0001504678
2020-03-01
2020-05-31
0001504678
2020-05-31
0001504678
2020-02-29
0001504678
us-gaap:CommonStockMember
2020-02-29
0001504678
us-gaap:CommonStockMember
2020-05-31
0001504678
us-gaap:PreferredStockMember
2020-05-31
0001504678
us-gaap:AdditionalPaidInCapitalMember
2020-05-31
0001504678
LOOP:CommonStockIssuableMember
2020-05-31
0001504678
us-gaap:RetainedEarningsMember
2020-05-31
0001504678
us-gaap:AccumulatedOtherComprehensiveIncomeMember
2020-05-31
0001504678
us-gaap:CommonStockMember
2019-03-01
2019-05-31
0001504678
us-gaap:PreferredStockMember
2019-03-01
2019-05-31
0001504678
us-gaap:AdditionalPaidInCapitalMember
2019-03-01
2019-05-31
0001504678
LOOP:CommonStockIssuableMember
2019-03-01
2019-05-31
0001504678
us-gaap:RetainedEarningsMember
2019-03-01
2019-05-31
0001504678
us-gaap:AccumulatedOtherComprehensiveIncomeMember
2019-03-01
2019-05-31
0001504678
us-gaap:CommonStockMember
2020-03-01
2020-05-31
0001504678
us-gaap:PreferredStockMember
2020-03-01
2020-05-31
0001504678
us-gaap:AdditionalPaidInCapitalMember
2020-03-01
2020-05-31
0001504678
LOOP:CommonStockIssuableMember
2020-03-01
2020-05-31
0001504678
us-gaap:RetainedEarningsMember
2020-03-01
2020-05-31
0001504678
us-gaap:AccumulatedOtherComprehensiveIncomeMember
2020-03-01
2020-05-31
0001504678
LOOP:EquityIncentiveplanMember
2020-02-29
0001504678
LOOP:EquityIncentiveplanMember
2020-05-31
0001504678
us-gaap:BuildingMember
2020-02-29
0001504678
us-gaap:LandMember
2020-02-29
0001504678
us-gaap:BuildingImprovementsMember
2020-02-29
0001504678
us-gaap:MachineryAndEquipmentMember
2020-02-29
0001504678
LOOP:OfficeEquipmentAndFurnitureMember
2020-02-29
0001504678
us-gaap:BuildingMember
2020-05-31
0001504678
us-gaap:LandMember
2020-05-31
0001504678
us-gaap:BuildingImprovementsMember
2020-05-31
0001504678
us-gaap:MachineryAndEquipmentMember
2020-05-31
0001504678
LOOP:OfficeEquipmentAndFurnitureMember
2020-05-31
0001504678
us-gaap:RestrictedStockUnitsRSUMember
2020-03-01
2020-05-31
0001504678
us-gaap:RestrictedStockUnitsRSUMember
2019-03-01
2019-05-31
0001504678
LOOP:EquityIncentiveplanMember
2020-03-01
2020-05-31
0001504678
LOOP:AdditionalPaidInCapitalWarrantsMember
2019-03-01
2019-05-31
0001504678
LOOP:AdditionalPaidInCapitalWarrantsMember
2020-03-01
2020-05-31
0001504678
LOOP:AdditionalPaidInCapitalWarrantsMember
2020-05-31
0001504678
LOOP:AdditionalPaidInCapitalWarrantsBeneficialConversionFeatureMember
2019-03-01
2019-05-31
0001504678
LOOP:AdditionalPaidInCapitalWarrantsBeneficialConversionFeatureMember
2020-03-01
2020-05-31
0001504678
LOOP:AdditionalPaidInCapitalWarrantsBeneficialConversionFeatureMember
2020-05-31
0001504678
LOOP:EquityIncentiveplanMember
2019-03-01
2019-05-31
0001504678
us-gaap:WarrantMember
2020-03-01
2020-05-31
0001504678
us-gaap:WarrantMember
2019-03-01
2019-05-31
0001504678
2019-03-01
2019-05-31
0001504678
2019-03-01
2020-02-29
0001504678
2019-05-31
0001504678
2020-07-09
0001504678
us-gaap:CommonStockMember
2019-02-28
0001504678
us-gaap:CommonStockMember
2019-05-31
0001504678
us-gaap:PreferredStockMember
2019-02-28
0001504678
us-gaap:PreferredStockMember
2019-05-31
0001504678
us-gaap:AdditionalPaidInCapitalMember
2019-02-28
0001504678
us-gaap:AdditionalPaidInCapitalMember
2019-05-31
0001504678
LOOP:AdditionalPaidInCapitalWarrantsMember
2019-02-28
0001504678
LOOP:AdditionalPaidInCapitalWarrantsMember
2019-05-31
0001504678
LOOP:AdditionalPaidInCapitalWarrantsBeneficialConversionFeatureMember
2019-02-28
0001504678
LOOP:AdditionalPaidInCapitalWarrantsBeneficialConversionFeatureMember
2019-05-31
0001504678
LOOP:CommonStockIssuableMember
2019-02-28
0001504678
LOOP:CommonStockIssuableMember
2019-05-31
0001504678
us-gaap:RetainedEarningsMember
2019-02-28
0001504678
us-gaap:RetainedEarningsMember
2019-05-31
0001504678
us-gaap:AccumulatedOtherComprehensiveIncomeMember
2019-02-28
0001504678
us-gaap:AccumulatedOtherComprehensiveIncomeMember
2019-05-31
0001504678
2019-02-28
0001504678
us-gaap:PreferredStockMember
2020-02-29
0001504678
us-gaap:AdditionalPaidInCapitalMember
2020-02-29
0001504678
LOOP:AdditionalPaidInCapitalWarrantsMember
2020-02-29
0001504678
LOOP:AdditionalPaidInCapitalWarrantsBeneficialConversionFeatureMember
2020-02-29
0001504678
LOOP:CommonStockIssuableMember
2020-02-29
0001504678
us-gaap:RetainedEarningsMember
2020-02-29
0001504678
us-gaap:AccumulatedOtherComprehensiveIncomeMember
2020-02-29
0001504678
us-gaap:StockOptionMember
2020-03-01
2020-05-31
0001504678
us-gaap:StockOptionMember
2019-03-01
2019-05-31
0001504678
us-gaap:RestrictedStockUnitsRSUMember
2020-03-01
2020-05-31
0001504678
us-gaap:RestrictedStockUnitsRSUMember
2019-03-01
2019-05-31
0001504678
us-gaap:WarrantMember
2020-03-01
2020-05-31
0001504678
us-gaap:WarrantMember
2019-03-01
2019-05-31
0001504678
us-gaap:CommonStockMember
2020-03-01
2020-05-31
0001504678
us-gaap:CommonStockMember
2019-03-01
2019-05-31
0001504678
us-gaap:LongTermDebtMember
us-gaap:FairValueInputsLevel2Member
2020-02-29
0001504678
us-gaap:LongTermDebtMember
us-gaap:FairValueInputsLevel2Member
2020-05-31
0001504678
LOOP:ForeignExchangeContractsMember
us-gaap:FairValueInputsLevel1Member
2020-05-31
0001504678
LOOP:ForeignExchangeContractsMember
us-gaap:FairValueInputsLevel1Member
2020-02-29
0001504678
LOOP:InvestissementQuebecFinancingFacilityMember
2020-05-31
0001504678
LOOP:InvestissementQuebecFinancingFacilityMember
2020-02-29
0001504678
LOOP:TermLoanMember
2020-05-31
0001504678
LOOP:TermLoanMember
2020-02-29
0001504678
LOOP:InvestissementQuebecFinancingFacilityMember
2020-03-01
2020-05-31
0001504678
LOOP:InvestissementQuebecFinancingFacilityMember
2019-03-01
2019-05-31
0001504678
LOOP:TermLoanMember
2020-03-01
2020-05-31
0001504678
LOOP:TermLoanMember
2019-03-01
2019-05-31
0001504678
LOOP:EquityIncentiveplanMember
2019-02-28
0001504678
LOOP:EquityIncentiveplanMember
2019-05-31
iso4217:USD
xbrli:shares
iso4217:USD
xbrli:shares
xbrli:pure
Loop Industries, Inc.
