Loop Industries has granted its India joint venture, ELITe, an exclusive perpetual royalty-bearing license for its depolymerization technology. The agreement establishes a tiered royalty structure that includes both minimum and maximum annual payment thresholds, which apply when net sales exceed $500 million.

The licensing arrangement secures ELITe's rights to utilize the core technology indefinitely, subject to the defined royalty obligations. This structure aligns the financial interests of the joint venture with Loop Industries' intellectual property portfolio.

Deal Structure

The key terms of the agreement are outlined below:

What the Numbers Show

The imposition of both minimum and maximum annual payments on net sales exceeding $500 million indicates a structured revenue-sharing model designed to balance guaranteed returns for the licensor with upside participation for the licensee.

Loop Industries reported a net loss of $3.4 million for the first quarter ended May 31, 2026, missing the analyst consensus estimate of $(0.05) per share with a loss of $(0.07) per share. Quarterly sales of $179,000 missed the analyst consensus estimate of $540,000 by 66.85 percent, representing a 28.97 percent decrease from $252,000 in the same period the prior year. Despite the financial shortfall, the company executed a Letter of Intent (LOI) in June 2026 with a major global apparel company for an initial multi-year offtake agreement targeting up to 15,000 metric tons annually of its proprietary PET fiber-grade resin.

The decline in revenue was attributed to lower engineering services provided to the India joint venture, while the company continues to focus on securing capital for its equity contribution to the ELITe India facility and ongoing pre-operational expenses. Cash operating expenses for the quarter were $1.6 million, reflecting a year-over-year decrease of $1.0 million. At the end of the quarter, total available liquidity stood at $3.6 million.

Operational Updates

Infinite Loop India, the company's strategic joint venture, continues to advance detailed engineering work led by Toyo Engineering India Private Limited. Loop's internal engineering team is meeting project milestones, which generated engineering services revenues during the quarter. The debt syndication process for the India JV facility has progressed to the technology due diligence phase, a critical step toward securing project capital.

In Europe, Infinite Loop Europe, a joint venture with Reed Societe Generale Group, has selected BASF Industriepark Lausitz in Schwarzheide, Germany, as the site for its first facility. The project is moving into the engineering and permitting phase, which is expected to generate engineering services revenue for Loop in the current fiscal year.

Financial Performance

Research and development expenses decreased to $962,000 from $1.3 million, primarily due to lower employee compensation and reduced plant and laboratory operating expenses. General and administrative expenses fell to $1.6 million from $1.6 million, driven by decreases in insurance and professional fees, partially offset by higher stock-based compensation. The company is pursuing various funding options, including non-dilutive and strategic alternatives, to support operations through commercial start-up.

Condensed Consolidated Statements of Operations

Condensed Consolidated Balance Sheets