Loop Industries enters agreements for joint venture in India with Ester Industries

Loop Industries, a company listed on NASDAQ under the ticker LOOP, has recently announced the formation of a joint venture with Ester Industries Ltd. This new partnership will result in the creation of Ester Loop Infinite Technologies Private Limited (ELITe). The joint venture was formalized through a series of definitive agreements, with the effective date set for February 4, 2026.

The core purpose of this joint venture is to construct and operate a manufacturing facility in India. The facility will be dedicated to producing recycled dimethyl terephthalate (rDMT), recycled mono-ethylene glycol (rMEG), and specialty polymers. This production will be facilitated by Loop Industries' proprietary Infinite Loop technology.

A License Agreement was signed between the two companies on August 13. Under this agreement, Loop granted ELITe a non-transferable, perpetual, and exclusive license to utilize Loop's depolymerization technology and related intellectual property. This license permits ELITe to manufacture and sell rDMT, rMEG, and specialty polymer products in India and any other territories mutually agreed upon.

Under this agreement, Loop Industries will receive royalties from ELITe based on a tiered percentage of the company's annual net sales. The royalty rates are structured to decrease as sales revenue increases. However, for sales exceeding $500 million annually, the royalty rates are subject to minimum and maximum thresholds. For sales surpassing $2 billion, the rates will be determined through a good faith negotiation between the two companies.

It's important to note that royalty payments commence upon the first commercial sale of a licensed product. In the event that the Marketing Agreement is terminated, the royalty rates are set to increase.

The Marketing Agreement also stipulates that Loop Industries will serve as ELITe’s exclusive sales, marketing, and promotional representative for the licensed products. Loop will have the sole authority to enter sales contracts and determine the pricing and quantities of these products, subject to the approval of the ELITe Board. Loop Industries will also receive marketing fees from ELITe, with these fees also being subject to a tiered structure based on annual net sales.

Additionally, a Services Agreement was executed, under which Ester Industries would provide ELITe with post-incorporation services, including project management and operational support. Ester will also receive a license to certain Ester process know-how from ELITe. This service fee will be a tiered fee based on annual net sales, with thresholds and negotiation terms similar to those of the other agreements.

All these agreements are expected to continue indefinitely and include provisions for termination in cases of material breach or default. This announcement is based on a filing with the Securities and Exchange Commission.