0001504678
10-Q
2020-05-31
false
--02-28
Yes
Non-accelerated Filer
Q1
2021
false
true
false
Yes
NV
000-54768
39935210
30016008
34523441
1937039
141226
570214
664544
334046
202863
7250045
7260254
1717159
264868
519816
4658730
99681
1657592
222268
664845
4608686
96654
1500000
850000
39100099
42836558
1462244
2134824
50772
52126
50772
52126
1411472
2082698
2185449
2238026
133941
1356228
846208
881798
3647693
4372850
2290152
2236221
125951
26840
0
0
35452406
38463708
3992
3993
0
83306794
0
-57169761
-558861
9870241
0
6818685
3381
3488
0
0
38966208
46536157
757704
1074633
1200915
1200915
800000
800000
-38811592
-42366142
-290224
-430366
2626392
0
82379413
9785799
0
0
-53317047
-388449
-558861
-388449
-57169761
-53317047
9870241
9785799
83306794
82379413
3993
3992
39100099
42836558
.0001
0.0001
250000000
250000000
39916905
39910774
39916905
39910774
0.0001
0.0001
25000000
25000000
1
1
1
1
0
0
3852714
3554550
-76641
12126
40346
0
126776
501849
255974
164336
1953081
1902630
1480588
997861
-3852714
-3554550
-3852714
-3554550
-4023126
-3694692
-170412
-140142
-0.10
-0.11
39916838
34714510
39910774
39916905
1
33805706
34875032
1
1
1
150000
15
-15
0
600000
60
4266725
4266785
319326
32
2372549
316929
2689510
-170412
-140142
-170412
-140142
556895
575513
556895
575513
370487
355177
370487
355177
6131
0
1
-1
84442
84442
-98502
0
0
268730
0
-46442
8547
583727
0
-8483
-9416
-117433
1011824
930690
-4977900
-2087353
-720759
-5366
1865216
-49136
76410
-158954
-1188789
-955356
144386
24811
394403
470545
650000
500000
-12693
4253727
12693
13057
0
863216
0
5130000
27508755
33717671
27508755
33717671
6971612
5833390
-6208916
1138222
-29534
-32796
40346
0
10311
14488
0
0
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b>The Company</b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Loop Industries, Inc. (the “Company,”
“Loop Industries,” “we,” or “our”) is a technology company that owns patented and proprietary
technology that depolymerizes no and low-value waste PET plastic and polyester fiber to its base building blocks (monomers). 
The monomers are filtered, purified and polymerized to create virgin-quality Loop™ branded PET resin for use in food-grade
packaging and polyester fiber.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On November 20, 2017, Loop Industries Inc. commenced
trading on the NASDAQ Global Market under its new trading symbol, “LOOP.” From April 10, 2017 to November 19, 2017,
our common stock was quoted on the OTCQX tier of the OTC Markets Group Inc. under the symbol “LLPP.”</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b>Basis of presentation</b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying unaudited interim condensed
consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United
States of America (“US GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”)
regarding interim financial reporting. Certain information and note disclosures included in these unaudited interim condensed consolidated
financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s
Annual Report on Form 10-K for the fiscal year ended February 29, 2020, filed with the SEC on May 5, 2020 and amended on May 6,
2020. The unaudited interim condensed consolidated financial statements comprise the consolidated financial position and results
of operations of Loop Industries, Inc. and its subsidiaries, Loop Innovations, LLC and Loop Canada Inc. All subsidiaries are, either
directly or indirectly, wholly owned subsidiaries of Loop Industries, Inc. (collectively, the “Company”). The Company
also owns, through Loop Innovations, LLC, a 50% interest in a joint venture, Indorama Loop Technologies, LLC, which is accounted
for under the equity method.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Intercompany balances and transactions are eliminated
on consolidation. The condensed consolidated balance sheet as of February 29, 2020, included herein, was derived from the audited
financial statements as of that date, but does not include all disclosures including certain notes required by GAAP on an annual
reporting basis. In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements present
fairly the financial position, results of operations, comprehensive loss and cash flows for the interim periods. The results for
the three months ended May 31, 2020 are not necessarily indicative of the results to be expected for any subsequent quarter, the
fiscal year ending February 28, 2021, or any other period.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Use of estimates</u></i></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The preparation of financial statements in conformity
with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during
the reporting period. Actual results could differ from those estimates. Those estimates and assumptions include estimates for depreciable
lives of property, plant and equipment, intangible assets, analysis of impairments of long-lived assets and intangible assets,
accruals for potential liabilities and assumptions made in calculating the fair value of stock-based compensation and other equity
instruments.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The uncertainties around the COVID-19 pandemic
required the use of estimates and assumptions that resulted in no significant impact to our unaudited condensed consolidated financial
statements as of and for the three-month period ended May 31, 2020.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Foreign currency translations and transactions</u></i></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying unaudited condensed consolidated
financial statements are presented in U.S. dollars, the reporting currency of the Company. Assets and liabilities of subsidiaries
that have a functional currency other than that of the Company are translated to U.S. dollars at the exchange rate as at the balance
sheet date. Income and expenses are translated at the average exchange rate of the period. The resulting translation adjustments
are included in other comprehensive income (loss) (“OCI”). As a result, foreign currency exchange fluctuations may
impact operating expenses. The Company currently has not engaged in any currency hedging activities.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For transactions and balances, monetary assets
and liabilities denominated in foreign currencies are translated into the functional currency of the entity at the prevailing exchange
rate at the reporting date. Non-monetary assets and liabilities, and revenue and expense items denominated in foreign currencies
are translated into the functional currency using the exchange rate prevailing at the dates of the respective transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions are recognized in the consolidated statements of operations
and comprehensive loss, except for gains or losses arising from the translation of intercompany balances denominated in foreign
currencies that forms part in the net investment in the subsidiary which are included in OCI. </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Stock-based compensation</u></i></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Loop Industries, Inc. periodically issues stock
options, warrants and restricted stock units to employees and non-employees in non-capital raising transactions for services and
financing expenses. The Company accounts for stock options granted to employees based on the authoritative guidance provided by
the FASB wherein the fair value of the award is measured on the grant date and where there are no performance conditions, recognized
as compensation expense on the straight-line basis over the vesting period and where performance conditions exist, recognize compensation
expense when it becomes probable that the performance condition will be met. Forfeitures on share-based payments are accounted
for by recognizing forfeitures as they occur.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company accounts for stock options and warrants
granted to non-employees in accordance with the authoritative guidance of the FASB wherein the fair value of the stock compensation
is based upon the measurement date determined as the earlier of the date at which either a) a commitment is reached with
the counterparty for performance or b) the counterparty completes its performance.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company estimates the fair value of restricted
stock unit awards to employees and directors based on the closing market price of its common stock on the date of grant.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The fair value of the stock options granted
are estimated using the Black-Scholes-Merton Option Pricing (“Black-Scholes”) model, which uses certain assumptions
related to risk-free interest rates, expected volatility, expected life of the stock options, and future dividends. Stock-based
compensation expense is recorded based on the value derived from the Black-Scholes model and on actual experience. The assumptions
used in the Black-Scholes model could materially affect stock-based compensation expense recorded in the current and future periods.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Income taxes</u></i></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company calculates its provision for income
tax on the basis of the tax laws enacted at the balance sheet date in the countries where the Company and its subsidiaries operate
and generate taxable income, in accordance with FASB ASC 740, <i>Income Taxes</i>. The Company uses an asset and liability approach
for financial accounting and reporting for income taxes that allows recognition and measurement of deferred tax assets based upon
the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided
for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more
likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility
is uncertain. The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax
expense.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Research and development expenses</u></i></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Research and development expenses relate primarily
to the development, design, testing of preproduction samples, prototypes and models, compensation, and consulting fees, and are
expensed as incurred. Total research and development expenses recorded during the three-month periods ended May 31, 2020 and 2019
amounted to $1,480,588 and $997,861, respectively, and are net of government research and development tax credits and government
grants from the federal and provincial taxation authorities accrued and recorded based on qualifying expenditures incurred during
the fiscal periods.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><i><u>Net earnings (loss) per share</u></i></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company computes net loss per share in accordance
with FASB ASC 260, <i>Earnings Per Share</i>. Basic earnings (loss) per share is computed by dividing the net income (loss) applicable
to common stockholders by the weighted average number of shares of common stock outstanding during the year. The Company includes
common stock issuable in its calculation. Diluted earnings (loss) per share is computed by dividing the net income (loss) applicable
to common stockholders by the weighted average number of common shares outstanding plus the number of additional common shares
that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential
common shares are excluded from the computation if their effect is antidilutive.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For the three-month periods ended May 31, 2020
and 2019, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an
antidilutive effect. As at May 31, 2020, the potentially dilutive securities consisted of 1,590,470 outstanding stock options (May
31, 2019 – 1,691,973), 4,302,527 outstanding restricted stock units (May 31, 2019 – 403,767), 5,084,331 outstanding
warrants (May 31, 2019 – 962,132) and nil outstanding issuable common stock (May 31, 2019 – 1,000,000).</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Recently adopted accounting pronouncements</u></i></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In August 2018, the FASB issued ASU 2018-15,
“Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that Is a Service Contract,”
which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract
with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements
that include an internal-use software license). This update is effective for fiscal years beginning after December 15, 2019, including
interim periods within those fiscal years. The adoption of the standard had no impact on the consolidated financial statements
of the Company.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In February 2018, the FASB issued ASU 2018-02,
<i>Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income</i>, which permits entities to reclassify
