Electrovaya Inc 6-K/A, filed Dec 17, 2024
Electrovaya Inc. (ELVA)
About this 6-K/A
Electrovaya Inc filed this 6-K/A on December 17, 2024.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
For
the month of December
Commission
File Number
(Translation of registrant’s name into English)
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F
| Form 20-F ☐ | Form 40-F ☒ |
Explanatory Note
We are amending our Report of Foreign Private Issuer on Form 6-K originally furnished to the U.S. Securities and Exchange Commission on December 13, 2024 (the “Original Filing”), solely for the purpose of (i) providing the audited consolidated financial statements contained therein with the relevant Interactive Data Files in Inline XBRL format and (ii) including Form 52-109F1 certifications of our Chief Executive Officer and Chief Financial Officer as Exhibits 99.4 and 99.5, respectively. As such, other than the foregoing, no part of the Original Filing is being amended.
Incorporation by Reference
Exhibits 99.1, 99.2, and 99.3 of this Form 6-K are hereby incorporated by reference as exhibits to the registrant’s registration statement on Form F-10 (File No. 333-278139).
INDEX TO EXHIBITS
| 99.1 | Management’s Discussion and Analysis for the fiscal year ended September 30, 2024 |
| 99.2 | Audited Consolidated Financial Statements for the fiscal years ended September 30, 2024 and 2023 |
| 99.3 | Consent of MNP LLP |
| 99.4 | Form 52-109F2 - Certification of Annual Filings - CEO |
| 99.5 | Form 52-109F2 - Certification of Annual Filings - CFO |
| 101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
| 101.SCH | XBRL Taxonomy Extension Schema Document |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB | XBRL Taxonomy Extension Labels Linkbase Document |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | Coverage Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| ELECTROVAYA INC. | |||
| (Registrant) | |||
| Date: December 17, 2024 | By | /s/ Raj Das Gupta | |
| Raj Das Gupta | |||
| Chief Executive Officer | |||
Exhibit 99.1
—————— www.electrovaya.com
ELECTROVAYA INC.
MANAGEMENT’S
DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED September 30, 2024
December 12, 2024
ELECTROVAYA
INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
| 1. | OUR BUSINESS | 5 | |
| 2. | OUR STRATEGY | 6 | |
| 3. | RECENT DEVELOPMENTS | 7 | |
| 4. | SELECTED QUARTERLY FINANCIAL INFORMATION | 10 | |
| 5. | LIQUIDITY AND CAPITAL RESOURCES | 19 | |
| 6. | OUTSTANDING SHARE DATA | 20 | |
| 7. | OFF-BALANCE SHEET ARRANGEMENTS | 20 | |
| 8. | RELATED PARTY TRANSACTIONS | 21 | |
| 9. | CRITICAL ACCOUNTING ESTIMATES | 21 | |
| 10. | CHANGES IN ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS | 21 | |
| 11. | FINANCIAL AND OTHER INSTRUMENTS | 21 | |
| 12. | DISCLOSURE CONTROLS | 21 | |
| 13. | INTERNAL CONTROL OVER FINANCIAL REPORTING | 22 | |
| 14. | QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT RISKS AND UNCERTAINTIES | 22 | |
| 15. | OTHER RISKS | 27 |
| ● | Introduction |
Management’s discussion and analysis (“MD&A”) provides our viewpoint on our Company, performance and strategy. “We,” “us,” “our,” “Company” and “Electrovaya” include Electrovaya Inc. and its wholly owned or controlled subsidiaries, as the context requires.
Our Board of Directors, on the recommendation of its Audit Committee, approved the content of this MD&A on December 12, 2024 and it is, therefore, dated as at that date. This MD&A includes the operating and financial results for the quarters and year ending September 30, 2024 and 2023, and should be read in conjunction with our consolidated financial statements. It includes comments that we believe are relevant to an assessment of and understanding of the Company’s consolidated results of operations and financial condition. The financial information herein is presented in thousands of US dollars unless otherwise noted (except per share amounts, which are presented in US dollars unless otherwise noted), in accordance with International Financial Reporting Standards (“IFRS”). Additional information about the Company, including Electrovaya’s current annual information form, can be found on the SEDAR website for Canadian regulatory filings at www.sedar.com and the EDGAR website for SEC regulatory filings at sec.gov/EDGAR.
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| ● | Forward-looking statements |
This MD&A contains forward-looking statements, including statements that relate to, among other things, revenue, purchase orders, revenue guidance of more than $60 million in FY 2025, order growth and customer demand in FY 2025, mass production schedules, funding from EXIM and the Company’s ability to finalize the loan facility from EXIM bank on a timely basis, the anticipated operational start schedule for the Company’s Jamestown facility, future business opportunities, use of proceeds, ability to deliver to customer requirements and revenue growth forecasts for the fiscal year ending September 30, 2025. Forward-looking statements can generally, but not always, be identified by the use of words such as “may”, “will”, “could”, “should”, “would”, “likely”, “possible”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “plan”, “objective” and “continue” (or the negative thereof) and words and expressions of similar import. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, assumptions and analyses made by the Company in light of the experience and perception of historical trends, current conditions and expected future developments and other factors it believes are appropriate are necessarily applied in making forward looking statements and such statements are subject to risks and uncertainties, therefore actual results may differ materially from those expressed or implied in such statements and undue reliance should not be placed on such statements. Material assumptions made in disclosing the forward-looking statements included in the news release include, but are not limited to assumptions that the Company’s customers will deploy its products in accordance with communicated timing and volumes, that the Company’s customers will complete new distribution centers in accordance with communicated expectations, intentions and plans, the sum of anticipated new orders in FY 2025 based on customers’ historical patterns and additional demand communicated to the Company and its partners but not yet provided as a purchase order with the Company’s current firm purchase order backlog totaling approximately $80 million, a discount of approximately 25% used in the revenue modeling applied to the overall expected order pipeline to account for potential delays in customer orders, expected decreases in input and material costs combined with stable selling prices in FY 2025, and a stable political climate with respect to exports from Canada to the United States, the start up time for manufacturing in Jamestown NY of H1 CY 2026, the ability to leverage IRA45X credits, the ability to receive incentives from the state of New York, the ability to improve margins from domestic manufacturing, and the ability to attract additional customers through domestic manufacturing. Factors that could cause actual results to differ materially from expectations include but are not limited to customers not placing orders roughly in accordance with historical ordering patterns and communicated intentions resulting in annual revenue in FY 2025 in a total amount of at least $60 million, the imposition of a new tariff regime on Canadian exports by the United States, macroeconomic effects on the Company and its business and on the lithium battery industry generally, the Company’s liquidity and cash availability in excess of its operational requirements, and the ability to generate and sustain sales orders. Additional information about material factors that could cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements may be found in the Company’s Annual Information Form for the year ended September 30, 2023 under “Risk Factors”, in the Company’s base shelf prospectus dated September 17, 2024, and in the Company’s most recent annual and interim Management’s Discussion and Analysis under “Qualitative And Quantitative Disclosures about Risk and Uncertainties” as well as in other public disclosure documents filed with Canadian securities regulatory authorities. The Company does not undertake any obligation to update publicly or to revise any of the forward-looking statements contained in this document, whether as a result of new information, future events or otherwise, except as required by law.
