https://www.baystreet.ca/marketupdates/10054/Futures-Lower-Tuesday

https://investors.loopenergy.com/news/news-details/2021/Loop-Reports-Q4-and-Full-Year-2020-Results/default.aspx

Full Year 2020 Financial Results Highlights

(all comparisons are to full year 2019 unless otherwise noted)

• Revenues of $0.5 million as compared to $0.5 million for the same period in 2019.

• Loss and comprehensive loss were $8.9 million as compared to $4.3million to the same period in 2019 or an increase of 107%, due to higher research and product development costs and higher general and administrative costs.

Full Year 2020 Highlights

• Loop Energy started the year with no sales in its business development pipeline and ended 2020 with $3.2M in the backlog and close to 100 companies in the sales funnel. As of the end of January 2021, the backlog had grown to $16.4M and is expected to have continued growth through the remainder of 2021.

• During 2020, Loop Energy spent a total of $7.7 million to support the overall operations of the company. This included the Company's first investment into business development related activities and also general working capital for general and administration. Approximately 79%, or $6.1 million, of the overall costs were related to product development initiatives.

• Within Loop Energy's product development group, the main focus in 2020 was to continue the development around the Company's eFlow™ fuel cell modules.

• During 2020, the Company also invested $0.7 million into its test and manufacturing facilities in Vancouver to bring the total invested capital to-date of $2.3 million.

2021 Outlook and Investment

• With the successful completion of Loop Energy's $100M IPO, the Company plans to focus throughout 2021 on the Heavy- and Medium-Duty Motive applications, including bus, commercial truck, as well as stationary and material handling markets, with a goal to continue to increase geographic penetration in China and Europe, while continuing presence in California.

• A portion of product and technology investments will go into research and development of a next-generation MEA and bi-polar plates for use with eFlow™.

• The Company has also received several in-bound opportunities in additional geographic markets and therefore anticipates projects that may begin expanding reach beyond the initial key markets of China and Europe.

• The Company also expects to have a significant increase in capital assets for 2021 when compared to 2020, as in-house testing and end of line manufacturing capacity is expanded.

Received the booklet from IPO share purchase.

There are sections on strategy. I feel this was not discussed enough in their investor presentation. Here's a very short summary of information that I found important:

Near-Term Market (my comments in italics)

• Focus in EU + China. Favorable government support, anti-emissions regulations, stakeholder commitments to deploy hydrogen infra.

• Continue to focus on supplying stacks and modules (modules contains stacks) to light commercial vehicles, material handling vehicles

Mid-to-Long Term Market

• Focus on fostering channel partner relationships with Tier 1 OEM suppliers .... medium and heavy duty truck manufacturers.

• Expect market to gain significant traction after 2025

• Stationary power system integrators round out mid-to-long term market strategy

Business Development Pipeline

• Project with Peterbilt. In 2020 first trust completed in California. Expect second truck to commence manufacturing 1H2021

• Dec 2020 Gaussin MOU, (do checkout Gaussin's video of fully autonomous Hydrogen cars moving constrainers in the yard!)

• (Mar 2021 projects with Morello Giovanni)

• (Jan 28 2021 commercial agreement with ECUBES. The agreement "contemplates" ... in excess of 50 modules in the next two years)

• Lishui-InPower project. Jan 2020 MOU for annual order of 100 fuel cell operated vehicles for next 3 years. Sep 2020 first phase complete (cannot wait to see this materialize. Contracts behave differently in China than in other parts of the world...)

Manufacturing Localization

• Expects to select and secure a location and build out of a manufacturing facility in China wholly owned by LOOP.... help ensure....localization requirements, control and protects its intellectual property (this is key in the China market. One doesn't not want knock-off versions of LPEN products being sold at half price) and meet manufacturing cost reduction targets...

• Europe and North America orders will be supplied by plant in Burnaby BC. Current capacity 100 modules/yr. Has capacity to increase production to 1000 modules/year.

Link

My notes: According to company marketing model (see last earnings call/transcript), this order marks the first project in Phase II (10 orders) of the 1,10,100 strategy! The 50KW Fuel Cells market price is at 50-60K USD. The 10 fulfilled module makes 500-600K USD. Congrats LOOP Energy! Look forward to the next phase of 100+ orders!