the disproportionate income tax effects of the Tax Reform Act on items within accumulated other comprehensive income (loss) ("AOCI")
to retained earnings. These disproportionate income tax effect items are referred to as "stranded tax effects." Amendments
in this update only relate to the reclassification of the income tax effects of the Tax Reform Act. Other accounting guidance that
requires the effect of changes in tax laws or rates to be included in net income from continuing operations is not affected by
this update. ASU 2018-02 should be applied either in the period of adoption or retrospectively to each period in which the effect
of the change in the U.S. federal corporate income tax rate in the Tax Reform Act is recognized. ASU 2018-02 is applicable beginning
March 1, 2020. The adoption of the standard had no impact on the consolidated financial statements of the Company.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In February 2016, the FASB issued ASU 2016-02,
“Leases,” amended in July by ASU 2018-10, “Codification Improvements to Topic 842, Leases,” ASU 2018-11,
“Targeted Improvements,” and ASU 2018-20, “Narrow-Scope Improvements for Lessors,” which requires lessees
to recognize leases on the balance sheet while continuing to recognize expenses in the income statement in a manner similar to
current accounting standards. For lessors, the new standard modifies the classification criteria and the accounting for sales-type
and direct financing leases. Enhanced disclosures will also be required to give financial statement users the ability to assess
the amount, timing, and uncertainty of cash flows arising from leases. This ASU may either be adopted on a modified retrospective
approach at the beginning of the earliest comparative period, or through a cumulative-effect adjustment at the adoption date. This
update is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The
Company adopted these standards effective March 1, 2020. The adoption of the standard had no impact on the consolidated financial
statements of the Company. The Company elected to apply the package of practical expedients that allows us not to reassess whether
expired or existing contracts contain leases, the classification of these leases and whether previously capitalized initial direct
costs would qualify for capitalization under Accounting Standards Codification (or “<i>ASC</i>”) 842. Furthermore,
we elected to use hindsight in determining the lease term and assessing impairment of the right-of-use assets.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Recently issued accounting pronouncements
not yet adopted</u></i></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In December 2019, the FASB issued ASU 2019-12,
“Simplifying the Accounting for Income Taxes,” which removes specific exceptions to the general principles in ASC 740,
“Income Taxes,” and clarifies certain aspects of the existing guidance. This update is effective for fiscal years beginning
after December 15, 2020, including interim periods within those fiscal years, with early adoption being permitted as of the beginning
of an interim or annual reporting period. All amendments to this ASU must be adopted in the same period on a prospective basis,
with certain exceptions. We are still evaluating the impact of this accounting guidance on our results of operations and financial
position.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In June 2016, the FASB issued ASU 2016-13, “Financial
Instruments—Credit Losses”. This ASU added a new impairment model (known as the current expected credit loss (“CECL”)
model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes an allowance
for its estimate of expected credit losses and applies to most debt instruments, trade receivables, lease receivables, financial
guarantee contracts, and other loan commitments. The CECL model does not have a minimum threshold for recognition of impairment
losses and entities will need to measure expected credit losses on assets that have a low risk of loss. This update is effective
for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years for smaller reporting companies.
We are still evaluating the impact of this accounting guidance on our results of operations and financial position.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Sales tax, research and development tax credits
and other receivables as at May 31, 2020 and February 29, 2020 were as follows:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>May 31,</b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2020</b></p></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center">February 29,</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center">2020</p></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; text-align: justify"><font style="font-size: 8pt">Sales tax</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">122,419</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">180 971</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Research and development tax credits</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">216,458</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">447,843</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Other receivables</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">231,337</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">35,730</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">570,214</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">664,544</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Prepaid expenses as at May 31, 2020 and February
29, 2020 were as follows:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>May 31,</b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2020</b></p></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center">February 29,</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center">2020</p></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; text-align: justify"><font style="font-size: 8pt">Insurance</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1,144,500</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">61,891</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Machinery and equipment</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">644,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Other prepaid expenses</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">148,539</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">79,335</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">1,937,039</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">141,226</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="10" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>As at May 31, 2020</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Cost</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Accumulated depreciation</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Net book value</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 62%"><font style="font-size: 8pt">Building</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1,798,134</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">(140,542</font></td>
<td style="width: 1%"><font style="font-size: 8pt">)</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1,657,592</font></td>
<td style="width: 3%"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Land</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">222,268</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">222,268</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Building and land improvements</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">900,479</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">(235,634</font></td>
<td><font style="font-size: 8pt">)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">664,845</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Machinery and equipment</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">6,207,312</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">(1,598,626</font></td>
<td><font style="font-size: 8pt">)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">4,608,686</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Office equipment and furniture</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">162,388</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(65,734</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">96,654</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Balances, end of period</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">9,290,581</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(2,040,536</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">7,250,045</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="10" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>As at February 29, 2020</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Cost</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Accumulated depreciation</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Net book value</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 62%"><font style="font-size: 8pt">Building</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1,846,070</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">(128,911</font></td>
<td style="width: 1%"><font style="font-size: 8pt">)</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1,717,159</font></td>
<td style="width: 3%"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Land</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">264,868</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">264,868</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Building and land improvements</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">733,884</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">(214,068</font></td>
<td><font style="font-size: 8pt">)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">519,816</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Machinery and equipment</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">6,085,195</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">(1,426,465</font></td>
<td><font style="font-size: 8pt">)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">4,658,730</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Office equipment and furniture</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">162,466</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(62,785</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">99,681</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Balances, end of period</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">9,092,483</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(1,832,229</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">7,260,254</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Depreciation expense for the three-month periods
ended May 31, 2020 and 2019 amounted to $248,199 and $161,321, respectively, and is recorded as an operating expense in the consolidated
statements of operations and comprehensive loss.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following tables presents the fair value
of the Company’s financial liabilities as at May 31, 2020 and February 29, 2020:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="10" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Fair Value Measurements as at May 31, 2020</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">Carrying Amount</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">Fair Value</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">Level in the hierarchy</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Instruments measured at fair value on a recurring basis:</font></td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 10pt; width: 62%; text-align: justify"><font style="font-size: 8pt">Foreign exchange contracts</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">125,951</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">125,951</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">Level 1</font></td>
<td style="width: 3%"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Instruments measured at amortized cost:</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 10pt; text-align: justify"><font style="font-size: 8pt">Long-term debt</font></td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">2,236,221</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">2,246,745</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">Level 2</font></td>