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The revenue for the periods described herein constitute future-oriented financial information and financial outlooks (collectively, “FOFI”), and generally, is, without limitation, based on the assumptions and subject to the risks set out above under “Forward-Looking Statements”. Although management believes such assumptions to be reasonable, a number of such assumptions are beyond the Company’s control and there can be no assurance that the assumptions made in preparing the FOFI will prove accurate. FOFI is provided for the purpose of providing information about management’s current expectations and plans relating to the Company’s future performance, and may not be appropriate for other purposes.
The FOFI does not purport to present the Company’s financial condition in accordance with IFRS, and it is expected that there may be differences between audited results and preliminary results, and the differences may be material. The inclusion of the FOFI in this news release disclosure should not be regarded as an indication that the Company considers the FOFI to be a reliable prediction of future events, and the FOFI should not be relied upon as such.
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ELECTROVAYA
INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
| 1. | OUR BUSINESS |
Electrovaya Inc. designs, develops and manufactures directly or through out-sourced manufacturing lithium ion batteries and battery systems that feature unique proprietary technologies that enhance safety and longevity performance. Electrovaya’s products are primarily used in heavy duty applications including Material Handling Electric Vehicles (“MHEV”), robotics, construction and mining vehicles, energy storage systems and other speciality and mission critical battery applications. Our main businesses include:
| (a) | lithium-ion battery systems to power MHEV including fork-lifts. |
| (b) | lithium-ion batteries for robotic applications. |
| (c) | high voltage battery systems for electric bus, truck, mining and defense applications; and, |
| (d) | industrial products for energy storage. |
The Company has a battery and battery systems research and manufacturing facility in Mississauga, Ontario at 6688 Kitimat Road. The location, which comprises approximately 62,000 square feet, is designed to enhance the Company’s productivity and efficiency. The Company also owns a 52 acre site including a 137,000 square foot manufacturing site at 1 Precision Way in Jamestown New York. This site is intended to be Electrovaya’s US headquarters and a key manufacturing hub. For further information, see “Liquidity and Capital Resources”. The Company has operating personnel in both Canada and the USA.
Electrovaya has a team of mechanical, electrical, electronic, battery, electrochemical, materials and system engineers able to give clients a “complete solution” for their energy and power requirements. Electrovaya also has substantial intellectual property in the lithium-ion battery sector.
Management believes that our battery and battery systems contain a unique combination of characteristics that enable us to offer battery solutions that are safer and exhibit increased longevity when compared to competing lithium ion and non-lithium-ion battery technologies. These characteristics include:
| ● | Safety: We believe our batteries provide a high level of safety in a lithium-ion battery. Electrovaya’s lithium-ion ceramic technology (Infinity Series) has demonstrated improved safety over competing technologies. Electrovaya has completed UL2580 certification on a wide variety of battery systems along with its lithium-ion cells. Safety in lithium-ion batteries is becoming an important performance factor and Original Equipment Manufacturers (“OEMs”) and users of lithium-ion batteries prefer to have the highest level of safety possible in lithium-ion batteries. |
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| ● | Longevity: Our cells are in the forefront of battery manufacturers with respect to cycle-life, with excellent rate capabilities. Cycle-life is generally controlled by the parasitic reactions inside the cell and these reactions have to be reduced in order to deliver industry leading cycle-life. Higher cycle-life is of importance in many intensive applications of lithium-ion batteries. |
| ● | Energy and Power: Our batteries give industry leading combination of energy and power and can be application specific. |
| ● | Battery Management System: Our Battery Management System (“BMS”) has developed over the years and provides excellent control and monitoring of the battery with advanced features as well as communication to many chargers, electric vehicles and other devices. |
| 2. | OUR STRATEGY |
We have developed a highly proprietary and specialized lithium-ion technology that provides superior cycle life and safety. Given these advantages, the Company is focused on applications where those two performances differentiators provide the greatest benefits which has led to a focus on heavy duty and mission critical applications. These often require battery systems to provide around the clock operational capability, longer life and better safety and include material handling, robotics, transit, aerospace and other intensive electrified applications. We developed cells, modules, battery management systems, software and firmware necessary to deliver systems for these intensive applications. We also developed supply chains which can produce needed components including separators, electrolytes with appropriate additives, cells and cell assembly, modules, electronic boards, electrical and mechanical components as needed for our battery systems. Our goal is to utilize our battery and systems technology to develop and commercialize mass-production levels of battery systems for our targeted end markets.
To achieve these strategic objectives, we intend to:
| ● | Establish global strategic relationships in order to broaden the market potential of our products and services; |
| ● | Develop and commercialize leading-edge technology for heavy duty and mission critical electrified applications, as well as partnering with key large organizations to bring them to market; |
| ● | Invest in research and development initiatives related to new technologies that reduce the costs of our products, but enhance the operating performance, of our current and future products; and, |
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| ● | Focus on intensive use and mission critical applications such as the logistics and e-commerce industry, automated guided vehicles, electric buses, energy storage and similar other applications. |
| 3. | RECENT DEVELOPMENTS |
In October 2023, the Company established a relationship with one of the four largest Japanese trading houses or “sogo shosha”. Through this partnership, Electrovaya products are being marketed to a host of Japanese and international OEMs representing a significant boost to the Company’s sales reach. The trading house was identified as Sumitomo Corporation in a press release on April 29th, 2024.
On October 21, 2023, the Company announced the appointment of Steven Berkenfeld to the Company’s board of directors.
On November 2, 2023, the Company announced that it had executed a strategic supply agreement with two leading affiliated OEM partners for material handling vehicles and other affiliates for the supply of battery systems. The new agreement supersedes a preceding agreement from December 2020 with just one of the OEM partners and includes a longer term with larger minimum purchases to maintain exclusivity.
On November 7, 2023, the Company announced the receipt of a battery purchase order through one of its OEM sales channels valued at over US$8 million. The batteries will be used by a leading Fortune 100 company in the United States for material handling electric vehicles.
On December 20, 2023, the Company renewed its revolving facility and extended the term of the facility by three months to March 29, 2024, with the aim to refinance the facility by the end of Q2 FY2024. The Company retains the option to extend the existing facility by a further three months to June 29, 2024.
On December 26, 2023, the Company announced that it had made its first shipment of its Infinity-HV battery system.
On February 14, 2024, the Company announced that it had agreed an increase to its credit facility from C$16 million to C$22 million with uncommitted accordions up to C$4 million to increase the facility to C$26 million in the future.
On February 27, 2024, the Company announced that its latest generation of battery management system had been approved by UL.
On March 11, 2024, the Company announced that its latest generation of battery systems had been integrated and tested with two leading providers of wireless chargers and had successfully demonstrated wireless charging capabilities that achieve performance metrics similar to that of wired chargers.
On April 29, 2024, the Company announced that it had established a supply agreement with Sumitomo Corporation Power & Mobility, a 100% owned subsidiary of Sumitomo Corporation. The supply agreement will initially cover the supply of battery modules to leading Japanese construction equipment manufacturers.
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On June 12, 2024, the Company announced the launch of its first Infinity Series Lithium-Ion Phosphate (LFP) based cell as its annual Battery Technology Day event. The newly developed EV-FP-44 cells, features LFP chemistry and retains the key competitive advantages of Electrovaya’s Infinity technology with respect to enhanced cycle life and safety, while also providing lower costs.
