Investment Thesis
Loop Industries is in terminal financial distress with negative stockholders' equity of -$9.6M, indicating technical insolvency. The company generates only $514K in annual revenue while burning $10.1M operationally, with approximately 2-3 months of cash runway remaining. The business model is fundamentally broken with a -2392.8% operating margin and no viable path to profitability.
Strengths
- Net loss improved 18.3% YoY, suggesting potential cost-cutting measures
- Current ratio of 1.31x indicates short-term liquidity not immediately critical
- Company retains $2.4M in cash and has minimal CapEx ($0), preserving cash for operations
Risks
- Negative stockholders' equity of -$9.6M represents technical insolvency and balance sheet insolvency
- Operating cash burn of $10.1M annually against $514K revenue is catastrophically unsustainable with ~2-3 months runway
- Liabilities of $18.1M exceed assets of $8.6M; $3.1M long-term debt is unmanageable with current asset base
- Operating margin of -2392.8% indicates fundamental business model failure with no profitability trajectory
- Zero revenue growth YoY signals complete stagnation in business development and market acceptance
Key Metrics to Watch
- Cash balance depletion rate and revised runway estimates
- Operating cash flow acceleration/deceleration and expense reduction efforts
- Revenue generation and gross margin achievement to determine business viability
- Debt covenant compliance and refinancing announcements or restructuring proceedings
Financial Metrics
Revenue
514.0K
Net Income
-12.3M
EPS (Diluted)
$-0.07
Free Cash Flow
-10.1M
Total Assets
8.6M
Cash
2.4M
Profitability Ratios
Gross Margin
N/A
Operating Margin
-2,392.8%
Net Margin
-2,392.8%
ROE
N/A
ROA
-143.7%
FCF Margin
-1,966.9%
Balance Sheet & Liquidity
Current Ratio
1.31x
Quick Ratio
1.31x
Debt/Equity
N/A
Debt/Assets
211.9%
Interest Coverage
-79.70x
Long-term Debt
3.1M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-29T07:44:02.304101 |
Data as of: 2026-02-28 |
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