<td> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="10" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Fair Value Measurements at February 29, 2020</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">Carrying Amount</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">Fair Value</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">Level in the hierarchy</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Instruments measured at fair value on a recurring basis:</font></td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 10pt; width: 62%; text-align: justify"><font style="font-size: 8pt">Foreign exchange contracts</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">26,840</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">26,840</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">Level 1</font></td>
<td style="width: 3%"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Instruments measured at amortized cost:</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 10pt; text-align: justify"><font style="font-size: 8pt">Long-term debt</font></td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">2,290,152</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">2,291,109</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">Level 2</font></td>
<td> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Accounts payable and accrued liabilities as
at May 31, 2020 and February 29, 2020 were as follows:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>May 31,<br />
2020</b></p></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center">February 29,<br />
2020</p></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; text-align: justify"><font style="font-size: 8pt">Trade accounts payable</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">648,670</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">814,081</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 20pt; text-align: justify; text-indent: -9pt"><font style="font-size: 8pt">Trade accrued liabilities</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">99,587</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">593,789</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 20pt; text-align: justify; text-indent: -9pt"><font style="font-size: 8pt">Accrued employee compensation</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">496,630</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">634,807</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Foreign exchange contracts</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">125,951</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">26,840</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 20pt; text-align: justify; text-indent: -9pt"><font style="font-size: 8pt">Other accrued liabilities</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">40,634</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">13,181</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">1,411,472</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">2,082,698</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 15, 2018, the Company, through
its wholly-owned subsidiary Loop Innovations, LLC, a Delaware limited liability company, entered into a Joint Venture Agreement
(the “Agreement”) with Indorama Ventures Holdings LP, USA, an indirect subsidiary of Indorama Ventures Public Company
Limited, to manufacture and commercialize sustainable polyester resin. Each company has a 50/50 equity interest in Indorama Loop
Technologies, LLC (“ILT”), which was specifically formed to operate and execute the joint venture.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Under the Agreement, Indorama Venture is contributing
manufacturing knowledge and Loop Industries is required to contribute its proprietary science and technology.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Specifically, the Company is contributing an
exclusive world-wide royalty-free license to ILT to use its proprietary technology to produce 100% sustainably produced PET resin
and polyester fiber.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">ILT meets the accounting definition of a joint
venture where neither party has control of the joint venture entity and both parties have joint control over the decision-making
process in ILT. As such, the Company uses the equity method of accounting to account for its share of the investment in Indorama
Loop Technologies, LLC. There were no operations in ILT from the date of inception of September 24, 2018 to May 31, 2020 and, as
at May 31, 2020, the carrying value of the equity investment was $1,500,000, which is the total of the cash contributions we have
made to ILT. During the three-month periods ended May 31, 2020 and May 31, 2019, we made contributions to ILT of $650,000 and $500,000,
respectively.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Long-term debt as of May 31, 2020 and February
29, 2020, was comprised of the following:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>May 31,</b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2020</b></p></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center">February 29,</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center">2020</p></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Investissement Québec financing facility:</font></td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; padding-left: 9pt; text-align: justify"><font style="font-size: 8pt">Principal amount</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1,602,404</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1,645,122</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-align: justify"><font style="font-size: 8pt">Unamortized discount</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">(273,652</font></td>
<td><font style="font-size: 8pt">)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">(289,852</font></td>
<td><font style="font-size: 8pt">)</font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-align: justify"><font style="font-size: 8pt">Accrued interest</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">10,489</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">958</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 27pt; text-align: justify"><font style="font-size: 8pt">Total Investissement Québec financing facility</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,339,241</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,356,228</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Term loan</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-align: justify"><font style="font-size: 8pt">Principal amount</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">896,980</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">933,924</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-align: justify"><font style="font-size: 8pt">Less: current portion</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(50,772</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(52,126</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 27pt"><font style="font-size: 8pt">Total term loan, net of current portion</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">846,208</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">881,798</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Long-term debt, net of current portion</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">2,185,449</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">2,238,026</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Investissement Québec financing facility</i></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 21, 2020, the Company received $1,645,122
(CDN$2,209,234) from Investissement Québec as the first disbursement of our financing facility, out of a maximum of $3,425,423
(CDN$4,600,000) (the “Financing Facility”). The loan bears interest at 2.36% and there is a 36-month moratorium on
both capital and interest repayments starting on the date of the first disbursement, after which capital and interest is repayable
in 84 monthly installments. The Company established the fair value of the loan for the first disbursement at $1,354,408 based
on a discount rate of 5.45%, which reflected a debt discount of $290,714. The discount rate used was based on the external financing
from a Canadian bank. The Company, under the loan agreement, was required to pay fees representing 1% of the loan amount,
$34,254 (CDN$46,000) to Investissment Québec which we deferred and recorded as a reduction of the Financing Facility. Debt
discount and deferred financing expenses are amortized to “Interest and other financial expenses” in our Consolidated
Statements of Operations and Comprehensive Loss. The Company recorded interest expense on the Investissement Québec loan
for the three months ended May 31, 2020 in the amount of $9,416 (2019 – nil) and an accretion expense of $8,547 (2019 –
nil).</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has also agreed to issue to Investissement
Québec warrants to purchase shares of common stock of the Company in an amount equal to 10% of each disbursement up to a maximum
aggregate amount of $333,648 (CDN$460,000). The exercise price of the warrants is equal to the higher of (i) $11.00 per share and
(ii) the ten-day weighted average closing price of Loop Industries shares of common stock on the Nasdaq stock market for the 10
days prior to the issue of the warrants. The warrants can be exercised immediately upon grant and will have a term of three years
from the date of issuance. The loan can be repaid at any time by the Company without penalty. In connection the first disbursement
of the Financing Facility, the Company issued a warrant (“First Disbursement Warrant”) to acquire 15,153 shares of
common stock at a strike price of $11.00 per share to Investissement Québec. The Company determined the fair value of the
warrants using the Black-Scholes pricing formula. The fair value of the First Disbursement Warrant was determined to be $77,954
and is included in “Additional paid-in capital – Warrants” in our Condensed Consolidated Balance Sheets. The
First Disbursement Warrant remains outstanding as at May 31, 2020.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The remaining amount available under the financing
facility is $1,734,073 (CDN$2,390,766) to be received in a maximum of two additional disbursements.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Term loan</i></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 24, 2018, the Company obtained a
$1,015,449 (CDN$1,400,000) 20-year term instalment loan (the “Loan”), from a Canadian bank. The Loan bears interest
at the bank’s Canadian prime rate plus 1.5%. By agreement, the Loan is repayable in monthly payments of $4,231 (CDN$5,833)
plus interest, until January 2021, at which time it will be subject to renewal. It includes an option allowing for the prepayment
of the Loan without penalty. During the three-month period ended May 31, 2020, we repaid $12,693 (2019 – 13,057) on the principal
balance of the Loan. Interest paid amounted to $10,311 during the quarter ended May 31, 2020 (2019 - $13,070). The terms of the
credit facility require the Company to comply with certain financial covenants. As at May 31, 2020 and 2019, the Company was in
compliance with its financial covenants.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0">Principal repayments due on the Company’s long-term debt over
the next five years are as follows:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="text-indent: 9pt"><font style="font-size: 8pt"><b>Years ending</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Amount</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 88%; text-indent: 9pt"><font style="font-size: 8pt">February 28, 2021</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">38,079</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-indent: 9pt"><font style="font-size: 8pt">February 28, 2022</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">50,772</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-indent: 9pt"><font style="font-size: 8pt">February 28, 2023</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">50,772</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-indent: 9pt"><font style="font-size: 8pt">February 29, 2024</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">279,684</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-indent: 9pt"><font style="font-size: 8pt">February 28, 2025</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">279,684</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-indent: 9pt"><font style="font-size: 8pt">Thereafter</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">1,787,700</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-indent: 9pt"><font style="font-size: 8pt"><b>Total</b></font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">2,486,691</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Employment Agreement</u></i></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 29, 2015, the Company entered into an
employment agreement with Mr. Daniel Solomita, the Company’s President and Chief Executive Officer (“CEO”). 