On June 13, 2024, the Company announced an update on its solid-state battery program at its annual Battery Technology Day event. Updates regarding Electrovaya’s solid state battery program included the following:
| ● | Development of a scalable and cost-effective lithium ion conducting ceramic that has demonstrated good performance: ionic conductivity in the range of ~8.10-4 S/cm; and work continues to further improve conductivity and scale up of production. |
| ● | Development of a proprietary separator that uses Electrovaya’s in-house ion conducting ceramic material. The separator incorporates a scalable manufacturing process, and the Company has made progress in increasing the separator size to meet the needs of commercially viable cells. |
3.1 Business Highlights, Subsequent Events and 2025 Outlook
Business Highlights - Q4 FY 2024
On July 11, 2024, the Company announced that it completed and passed fire propagation testing on two of its high voltage battery systems, each with over 50kWh in capacity. The testing was done in accordance with the UL2580 standard, and one test was completed at an independent lab and the second completed in-house.
On September 10, 2024, the Company announced the receipt of its first purchase orders for pre-production battery modules to be provided to a global Japanese headquartered manufacturer of construction equipment. This will be part of an electric excavator program with an estimated scaled production start in 2026. The initial shipments are expected to be delivered in Q2 FY2025 to a manufacturing site in Japan.
On September 30, 2024, the Company announced the establishment of a Strategic Supply Agreement with Innovative Rail Technologies, LLC (IRT). The Agreement will initially cover the supply of Electrovaya’s Infinity battery systems for IRT’s electric locomotive systems.
Subsequent Events
On October 17, 2024, the Company announced a C$2-million investment from the Government of Canada through the Federal Economic Development Agency for Southern Ontario (FedDev Ontario). This funding will be used to support investments in automation, AI and capacity enhancements at Electrovaya’s Mississauga, Ontario manufacturing facility.
On November 12, 2024, the Company announced it had received a purchase order valued at approximately US$3.5 million for immediate delivery of its batteries from one of its OEM sales channels. The batteries will be used by a leading Fortune 100 e-commerce company in the United States and Australia for powering material handling electric vehicles in its warehouse operations.
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On November 14, 2024, the Company announced that it has secured a direct loan in the amount of US$50.8 million from the Export-Import Bank of the United States (“EXIM”) under the bank’s ‘Make More in America’ initiative. This financing will fund Electrovaya’s battery manufacturing buildout in Jamestown, New York including equipment, engineering and setup costs for the facility.
On November 21, 2024, the Company announced that it had received a follow-on order for Infinity-HV battery systems, from a global aerospace and defense company.
On December 3, 2024, the Company announced that it had received orders from an existing Fortune 500 retailer for batteries to outfit two distribution centers, valued at $4.1million.
Positive Financial Outlook:
The Company anticipates strong growth into FY2025 with estimated revenues to exceed $60 million driven by renewed demand from the Company’s largest end users of material handling batteries. This guidance was prepared by taking into account its existing purchase orders, along with anticipated pipeline from its key end users and customers. This guidance also takes into consideration a percentage of anticipated revenue that potentially may be deferred to FY 2026. This guidance is subject to change and is made barring any unforeseen circumstances. See “Forward-Looking Statements”.
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| 4. | SELECTED ANNUAL FINANCIAL INFORMATION |
| 4.1 | Operating Segments |
The Company has reviewed its operations and determined that it operates in one business segment and has only one reporting unit. The Company develops, manufactures and markets power technology products.
| 4.2 | Selected Annual Financial Information for the Years Ended September 30, 2024, 2023, 2022 |
Results of Operations
(Expressed in thousands of U.S. dollars)
| Year Ended September 30, | ||||||||||||
| 2024 | 2023 | 2022 | ||||||||||
| Total Revenue | 44,615 | 44,059 | 16,270 | |||||||||
| Direct manufacturing costs | 30,926 | 32,203 | 12,396 | |||||||||
| Gross margin | 13,689 | 11,856 | 3,874 | |||||||||
| GM% | 30.7 | % | 26.9 | % | 23.8 | % | ||||||
| Expenses | ||||||||||||
| Research & development | 3,038 | 3,382 | 3,434 | |||||||||
| Government assistance | (316 | ) | (387 | ) | (210 | ) | ||||||
| Sales & marketing | 2,935 | 1,897 | 1,147 | |||||||||
| General & administrative | 3,939 | 3,687 | 3,046 | |||||||||
| Stock based compensation | 2,155 | 1,167 | 3,223 | |||||||||
| Depreciation and amortization | 1,209 | 907 | 503 | |||||||||
| 12,960 | 10,653 | 11,143 | ||||||||||
| Income (Loss) from operations | 729 | 1,203 | (7,269 | ) | ||||||||
| Finance Cost | 2,366 | 2,474 | 3,033 | |||||||||
| Foreign exchange (gain)/loss | (152 | ) | 887 | (1,091 | ) | |||||||
| (1,485 | ) | (2,158 | ) | (9,211 | ) | |||||||
| Deferred Tax Recovery | — | 679 | — | |||||||||
| Net Loss | (1,485 | ) | (1,479 | ) | (9,211 | ) | ||||||
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Revenue
Revenue increased to $44.6 million, compared to $44.1 million for the years ended September 30, 2024 and 2023 respectively, an increase of $0.5 million or 1%. As stated during the year, revenue was materially affected by customer delays, resulting in approximately $20 million worth of orders with delivery dates in FY2024 being moved to FY2025.
Revenue was predominantly from the sale of batteries and battery systems for MHEVs. Batteries and battery systems accounted for $42.9 million or 96.3% of revenue for FY 2024 and $42.2 million or 95.7% for FY2023. Sale of engineering services, research grants, and other sources of revenue, including Government assistance, accounted for the remaining $1.6 million or 3.7% in FY 2024 and $1.9 million or 4.3% in FY 2023.
| Year Ended September 30, | ||||||||||||
| 2024 | 2023 | 2022 | ||||||||||
| Battery Systems | 42,970 | 42,168 | 15,190 | |||||||||
| Services | 983 | 216 | 142 | |||||||||
| Research Grants | 26 | 693 | 650 | |||||||||
| Other Revenue | 636 | 982 | 288 | |||||||||
| 44,615 | 44,059 | 16,270 | ||||||||||
For the year ended September 30, 2024, revenue attributable to the United States accounted for $42.8 million or 95.9% of total revenue while revenue attributed to Canada and other countries accounted for the remaining $1.8 million or 4.1%. For the year ended September 30, 2023, revenue attributable to the United States accounted for $42.3 million or 96.1% with Canada and other countries being $1.7 million or 3.9%.
Direct Manufacturing Costs and Gross Margin
Direct manufacturing costs are comprised of materials, labour and manufacturing overhead, excluding amortization, associated with the production of batteries and battery packs for Electric Vehicles, stationary grid applications and research and engineering service revenues.
The gross margin increased to $13.69 million, compared to $11.86 million for the year ended September 30, 2024 and September 30, 2023 respectively, an increase of $1.83 million or 15.4%. The gross margin percentage was 30.7% for the year ended September 30, 2024 compared to 26.9% for the prior year. When reviewing gross margin by revenue stream, the main driver of revenue, Battery Systems, shows a gross margin of 31.3% for the year.
