Business Context and Reporting Period
This Form 8-K Current Report was filed by Loop Industries, Inc. on March 29, 2017, covering events occurring on February 28, 2017. The Company, incorporated in Nevada, operates in the recycling and materials recovery sector.
Key Financial Metrics
This filing is a Current Report regarding a material agreement and does not contain financial statements. Consequently, data regarding revenue, profit, cash flow, margins, debt, and liquidity are not provided in this document.
Material Changes
The primary material event reported is the entry into a definitive agreement with an affiliate of PepsiCo, effective January 1, 2017. Under this agreement and an accompanying statement of work, Loop Industries will manage a mail-back recycling program for specified PepsiCo products. The Company will provide mailing materials and process returned items. PepsiCo will reimburse the Company for mailing materials, shipping costs, and pay a management fee.
Outlook, Risks, and Unusual Items
The agreement is set to expire on the later of December 1, 2017, or the completion of all outstanding statements of work, unless earlier terminated by PepsiCo. The filing notes that the description of the agreement is a summary and is qualified by the full terms of the agreement, which will be filed as an exhibit to the Company's Annual Report on Form 10-K for the year ended February 28, 2017.
Investor Verification Checklist
- Verify the specific financial terms of the management fee and cost reimbursement structure in the full agreement.
- Review the termination clauses and conditions under which PepsiCo may end the agreement early.
- Confirm the scope of "specified products" covered under the recycling program.
- Monitor the upcoming Form 10-K filing for the full text of the agreement and its impact on the fiscal year ended February 28, 2017.