The employment agreement is for an indefinite term. </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 13, 2018, the Company and Mr. Solomita
entered into an amendment and restatement of the employment agreement which provided for a long-term incentive grant of 4,000,000
shares of the Company’s common stock, in tranches of one million shares each, upon the achievement of four performance milestones.
This was modified to provide a grant of 4,000,000 restricted stock units covering 4,000,000 shares of the Company’s common
stock while the performance milestones remained the same. The grant of the restricted stock units became effective upon approval
by the Company’s shareholders at the Company’s 2019 annual meeting, of an increase in the number of shares available
for grant under the Plan.  Such approval was granted by the Company’s shareholders at the Company’s 2019 annual
meeting.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 30, 2020, the Company and Mr. Solomita
entered into an amendment of Mr. Solomita’s employment agreement.  The amendment clarified the milestones consistent
with the shift in the Company’s business from the production of terephthalate to the production of dimethyl terephthalate,
another proven monomer of PET plastic that is far simpler to purify.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the quarters ended May 31, 2020 and May
31, 2019, no outstanding milestones were probable of being met based on the authoritative guidance provided by the FASB and,
accordingly, the Company did not record any additional compensation expense. When a milestone becomes probable, the corresponding
expense will be valued based on the grant date fair value on April 30, 2020, the date of the last modification of Mr. Solomita’s
employment agreement. The closing price of the Company’s common stock on the Nasdaq on April 30, 2020 was $7.74 per share.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Common Stock</b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><font style="font-size: 8pt"><b>For the period ended May 31, 2020</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Number of shares</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Amount</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; padding-left: 9pt; text-align: justify; text-indent: -9pt"><font style="font-size: 8pt">Balance, February 29, 2020</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">39,910,774</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">3,992</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><font style="font-size: 8pt">Issuance of shares upon settlement of restricted stock units</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">6,131</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">1</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-indent: -9pt"><font style="font-size: 8pt">Balance, May 31, 2020</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"> </td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">39,916,905</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">3,993</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><font style="font-size: 8pt"><b>For the period ended May 31, 2019</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Number of shares</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Amount</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%">
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: -9pt">Balance, February
29, 2019</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: -9pt"></p></td>
<td style="width: 1%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%"><font style="font-size: 8pt"> </font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">33,805,706</font></td>
<td style="width: 1%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">3,381</font></td>
<td style="width: 1%"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><font style="font-size: 8pt">Issuance of shares for
cash</font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: right"><font style="font-size: 8pt"> 600,000</font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: right"><font style="font-size: 8pt"> 60</font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><font style="font-size: 8pt">Issuance of shares upon
settlement of legal matter</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">150,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">15</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><font style="font-size: 8pt">Issuance of shares upon conversion of Convertible notes</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">319,326</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">32</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-indent: -9pt"><font style="font-size: 8pt">Balance, May 31, 2019</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"> </td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">34,875,032</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">3,488</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the three months ended May 31, 2020,
the Company recorded the following common stock transactions:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="3" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr>
<td style="vertical-align: top; width: 36px"><font style="font-size: 8pt">(i)</font></td>
<td style="text-align: justify"><font style="font-size: 8pt">The Company issued 6,131 shares of the common stock to settle restricted stock units that vested in the period.</font></td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the three months ended May 31, 2019,
the Company recorded the following common stock transactions:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="3" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr>
<td style="vertical-align: top; width: 36px"><font style="font-size: 8pt">(i)</font></td>
<td style="text-align: justify"><font style="font-size: 8pt">On March 1, 2019, the Company sold 600,000 shares of its common stock at an offering price of $8.55 per share in a registered direct offering, for gross proceeds of $5,130,000;</font></td></tr>
</table>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="3" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr>
<td style="vertical-align: top; width: 36px"><font style="font-size: 8pt">(ii)</font></td>
<td><font style="font-size: 8pt">On March 8, 2019 and March 11, 2019, the Company issued 150,000 shares of its common stock in settlement of a legal matter;</font></td></tr>
</table>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="3" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr>
<td style="vertical-align: top; width: 36px"><font style="font-size: 8pt">(iii)</font></td>
<td style="text-align: justify"><font style="font-size: 8pt">On April 9, 2019, the Company converted Convertible notes with a face value of $2,650,000 plus accrued interest of $80,241 at a conversion price of $8.55, into 319,326 common shares.</font></td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Stock Options</b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the three-month period ended May 31,
2020, the Company granted 3,389 stock options (2019 – nil) with a weighted average exercise price of $8.78 (2019 –
nil), no stock options were forfeited (2019 – 10,010; weighted average exercise price: $8.75) or exercised (2019 –
nil) and no stock options expired (2019 – 260,417; weighted average exercise price: $13.89).</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company applies the fair value method of
accounting for stock-based compensation awards granted. Fair value is calculated based on a Black-Scholes option pricing model.
The principal components of the pricing model were as follows:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>2020</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">2019</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; padding-left: 9pt; text-align: justify; text-indent: -9pt"><font style="font-size: 8pt">Exercise price</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">8.78</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">-</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><font style="font-size: 8pt">Risk-free interest rate</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1.05</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><font style="font-size: 8pt">Expected dividend yield</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">0.00</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><font style="font-size: 8pt">Expected volatility</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">75.95</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><font style="font-size: 8pt">Expected life</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">7.5 years </font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the three-month periods ended May 31,
2020 and 2019, stock-based compensation expense attributable to stock options amounted to $556,895 and $575,513, respectively,
and is included in operating expenses.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b>Restricted Stock Units</b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the three-month period ended May
31, 2020, the Company granted 83,725 restricted stock units (“RSUs”) (2019 – 25,145) with a weighted
average fair value of $8.71 (2019 – 9.79), settled 6,131 RSUs (2019 – 7,043) with a weighted average fair value
of $9.55 (2019 – 12.16) and 2,989 RSUs were forfeited (2019 – 17,203) with a weighted average fair value of $8.78
(2019 – $8.75).</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company applies the fair value method of
accounting for awards granted through the issuance of restricted stock units. Fair value is calculated based on the closing share
price at grant date multiplied by the number of restricted stock unit awards granted.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the three-month periods ended May 31,
2020 and 2019, stock-based compensation attributable to RSUs amounted to $370,487 and $355,178, respectively, and is included in
operating expenses.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the three-month periods ended May 31,
2020 and 2019, stock-based compensation included in research and development expenses amounted to $352,007 and $312,435, respectively,
and in general and administrative expenses amounted to $659,817 and $618,255, respectively.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 6, 2017, the Company adopted the 2017
Equity Incentive Plan (the “Plan”). The Plan permits the granting of warrants, stock options, stock appreciation rights
and restricted stock units to employees, directors and consultants of the Company. A total of 3,000,000 shares of common stock
were initially reserved for issuance under the Plan at July 6, 2017, with annual automatic share reserve increases, as defined
in the Plan, amounting to the lessor of (i) 1,500,000 shares, (ii) 5% of the outstanding shares on the last day of the immediately
preceding fiscal year, or (iii) or such number of shares determined by the Administrator of the Plan, effective March 1, 2018.
