Update on the customer pipeline, how much capacity is left to sell, and what the pipeline looks like.

Loop is in negotiations with several leading brands in textile and consumer packaging. Once these advanced agreements are finalized, most of the 70,000-ton facility will be locked in via contracts or LOIs. The challenge is the textile industry's complex supply chain, making long-term contracts difficult, but appetite for the material is strong due to competitive pricing. “with the customers that we are in negotiations with now, we'll have enough of the capacity sold to begin the project.”

Clarify if the LOI converts to a final contract and the total potential volume from the customer.

The LOI will not be renegotiated into a final contract but will convert to spot market buying once the plant is operational. The customer's total appetite is 90,000 tonnes per year, which is a significant opportunity for future expansion, including a planned second facility. “The LOI is not going to be renegotiated into a final contract. We have the volume. We have the price, and now it's going to be bought in the spot market for the plant once the plant is open.”

How Loop plans to fund operating expenses and remaining CapEx over the next 12 months, specifically cash runway and reliance on equity/debt.

Existing liquidity combined with revenue from engineering contracts (first one starting September 2026) will provide sufficient cash for ongoing back office operations for the foreseeable future. An additional EUR 10 million licensing payment is expected in late 2027 from the European project. For the Indian JV equity, Loop prioritizes non-dilutive options like structured debt. “with the liquidity we have, on hand plus our engineering contracts that I mentioned during the call, we will have sufficient cash for ongoing operations for the foreseeable future from those 2 sources”

LOOP

Loop Industries (LOOP) Q1 FY27 earnings call: guidance and Q&A

Earnings call· May 2026 (Q1 FY27)· Materials· Jul 15, 2026

Source: earnings call transcript

Executive summary

Loop Industries Q1 FY27 — Project Development and Financing Progress

Loop Industries is making significant strides in advancing its key projects in India and Europe, securing customer commitments and progressing financing efforts. The company is focused on non-dilutive capital for its Indian joint venture equity, while engineering contracts are set to fund ongoing operations. Despite positive momentum, the company's current liquidity necessitates successful capital raising to support its ambitious project timelines.

Highlights

Secured an LOI for 15,000 tonnes of material at a fixed price from a leading textile apparel brand, with potential for 90,000 KTA.
Applied for $28 million in subsidies from the state of Gujarat for the Infinite Loop India project, enhancing financial viability.
Advanced debt financing for the India JV, receiving additional term sheets and commencing technical due diligence.
Secured an engineering contract for the Infinite Loop Europe project, scheduled to begin in September 2026, providing cash flow for back office expenses.
Reduced cash overhead to approximately $500,000 per month, driven by lower employee compensation and insurance costs.

Concerns

Current liquidity of $3.6 million as of May 31, 2026, requires additional capital raising for the Indian joint venture equity portion.
The LOI for 15,000 tonnes will convert to spot buying once the plant is operational, not a long-term contract, which may impact long-term revenue visibility.

Guidance & targets

Category	Target	Timeline	Confidence
Infinite Loop India project debt financing conclusion	Fall of this year high materiality	Fall 2026 · FY27	High
Infinite Loop India project groundbreaking	Fall of this year high materiality	Fall 2026 · FY27	High
Infinite Loop India project operational date	2028 high materiality	CY2028 · FY29	High
Infinite Loop Europe first phase engineering contract start	September of this year medium materiality	September 2026 · FY27	High
Infinite Loop Europe first phase engineering contract completion	Q1 2027 medium materiality	Q1 · FY27	High
Infinite Loop Europe second phase engineering contract start	Middle of 2027 medium materiality	Mid-2027 · FY28	High
Infinite Loop Europe Final Investment Decision (FID)	End of 2027, beginning of 2028 high materiality	Late 2027/Early 2028 · FY28/FY29	Medium
Infinite Loop Europe project operational date	2030 high materiality	CY2030 · FY31	Medium
Funding for Loop's equity for Indian JV	Completed in the next few months high materiality	Next few months · FY27	Medium

Orderbook & backlog

LOI for material supply (textile brand) 15,000 tonnes Q1 FY27

Fixed price, will convert to spot market buying once plant is operational. Customer has total appetite of 90,000 KTA.

Deals & partnerships

Ester Industries Joint Venture

Joint venture for the Infinite Loop India project. KPMG hired to arrange project debt. Loop is responsible for 15% of the equity.

Societe Generale Group Licensing Agreement EUR 10 million (initial down payment) + EUR 10 million (investment) + EUR 10 million (future licensing payment)

For the Infinite Loop Europe project. SocGen chose a site in Schneider, Germany (owned by BASF). Loop is in final negotiations for the first phase of an engineering contract starting September 2026. This project will use modular construction.

