Attached files
| file | filename |
|---|---|
| EX-99.1 - PRESS RELEASE DATED JUNE 23, 2021 - Loop Industries, Inc. | loop_ex991.htm |
|
|
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported)
June 18, 2021
|
LOOP INDUSTRIES, INC.
|
|
(Exact
name of registrant as specified in its charter)
|
|
Nevada
|
|
000-54786
|
|
27-2094706
|
|
(State
or other jurisdictionof incorporation)
|
|
(CommissionFile
Number)
|
|
(IRS
EmployerIdentification No.)
|
480 Fernand-Poitras
Terrebonne, Quebec, Canada, J6Y 1Y4
(Address
of principal executive offices, including zip code)
(450) 951-8555
(Registrant’s
telephone number, including area code)
Not Applicable
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2.
below):
☐
Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Securities
registered pursuant to Section 12(b) of the Act:
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
|
Common
stock, par value $0.0001 per share
|
LOOP
|
Nasdaq
Global Market
|
Indicate
by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of
1934 (§240.12b-2 of this chapter). Emerging growth company
☐
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
Securities Purchase Agreement
On June 22, 2021, Loop Industries, Inc. (the “Company”)
entered into a Securities Purchase Agreement (the “Purchase
Agreement”) by and between the Company and SK global chemical
Co., Ltd, an accredited investor (the “Purchaser”).
Pursuant to the Purchase Agreement, the Company has agreed to issue
and sell to the Purchaser the following securities for an aggregate
purchase price of approximately $56.5 million (collectively, the
“Investment”):
●
an
aggregate of 4,714,813 shares (the “Shares”) of the
Company’s common stock (the “Common
Stock”);
●
warrants
to purchase 4,714,813 shares of Common Stock for an exercise price
of $15.00 (the “First Tranche Warrants”), with an
expiration date of the third anniversary of the issue
date;
●
warrants
to purchase 2,357,407 shares of Common Stock for an exercise price
of $20.00 (the “Second Tranche Warrants”), with an
expiration date of the earlier of (A) the date that is the third
anniversary of the First Plant Milestone (as defined in the Second
Tranche Warrants), (B) the expiration of the JV Negotiation Period
(as defined in the Second Tranche Warrants), provided that the
Joint Venture Transaction Agreements (as defined in the Second
Tranche Warrants) have not been executed by the expiration of the
JV Negotiation Period and (C) the third anniversary of the BDP Date
(as defined in the Second Tranche Warrants), provided that the
First Plant Milestone has not occurred as of such date;
and
●
warrants
to purchase 461,298 shares of Common Stock for an exercise price of
$11.00 (the “Third Tranche Warrants,” and together with
First Tranche Warrants and the Second Tranche Warrants, the
“Warrants”), with an expiration date of June 14,
2022.
The Purchaser may exercise the First Tranche Warrant and the Third
Tranche Warrant at any time prior to their applicable expiration
dates. The Purchaser may exercise the Second Tranche Warrant at any
time on or after the first business day following the First Plant
Milestone (as defined in the Second Tranche Warrant) prior to its
expiration date.
Based on 42,433,320 shares of common stock and issued and
outstanding as of May 27, 2021, the Purchaser is expected to own
approximately 10.0% of the issued and outstanding Common Stock
immediately following the Investment.
The Purchase Agreement contains customary representations,
warranties and covenants and conditions to closing of the
Investment. The Purchase Agreement may be terminated by either the
Company or the Purchaser if the closing has not occurred by
September 20, 2021.
The Company intends to use the proceeds toward the funding of its
planned Infinite Loop™ manufacturing facility at its recently
acquired site in Becancour, Quebec.
For the sale of the Shares, the Company relied on Section 4(a)(2)
of the Securities Act of 1933, as amended or the private offering
safe harbor provision of Rule 506 of Regulation D promulgated
thereunder based on the following factors: (i) the number of
offerees or purchasers, as applicable, (ii) the absence of general
solicitation, (iii) representations obtained from the purchasers
relative to their accreditation and/or sophistication and/or their
relationship to the company (directors and officers), (iv) the
provision of appropriate disclosure, and (v) the placement of
restrictive legends on the certificates reflecting the securities
coupled with investment representations obtained from the
purchasers.