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| Year Ended September 30, | ||||||||||||
| Revenue | GM % | GM $ | ||||||||||
| Battery Systems | 42,970 | 31.3 | % | 13,429 | ||||||||
| Services | 983 | 20.5 | % | 202 | ||||||||
| Research Grants | 26 | 0.0 | % | — | ||||||||
| Other Revenue | 636 | 9.1 | % | 58 | ||||||||
| 44,615 | 30.7 | % | 13,689 | |||||||||
Our margin varies from period to period due to a number of factors including the product mix, special customer pricing, material cost, shipping costs and foreign exchange movement. In the current fiscal year, we have been able to take advantage of strong operational efficiencies and some economies of scale to help improve margins. The Company continues to monitor gross margin closely and has implemented measures to increase it for fiscal year 2025.
Operating Expenses
Operating expenses include:
| ● | Research and Development (“R&D”): Research and development expenses consist primarily of compensation and premises costs for research and development personnel and activities, including independent contractors and consultants, and direct materials; |
| ● | Government Assistance: The company applied for and received funding from the Industrial Research Assistance Program during the year; |
| ● | Sales and Marketing: Sales and marketing expenses are comprised of the salaries and benefits of sales and marketing personnel, marketing activities, advertising and other costs associated with the sales of Electrovaya’s product lines; |
| ● | General and Administrative: General and administrative expenses include salaries and benefits for corporate personnel, insurance, professional fees, reserves for bad debts and facilities expenses. The Company’s corporate administrative staff includes its executive officers and employees engaged in business development, financial planning and control, legal affairs, human resources and information technology; |
| ● | Stock based compensation: Recognizes the value based on Black-Scholes option pricing model of stock based compensation expensed over the relevant vesting period; |
| ● | Depreciation and Amortization: Expenses relating to the depreciation and amortization of capital equipment, leasehold improvements and other assets. |
Total operating expenses are $12.96 million compared to $10.65 million for the years ended September 30, 2024 and September 30, 2023 respectively, an increase of $2.31 million or 21.7%. Within the year, R&D expenses decreased by $0.34 million which is not a significant change from earlier reporting period and emphasises the Company’s consistent commitment to address the growing number of projects with our OEM partner, the engineering requirements of additional sales verticals, and on-going research in the areas of solid-state batteries, electrode manufacturing and higher energy density batteries. The R&D expense will vary period to period as staff are utilized in R&D or production activities.
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Other movements in the year included a decrease to government assistance of $0.1 million, an increase in sales & marketing costs of $1.04 million, being costs associated with additional sales verticals and an increase in general & administrative costs of $0.25 million. Stock based compensation increased significantly in 2024 by $1.0 million due to the recognition of options granted with special market conditions. Although these market conditions have yet to be met, the options are recognised based on the valuation under the Monte Carlo option pricing model. As a result of this calculation, an additional $1.0 million was recognised in 2024, compared to $0.7 million in 2023 and $3.4 million in 2022.
Net Loss
The net loss increased marginally to $1.485 million from a net loss of $1.479 million for the years ended September 30, 2024 and September 30, 2023 respectively. The Company experienced favourable movements in exchange rates and recognised a foreign exchange gain of $0.15 million, compared to the loss of $0.89 million in the prior year.
Key Performance Indicators
In addition to operating results and financial information described above, management reviews the following measures (which are not measures defined under IFRS):
Adjusted EBITDA1
(Expressed in thousands of U.S. dollars)
| Year Ended September 30, | |||||||||||||
| 2024 | 2023 | 2022 | |||||||||||
| Income (Loss) from operations | 729 | 1,203 | (7,269 | ) | |||||||||
| Less: | Stock based compensation | 2,155 | 1,167 | 3,223 | |||||||||
| Depreciation and amortization | 1,209 | 907 | 503 | ||||||||||
| Adjusted EBITDA1 | 4,093 | 3,277 | (3,543 | ) | |||||||||
| Adjusted EBITDA1 % | 9 | % | 7 | % | -22 | % | |||||||
1 Non-IFRS Measure: Adjusted EBITDA is defined as profit/(loss) from operations, plus stock-based compensation costs and depreciation and amortization. Adjusted EBITDA does not have a standardized meaning under IFRS. We believe that certain investors and analysts use Adjusted EBITDA to measure the performance of the business and is an accepted measure of financial performance in our industry. It is not a measure of financial performance under IFRS and may not be defined and calculated in the same manner by other companies and should not be considered in isolation or as an alternative to Income (loss) from operations.
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Adjusted EBITDA1 increased by $0.8 million from the 2023 figure, and $7.6 million from the 2022 figure. The main driver of the improvement is an increase in revenue, efficiency in manufacturing improving gross margins and a larger portion of operating expenses being non cash such as stock-based compensation. Adjusted EBITDA for Q4 was $1.5 million, and management is focused on maintaining this trend in 2025.
Adjusted EBITDA1 will improve primarily through increased sales, maintaining gross margin percentage and controlling operating expenses. We continue our efforts for sales growth, control of manufacturing costs and reduction operating expenses.
Summary Financial Position
(Expressed in thousands of U.S. dollars)
| Year Ended September 30, | ||||||||||||
| 2024 | 2023 | 2022 | ||||||||||
| Total current assets | $ | 29,418 | $ | 25,906 | $ | 14,788 | ||||||
| Total non-current assets | 10,064 | 10,608 | 7,401 | |||||||||
| Total assets | $ | 39,482 | $ | 36,514 | $ | 22,189 | ||||||
| Total current liabilities | 28,531 | 26,611 | 22,662 | |||||||||
| Total non-current liabilities | 2,366 | 2,757 | 6,234 | |||||||||
| Equity (Deficiency) | 8,585 | 7,146 | (6,707 | ) | ||||||||
| Total liabilities and equity (deficiency) | $ | 39,482 | $ | 36,514 | $ | 22,189 | ||||||
In the three-year period commencing September 30, 2022 and ending September 30, 2024 current assets have increased by $14.6 million, current liabilities have increased by $5.9 million and the equity deficiency has decreased by $15.3 million. The Company also finished the fiscal year with a positive current ratio 1.03.
Management is focused on continuing to improve the company’s financial position through the prudent use of debt and equity but most importantly achieving a profitable position and strong working capital management.
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Summary Cash Flow
(Expressed in thousands of U.S. dollars)
| Year Ended September 30, | |||||||||||||
| 2024 | 2023 | 2022 | |||||||||||
| Net loss for the year | $ | (1,485 | ) | $ | (1,479 | ) | $ | (9211 | ) | ||||
| Less: | Depreciation and amortization | 1,209 | 907 | 503 | |||||||||
| Stock based compensation | 2,155 | 1,167 | 3,223 | ||||||||||
| Financing costs (non-cash) | 2,339 | 2,474 | 3,033 | ||||||||||
| Foreign exchange (non-cash) | (40 | ) | 1 | — | |||||||||
| Gain on debt extinguishment | (936 | ) | — | — | |||||||||
| Bad debt recovery (expense) | 51 | ||||||||||||
| Premium on purchase of SEJ | — | 495 | — | ||||||||||
| Deferred tax recovery | — | (679 | ) | — | |||||||||
| Cash provided by (used in) operating activities | $ | 3,293 | $ | 2,886 | $ | (2,452 | ) | ||||||
| Net change in working capital | (2,255 | ) | (8,121 | ) | (6,373 | ) | |||||||
| Cash from(used in) operating activities | 1,038 | (5,235 | ) | (8,825 | ) | ||||||||
| Cash (used in) investing activities | (666 | ) | (903 | ) | (212 | ) | |||||||
| Cash from financing activities | (629 | ) | 6,553 | 7,886 | |||||||||
| Decrease in cash | (257 | ) | 415 | (1,151 | ) | ||||||||
| Exchange difference | 6 | (9 | ) | (2,425 | ) | ||||||||
| Cash, beginning of year | 1,032 | 626 | 4202 | ||||||||||
| Cash at end of year | $ | 781 | $ | 1,032 | $ | 626 | |||||||
The Company ended September 30, 2024, with $0.78 million of cash as compared to $1.03 million for September 30, 2023. The Company showed a positive cash generated from operations of $1.04 compared to a cash used in operations of $5.23 million for September 2023.This is a significant milestone for the Company as we move towards continued positive cash flow from operations.
