Loop Industries’ India Facility Timeline Shifts and Offtake Uncertainty Highlight Earnings Call Contradictions

Date of Call: Jan 15, 2026

Business Commentary:

Project Progress and Financing:

• Loop Industries reported that its Infinite Loop India manufacturing facility is on budget and on schedule, with construction expected to be completed by the end of 2027.
• The company has executed a supply contract with Nike, securing an anchor customer for the facility.
• Debt syndication is progressing well, with several term sheets received for project debt financing.
• The timing aligns with European regulations mandating more recycled content in clothing, expected to be enforced in 2028.

Customer and Market Developments:

• Loop's technology is uniquely suited for recycling post-consumer textile waste due to its low-temperature depolymerization process.
• The company is in discussions with several CPG and apparel brand companies to secure additional offtake agreements.
• European regulations are driving demand for textile-to-textile recycling, positioning Loop to capitalize on this market shift.

Financial Management and Cost Reduction:

• Cash operating expenses for the quarter were $2.2 million, reflecting a year-over-year decrease of $1.1 million.
• The company has total liquidity available of $7.7 million, with plans to decrease operating expenses further by transferring more costs to the joint venture in India and the European project.
• The focus is on raising remaining financing for equity contributions and operating expenses until the start-up of the Indian facility.

Strategic Partnerships and Expansion:

• Loop Industries has partnered with Reed Societe Generale Group for a project in Europe, with site selection narrowed down to three potential locations.
• The European facility is expected to be operational by the end of 2027, with engineering and milestone payments covering Loop's back-office expenses for several years.
• The company is leveraging its existing customer relationships and technology to expand into both the packaging and textile markets.

Technological Advantages and Market Positioning:

• Loop's low-temperature methanolysis technology allows it to recycle complex textile waste, unlike traditional high-temperature methods.
• The company is positioned to capture a significant share of the global polyester fiber market, which accounts for 66% of the world's polyester production.
• The ability to serve both the textile and packaging markets provides Loop with a competitive advantage, enabling it to adapt to fluctuating demand.

Sentiment Analysis:

Overall Tone: Positive

• CEO reported 'positive developments', highlighted that projects are 'on budget and on schedule', described 'steady progress', and expressed confidence in 'the financing as well'. He stated 'we're really confident in the financing as well. So looking forward to getting all this done in this quarter.'

Q&A:

• Question from Gerard Sweeney (ROTH Capital Partners): Just curious, how much of the facility in India is under contract? And you have Nike, and I believe you have a few other people.
  Response: Expect 5 to 6 total customers; currently have Taro Plast and Nike, with negotiations underway with several other CPG and textile companies to secure the entire capacity.

• Question from Gerard Sweeney (ROTH Capital Partners): On that front, or pricing, I know you don't necessarily want to give pricing but maybe in broad strokes or broad terms, textile and packaging, is it similar pricing and margins?
  Response: Target average sales price for the facility; textiles currently command a slightly higher premium due to regulatory drivers and uniqueness, but both markets are served with comparable margins.

• Question from Gerard Sweeney (ROTH Capital Partners): Are you still going to be able to market the textile and packaging with some of that marketing opportunity like Loop -- made with Loop recycled product?
  Response: Yes, will continue marketing on both sides; for textiles, uses the sub-brand 'twist' and sees opportunities for co-marketing and co-branding around circularity.

• Question from Gerard Sweeney (ROTH Capital Partners): Just last question, just time line for the India facility.
  Response: Project is on schedule to have construction completed in Q4 2027, with detailed engineering underway and debt financing anticipated in the coming months.

• Question from Marvin Wolff (Paradigm Capital Inc.): I just had a question with respect to the German site selection that's going on now. How big a plan would that be once that comes on board?
  Response: Same size as the Indian facility, 70,000 tons capacity, focused mainly on the packaging side but could also handle textile recycling.

• Question from Marvin Wolff (Paradigm Capital Inc.): And if you could just remind us, what is the size of the debt package you're looking at?
  Response: For India, the debt package is $130 million, with Loop's equity contribution being approximately $28 million.