Simultaneous with the execution of the Purchase Agreement, the
Company and the Purchaser entered into a Joint Venture Memorandum
of Understanding (“JV MOU”) with respect to a potential
joint venture to commercialize the Company’s plastic
recycling technology in Asia (“Proposed Asia JV”). The
JV MOU, which is non-binding, outlines certain principal terms for
the Proposed Asia JV. The Purchase Agreement provides that the
parties will negotiate exclusively with one another from the date
of the Purchase Agreement until the date which is six months from
the BDP Date (as defined in the Purchase Agreement) with respect to
the Proposed Asia JV (subject to extension in accordance with the
terms and conditions of the Purchase Agreement), with the objective
of executing definitive agreements for the Proposed Asia
JV.
Investors Rights Agreement
On the closing date of the Purchase Agreement, the Company will
enter into an Investors Rights Agreement (the “Investors
Rights Agreement”) by and among the Company, the Purchaser,
and Daniel Solomita, in his individual capacity and solely for the
purposes of the voting arrangement in the Purchase Agreement.
Pursuant to the Investors Rights Agreement, effective as of the
closing date of the Purchase Agreement, the Company’s board
of directors (the “Board”) will appoint a designee of
the Purchaser to the Board (the “Investor Designee”),
subject to the terms and conditions of the Investors Rights
Agreement. Purchaser will have the right to require the Board to
nominate its designee for election to the Board until the Purchaser
and its affiliates beneficially own less than 4,000,000 shares of
Common Stock.
Standstill. The Investors
Rights Agreement provides that Company and the Purchaser and its
respective affiliates will be subject to a standstill provision
commencing on the closing date until the later of (i) the date that
concludes any 90 day continuous period during which no Investor
Designee serves on the Board and (ii) the date on which the
Purchaser and its affiliates beneficially own less than 5.0% of the
issued and outstanding Common Stock (the “Standstill
Period”). During the Standstill Period, the Purchaser and its
affiliates will not, among other things and subject to specified
exceptions: (a) acquire any securities of the Company (except for
purchases of Common Stock in the public market to the extent
necessary to reverse any decrease in such parties’ percentage
ownership of the issued and outstanding Common Stock resulting
solely from a net increase in the number of shares of issued and
outstanding Common Stock). (b) propose any merger, consolidation,
business combination, tender offer or similar transaction involving
the Company. (c) solicit proxies or consents to vote any securities
of the Company. (d) form, join or participate in any group (as such
term is used in the rules of the Securities and Exchange
Commission). or (e) seek to call a meeting of the stockholders of
the Company or propose any matter to be voted upon by the
stockholders of the Company.
Transfer Restrictions. The
Investors Rights Agreement also provides that, for a period ending
on the second anniversary of the closing of the Investment (the
“Lock-Up Period”), the Purchaser will be prohibited
from transferring any Common Stock, subject to certain exceptions.
The Purchaser will also be generally prohibited from transferring
Common Stock to any competitor of the Company (as determined by the
Board).
Resale Registration Rights. The
Investors Rights Agreement includes customary resale shelf
registration rights for the Purchaser that require the Company to
register the Common Stock held by the Purchaser for resale
following the expiration of the Lock-Up Period.
Voting Arrangement. Under the
Investors Rights Agreement, Mr. Solomita agrees, with respect to
any matter that needs to be approved by shareholders of the Company
to give effect to the Purchaser’s rights under the Investors
Rights Agreement, the Purchase Agreement, and the Warrants (the
“Required Approvals”), that he shall vote (or cause to
be voted), or deliver a proxy (or cause a proxy to be delivered)
covering all of the shares of the Series A Preferred Stock of the
Company and the Common Stock for which Mr. Solomita is the
registered and/or direct or indirect beneficial owner of, or
exercises control or direction over: (i) in favor of the Required
Approvals and (ii) against any proposal that conflicts with or
would interfere with the exercise of the Purchaser’s rights
under the Investors Rights Agreement.