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4.2 Quarterly Financial Results
Results of Operations
(Expressed in thousands of U.S. dollars)
| 2024 | ||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | 2024 | ||||||||||||||||
| Total Revalue | 12,091 | 10,695 | 10,274 | 11,555 | 44,615 | |||||||||||||||
| Direct Manufacturing Costs | 8,562 | 6,970 | 6,815 | 8,579 | 30,926 | |||||||||||||||
| Gross Margin | 3,529 | 3,725 | 3,459 | 2,976 | 13,689 | |||||||||||||||
| GM% | 29.2 | % | 34.8 | % | 33.7 | % | 25.8 | % | 30.7 | % | ||||||||||
| Expenses | ||||||||||||||||||||
| Research & development | 964 | 642 | 1,037 | 395 | 3,038 | |||||||||||||||
| Government assistance | (58 | ) | (29 | ) | (34 | ) | (195 | ) | (316 | ) | ||||||||||
| Sales & marketing | 730 | 708 | 934 | 563 | 2,935 | |||||||||||||||
| General & administrative | 1,334 | 921 | 928 | 756 | 3,939 | |||||||||||||||
| Stock based compensation | 369 | 480 | 820 | 486 | 2,155 | |||||||||||||||
| Depreciation and amortization | 290 | 300 | 358 | 261 | 1,209 | |||||||||||||||
| 3,629 | 3,022 | 4,043 | 2,266 | 12,960 | ||||||||||||||||
| Gain (Loss) from operations | (100 | ) | 703 | (584 | ) | 710 | 729 | |||||||||||||
| Finance Cost | 19 | 1,535 | 356 | 456 | 2,366 | |||||||||||||||
| Foreign exchange (gain)/loss | 89 | 7 | (616 | ) | 368 | (152 | ) | |||||||||||||
| (208 | ) | (839 | ) | (324 | ) | (114 | ) | (1,485 | ) | |||||||||||
| Deferred Tax Recovery | — | — | — | — | ||||||||||||||||
| Net Loss | (208 | ) | (839 | ) | (324 | ) | (114 | ) | (1,485 | ) | ||||||||||
| 2023 | ||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | 2023 | ||||||||||||||||
| Total Revenue | 8,562 | 8,470 | 10,597 | 16,430 | 44,059 | |||||||||||||||
| Direct Manufacturing Costs | 6,372 | 6,572 | 7,369 | 11,890 | 32,203 | |||||||||||||||
| Gross Margin | 2,190 | 1,898 | 3,228 | 4,540 | 11,856 | |||||||||||||||
| GM% | 25.6 | % | 22.4 | % | 30.5 | % | 27.6 | % | 26.9 | % | ||||||||||
| Expenses | ||||||||||||||||||||
| Research & development | 983 | 720 | 460 | 1,219 | 3,382 | |||||||||||||||
| Government assistance | (80 | ) | (137 | ) | (109 | ) | (61 | ) | (387 | ) | ||||||||||
| Sales & marketing | 725 | 503 | 379 | 290 | 1,897 | |||||||||||||||
| General & administrative | 884 | 1,070 | 783 | 950 | 3,687 | |||||||||||||||
| Stock based compensation | 322 | 214 | 578 | 53 | 1,167 | |||||||||||||||
| Depreciation and amortization | 160 | 210 | 242 | 295 | 907 | |||||||||||||||
| 2,994 | 2,580 | 2,333 | 2,746 | 10,653 | ||||||||||||||||
| Gain (Loss) from operations | (804 | ) | (682 | ) | 895 | 1,794 | 1,203 | |||||||||||||
| Finance Cost | 1,117 | 480 | (168 | ) | 1,045 | 2,474 | ||||||||||||||
| Foreign exchange (gain)/loss | 660 | (180 | ) | 1,620 | (1,213 | ) | 887 | |||||||||||||
| (2,581 | ) | (982 | ) | (557 | ) | 1,962 | (2,158 | ) | ||||||||||||
| Deferred Tax Recovery | — | 679 | — | — | 679 | |||||||||||||||
| Net Profit (Loss) | (2,581 | ) | (303 | ) | (557 | ) | 1,962 | (1,479 | ) | |||||||||||
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For the three-month period ended September 30, 2024, total revenue was $11.6 million. This quarterly revenue was $4.9 million lower than Q4 FY2023. The decrease is mostly attributable to timing of production, with approx. $4.5 million of batteries completed in Q3 2023, being recognised in Q4 2023. There was no such timing difference in Q4 2024.
In line with the movement in revenue, gross margin decreased by $1.5 million to $3.0 million for Q4 2024 from $4.5 million for Q4 2023. The timing impact on gross margins of batteries manufactured in Q3 2023 but recognised in Q4 2023, was $1.3 million. The gross margin percentage also decreased to 25.8%, compared to 27.6% in the prior year. Gross margin is affected by a number of factors including the product mix, special customer pricing, material costs, shipping costs and foreign exchange movement. This can have a direct impact on the gross margin on a quarterly basis. The Company is striving to further improve gross margins for fiscal year 2025.
Total operating expenses for Q4 2024 decreased to $2.3 million as compared to $2.7 million for Q4 2023, a decrease of $0.4 million. In comparison to the prior year, research and development and general and administrative costs both decreased by $0.8 million and $0.2 million respectively. Sales and marketing costs and stock-based compensation both increased by $0.3 million and $0.4 million respectively.
Quarterly Adjusted EBITDA1
| 2024 | |||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | 2024 | |||||||||||||||||
| Gain (Loss) from operations | (100 | ) | 703 | (584 | ) | 710 | 729 | ||||||||||||||
| Less: | Stock based compensation | 369 | 480 | 820 | 486 | 2,155 | |||||||||||||||
| Depreciation and amortization | 290 | 300 | 358 | 261 | 1,209 | ||||||||||||||||
| Adjusted EBITDA1 | 559 | 1,483 | 594 | 1,457 | 4,093 | ||||||||||||||||
| 2023 | |||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | 2023 | |||||||||||||||||
| Gain (Loss) from operations | (804 | ) | (682 | ) | 895 | 1,794 | 1,203 | ||||||||||||||
| Less: | Stock based compensation | 322 | 214 | 578 | 53 | 1,167 | |||||||||||||||
| Depreciation and amortization | 160 | 210 | 242 | 295 | 907 | ||||||||||||||||
| Adjusted EBITDA1 | (322 | ) | (258 | ) | 1,715 | 2,142 | 3,277 | ||||||||||||||
1 Non-IFRS Measure: Adjusted EBITDA is defined as profit/loss from operations, plus stock-based compensation costs and depreciation and amortization. Adjusted EBITDA does not have a standardized meaning under IFRS. We believe that certain investors and analysts use Adjusted EBITDA to measure the performance of the business and is an accepted measure of financial performance in our industry. It is not a measure of financial performance under IFRS and may not be defined and calculated in the same manner by other companies and should not be considered in isolation or as an alternative to Income (loss) from operations.
