Loop Industries, Inc., a clean technology company whose mission is to accelerate a circular plastics economy by manufacturing 100% recycled polyethylene terephthalate (“PET”) plastic and textile-to-textile (“T2T”) polyester fiber, has secured €10 million through a convertible preferred security financing with Reed Societe Generale Group, a European investment firm majority-owned by the bank Societe Generale. Additionally, as part of the Reed Societe Generale Group transaction, Loop has finalized the sale of its first Infinite Loop technology license, generating an initial €10 million payment, with additional milestone-based payments from Reed Societe Generale Group to follow.

The Reed Societe Generale Group transaction marks a pivotal step in Loop’s commercialization strategy, enabling the deployment of its patented recycling technology across Europe and supporting capital investment in cost-effective manufacturing regions, including its joint venture in India with strategic partner Ester Industries Ltd. Proceeds from the financing and licensing deal will fund the Indian project and Loop’s operational cash flow needs.

Key terms of the €10 million convertible preferred security include: 13% PIK dividend rate, five-year term, and convertible to Loop common stock at $4.75 per share or redeemable in cash.

The technology license will be granted to a European partnership owned 90% by Reed Societe Generale Group and 10% by Loop, which is being formed to develop Infinite Loop manufacturing facilities in Europe. Loop retains the right to increase its equity stake in the European manufacturing facility, as well as potential future facilities, to a maximum of 50% for each facility. The license is to build one Infinite Loop manufacturing facility in Europe. Future facilities under this partnership will require the purchase of additional technology licenses from Loop.

The license sale underscores the commercial readiness of Loop’s technology, validated by four years of successful operations at its Terrebonne facility, which supplies bottle-grade PET resin for consumer packaging and T2T polyester fiber to advance circular fashion for apparel brands. Loop is committed to expanding the reach of its proven solution to the plastic waste global issue by partnering with well-financed, reliable customers through technology licenses and engineering services. This strategy allows Loop to address global demand in regions where it does not plan to build facilities, driving further growth and value creation while focusing Loop’s internal resources and capital on direct equity investments.

With regulatory approval for Societe Generale’s acquisition of a 75% stake in Reed Societe Generale Group finalized, it is positioned to deploy capital into this and other projects. The previous condition precedent to closing relating to government funding is no longer applicable, although Loop expects that such additional financing will be available when the Indian project is approved to begin construction. Funding for both the financing and the initial payment for the technology license is expected within seven business days following the incorporation of the European partnership company.

Julien Touati, CEO of Reed Societe Generale Group, comments: “Reducing dependency on virgin plastics is a global challenge. We are proud to support the rollout of Loop’s technology in Europe by becoming the majority shareholder of this European partnership. This strategic investment allows us to leverage Loop’s unique expertise and strong relationships with world-class brands committed to decarbonizing their supply chains. It fits perfectly with our ambition to actively contribute to the industrialization of Europe’s circular economy, significantly reduce pollution, and foster sustainable growth.”

“The sale of our first technology license is a transformative milestone, proving the scalability and market readiness of our Infinite Loop technology,” says Daniel Solomita, CEO and founder of Loop Industries. “Our financing agreement and partnership with Reed Societe Generale Group propels us into a new phase of growth – expanding into Europe with strategic precision while advancing our flagship Infinite Loop project in India. These strategic steps align with our long-term investment vision and underscore our commitment to innovation, scalability, and delivering exceptional value for our shareholders. I look forward to working closely with Julien and his team at Reed Societe Generale Group in leading the circular economy in plastic packaging and circular fashion in Europe.”