Recycler Loop Industries Inc. said it has received a subpoena from the U.S. Securities and Exchange Commission for details on its technologies, a move that came a few days after the release of a report from a stock short-selling firm that questioned the viability of its chemical recycling processes.
The Montreal-based company disclosed in an Oct. 16 SEC filing that the securities regulator asked for details of its technology in an Oct. 15 subpoena.
On Oct. 13, the firm Hindenburg Research LLC had published a report it said was based on interviews with former employees, litigation records and other research that questioned Loop's technology. Hindenburg said it shared its findings with regulators.
Loop said in its filing that the SEC was "requesting certain information from the company, including information regarding testing, testing results and details of results from our Gen I and Gen II technologies and certain of our partnerships and agreements."
"The SEC informed the company that its investigation does not mean that the SEC has concluded that anyone has violated the law and that the investigation does not mean that the SEC has a negative opinion of the company," Loop said.
In public statements responding to Hindenburg, Loop has defended its depolymerization technology and said the accusations were inaccurate. Loop said Hindenburg holds a short position on Loop stock and said the conclusions in the report either wrong or based on its first-generation PET recycling technology.
Hindenburg said Loop's technology was "smoke and mirrors."
Loop also told SEC that shareholders in the United States and Canada filed class-action lawsuits against the company in both countries Oct. 13.
The company's stock price fell more than 40 percent after Hindenburg published its report, from closing at $11.61 on Oct. 12 to a close of $6.78 on Oct. 20.