• Question from Varyk Kutnick (Divyde Capital Partners): Does that same [CapEx per pound] number translate to the European facility?
  Response: European facility will be a little more expensive due to module transportation and reconnection costs, but offset by existing site utilities, keeping CapEx generally in the same range.

• Question from Varyk Kutnick (Divyde Capital Partners): And obviously, is it safe to assume that your return on invested capital... your payback period would be significantly better.
  Response: Yes, payback period is less than 3 years in India; cash flows from the joint venture will fund future growth, including a second facility on the same site.

• Question from Varyk Kutnick (Divyde Capital Partners): The Nike deal, I don't think people have mentioned that and what a big deal that itself.
  Response: Nike is a huge honor as an anchor customer; they are a true innovator moving quickly to adopt textile-to-textile recycling.

Contradiction Point 1

Timeline for India Facility Operational Status

Contradictory statements on when the India facility will be operational.

What is the timeline for the India facility's construction and commissioning? - Gerard Sweeney (ROTH Capital Partners)

2026Q3: Construction is targeted for completion in Q4 2027, with the facility operational by the end of that year. - Daniel Solomita(CEO)

What is the current status of the India project's construction timeline and commissioning? - Brandon B. Rogers (ROTH Capital Partners)

2026Q2: The project is on schedule to be completed by the end of 2027... Products are expected to start shipping in 2028. - Daniel Solomita(CEO)

Contradiction Point 2

Customer Pipeline and Offtake Status

Contradiction on the status and number of signed customer offtake agreements.

What percentage of India facility's output is contracted with Nike? What are the other potential customers and the packaging versus textile demand mix? - Gerard Sweeney (ROTH Capital Partners)

2026Q3: The facility is expected to have 5–6 total customers. Currently, Taro Plast and Nike are under contract. - Daniel Solomita(CEO)

Can you provide details on the anchor offtake agreement with the global sports brand, the percentage of the 70,000-ton capacity covered by contracted offtake agreements, and whether additional CPG offtake agreements are expected before year-end? - Brandon B. Rogers (ROTH Capital Partners)

2026Q2: The company does anticipate finalizing other supply agreements by the end of the year. - Daniel Solomita(CEO)

Contradiction Point 3

Future Financing for Expansions

Inconsistency regarding the funding source for future facility expansions.

How will future facility expansions be funded? - Varyk Kutnick (Divyde Capital Partners)

2026Q3: Future growth will be 100% funded through cash flows from the India facility. - Daniel Solomita(CEO)

How are you approaching diversification—expanding India's capacity beyond 70,000 tons or allocating incremental demand to other sites? - Varyk Kutnick (DIVYDE Capital Partners)

2026Q2: The European project is accelerated... with potential to generate revenue from engineering services and milestone payments that cover back-office expenses. - Daniel Solomita(CEO)

Contradiction Point 4

Project Timeline and Readiness

Contradiction on construction readiness and schedule certainty.

What is the construction and commissioning timeline for the India facility? - Gerard Sweeney (ROTH Capital Partners)

2026Q3: The project is on schedule and on budget. - Daniel Solomita(CEO)

What is the latest timeline for the India JV, have any binding offtake agreements been finalized, and what key risks could delay the 2027 commercial operations target? - Brandon B. Rogers (ROTH Capital)

2025Q4: Break ground is scheduled for the second half of 2025. The gating item is securing offtake agreements... no binding agreements are finalized yet. - Daniel Solomita(CEO)

Contradiction Point 5

Financial Structure and Funding

Contradiction on the funding mechanism for equity contribution to the India JV.

What is the debt package size and Loop’s equity contribution for the India facility? - Marvin Wolff (Paradigm Capital)

2026Q3: Loop’s equity contribution is approximately $28 million, which is about 20% of the project cost. - Daniel Solomita(CEO)

How many quarters of runway remain, what portion of Quebec government financing is untapped, and will incremental capital be required for the $25M India JV equity commitment? - Brandon B. Rogers (ROTH Capital)

2025Q4: A financing gap exists, and discussions are ongoing with strategic partners to close it. - Daniel Solomita(CEO)