The foregoing descriptions of the Purchase Agreement, Investors
Rights Agreement and form of Warrants are summaries of each and are
qualified in their entirety by the text of the Purchase Agreement,
Investors Rights Agreement and form of Warrants, respectively,
copies of which will be filed as exhibits to the Company’s
Quarterly Report on Form 10-Q for the period ended August 31,
2021.
The foregoing agreements have been included to provide investors
with information regarding its terms. They are not intended to
provide any other factual information about the Company and its
subsidiaries and affiliates. The representations and warranties
contained in the Purchase Agreement were made only for purposes of
the Purchase Agreement (together with the exhibits thereto) and as
of specific dates, are solely for the benefit of the parties to the
Purchase Agreement, may be subject to limitations agreed upon by
the contracting parties, may have been made for the purposes of
allocating contractual risk between the parties to the Purchase
Agreement instead of establishing these matters as facts, and may
be subject to standards of materiality applicable to the
contracting parties that differ from those applicable to investors.
Investors are not third-party beneficiaries to the representations
and warranties contained in the Purchase Agreement and should not
rely on the representations and warranties or any descriptions
thereof as characterizations of the actual state of facts or
condition of the parties thereto or any of their respective
subsidiaries or affiliates. Moreover, information concerning the
subject matter of representations and warranties may change after
the date of the Purchase Agreement, which subsequent information
may or may not be fully reflected in the Company’s public
disclosures.
Indorama Joint Venture Amendments
On June 18, 2021, the Company, Loop Innovations, LLC, a
wholly-owned subsidiary of the Company (“Loop
Innovations”), Indorama Ventures Holdings LP
(“Indorama”) and Indorama Loop Technologies, LLC (the
“Indorama Joint Venture Company”) amended (i) the
Limited Liability Company Agreement between Loop Innovations, LLC
and Indorama Ventures Holdings LP (the “LLC
Agreement”), (ii) the Marketing Agreement between the Company
and Indorama Loop Technologies, LLC (the “Marketing
Agreement”) and (iii) the License Agreement between the
Company and the Indorama Joint Venture Company (the “License
Agreement”), each dated September 24, 2018 (collectively such
amendments, the “Indorama Joint Venture
Amendments”).
Under the Indorama Joint Venture Amendments, the Company, Indorama
and the Indorama Joint Venture Company agreed to:
●
terminate
Indorama’s right of first refusal under the LLC Agreement
over any facility to produce products utilizing any waste-to-resin
technology applying the PET depolymerization process of the
Company;
●
amend
the non-compete obligations under the LLC Agreement to solely apply
to the Company;
●
limit
the scope of the Company’s grant of intellectual property
rights and the scope of the exclusivity rights of the Indorama
Joint Venture Company for the retrofit of existing facilities under
the License Agreement to North America and Europe; and
●
limit
the scope of the Indorama Joint Venture Company’s permitted
marketing rights under the Marketing Agreement to North America and
Europe.
The foregoing description of the Indorama Joint Venture Amendments
does not purport to be complete and is qualified in its entirety by
reference to the Indorama Joint Venture Amendments, a copy of which
will be filed as exhibits to the Company’s Quarterly Report
on Form 10-Q for the period ended August 31, 2021.
Item 3.02 Unregistered Sales of Equity Securities.
The information contained in Item 1.01 above is hereby incorporated
into this Item 3.02 by reference.
Item 8.01 Other Events.
A copy of the press release announcing the private placement is
attached to this Current Report on Form 8-K as Exhibit
99.1.
The information contained in Item 8.01 and Exhibit 99.1 of this
Current Report on Form 8-K is being furnished and shall not be
deemed “filed” for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, nor shall such
information be deemed incorporated by reference in any filing under
the Securities Act of 1933, as amended, except as shall be
expressly set forth by specific reference in such
filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
|
Exhibit
Number
|
|
Description
|
|
|
Press
Release dated June 23, 2021
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly
authorized.
|
|
LOOP INDUSTRIES, INC.
|
|
|
|
|
|
|
|
|
Date:
June 23, 2021
|
By:
|
/s/
Drew Hickey
|
|
|
|
|
Drew
Hickey
|
|
|
|
|
Chief
Financial Officer
|
|