Restatements of Previously Issued Consolidated Financial Statements
 9 Months Ended
Nov. 30, 2015
Restatements Of Previously Issued Consolidated Financial Statements  
Note 10. Restatements of Previously Issued Consolidated Financial Statements

Subsequent to the original issuance of Loop Holdings's financial statements as of and for the period from October 23, 2014 (inception) through February 28, 2015, for the quarterly periods ended May 31, 2015 and August 31, 2015, the management of the Company identified certain misstatements during the periods. As a result of certain misstatements identified, its Board of Directors, in consultation with the management and Li and Company, PC, its independent registered public accounting firm, concluded that its previously issued financial statements for the periods, should no longer be relied upon because of certain misstatements identified. On December 1, 2014, the Company entered into consulting agreements with certain consultants ("the Consultants") for a period of twelve (12) months from the date of signing. Upon signing of the agreements, the Consultants will be granted 890,000 fully vested, nonforfeitable shares of Loop common stock. The Company valued 890,000 fully vested, nonforfeitable shares issued to the Consultants for obtaining services at $0.80 per share, the most recent PPM price, or $712,000 and booked the fair value of the equity instruments issued as consulting fees on the date of grant, which should have been booked as prepaid consulting fees on the date of grant and the expense of the consulting services should have been recognized as those services are received. Accordingly, the Company restated its previously issued financial statements for the periods. The details of the misstatements identified are set out below:

 

Misstatements as of and for the period from October 23, 2014 (inception) through February 28, 2015:

 

   

Misstatements

Dr. (Cr.)

     Impact to Statement of Operations – Income (Loss)  
             
(i) To reverse 890,000 fully vested, nonforfeitable shares issued to parties other than employees for acquiring goods or services originally recorded as consulting fees on the date of grant.            
             
Common stock par value $0.00001   $ 7        
               
Additional paid-in capital     711,993        
               
Consulting fees     (712,000 )     712,000  
                 
(ii) To record 890,000 fully vested, nonforfeitable shares issued to parties other than employees for acquiring goods or services as prepaid consulting fees on the date of grant.                
                 
Prepaid consulting fees     712,000          
                 
Common stock par value $0.00001     (7 )        
                 
Additional paid-in capital     (711,993 )        
                 
(iii) To recognize consulting fees as those services are received.                
                 
Prepaid consulting fees   $ (177,999 )        
                 
Consulting fees     177,999       (177,999 )
                 
            $ 534,001  

 

Misstatement as of and for the quarterly period ended May 31, 2015:

 

   

Misstatements

Dr. (Cr.)

     Impact to Statement of Operations – Income (Loss)  
             
(iv) To recognize consulting fees as those services are received.            
             
Prepaid consulting fees   $ (177,999 )      
               
Consulting fees     177,999       (177,999 )
                 
            $ (177,999 )

 

Misstatement as of and for the quarterly period ended August 31, 2015:

 

   

Misstatements

Dr. (Cr.)

     Impact to Statement of Operations – Income (Loss)  
             
(v) To recognize consulting service fees as those services are received            
             
Prepaid consulting fees   $ (177,999 )      
               
Consulting fees     177,999       (177,999 )
                 
            $ (177,999 )

 

The following tables present the impact of the above mentioned adjustments to the financial information

 

Balance sheets information:

 

The restated balance sheets are set out as follows:

 

Loop Industries, Inc.
Consolidated Balance Sheets

 

    August 31,
2015		     August 31,
2015		     August 31,
2015		  
    (Previously Reported)     (Adjustments)     (Restated)  
    (Unaudited)     (Unaudited)     (Unaudited)  
                   
Assets                  
Current Assets                  
Cash   $ 1,430,404     $ -     $ 1,430,404  
Prepayments     6,453       178,003       184,456  
                         
Total current assets     1,436,857       178,003       1,614,860  
                         
Property and Equipment                        
Equipment     9,801       -       9,801  
Accumulated depreciation     (326 )     -       (326 )
                         
Total property and equipment     9,475       -       9,475  
                         
Intellectual Property                        
Intellectual property     445,050       -       445,050  
Accumulated amortization     (24,730 )     -       (24,730 )
                         
Intellectual property, net     420,320       -       420,320  
                         
Total assets   $ 1,866,652     $ 178,003     $ 2,044,655  
                         
Liabilities and Stockholders' Equity                        
Current Liabilities                        
Accounts payable   $ 114,452     $ -     $ 114,452  
Accrued compensation - officer     30,000       -       30,000  
Advances from related party     52,768       -       52,768  
                         
