LOOP ALERT: Nationally Recognized Investor Rights Litigation Firm Labaton Sucharow Announces Investigation of Loop Industries (NASDAQ: LOOP) in the Wake of Hindenburg Report

NEW YORK--(BUSINESS WIRE)--Labaton Sucharow, a global investor rights law firm, announces an investigation on behalf of purchasers of the securities of Loop Industries (NASDAQ: LOOP) and encourages stock, option, and derivative purchasers to contact the firm.

Calling the company "smoke and mirrors," Hindenburg Research noted the following in its recently release report:

• As part of our investigation, we interviewed former employees, competitors, industry experts, and company partners. We also reviewed extensive company documentation and litigation records.
• Former employees revealed that Loop operated two labs: one reserved for the company’s two twenty-something lead scientist brothers and their father, where incredible results were achieved, and a separate lab where rank-and-file employees were unable to replicate the supposedly breakthrough results.
• The two brothers who act as lead scientists for Loop and who co-invented Loop’s recycling process appear to have no post-graduate education in chemistry and list no work experience other than Loop.
• A former Loop employee told us that Loop’s scientists, under pressure from CEO Daniel Solomita, were tacitly encouraged to lie about the results of the company’s process internally. We have obtained internal documents and photographs to support their claims.
• Loop focuses on recycling a common form of plastic called “PET”. According to a former employee, Loop’s previous claims of breaking PET down to its base chemicals at a recovery rate of 100% were “technically and industrially impossible”. The same employee told us the company’s claims of producing “industrial grade purity” base chemicals from PET were false.
• According to litigation records, Loop’s CEO, Daniel Solomita hired a convict, who had previously pled guilty to stock manipulation, to help raise Loop’s startup capital. That convict introduced Solomita to another convict who facilitated Loop’s first investment.
• Solomita has no apparent formal science education but has a history of stock promotion at another publicly traded company that subsequently imploded.
• Executives from a division of key partner Thyssenkrupp, who Loop entered into a “global alliance agreement” with in December 2018, told us their partnership is on “indefinite” hold and that Loop “underestimated” both costs and complexities of its process.
• We contacted Loop’s other partners, including Coca-Cola and PepsiCo, most of whom refused to divulge whether any plastic had been recycled as part of their partnerships with Loop. Comments from Danone, owner of the Evian brand, suggested it had not bought any PET from Loop thus far. We suspect these partnerships have gone nowhere.
• Loop’s JV with PET and chemical company Indorama, promoted frequently over the last two years as an imminent revenue stream, is “still being finalized”, according to an employee, despite being announced in 2018. An Indorama employee told us no production has taken place thus far.
• We expect Loop will never generate any meaningful revenue. With a market cap of ~$515 million, we see 100% downside to Loop once it burns through its ~$48 million in balance sheet cash.
• We have submitted our findings to regulators.

Following this report, Loop shares are down over 30% on enormous volume.

About the Firm

Labaton Sucharow LLP is one of the world’s leading complex litigation firms representing clients in securities, antitrust, corporate governance and shareholder rights, and consumer cybersecurity and data privacy litigation. Labaton Sucharow has been recognized for its excellence by the courts and peers, and it is consistently ranked in leading industry publications. Offices are located in New York, NY, Wilmington, DE, and Washington, D.C. More information about Labaton Sucharow is available at http://www.labaton.com.