Capital programs

Infinite Loop India Project underway

Funding: 70% debt, 30% equity (Loop responsible for 15% of equity)

Start: Fall 2026 (groundbreaking)

Joint venture with Ester Industries. Debt financing is in technical due diligence. Applied for $28 million in state subsidies over 8 years. 18-month construction period.

Infinite Loop Europe Project (Modular Construction) underway

Funding: Licensing agreement with Societe Generale Group; Loop not injecting capital for equity

Start: September 2026 (first engineering contract)

Benefit:70,000-ton Infinite Loop plant

First plant to be built in Schneider, Germany, owned by BASF. Loop's engineering team will deliver a pre-FEED package. This is the first modular construction project, with modules built in India and shipped to minimize local labor costs. Loop generates cash from engineering contracts, licensing payments, and module sales.

Risks & headwinds

Equity financing for India JV Next few months, in line with debt closing in Fall 2026

Loop is responsible for 15% of the equity in the 70-30 debt-to-equity split for the India JV.

Mitigation:Evaluating non-dilutive options, such as a structured debt facility.

Liquidity management Ongoing

$3.6 million of liquidity as of May 31, 2026.

Mitigation:Reduced cash overhead to $500,000 per month; engineering contracts expected to generate significant revenue and profitability; additional EUR 10 million licensing payment expected late 2027.

Customer contract structure for India JV Upon plant operation (2028)

LOI for 15,000 tonnes will convert to spot market buying, not a long-term contract.

Mitigation:LOI provides comfort to lenders; customer has a total appetite of 90,000 KTA, indicating strong demand; company is negotiating additional contracts.

Q&A highlights

What are the remaining steps for the India JV debt financing, the timeline to close, and if the 70-30 debt-to-equity split remains?

The 70-30 debt-to-equity split is confirmed with a fair interest rate. Remaining steps include technical due diligence by the consortium, which Loop is confident about due to prior validations. Final negotiations and closing are expected in Fall 2026, aligning with the project's groundbreaking. Customer contracts are also a key piece for lenders.

“the timing is going to be in the fall of this year, which falls in line with the project breaking ground.”

asked by Gerard Sweeney · answered by Daniel Solomita

2 min read 6 chapters

Detailed narrative

Infinite Loop India Project Progress

The Infinite Loop India project, a joint venture with Ester Industries, is making significant strides in debt financing. KPMG is arranging project debt, with additional term sheets received from new lenders. The consortium of debt lenders is now initiating technical due diligence, a process Loop Industries is confident in given prior successful due diligence by other partners.

The project is targeting a 70-30 debt-to-equity split, with Loop responsible for 15% of the equity.

Customer Contracts and Offtake Agreements

Loop Industries secured a Letter of Intent (LOI) for 15,000 tonnes of material at a fixed price from a major textile apparel brand. This customer, typically a spot buyer, signed the LOI to support the project and has a total appetite of 90,000 KTA.

While the LOI will convert to spot market buying upon plant operation, it provides comfort to lenders. The company is in advanced negotiations for additional contracts to secure sufficient volume for construction to begin.

Subsidies and Financial Viability

The company has applied for subsidies from the state of Gujarat for its India project. The project is eligible for approximately $28 million to be returned to the joint venture over an 8-year period, significantly enhancing the financial viability and returns for the project. This subsidy program is specifically for clean technology projects in the region.

Infinite Loop Europe Licensing Project

For the European project with Societe Generale, a site in Germany owned by BASF has been chosen for the first Infinite Loop Europe plant. Loop is finalizing negotiations for the first phase of an engineering contract, set to begin in September 2026.

This modular construction project will deliver a pre-FEED engineering package for a 70,000-ton plant and is expected to provide sufficient cash flow for Loop's back office expenses for the foreseeable future.

Liquidity and Capital Allocation

As of May 31, 2026, Loop Industries had approximately $3.6 million in liquidity, including its credit facility. The company has reduced its cash overhead to about $500,000 per month through employee compensation and insurance cost reductions. Funding from the National Research Council of Canada (CAD 2.9 million) also contributes to liquidity.

Loop is actively evaluating non-dilutive options, such as structured debt, to fund its equity requirement for the Indian joint venture.

Modular Construction Strategy

Loop Industries is adopting a modular construction approach for its future projects, starting with the European plant. This strategy involves building plant modules in India and shipping them to various regions globally. This method is intended to minimize local labor rates and reduce overall construction costs, serving as a roadmap for low-cost manufacturing expansion.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.