On March 1, 2020, the Board of Directors opted to waive the annual share reserve increase. The Plan is administered by the Board
of Directors who designates eligible participants to be included under the Plan, the number of awards granted, the share price
pursuant to the awards and the vesting conditions and period. The awards, when granted, will have an exercise price of no less
than the estimated fair value of shares at the date of grant and a life not exceeding 10 years from the grant date. However, where
a participant, at the time of the grant, owns stock representing more than 10% of the voting power of the Company, the life of
the options shall not exceed 5 years.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0">The following table summarizes the continuity of the Company’s
Equity Incentive Plan units during the three-month periods ended May 31, 2020 and 2019:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>2020</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">2019</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Number of units</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">Number of units</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; padding-left: 9pt; text-indent: -9pt"><font style="font-size: 8pt">Outstanding, beginning of period</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1,300,518</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">3,223,516</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-indent: -9pt"><font style="font-size: 8pt">Automatic share reserve increase</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,500,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-indent: -9pt"><font style="font-size: 8pt">Units granted</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">(87,114</font></td>
<td><font style="font-size: 8pt">)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">(25,145</font></td>
<td><font style="font-size: 8pt">)</font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-indent: -9pt"><font style="font-size: 8pt">Units forfeited</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2,989</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">27,213</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-indent: -9pt"><font style="font-size: 8pt">Units expired</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">-</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">260,417</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-indent: -9pt"><font style="font-size: 8pt">Outstanding, end of period</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">1,216,393</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">4,986,001</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the three-month period ended May 31,
2020, the Company issued, in exchange for consulting services, a warrant to purchase 25,000 shares of our common stock at the price
of $9.43 per share expiring May 12, 2022. No warrants were exercised or expired in the three-month period ended May 31, 2020.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the three-month period ended May 31,
2019, the Company issued a warrant to purchase 159,663 shares of our common stock at the price of $8.55 per share expiring October
5, 2020. No warrants were exercised or expired in the three-month period ended May 31, 2019.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Interest and other financial expenses for the
three-month periods ended May 31, 2020 and 2019 are as follows:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>2020</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">2019</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; text-align: justify"><font style="font-size: 8pt">Interest on long-term debt</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">19,727</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">13,070</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Interest on convertible notes</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">117,435</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Accretion expense</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">8,547</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">547,562</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Amortization of deferred finance expenses</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">46,442</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Revaluation of warrants</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">8,483</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">  Loss on revaluation of foreign exchange contracts</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">98,502</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Gain on conversion of November 2018 Notes</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">(232,565</font></td>
<td><font style="font-size: 8pt">)</font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Other</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">-</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">1,422</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">126,776</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">501,849</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The preparation of financial statements in conformity
with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during
the reporting period. Actual results could differ from those estimates. Those estimates and assumptions include estimates for depreciable
lives of property, plant and equipment, intangible assets, analysis of impairments of long-lived assets and intangible assets,
accruals for potential liabilities and assumptions made in calculating the fair value of stock-based compensation and other equity
instruments.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The uncertainties around the COVID-19 pandemic
required the use of estimates and assumptions that resulted in no significant impact to our unaudited condensed consolidated financial
statements as of and for the three-month period ended May 31, 2020.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying unaudited condensed consolidated
financial statements are presented in U.S. dollars, the reporting currency of the Company. Assets and liabilities of subsidiaries
that have a functional currency other than that of the Company are translated to U.S. dollars at the exchange rate as at the balance
sheet date. Income and expenses are translated at the average exchange rate of the period. The resulting translation adjustments
are included in other comprehensive income (loss) (“OCI”). As a result, foreign currency exchange fluctuations may
impact operating expenses. The Company currently has not engaged in any currency hedging activities.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For transactions and balances, monetary assets
and liabilities denominated in foreign currencies are translated into the functional currency of the entity at the prevailing exchange
rate at the reporting date. Non-monetary assets and liabilities, and revenue and expense items denominated in foreign currencies
are translated into the functional currency using the exchange rate prevailing at the dates of the respective transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions are recognized in the consolidated statements of operations
and comprehensive loss, except for gains or losses arising from the translation of intercompany balances denominated in foreign
currencies that forms part in the net investment in the subsidiary which are included in OCI. </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Loop Industries, Inc. periodically issues stock
options, warrants and restricted stock units to employees and non-employees in non-capital raising transactions for services and
financing expenses. The Company accounts for stock options granted to employees based on the authoritative guidance provided by
the FASB wherein the fair value of the award is measured on the grant date and where there are no performance conditions, recognized
as compensation expense on the straight-line basis over the vesting period and where performance conditions exist, recognize compensation
expense when it becomes probable that the performance condition will be met. Forfeitures on share-based payments are accounted
for by recognizing forfeitures as they occur.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company accounts for stock options and warrants
granted to non-employees in accordance with the authoritative guidance of the FASB wherein the fair value of the stock compensation
is based upon the measurement date determined as the earlier of the date at which either a) a commitment is reached with
the counterparty for performance or b) the counterparty completes its performance.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company estimates the fair value of restricted
stock unit awards to employees and directors based on the closing market price of its common stock on the date of grant.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The fair value of the stock options granted
are estimated using the Black-Scholes-Merton Option Pricing (“Black-Scholes”) model, which uses certain assumptions
related to risk-free interest rates, expected volatility, expected life of the stock options, and future dividends. Stock-based
compensation expense is recorded based on the value derived from the Black-Scholes model and on actual experience. The assumptions
used in the Black-Scholes model could materially affect stock-based compensation expense recorded in the current and future periods.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company calculates its provision for income
tax on the basis of the tax laws enacted at the balance sheet date in the countries where the Company and its subsidiaries operate
and generate taxable income, in accordance with FASB ASC 740, <i>Income Taxes</i>. The Company uses an asset and liability approach
for financial accounting and reporting for income taxes that allows recognition and measurement of deferred tax assets based upon
the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided
for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more
likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility
is uncertain. The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax
expense.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Research and development expenses relate primarily
to the development, design, testing of preproduction samples, prototypes and models, compensation, and consulting fees, and are
expensed as incurred. Total research and development expenses recorded during the three-month periods ended May 31, 2020 and 2019
amounted to $1,480,588 and $997,861, respectively, and are net of government research and development tax credits and government
grants from the federal and provincial taxation authorities accrued and recorded based on qualifying expenditures incurred during
the fiscal periods.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company computes net loss per share in accordance
with FASB ASC 260, <i>Earnings Per Share</i>. Basic earnings (loss) per share is computed by dividing the net income (loss) applicable
to common stockholders by the weighted average number of shares of common stock outstanding during the year. The Company includes
common stock issuable in its calculation. Diluted earnings (loss) per share is computed by dividing the net income (loss) applicable
to common stockholders by the weighted average number of common shares outstanding plus the number of additional common shares
that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential
common shares are excluded from the computation if their effect is antidilutive.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For the three-month periods ended May 31, 2020
and 2019, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an
antidilutive effect. As at May 31, 2020, the potentially dilutive securities consisted of 1,590,470 outstanding stock options (May
31, 2019 – 1,691,973), 4,302,527 outstanding restricted stock units (May 31, 2019 – 403,767), 5,084,331 outstanding
warrants (May 31, 2019 – 962,132) and nil outstanding issuable common stock (May 31, 2019 – 1,000,000).</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Recently adopted accounting pronouncements</u></i></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In August 2018, the FASB issued ASU 2018-15,
“Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that Is a Service Contract,”
which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract
with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements
that include an internal-use software license). This update is effective for fiscal years beginning after December 15, 2019, including
interim periods within those fiscal years. The adoption of the standard had no impact on the consolidated financial statements
of the Company.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In February 2018, the FASB issued ASU 2018-02,
<i>Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income</i>, which permits entities to reclassify
the disproportionate income tax effects of the Tax Reform Act on items within accumulated other comprehensive income (loss) ("AOCI")
to retained earnings. These disproportionate income tax effect items are referred to as "stranded tax effects." Amendments
in this update only relate to the reclassification of the income tax effects of the Tax Reform Act. Other accounting guidance that
requires the effect of changes in tax laws or rates to be included in net income from continuing operations is not affected by
this update. ASU 2018-02 should be applied either in the period of adoption or retrospectively to each period in which the effect
of the change in the U.S. federal corporate income tax rate in the Tax Reform Act is recognized. ASU 2018-02 is applicable beginning
March 1, 2020. The adoption of the standard had no impact on the consolidated financial statements of the Company.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In February 2016, the FASB issued ASU 2016-02,
“Leases,” amended in July by ASU 2018-10, “Codification Improvements to Topic 842, Leases,” ASU 2018-11,
“Targeted Improvements,” and ASU 2018-20, “Narrow-Scope Improvements for Lessors,” which requires lessees
to recognize leases on the balance sheet while continuing to recognize expenses in the income statement in a manner similar to
current accounting standards. For lessors, the new standard modifies the classification criteria and the accounting for sales-type
and direct financing leases. Enhanced disclosures will also be required to give financial statement users the ability to assess
the amount, timing, and uncertainty of cash flows arising from leases. This ASU may either be adopted on a modified retrospective
approach at the beginning of the earliest comparative period, or through a cumulative-effect adjustment at the adoption date. This
update is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The