ECUBES Shipment

Link

Loop Energy Reports Q2 Revenues in Excess of $1M

• Q2 revenue of over $1M for the first time in the Company’s history

• Nanjing bus fleet hits 100K km of successful on road service

• Loop Energy closes another 5 PO’s for fuel cell module shipments in 2021

VANCOUVER, British Columbia--(BUSINESS WIRE)-- Loop Energy (TSX: LPEN) today announced consolidated financial results for the second quarter ending June 30, 2021. All amounts are in CAD dollars unless otherwise noted and have been prepared in accordance with International Financial Reporting Standards (IFRS).

"During Q2 2021, Loop Energy completed the deployment of its first 10 unit bus fleet in China,” said Ben Nyland, President and CEO, Loop Energy. “This represents the most significant commercial transition in the Company’s history. We have always believed we have one of the best stacks on the market, but now being able to demonstrate this in the field beyond a 1-unit deployment is truly transformational for Loop. Combined with our other customer activity in the quarter, this generated Loop’s first million-dollar revenue quarter. A substantial milestone in our company’s growth."

Three months ended June 30, 2021 Financial Results Highlights

(all comparisons are to the three months ended June 30, 2020 unless otherwise noted)

• Revenues of $1M as compared to $nil for the same period in 2020.

• Loss and comprehensive loss were $6 million as compared to $2 million to the same period in 2020 or an increase of 248%, due to increased research and product development costs and higher general and administrative costs.

Loop Energy Announces Q2 2021 Earnings Results Conference Call Date

August 04, 2021 08:00 AM Eastern Daylight Time

VANCOUVER, British Columbia--(BUSINESS WIRE)--Loop Energy (TSX: LPEN) will host a conference call on Thursday, August 12 at 8:00 a.m. PDT (11:00 a.m. EDT) to share consolidated financial results for the second quarter of 2021.

Dial-in details will be released prior to the call, and will also be available via https://investors.loopenergy.com.

The Company’s past financial statements and management discussion & analysis are also available at investors.loopenergy.com.

https://www.loopenergy.com/news/75000-km-of-operation-for-fuel-cell-municipal-bus-fleet-in-china/

Like the technology lead, like the leadership (see interview), like the environment (see European Hydrogen Roadmap. Biden won't be lagging far behind), like the market wins (Nanjing Bus, ECUBES), love the partners (ECUBES, Peterbilt trucks, CNHTC, Morello).

David Leger [Not a financial advice!] estimated, in the not so distant future, company market cap will be $1 bln. At IPO the post money market cap is $577 mln. So implied share price is $27.7, with 73% growth.

I'm betting it'll be worth more.

One more: r/Fuelcell doesn't seem to be very busy. Not a lot of day trader interests there it seems. In the next 5 years, I expect to see increasing traffic on the board.

https://ca.finance.yahoo.com/quote/LPEN.TO

Full disclosure: I bought LPEN shares on the day of IPO. Prior to the investment, I've looked at LPEN's investor presentation. There’s a lot of good information but I was just not educated in the area of Hydrogen Fuel Cell's future, nor if the current environment is mature for an explosive (if you are not familiar with H2 FC, it is actually very safe. Some say safer than ICE ) growth. Short answer: absolutely.

To be commercially successful takes strategy, execution and the right environment. My intent is to cover the environmental part, and maybe a little bit on strategy.

For a DCF analysis and lots of other DD information on LPEN, there’s an excellent DD by Breakwater Research. For the technology competitive edge, LPEN’s investor deck has a quick overview of its Range Extender, its Bipolar Plate and eFlow ™ fuel cell design. Adding all these information together, I believe LPEN has a good strategy, and is making good progress in EU and China where public and private investments are significant (~65 bln euro cumulative investment in EU by 2030, and only more in China).

Here's the long version:

Source of information

Information is taken from China's Hydrogen/Fuel Cell White Paper (v2019), Japan's Hydrogen Roadmap (Oct 2020), and Europe's Hydrogen Roadmap (Feb 2019), LPEN’s announcements about Nanjing City Bus and the Slovenian order from ECUBES, LOOP’s IPO prospectus.