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Quarterly Adjusted EBITDA shows an improving trend from fiscal 2023 to fiscal 2024, driven by increased revenue and operational efficiencies.
Quarterly Comparative Summaries
Quarterly revenue from continued operations are as follows:
| (USD $ thousands) | Q1 | Q2 | Q3 | Q4 | |||||||||||||
| 2024 | $ | 12,091 | $ | 10,695 | $ | 10,274 | $ | 11,555 | |||||||||
| 2023 | $ | 8,562 | $ | 8,470 | $ | 10,597 | $ | 16,430 | |||||||||
| 2022 (restated) | $ | 1,250 | $ | 4,290 | $ | 4,305 | $ | 9,978 | |||||||||
Quarterly net profits/(losses) from continued operations are as follows:
| (USD $ thousands) | Q1 | Q2 | Q3 | Q4 | |||||||||||||
| 2024 | $ | (208 | ) | $ | (839 | ) | $ | (324 | ) | $ | (114 | ) | |||||
| 2023 | $ | (2,581 | ) | $ | (303 | ) | $ | (557 | ) | $ | 1,962 | ||||||
| 2022 (restated) | $ | (2,155 | ) | $ | (2,251 | ) | $ | (1,461 | ) | $ | (680 | ) | |||||
Quarterly net gains (losses) per common share from continued operations are as follows:
| Q1 | Q2 | Q3 | Q4 | ||||||||||||||
| 2024 | $ | (0.00 | ) | (0.03 | ) | $ | (0.01 | ) | $ | (0.00 | ) | ||||||
| 2023 | $ | (0.08 | ) | $ | (0.01 | ) | $ | (0.02 | ) | $ | 0.06 | ||||||
| 2022 (restated) | $ | (0.01 | ) | $ | (0.02 | ) | $ | (0.01 | ) | $ | (0.00 | ) | |||||
Quarterly Revenue and Seasonality
In recent periods, revenue has been weighted towards the second half of the fiscal year, and management expects this trend to continue.
The lithium-ion forklift battery has a long sales cycle as many customers are large companies, the technology is relatively new to the forklift market, and customers need time to familiarize themselves with and validate the benefits as compared to the incumbent technology of lead acid batteries. In some cases, the process involves receiving a demonstrator battery for testing and trial. This causes a somewhat long and “lumpy”, or uneven, sales cycle. As customers become more comfortable with the product and place repeat orders, it is management’s view that the sales will grow in a more predictable and consistent fashion.
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| 5. | LIQUIDITY AND CAPITAL RESOURCES |
During the year ended September 30, 2024, the Company generated cash from operations of $1.04 million (September 30, 2023: $(5.23 million). As of September 30, 2024, the Company has working capital of $0.89 million (September 30, 2023: $(0.71) million) and a net loss of $1.49 million (2023: $1.48 million).
The Company currently has a revolving facility with its existing lender with a limit of C$22 million and a maturity date of July 29, 2025. The Company has a long-standing relationship with this lender and has renewed the facility each year. The Company is also exploring alternative financing options to replace this facility.
The Company is also anticipating the planned construction of its gigafactory in Jamestown, New York (the “Gigafactory”), and has been able to secure financing for the same. This includes a direct loan of $50.8 million from The Export-Import Bank of the United States (EXIM) which was approved on November 14, 2024. The Company has also secured support from the State of New York including $2 million in grants and $4.5 million in refundable tax credits. The first phase of construction is expected to take place within the existing 135,000 square foot manufacturing facility for the production of cells and batteries, with an estimated capital expenditure of approximately US$50 million.
In assessing whether the going concern assumption was appropriate, management took into account all relevant information available about the future, which was at least, but not limited to, the twelve-month period following September 30, 2024. The Company and its Board of Directors have implemented various operating and financing strategies.
Further, the Company continuously aims to improve its manufacturing process, equipment and facilities. The Company also anticipates gross margins to improve or remain consistent in fiscal year 2025 due to decreasing costs of key materials including but not limited to cell materials, separators, and other high value items. These anticipated improved margins, when combined with expected overall sales growth should result in improved overall financial performance.
At September 30,2024, the Company has the following contractual debt obligations:
| Year of Payment Obligation | $ | ||||
| 2025 | 17,928 | ||||
| 2026 | 786 | ||||
| 2027 | 763 | ||||
| 2028 | 798 | ||||
| 2029 and beyond | 1,198 | ||||
| Total | 21,473 | ||||
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| 6. | OUTSTANDING SHARE DATA |
The authorized and issued capital stock of the Company consists of an unlimited authorized number of common shares as follows:
| Number | Amount | |||||||
| Balance, September 30, 2023 | 33,832,784 | 115,041 | ||||||
| Issuance of shares | 10,024 | 30 | ||||||
| Issuance of shares | 42,157 | 169 | ||||||
| Transfer from contributed surplus | — | 501 | ||||||
| Exercise of options | 252,700 | 667 | ||||||
| Balance, September 30, 2024 | 34,137,665 | 116,408 | ||||||
Details of share warrants
| Number Outstanding | Exercise Price | |||||||
| Outstanding, September 30, 2024 | 1,420,000 | $ | 2.38 | |||||
Details of compensation options
| Number Outstanding | Amount | |||||||
| Outstanding, September 30, 2023 | 17,522 | 4.95 | ||||||
| Expired during the year | 17,522 | 6.70 | ||||||
| Outstanding, September 30, 2024 | — | — | ||||||
| 7. | OFF-BALANCE SHEET ARRANGEMENTS |
The Company does not have any off-balance sheet arrangements for the quarter ended September 30, 2024.
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| 8. | RELATED PARTY TRANSACTIONS |
Please refer to note 16 to the September 30, 2024 Financial Statements for details on related party transactions.
| 9. | CRITICAL ACCOUNTING ESTIMATES |
The Company’s management makes judgments in the process of applying the Company’s accounting policies in the preparation of its consolidated financial statements. In addition, the preparation of financial information requires that the Company’s management make assumptions and estimates of effects of uncertain future events on the carrying amounts of the Company’s assets and liabilities at the end of the reporting period and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from those estimates as the estimation process is inherently uncertain. Estimates are reviewed on an ongoing basis based on historical experience and other factors that are considered to be relevant under the circumstances. Revisions to estimates and the resulting effects on the carrying amounts of the Company’s assets and liabilities are accounted for prospectively.
