Item 1.01. Entry into a Material Definitive Agreement.
On April 27, 2023, Loop Industries, Inc. (the "Company" or "Loop") entered into
an agreement (the "Agreement") by and between the Company and SK Geo Centric
Co., Ltd ("SKGC"). Pursuant to the Agreement, the Company and SKGC agreed to
form a new company (the "Venture Company") headquartered in Singapore to deploy
Loop's depolymerization technology in the Asian market through one or more
subsidiaries. SKGC will contribute 51% and Loop will contribute 49% of the
initial equity capital of the Venture Company.
The initial board of directors of the Venture Company will be comprised of three
directors appointed by SKGC and two directors appointed by Loop. SKGC will be
responsible for the construction and operation of the Venture Company's
manufacturing facilities, subject to the terms of the relevant governing
documents, and for facilitating debt financing for the Venture Company pursuant
to the terms of the Agreement.
The Agreement provides that Loop and SKGC will use commercially reasonable
efforts to cause the Venture Company to acquire from SKGC real estate located in
Ulsan, South Korea for the purposes of constructing an initial rPET product
plant, with such plant to be mutually designed by Loop and SKGC. The
commencement of construction of the initial rPET product plant is subject to the
satisfaction of obtaining the final investment decision of each of Loop and
SKGC, and other customary closing conditions.
Pursuant to the Agreement, the Venture Company will enter into (i) a technology
license agreement with Loop (the "Loop Technology License Agreement"), (ii) a
service agreement with SKGC, and (iii) a sales and marketing agreement with Loop
and SKGC, each on terms to be mutually agreed upon by the parties. Loop and SKGC
will provide research and development services to the Venture Company and may
enter into a joint development agreement with the Venture Company on terms to be
agreed upon by the board of directors of the Venture Company.
Pursuant to the Agreement, the Venture Company will be granted the licenses
under the Loop Technology License Agreement on an exclusive basis as set forth
therein for a period of six years following the date on which Loop and SKGC
agree to a basic design package regarding the initial rPET product plant,
subject to extension or early termination under certain conditions as described
in the Agreement.
Additionally, for the duration of the exclusivity period referred to in the
previous paragraph, Loop granted SKGC a right of first refusal in respect of any
plans to directly or indirectly develop any manufacturing facility in the United
States or Canada for the manufacture of rPET products.
The foregoing description of the Agreement does not purport to be complete and
is qualified in its entirety by reference to the full text of the Agreement,
which will be filed as an exhibit to a future periodic or current report of the
Company.
Item 7.01. Regulation FD Disclosure.
On May 2, 2023, the Company issued a press release announcing the signing of the
Agreement. A copy of the press release is being furnished as Exhibit 99.1 and is
incorporated herein by reference.
The information in this Item 7.01 of this Current Report on Form 8-K is being
furnished and shall not be deemed "filed" for the purposes of Section 18 of the
Securities Exchange Act of 1934 (the "Exchange Act"), and shall not be
incorporated or deemed to be incorporated by reference into any filing by the
Company under the Securities Act of 1933 (the "Securities Act"), or the Exchange
Act, except as expressly set forth by specific reference in such filing.
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Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
99.1 Press Release, dated May 2, 2023
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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