Company adopted these standards effective March 1, 2020. The adoption of the standard had no impact on the consolidated financial
statements of the Company. The Company elected to apply the package of practical expedients that allows us not to reassess whether
expired or existing contracts contain leases, the classification of these leases and whether previously capitalized initial direct
costs would qualify for capitalization under Accounting Standards Codification (or “<i>ASC</i>”) 842. Furthermore,
we elected to use hindsight in determining the lease term and assessing impairment of the right-of-use assets.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Recently issued accounting pronouncements
not yet adopted</u></i></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In December 2019, the FASB issued ASU 2019-12,
“Simplifying the Accounting for Income Taxes,” which removes specific exceptions to the general principles in ASC 740,
“Income Taxes,” and clarifies certain aspects of the existing guidance. This update is effective for fiscal years beginning
after December 15, 2020, including interim periods within those fiscal years, with early adoption being permitted as of the beginning
of an interim or annual reporting period. All amendments to this ASU must be adopted in the same period on a prospective basis,
with certain exceptions. We are still evaluating the impact of this accounting guidance on our results of operations and financial
position.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In June 2016, the FASB issued ASU 2016-13, “Financial
Instruments—Credit Losses”. This ASU added a new impairment model (known as the current expected credit loss (“CECL”)
model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes an allowance
for its estimate of expected credit losses and applies to most debt instruments, trade receivables, lease receivables, financial
guarantee contracts, and other loan commitments. The CECL model does not have a minimum threshold for recognition of impairment
losses and entities will need to measure expected credit losses on assets that have a low risk of loss. This update is effective
for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years for smaller reporting companies.
We are still evaluating the impact of this accounting guidance on our results of operations and financial position.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>May 31,</b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2020</b></p></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center">February 29,</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center">2020</p></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; text-align: justify"><font style="font-size: 8pt">Sales tax</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">122,419</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">180 971</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Research and development tax credits</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">216,458</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">447,843</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Other receivables</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">231,337</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">35,730</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">570,214</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">664,544</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>May 31,</b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2020</b></p></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center">February 29,</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center">2020</p></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; text-align: justify"><font style="font-size: 8pt">Insurance</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1,144,500</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">61,891</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Machinery and equipment</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">644,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Other prepaid expenses</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">148,539</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">79,335</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">1,937,039</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">141,226</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="10" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>As at May 31, 2020</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Cost</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Accumulated depreciation</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Net book value</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 62%"><font style="font-size: 8pt">Building</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1,798,134</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">(140,542</font></td>
<td style="width: 1%"><font style="font-size: 8pt">)</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1,657,592</font></td>
<td style="width: 3%"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Land</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">222,268</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">222,268</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Building and land improvements</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">900,479</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">(235,634</font></td>
<td><font style="font-size: 8pt">)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">664,845</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Machinery and equipment</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">6,207,312</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">(1,598,626</font></td>
<td><font style="font-size: 8pt">)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">4,608,686</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Office equipment and furniture</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">162,388</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(65,734</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">96,654</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Balances, end of period</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">9,290,581</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(2,040,536</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">7,250,045</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="10" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>As at February 29, 2020</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Cost</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Accumulated depreciation</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Net book value</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 62%"><font style="font-size: 8pt">Building</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1,846,070</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">(128,911</font></td>
<td style="width: 1%"><font style="font-size: 8pt">)</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1,717,159</font></td>
<td style="width: 3%"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Land</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">264,868</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">264,868</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Building and land improvements</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">733,884</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">(214,068</font></td>
<td><font style="font-size: 8pt">)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">519,816</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Machinery and equipment</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">6,085,195</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">(1,426,465</font></td>
<td><font style="font-size: 8pt">)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">4,658,730</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Office equipment and furniture</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">162,466</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(62,785</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">99,681</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Balances, end of period</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">9,092,483</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(1,832,229</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">7,260,254</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="10" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Fair Value Measurements as at May 31, 2020</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">Carrying Amount</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">Fair Value</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">Level in the hierarchy</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Instruments measured at fair value on a recurring basis:</font></td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 10pt; width: 62%; text-align: justify"><font style="font-size: 8pt">Foreign exchange contracts</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">125,951</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">125,951</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">Level 1</font></td>
<td style="width: 3%"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Instruments measured at amortized cost:</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 10pt; text-align: justify"><font style="font-size: 8pt">Long-term debt</font></td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">2,236,221</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">2,246,745</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">Level 2</font></td>
<td> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="10" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Fair Value Measurements at February 29, 2020</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">Carrying Amount</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">Fair Value</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">Level in the hierarchy</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Instruments measured at fair value on a recurring basis:</font></td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 62%; text-align: justify"><font style="font-size: 8pt">Foreign exchange contracts</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">26,840</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">26,840</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">Level 1</font></td>
<td style="width: 3%"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Instruments measured at amortized cost:</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 10pt; text-align: justify"><font style="font-size: 8pt">Long-term debt</font></td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">2,290,152</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">2,291,109</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">Level 2</font></td>
<td> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>May 31,</b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2020</b></p></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center">February 29,</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center">2020</p></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Investissement Québec financing facility:</font></td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; padding-left: 9pt; text-align: justify"><font style="font-size: 8pt">Principal amount</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1,602,404</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1,645,122</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-align: justify"><font style="font-size: 8pt">Unamortized discount</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">(273,652</font></td>
<td><font style="font-size: 8pt">)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">(289,852</font></td>
<td><font style="font-size: 8pt">)</font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-align: justify"><font style="font-size: 8pt">Accrued interest</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">10,489</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">958</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 27pt; text-align: justify"><font style="font-size: 8pt">Total Investissement Québec financing facility</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,339,241</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,356,228</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Term loan</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-align: justify"><font style="font-size: 8pt">Principal amount</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">896,980</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">933,924</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-align: justify"><font style="font-size: 8pt">Less: current portion</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(50,772</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(52,126</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 27pt"><font style="font-size: 8pt">Total term loan, net of current portion</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">846,208</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">881,798</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Long-term debt, net of current portion</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">2,185,449</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">2,238,026</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="text-indent: 9pt"><font style="font-size: 8pt"><b>Years ending</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Amount</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 88%; text-indent: 9pt"><font style="font-size: 8pt">February 28, 2021</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">38,079</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-indent: 9pt"><font style="font-size: 8pt">February 28, 2022</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">50,772</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-indent: 9pt"><font style="font-size: 8pt">February 28, 2023</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">50,772</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-indent: 9pt"><font style="font-size: 8pt">February 29, 2024</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">279,684</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-indent: 9pt"><font style="font-size: 8pt">February 28, 2025</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">279,684</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-indent: 9pt"><font style="font-size: 8pt">Thereafter</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">1,787,700</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-indent: 9pt"><font style="font-size: 8pt"><b>Total</b></font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">2,486,691</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>2020</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">2019</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; padding-left: 9pt; text-align: justify; text-indent: -9pt"><font style="font-size: 8pt">Exercise price</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">8.78</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">-</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><font style="font-size: 8pt">Risk-free interest rate</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1.05</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><font style="font-size: 8pt">Expected dividend yield</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">0.00</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><font style="font-size: 8pt">Expected volatility</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">75.95</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><font style="font-size: 8pt">Expected life</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">7.5 years </font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>2020</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">2019</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Number of units</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">Number of units</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; padding-left: 9pt; text-indent: -9pt"><font style="font-size: 8pt">Outstanding, beginning of period</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1,300,518</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">3,223,516</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-indent: -9pt"><font style="font-size: 8pt">Automatic share reserve increase</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,500,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-indent: -9pt"><font style="font-size: 8pt">Units granted</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">(87,114</font></td>
