10. Customer Deposits

In October 2022, the Company received a cash deposit from a customer of $1,000,000 in relation to an executed capacity reservation agreement. The deposit is to be credited against any future sales of Loop™ PET resin over a five-year period, commencing two years after the first delivery of Loop™ PET resin to the customer. Under the terms of the capacity reservation agreement, the cash deposit is designated for expenditures related to the first Infinite Loop™ manufacturing facility and is refundable to the customer in the event that the Infinite Loop™ manufacturing facility is not constructed. As the cash deposit is restricted in its use, it has been reflected as restricted cash as at February 28, 2023. A corresponding contract liability is recognized in the consolidated balance sheet. The remaining $11,732 in customer deposits is related to a contract with a customer for the sale of Loop™ PET resin from the Terrebonne Facility.