The critical judgments, estimates and assumptions applied in the preparation of Company’s financial information are reflected in Note 3 of the Company’s September 30, 2024, consolidated financial statements.
| 10. | CHANGES IN ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS |
Our accounting policies and information on the adoption and impact of new and revised accounting standards the Company was required to adopt are disclosed in Note 4 of our consolidated financial statements and their related notes for the year ended September 30, 2024.
| 11. | FINANCIAL AND OTHER INSTRUMENTS |
Please refer to note 20 of the September 30, 2024, Financial Statements for details of Financial and Other Instruments.
| 12. | DISCLOSURE CONTROLS |
We have established disclosure controls and procedures that are designed to ensure that the information required to be disclosed by the Company in the reports that it files or submits under securities legislation is recorded, processed, summarized, and reported within the time periods specified in such rules and forms and that such information is accumulated and communicated to management, including our principal executive officer and principal financial officer (who are our Chief Executive Officer and Chief Financial Officer, respectively) as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognized that disclosure controls and procedures can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met.
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Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures. Based on this evaluation and as described below under “Internal Control over Financial Reporting”, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2024.
| 13. | INTERNAL CONTROL OVER FINANCIAL REPORTING |
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed by, or under the supervision of, the CEO and the CFO and effected by the Board of Directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with IFRS.
Our management, including our CEO and CFO, believes that any disclosure controls and procedures or internal control over financial reporting, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, they cannot provide absolute assurance that all control issues and instances of fraud, if any, have been prevented or detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by unauthorized override of the control. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Accordingly, because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud might occur and not be detected.
Management assessed the effectiveness of the Company’s internal control over financial reporting on September 30, 2024, based on the criteria set forth in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission as published in 2013, and determined that the Company’s internal control over financial reporting was effective. Also, management determined there were no material weaknesses in the Company’s internal control over financial reporting on September 30, 2024.
| 14. | QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT RISKS AND UNCERTAINTIES |
The Company may be exposed to risks of varying degrees of significance which could affect its ability to achieve its strategic objectives. The main objectives of the Company’s risk management processes are to ensure that the risks are properly identified and that the capital base is adequate in relation to those risks. The principal risks to which the Company is exposed are described below.
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Capital risk
The Company manages its capital to ensure that there are adequate capital resources for the Company to maintain and develop its products. The capital structure of the Company consists of shareholders’ equity and depends on the underlying profitability of the Company’s operations.
The Company manages its capital structure and makes adjustments to it, based on the funds available to the Company, in order to support the development, manufacture and marketing of its products. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company’s management to sustain future development of the business.
The Company’s capital management objectives are:
| ● | to ensure the Company’s ability to continue as a going concern. |
| ● | to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk. |
The Company monitors capital on the basis of the carrying amount of equity plus its short-term debt composed of the Promissory note, less cash and cash equivalents as presented on the face of the statement of financial position.
The Company sets the amount of capital in proportion to its overall financing structure, comprising equity and long-term debt. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company issues new shares or increases its long-term debt.
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Capital for the reporting periods under review is summarized as follows:
| Sep 30, | Sep 30, | |||||||
| 2024 | 2023 | |||||||
| Total Equity | 8,585 | 7,146 | ||||||
| Cash and cash equivalents | (781 | ) | (1,032 | ) | ||||
| Equity | 7,804 | 6,114 | ||||||
| Total Equity | 8,585 | 7,146 | ||||||
| Promissory Note | 519 | 1,026 | ||||||
| Short-term loan | 1,630 | 3,457 | ||||||
| Working capital facilities | 16,283 | 11,821 | ||||||
| Other Long-term liabilities | 2,366 | 2,757 | ||||||
| Overall Financing | 29,383 | 26,207 | ||||||
| Capital to Overall financing Ratio | 0.27 | 0.23 | ||||||
Credit risk
Credit risk is the risk that the counterparty fails to discharge an obligation to the Company. The Company is exposed to this risk for various financial instruments, for example, by granting loans and receivables to customers, placing deposits, etc. The Company’s maximum exposure to credit risk is limited to the carrying amount of financial assets recognized at the reporting date, as summarized below:
| September 30, | September 30, | |||||||
| 2024 | 2023 | |||||||
| Cash and cash equivalents | $ | 781 | $ | 1,032 | ||||
| Trade and other receivables | 11,292 | 10,611 | ||||||
| Carrying amount | $ | 12,073 | $ | 11,643 | ||||
Cash and cash equivalents are comprised of the following:
| September 30, | September 30, | |||||||
| 2024 | 2023 | |||||||
| Cash | $ | 781 | $ | 1,032 | ||||
| Cash equivalents | — | — | ||||||
| $ | 781 | $ | 1,032 | |||||
The Company’s current portfolio consists of certain banker’s acceptance and high interest yielding savings accounts deposits. The majority of cash and cash equivalents are held with financial institutions, each of which had at September 30, 2024, a rating of R-1 mid or above.
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The Company manages its credit risk by establishing procedures to establish credit limits and approval policies. The balance in trade and other receivables is primarily attributable to trade accounts receivables. In the opinion of management, the credit risk is moderate as some receivables are falling into arrears. Management is taking appropriate action to mitigate this risk by adjusting credit terms.
Liquidity risk
Liquidity risk is the risk that we may not have cash available to satisfy our financial obligations as they come due. The majority of our financial liabilities recorded in accounts payable, accrued and other current liabilities and provisions are due within 90 days. We manage liquidity risk by maintaining a portfolio of liquid funds and having access to a revolving credit facility. We believe that cash flow from operating activities, together with cash on hand, cash from our A/R, and borrowings available under the Revolver are sufficient to fund our currently anticipated financial obligations and will remain available in the current environment.
Market risk
Market risk incorporates a range of risks. Movement in risk factors, such as market price risk and currency risk, affect the fair value of financial assets and liabilities. The Company is exposed to these risks as the ability of the Company to develop or market its products and the future profitability of the Company is related to the market price of its primary competitors for similar products.
Interest rate risk
The Company has floating and fixed interest-bearing debt ranging from prime plus 7% to 9%. The Company’s current policy is to invest excess cash in investment-grade short-term deposit certificates issued by its banking institutions.
Foreign currency risk
The Company is exposed to foreign currency risk. The Company’s functional currency is the US dollar and a majority of its revenue is derived in US dollars. Purchases are transacted in Canadian dollars, United States dollars and Euro. Management believes the foreign exchange risk derived from any currency conversions may have a material effect on the results of its operations. The financial instruments impacted by a change in exchange rates include our exposures to the above financial assets or liabilities denominated in non functional currencies. Cash held by the Company in US dollars at September 30, 2024 was $159 (September 30, 2023 - $175).
If the US dollar to Canadian foreign exchange rate changed by 2% this would change the recorded net gain by $174 (September 30, 2023 - $173).
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Price risk
The Company is exposed to price risk. Price risk is the risk that the commodity prices that the Company charges are significantly influenced by its competitors and the commodity prices that the Company must charge to meet its competitors may not be sufficient to meet its expenses. The Company reduces the price risk by ensuring that it obtains information regarding the prices set by its competitors to ensure that its prices are appropriate to the unique attributes of our product. In the opinion of management, the price risk is low and is not material.
Disclosure control risks
The Company’s management, with the participation of the Chief Executive Officer and Chief Financial Officer of the Company, have designed disclosure controls and procedures (“DC&P”), or caused them to be designed under their supervision, to provide reasonable assurance that material information relating to the issuer, including its consolidated subsidiaries, is made known, particularly during the period in which interim or annual filings are being prepared, and information required to be disclosed by the Company in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation. Although certain weaknesses have been identified, these items do not constitute a material weakness or a weakness in DC&P that are significant. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. DC&P are reviewed on an ongoing basis.