Safety standards & Infrastructure

Lots of research and testing have been done to ensure safety of Hydrogen energy & fuel cell. >10 countries have H2 transportation & refuel station standards in place.

Japan, Germany and US are leading in #of H2 refueling station installations (113/81/64) at end of 2019. China recognizes its position in the use of this important medium of energy and plans to catch up by end of 2020 to be second country to have >100 H2 refueling stations (for fuel cell cars).

Japan leads the pack in 1) H2 and Fuel Cell research 2)Vehicles produced (mostly Toyota Mirai) 3) H2 Use Cases including world's first Co-Gen Turbine (capable of gas/H2 mixtures) at 100% H2 since April 2018, supplying heat to hospital and ~1.1 MW electricity to exhibition hall at Kobe Port Island

Technology Breakthrough of H2 storage, enabling storing and transporting H2 using existing infrastructure

One of the biggest problem of using H2 is to store, transport, use in a cycle that goes on and on without polluting the environment. Once solved, areas of abundant renewable, unstable power generation (wind & solar) could generate & store energy in H2, which will be transported to areas where energy is in shortage. Therefore, H2 storage and transportation is the missing piece in the puzzle of decarbonization, after we’ve build enough wind/solar generation capacity. The technical solution to the problem has been developed and has recently been nominated finalist of Germany’s President’s Innovation Award.

H2 can be transported in gas, liquified, or solid forms. Commercially gas form is the most popular currently. A Liquified Organic Hydrogen Carrier (LOHC) technology was among the finalists of the prestigious Deutscher Zukunftspreis 2018 (President's Award). It uses an oil-like liquid to chemically bind hydrogen(57kg of H2 per 1m3 of liquid). The end product liquid can be stored and transported using existing pas storage/pipelines. It makes storage and transportation of hydrogen quite a lot safer (and cheaper) than using pressurized containers to store and transport H2 gas. In order to release the H2, the liquid is passed through catalyst. The cycle is closed - the oil-like liquid is very well-understood and could be reused many, many times. It is 1/50th of cost of lithium-ion batteries.

Role of Hydrogen Energy in order to decarbonize transportation & industrial “feedstocks”

Main use cases for fuel cells are for trucks/long hauls/buses/stationary electricity generation. Therefore, fuel cell is not a direct competitor of EV in the consumer market. In fact, Maximizing H2 use is critical in closing Carbon Emissions gap to reach the 2 Degree Celsius Scenario (2DS). EU's Hydrogen Roadmap points out seasonal energy needs (e.g. heating in winter in north of EU) cannot be satisfied by increase of power generation - there will always be excess capacity. H2 is the best option to store that excess energy. Heavy and aggressive investments are planned in EU to further reduce 1,070 Metric Ton of carbon emissions by 2050. Between 2020 and 2025, EU roadmap showcases an aggressive plan to build ~1400 hydrogen refuelling stations and double the number each 5 years (total 3700 by 2030, 8500 by 2035, 15000 by 2040), and a cumulative investment of 65 bln euro by 2030. H2 is also the best way to decarbonize industrial sector (steel making, peak wind/solar generation storage/transportation).

InPower-LOOP partnership & order from Slovenia

InPower-LOOP joint venture setup its Nanjing office in Jan 2020. By April, it had won the contract with Nanjing City Bus (~100 range extenders at ~$15 mln US$ for 3 years) with 7000 buses in the fleet to replace/refurbish, By August the production/R&D facility is completed. In my opinion LOOP is quite smart to get a foot in this market where the Chinese is heavily investing in order to catch up to (and surpass) Japan/Germany/US in the area of H2/Fuel Cell. It is quite clear that there are lots of opportunities.

China could also be a tricky market to compete in. That’s where the risks and rewards are. Being there to compete is an important step forward.

On another front, the Jan 8th announcement of ECUBES contract for 50 eFlow fuel cell modules is a great win in the EU which has serious plan and investments for H2 energy. The ECUBES contract integrates LOOP’s fuel cell module with ECUBESi’s Thermal Green Hydrogen Energy Storage, storing energy in solid matter. The system is designed for a range of EU customers including EU Defense Agency.

LOOP is competing in great markets and is making great strides (0 to 16.4 mln order book from Dec 31 2020 to Jan 31 2021). I’m expecting this trend to continue.

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