Loop Industries, Inc.

good morning ladies and gentlemen thank you for standing by welcome to loop industries second quarter 2025 earnings call my name is emily and i'll be coordinating your call today after the presentation there will be the opportunity for you to ask any questions which you can do so by pressing star followed by the number one on your telephone keypad this conference is being recorded today october 16 2024 and the press release accompanying this conference call was issued yesterday October 15th, 2024. On our call today are Luke Industries, Chief Executive Officer, Daniel Solomita, Fadi Manzoor, Chief Financial Officer, and Kevin O'Dowd, Head of Investor Relations. I would now like to turn the conference over to Kevin to read a disclaimer about forward-looking statements.

Thank you, Operator. Before we get started, let me remind you that today's call will include forward-looking statements, then the meaning of the securities laws, These forward-looking statements relate to, among other things, current plans, expectations, events, and industry trends that may affect the company's future operating results and financial position. Such statements involve risks and uncertainties, and future activities and results may differ materially from these expectations. Additional information concerning these statements and related risks and uncertainties is contained in the Risk Factors and Forward-Looking Statements section of our latest annual report from Form 10-K and our quarterly report Form 10-Q filed with the SEC yesterday and yesterday's press release. Copies of these documents are available at sec.gov or from our investor relations department. At this time, I'd like to turn the call over to Daniel Salamita, Chief Executive Officer of Loop Industries. Please go ahead, Daniel.

Good morning, everyone. Thank you very much for joining today's call. So it was a pretty significant quarter for us. Obviously, the REIT financing, we've been talking about it for quite a while now, so we're at the last legs of concluding the transaction with REIT. As we previously announced, Société Générale, the large French financial institution, acquired 75% stake in REIT management and an initial commitment of $250 million with potential to bring that up to $350 million, and Reed is going to be raising additional financing from other sources as well. So we're really excited about partnering with Reed in their new venture for the energy transition in Europe. I think they'll be a great long-term financial partner and strategic partner for Loop for financing and also for building out our capacity in Europe. The transaction is scheduled to close in November. Regulatory approval on Reed's side is imminent, so everything is going according to plan there. There's a little bit of a delay in the schedule, but nothing major. And so we're expecting the entire transaction to close in November, and Loop will receive the financing from Reed. Just in case there are any delays, we don't foresee any delays, but in case there would be any delays, myself and one of the other lead directors have agreed to lend the company $2 million to allow our liquidity to go through until mid-February in case there would be any type of delay on getting the financing from REIT. But we don't anticipate that whatsoever. But it's just an insurance policy in case it's needed. So, yeah, we're really excited about closing the REIT deal and moving the company forward on the commercialization side. Most of the quarter, we've been really working diligently on our project in India. I still believe that India is the ideal location for the facility. Low-cost manufacturing being competitive in the PET world, no matter what the price of PET does. The past couple of years after COVID, we saw capexes go up, and we saw the price of commodities and plastics come dramatically down, so there's a big delta. In those years, at the end of COVID, all projects around the world looked really attractive because prices of PET and all plastics were very high, but that reality didn't last. As inflation picked up and interest rates picked up, a lot of the consumer good companies were more focused on cutting costs rather than looking at ESG so closely. And so everyone started going back and buying, you know, virgin PET plastic at very, very cheap prices because China is oversupplying the world in cheap PET. And therefore, you know, that really put a lot of pressure on seeing projects around the world, which ones make sense and which ones are just too expensive. For us, moving into the Indian opportunity allows us to be super competitive no matter what the price of PET does. Having a low-cost manufacturing strategy in India, I believe, is really going to pay off big time in the future. In India, we have a great partner in Esther. They have tons of experience in the polyester world. They've been making PET since 1985. They have multiple facilities across India that produce virgin PET and other products. specialty products as well. So great partner with Esther. They bring in a lot of all of the low-cost manufacturing, construction of the facilities, and sourcing of the raw material. We hired a British engineering firm with a large presence in India to be able to do a land survey for us. So we looked at all the different regions across India to where would be the best place to implement the plant. The criteria really for The plant was looking for good infrastructure near a seaport as most of our product will be exported around the world. Infrastructure, roads, bridges and petrochemical infrastructure Low-cost manufacturing, so a skilled labor force, low-cost labor force, green energy, which is really important for us, and the ability close to the polyester manufacturing hubs because the main part of our waste that will be the input feedstocks for our facility will be coming from the polyester textile industry. And so we did a large study, went out and viewed 20 different sites around the world. We ended up choosing the Gujarat province, which is just north of Mumbai. as the location for the facility. It really checks all of those boxes. Labor force, very skilled labor force, a lot of petrochemical industry in that area, and low-cost labor, good infrastructure near the seaport, green energy. So 100% of the main energy source from the facility will be biomass, So replacing all of the main natural gas will be done through biomass, which is the rice husk. So the waste product of the rice manufacturing process will be used as our primary energy source, which is 100% renewable energy, which is fantastic for us. When we're looking at sustainability and a green product, having 100% biomass is really key for us. And the big part is being close to the polyester fiber supply chain. So we've already secured a significant amount of polyester fiber that we'll be using at the facility. We're processing it in our plant in Montreal every day. So we have all of the knowledge about the different suppliers. We're qualifying all the different suppliers. So it's basically waste polyester fiber coming from the sewing factories all across India, especially in the Gujarat province, the Surat area. which enables us to offer a very special product to the customers, which is a polyester resin, fiber grade resin made from textile waste. So textile to textile recycling. I firmly believe that textile to textile recycling is going to be the largest driver in the future of this business. The brands, the apparel brands need a solution for recycling. Today, the only sustainable materials they can get from polyesters, the mechanical recycling of water bottles. But as legislation comes in, as regulation comes in, forcing more recycled content on the bottle industry, bottles have to stay with bottles and bottles can no longer be going into the fiber industry. So being able to supply fiber to fiber, which, you know, loops technology is one of the only technologies in the world able to produce fiber-to-fiber technology for the brand is going to be a huge part of the future of our technology and of Loop's future. So dealing with all the large apparel brands and supplying this new wave material for them. So we see a lot of interest from all the apparel brands. And being in India is close to all of their supply chains. So that's really a key for us. You know, that's where after the resin is sold and has to get spun into a fiber and texturized, dyed, and then turned into a garment. So being close to that supply chain, and India offers all of that supply chain, is really critical. So yeah, the Indian project is really exciting, and it's moving forward, finalizing all of the engineering packages and looking forward to breaking ground on this facility. The REIT financing and all of the other, you know, all of the conditions of the REIT financing will be met, and then we'll be fully financed to be able to execute on our project in India. In the market side, we're seeing strong customer demand from the fiber-to-fiber industry, obviously, but also from the bottle grade that needs the very high-quality PET products. You know, which loops material were FDA approved, Health Canada approved, REACH certification approved for food grade plastics. We also have pharmaceutical grade certification, which is even a higher qualification than the food grade plastics. So we're seeing a lot of interest from across the board. There was a little bit of a time, like I said, After COVID, when inflation kicked up or brands were really looking at cutting costs rather than focusing on ESG, now we're seeing that trend come back slowly. As inflation comes down, as interest rates are coming down, brands are, again, very interested on the ESG side. So working with all of the large beverage industry customers who are looking for top quality material. Yeah. Regulation also in Europe coming in 2025 for 50% recycled content is another big opportunity where the European beverage brands are now forced to put 50% recycled content starting in January. So that's going to be a big push, and most of our material from India will be exported. That's all for me. I'll hand it over to Fadi on the CFO side to give you a quick update on the financials.