<td><font style="font-size: 8pt">)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">(25,145</font></td>
<td><font style="font-size: 8pt">)</font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-indent: -9pt"><font style="font-size: 8pt">Units forfeited</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2,989</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">27,213</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-indent: -9pt"><font style="font-size: 8pt">Units expired</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">-</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">260,417</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-indent: -9pt"><font style="font-size: 8pt">Outstanding, end of period</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">1,216,393</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">4,986,001</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>2020</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">2019</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; text-align: justify"><font style="font-size: 8pt">Interest on long-term debt</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">19,727</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">13,070</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Interest on convertible notes</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">117,435</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Accretion expense</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">8,547</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">547,562</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Amortization of deferred finance expenses</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">46,442</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Revaluation of warrants</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">8,483</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">  Loss on revaluation of foreign exchange contracts</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">98,502</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Gain on conversion of November 2018 Notes</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">(232,565</font></td>
<td><font style="font-size: 8pt">)</font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Other</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">-</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">1,422</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">126,776</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">501,849</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
1590470
1691973
4302527
403767
5084331
962132
0
1000000
122419
180971
216458
447843
231337
35730
570214
664544
1144500
61891
644000
0
148539
79335
2040536
1832229
128911
0
214068
1426465
62785
140542
0
235634
1598626
65734
9290581
9092483
1846070
264868
733884
6085195
162466
1798134
222268
900479
6207312
162388
248199
161321
202863
127672
-22311
0
7891
3015
22631
0
0
-5312
-2150
2291109
2246745
125951
26840
1411472
2082698
40634
13181
125951
26840
496630
634807
99587
593789
648670
814081
2486691
1602404
1645122
896980
933924
273652
289852
10489
958
38079
50772
50772
279684
279684
1787700
9416
0
8547
0
10311
13070
8.78
.00
.0105
.0000
.0000
.0000
.7595
.0000
P7Y6M
P0Y
3389
0
8.78
.00
0
10010
.00
8.75
0
0
0
260417
0
13.89
556895
575513
83725
25145
87114
25145
25000
159663
8.71
9.79
9.43
8.55
6131
7043
9.55
12.16
2989
17203
2989
27213
8.78
8.75
370487
355178
1300518
1216393
3223516
4986001
0
1500000
0
260417
126776
501849
0
-1422
0
232565
0
8483
0
46442
8547
547562
0
117435
19727
13070
<table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><font style="font: 8pt Times New Roman, Times, Serif"><b>For the period ended May 31, 2020</b></font></td>
<td> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Number of shares</b></font></td>
<td> </td>
<td> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Amount</b></font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 78%; padding-left: 9pt; text-align: justify; text-indent: -9pt"><font style="font: 8pt Times New Roman, Times, Serif">Balance, February 29, 2020</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 8%; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">39,910,774</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 8%; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">3,992</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><font style="font: 8pt Times New Roman, Times, Serif">Issuance of shares upon settlement of restricted stock units</font></td>
<td> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">6,131</font></td>
<td> </td>
<td> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-indent: -9pt"><font style="font: 8pt Times New Roman, Times, Serif">Balance, May 31, 2020</font></td>
<td> </td>
<td style="border-bottom: black 1pt double"> </td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">39,916,905</font></td>
<td> </td>
<td> </td>
<td style="border-bottom: black 1pt double"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">3,993</font></td>
<td> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p>
<table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><font style="font: 8pt Times New Roman, Times, Serif"><b>For the period ended May 31, 2019</b></font></td>
<td> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Number of shares</b></font></td>
<td> </td>
<td> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Amount</b></font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 78%; padding-left: 9pt; text-align: justify; text-indent: -9pt"><font style="font: 8pt Times New Roman, Times, Serif">Balance, February 29, 2019</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 8%; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">33,805,706</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 8%; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">3,381</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><font style="font: 8pt Times New Roman, Times, Serif">Issuance of shares for cash</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font: 8pt Times New Roman, Times, Serif"> 600,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font: 8pt Times New Roman, Times, Serif"> 60</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><font style="font: 8pt Times New Roman, Times, Serif">Issuance of shares upon settlement of legal matter</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">150,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">15</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><font style="font: 8pt Times New Roman, Times, Serif">Issuance of shares upon conversion of Convertible notes</font></td>
<td> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">319,326</font></td>
<td> </td>
<td> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">32</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; text-indent: -9pt"><font style="font: 8pt Times New Roman, Times, Serif">Balance, May 31, 2019</font></td>
<td> </td>
<td style="border-bottom: black 1pt double"> </td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">34,875,032</font></td>
<td> </td>
<td> </td>
<td style="border-bottom: black 1pt double"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">3,488</font></td>
<td> </td></tr>
</table>
<p style="font: 8pt/107% Times New Roman, Times, Serif; margin: 0 0 8pt"> </p>
256090
164336
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b>As at May 31,</b></font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt">As at February 29,</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>2020</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">2020</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; text-align: justify"><font style="font-size: 8pt">Intangible assets, at cost - beginning of period</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">225,174</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">127,672</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Intangible assets, accumulated depreciation – beginning of period</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(22,311</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">-</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">202,863</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">127,672</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Add: Additions in the period</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">144,386</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">99,972</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Deduct: Amortization of intangibles</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">(7,891</font></td>
<td><font style="font-size: 8pt">)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">(22,631</font></td>
<td><font style="font-size: 8pt">)</font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Deduct: Impairment of intangibles</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Add (deduct): Foreign exchange effect</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(5,312</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(2,150</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">334,046</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">202,863</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Amortization expense for the three-month periods
ended May 31, 2020 and 2019 amounted to $7,891 and $3,015, respectively, and is recorded as an operating expense in the unaudited
condensed consolidated statements of operations and comprehensive loss.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b>As at May 31,</b></font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt">As at February 29,</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>2020</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">2020</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; text-align: justify"><font style="font-size: 8pt">Intangible assets, at cost - beginning of period</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">225,174</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">127,672</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Intangible assets, accumulated depreciation – beginning of period</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(22,311</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">-</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">202,863</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">127,672</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Add: Additions in the period</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">144,386</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">99,972</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Deduct: Amortization of intangibles</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">(7,891</font></td>
<td><font style="font-size: 8pt">)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">(22,631</font></td>
<td><font style="font-size: 8pt">)</font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Deduct: Impairment of intangibles</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Add (deduct): Foreign exchange effect</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(5,312</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(2,150</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">334,046</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">202,863</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>May 31,<br />
2020</b></p></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center">February 29,<br />
2020</p></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; text-align: justify"><font style="font-size: 8pt">Trade accounts payable</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">648,670</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">814,081</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 20pt; text-align: justify; text-indent: -9pt"><font style="font-size: 8pt">Trade accrued liabilities</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">99,587</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">593,789</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 20pt; text-align: justify; text-indent: -9pt"><font style="font-size: 8pt">Accrued employee compensation</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">496,630</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">634,807</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Foreign exchange contracts</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">125,951</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">26,840</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 20pt; text-align: justify; text-indent: -9pt"><font style="font-size: 8pt">Other accrued liabilities</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">40,634</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">13,181</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">1,411,472</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">2,082,698</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
225174
127672
144386
99972