Total current liabilities     197,220       -       197,220  
                         
Commitments and Contingencies                        
                         
Stockholders' Equity                        
Common stock par value $0.0001: 250,000,000 shares authorized; 29,810,800 and 20,498,750 shares issued and outstanding, respectively     2,981       -       2,981  
Additional paid-in capital     3,373,290       -       3,373,290  
                         
Accumulated deficit     (1,706,839 )     178,003       (1,528,836 )
                         
Total stockholders' equity     1,669,432       178,003       1,847,435  
                         
Total liabilities and stockholders' equity   $ 1,866,652     $ 178,003     $ 2,044,655  

 

Statements of operations information:

 

The restated statements of operations are set out as follows:

 

Loop Industries, Inc.
Consolidated Statements of Operations

 

      For the six months     For the six months     For the six months     For the three months     For the three months     For the three months  
      ended     ended     ended     ended     ended     ended  
      August 31, 2015     August 31, 2015     August 31, 2015     August 31, 2015     August 31, 2015     August 31, 2015  
      (Previously Reported)     (Adjustments)     (Restated)     (Previously Reported)     (Adjustments)     (Restated)  
      (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)  
                                       
Revenue     $ -     $ -     $ -     $ -     $ -     $ -  
                                                   
Operating Expenses                                                  
Consulting fees       -       355,998       355,998       -       177,999       177,999  
Professional fees       100,344       -       100,344       57,979       -       57,979  
Research and development       117,044       -       117,044       116,093       -       116,093  
Research and development - related party       600,000       -       600,000       400,000       -       400,000  
General and administrative expenses       97,731       -       97,731       78,535       -       78,535  
                                                   
Total operating expenses       915,119       355,998       1,271,117       652,607       177,999       830,606  
                                                   
Loss from Operations       (915,119 )     (355,998 )     (1,271,117 )     (652,607 )     (177,999 )     (830,606 )
                                                   
Other (Income) Expense                                                  
Foreign currency transaction (gain) loss       2,120       -       2,120       -       -       -  
                                                   
Other (income) expense, net       2,120       -       2,120       -       -       -  
                                                   
Loss before Income Tax Provision       (917,239 )     (355,998 )     (1,273,237 )     (652,607 )     (177,999 )     (830,606 )
                                                   
Income Tax Provision       -       -       -       -       -       -  
                                                   
Net Loss     $ (917,239 )   $ (355,998 )   $ (1,273,237 )   $ (652,607 )   $ (177,999 )   $ (830,606 )
                                                   
                                                   
Earnings per share                                                  
-Basic and Diluted     $ (0.04 )   $ (0.02 )   $ (0.06 )   $ (0.06 )   $ (0.02 )   $ (0.07 )
                                                   
Weighted average common shares outstanding                                                  
-Basic and Diluted       22,637,020       22,637,020       22,637,020       11,638,510       11,638,510       11,638,510  

 

Statement of cash flows information:

 

The restated statements of cash flows are set out as follows:

 

Loop Industries, Inc.
Consolidated Statements of Cash Flows

 

    For the six months     For the six months     For the six months  
    ended     ended     ended  
    August 31,
2015		     August 31,
2015		     August 31,
2015		  
    (Previously Reported)     (Adjustments)     (Restated)  
    (Unaudited)     (Unaudited)     (Unaudited)  
                   
Cash Flows from Operating Activities                  
Net loss   $ (917,239 )   $ (355,998 )   $ (1,273,237 )
Adjustments to reconcile net loss to net cash used in operating activities:                        
Depreciation expense     326       -       326  
Amortization expense     14,838       -       14,838  
Common shares issued for services     -       355,998       355,998  
Changes in operating assets and liabilities:                        
Prepayments     (503 )     -       (503 )
Accounts payable     114,452       -       114,452  
Accrued compensation - officer     30,000       -       30,000  
Intellectual property obligation     (212,880 )     -       (212,880 )
                         
Net Cash Used in Operating Activities     (971,006 )     -       (971,006 )
                         
Cash Flows from Investing Activities                        
Purchase of property and equipment     (9,801 )     -       (9,801 )
                         
Net Cash Used in Investing Activities     (9,801 )     -       (9,801 )
                         
Cash Flows from Financing Activities                        
Advances from (Repayment to) stockholder     (8,281 )     -       (8,281 )
Proceeds from sale of common shares     2,237,000       -       2,237,000  
                         
Net Cash Provided by Financing Activities     2,228,719       -       2,228,719  
                         
Net Change in Cash     1,247,912       -       1,247,912  
                         
Cash - beginning of period     182,492       -       182,492  
                         
Cash - end of period   $ 1,430,404     $ -     $ 1,430,404  
                         
Supplemental disclosure of cash flow information:                        
                         
Interest paid   $ -     $ -     $ -  
                         
Income tax paid   $ -     $ -     $ -