 and$27). During thesix-month period ended* August 31, 2025*, the Company made repayments of$136 (2024 –$50) on the Investissement Québec loan.

Total repayments due on the Company's indebtedness over the nextfive years are as follows:

Credit facility from a Canadian bank

On* July 26, 2022,Loop Canada, Inc., a wholly-owned subsidiary of the Company (the "Borrower"), entered into an Operating Credit Facility (the “Credit Facility”) with a Canadian bank. The Credit Facility allows for borrowings of up to$2,547 in aggregate principal amount. The Credit Facility is secured by the Company's Terrebonne, Québec property and is subject to a minimum equity covenant, tested quarterly with which the Company was in compliance as at August 31, 2025*. All borrowings under the Credit Facility bear interest at an annual rate equal to the bank's Canadian prime rate plus 1.0%. As at* August 31, 2025*, the$2,547 Credit Facility was available and undrawn. As at* August 31, 2024*, the Company had borrowings of $1,587 under the Credit Facility.

On* July 4, 2025,the Borrower, the Company and the Canadian bank executed an amendment to the Credit Facility, modifying the minimum equity covenant to include the balance of Series B Convertible Preferred Stock as at February 28, 2025*of $10,647 in the calculation of stockholders' equity.

On* October 10, 2025,*the Borrower, the Company and the Canadian bank executed an amendment to the Credit Facility, which removed the minimum equity covenant tested quarterlyfor the duration of the term of the Credit Facility.

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12. Stockholders' Equity (Deficit)

Common Stock

During thesix months ended* August 31, 2025*, the Company recorded the following common stock transactions:

During thesix months ended* August 31, 2024*, the Company recorded the following common stock transaction:

13. Revenues

Revenue for thethree-month periods ended* August 31, 2025and2024* were as follows:

Revenue for thesix-month periods ended* August 31, 2025and2024* were as follows:

14. Research and Development Expenses

Research and development expenses for thethree-month periods ended* August 31, 2025and2024* were as follows:

Research and development expenses for thesix-month periods ended* August 31, 2025and2024* were as follows:

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15. General and Administrative Expenses

General and administrative expenses for thethree-month periods ended* August 31, 2025and2024* were as follows:

General and administrative expenses for thesix-month periods ended* August 31, 2025and2024* were as follows:

16. Share-based Payments

Stock Options

The following table summarizes the continuity of the Company's stock options during thethree-month periods ended* August 31, 2025and2024*:

The following table summarizes the continuity of the Company's stock options during thesix-month periods ended* August 31, 2025and2024*:

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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. The principal components of the pricing model for the stock options granted in thesix-month period ended* August 31, 2025and2024* were as follows:

The weighted-average grant-date fair value of options granted during thesix-month periods ended* August 31, 2025and2024* was $0.62 and $2.03, respectively.

A summary of the Company’s nonvested shares as of* August 31, 2025*, and changes during the period ended* August 31, 2025* were as follows:

During thethree-month periods ended* August 31, 2025and2024*, stock-based compensation expense attributable to stock options amounted to $165 and $148, respectively. During thesix-month periods ended* August 31, 2025and2024*, stock-based compensation expense attributable to stock options amounted to $651 and $295, respectively

Restricted Stock Units

The following table summarizes the continuity of the restricted stock units during thethree-month periods ended* August 31, 2025and2024*:

The following table summarizes the continuity of the restricted stock units during thesix-month periods ended* August 31, 2025and2024*:

The Company applies the fair value method of accounting for awards granted through the issuance of restricted stock units. Fair value is calculated based on the intrinsic value at grant date multiplied by the number of restricted stock unit awards granted.

During thethree-month periods ended* August 31, 2025and2024*, stock-based compensation attributable to RSUs amounted to $115 and $214, respectively. During thesix-month periods ended* August 31, 2025and2024*, stock-based compensation expense attributable to RSUs amounted to $4, which includes $(291) for forfeitures recorded in the period, and $437, respectively.

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Stock-Based Compensation Expense

During thethree-month periods ended* August 31, 2025and2024*, stock-based compensation included in research and development expenses amounted to $32 and $131, respectively, and in general and administrative expenses amounted to $248 and $231, respectively. During thesix-month periods ended* August 31, 2025and2024*, stock-based compensation included in research and development expenses amounted to $344 and $261, respectively, and in general and administrative expenses amounted to $311 and $471, respectively.

17. Equity Incentive Plan

On* July 6, 2017,the Company adopted the2017* 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) such number of shares determined by the Administrator of the Plan, effective March 1, 2018.On March 1, 2025,the share reserve was increased by 1,500,000 shares (2024 –1,500,000). 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 ofno* less than the estimated fair value of shares at the date of grant and a lifenot exceeding 10 years from the grant date. However, where a participant, at the time of the grant, owns stock representing more than10% of the voting power of the Company, the life of the options shallnot exceed 5 years.

The following table summarizes the continuity of the units that were authorized for issuance under the Plan as at and during thesix-month periods ended* August 31, 2025and2024*:

*The use of the term “units” in the table above describes a combination of stock options and RSUs.

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18. Subsequent Event

On* September 23, 2025,Loop entered into a Securityholders Agreement with Reed Circular Economy ("RCE"), an affiliate of Reed Management SAS, to establish the framework for the governance, ownership, and operations of Infinite Loop Europe SAS ("Infinite Loop Europe"). Under this agreement, RCE and Loop hold their interests in Infinite Loop Europe on a90/10* basis to pursue the non-exclusive development, financing, construction, ownership, operation, and commercialization of chemical upcycling plants and related products using Loop's technology within Europe. The Securityholders Agreement provides Infinite Loop Europe with priority rights to evaluate European project opportunities, establishes financing arrangements between the shareholders, grants Loop options to participate in project equity, and confirms that Loop retains ownership of its intellectual property while granting the Infinite Loop Europe limited use rights.

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