Internal control risks
The Company’s management, with the participation of the Chief Executive Officer and Chief Financial Officer of the Company, have designed such internal control over financial reporting (“ICFR”), or caused it to be designed under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Such design also uses the framework and criteria established in Internal Control over Financial Reporting - Guidance for Smaller Public Companies, issued by The Committee of Sponsoring Organizations of the Treadway Commission. The Company relies on entity-wide controls and programs including written codes of conduct and controls over initiating, recording, processing and reporting significant account balances and classes of transactions. Other controls include centralized processing controls, including a shared services environment and monitoring of operating results. Based on the evaluation of the design and operating effectiveness of the Company’s ICFR, the CEO and CFO concluded that the company’s ICFR was effective as at September 30, 2024.
The Company does not believe that it has any material weakness or a weakness in ICFR that are significant, other than those reported in the September 30, 2024, audited financial statements. Control deficiencies have been identified within the Company’s accounting and finance departments and its financial information systems over segregation of duties and user access respectively. Specifically, certain duties within the accounting and finance departments were not properly segregated due to the small number of individuals employed in these areas. To our knowledge, none of the control deficiencies has resulted in a misstatement to the financial statements. However, these deficiencies may be considered a material weakness resulting in a more-than remote likelihood that a material misstatement of the Company’s annual or interim financial statements would not be prevented or detected.
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As the Company incurs future growth, we plan to expand the number of individuals involved in the accounting function. At the present time, the CEO and CFO oversee all material transactions and related accounting records. In addition, the Audit Committee reviews on a quarterly basis the financial statements and key risks of the Company and queries management about significant transactions, there is a quarterly review of the company’s condensed interim unaudited financial statements by the Company’s auditors and daily oversight by the senior management of the Company.
| 15. | OTHER RISKS |
Other Risk Factors.
The risks described above are not the only risks and uncertainties that we face. Additional risks the Company faces are described under the heading “Risk Factors” in the Company’s AIF for the year ended September 30, 2024.
Other additional risks and uncertainties not presently known to us or that we currently consider immaterial may also impair our business operations. These risk factors could materially affect our future operating results and could cause actual events to differ materially from those described in our forward-looking statements.
Additional information relating to the Company, including our AIF for the year ended September 30, 2024, is available on SEDAR and EDGAR.
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Exhibit 99.2
|
|
CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. dollars)
FOR
THE YEARS ENDED
| REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |  |
To the Board of Directors and Shareholders of Electrovaya Inc.
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statements of financial position of Electrovaya Inc. (the “Company”) as at September 30, 2024 and 2023, and the related consolidated statements of earnings, comprehensive income (loss), changes in equity, and cash flows for each of the years in the two-year period ended September 30, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).
In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as at September 30, 2024 and 2023, and the results of its consolidated operations and its consolidated cash flows for each of the years in the two-year period ended September 30, 2024, in conformity with IFRS® Accounting Standards as issued by the International Accounting Standards Board.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ MNP LLP
Chartered Professional Accountants
Licensed Public Accountants
We have served as the Company’s auditor since 2023.
Toronto, Canada
December 12, 2024
| MNP LLP | |
| 1 Adelaide Street East, Suite 1900, Toronto ON, M5C 2V9 | 1.877.251.2922 T: 416.596.1711 F: 416.596.7894 |
ELECTROVAYA INC.
Consolidated Statements of Financial Position
(Expressed in thousands of U.S. dollars)
As at September 30, 2024 and September 30, 2023
| As at | As at | ||||||||||
| Notes | September 30, 2024 | September 30, 2023 | |||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | |||||||||||
| Trade and other receivables | Note 5 | ||||||||||
| Inventories | Note 6 | ||||||||||
| Prepaid expenses | Note 8 | ||||||||||
| Total current assets | |||||||||||
| Non-current assets | |||||||||||
| Property, plant and equipment | Note 7, 9 | ||||||||||
| Long-term deposit | |||||||||||
| Total non-current assets | |||||||||||
| Total assets | |||||||||||
| Liabilities and Equity | |||||||||||
| Current liabilities | |||||||||||
| Trade and other payables | Note 10, 23 | ||||||||||
| Working capital facilities | Note 11 (a) | ||||||||||
| Promissory notes | Note 11 (b) | ||||||||||
| Short term loans | Note 12 | ||||||||||
| Derivative liability | Note 20 | ||||||||||
| Relief and recovery fund payable | Note 18 | ||||||||||
| Lease liability | Note 14 | ||||||||||
| Total current liabilities | |||||||||||
| Non-current liabilities | |||||||||||
| Lease liability | Note 14 | ||||||||||
| Government assistance payable | Note 18 | ||||||||||
| Other payables | Note 23 | ||||||||||
| Total non-current liabilities | |||||||||||
| Equity | |||||||||||
| Share capital | Note 15 | ||||||||||
| Contributed surplus | |||||||||||
| Warrants | Note 15 | ||||||||||
| Accumulated other comprehensive income | |||||||||||
| Deficit | ( | ) | ( | ) | |||||||
| Total Equity | |||||||||||
| Total liabilities and equity | |||||||||||
| See accompanying notes to consolidated financial statements. | |||||||||||
| Signed on behalf of the Board of Directors | |||||||||||
| Chair of the Board | Sankar Das Gupta, Director | ||||||||||
| Chair of Audit Committee | James K Jacobs, Director | ||||||||||
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ELECTROVAYA INC.
Consolidated Statements of Earnings
(Expressed in thousands of U.S. dollars)
For the years ended September 30, 2024 and September 30, 2023
| Notes | September 30, 2024 | September 30, 2023 | |||||||||
| Revenue | Note 22 | ||||||||||
| Direct manufacturing costs | Note 6(b) | ||||||||||
| Gross margin | |||||||||||
| Expenses | |||||||||||
| Research and development | |||||||||||
| Government assistance | Note 19 | ( | ) | ( | ) | ||||||
| Sales and marketing | |||||||||||
| General and administrative | |||||||||||
| Stock based compensation | |||||||||||
| Depreciation and amortization | |||||||||||
| Operating expenses | |||||||||||
| Income from operations | |||||||||||
| Net finance charges | Note 13 | ||||||||||
| Foreign exchange loss (gain) and interest income | ( | ) | |||||||||
| Loss before income tax | ( | ) | ( | ) | |||||||
| Deferred tax recovery | Note 24 | ||||||||||
| Net loss for the year | ( | ) | ( | ) | |||||||
| Basic and diluted income (loss) per share | ( | ) | ( | ) | |||||||
| Weighted average number of shares | |||||||||||
| Outstanding, basic and fully diluted | |||||||||||
See accompanying notes to consolidated financial statements.
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ELECTROVAYA INC.
Consolidated Statement of Comprehensive Income (Loss)
(Expressed in thousands of U.S. dollars)
For the years ended September 30, 2024 and September 30, 2023
| September 30, 2024 | September 30, 2023 | |||||||
| Net loss for the year | ( | ) | ( | ) | ||||
| Items that will not be reclassified to Profit and Loss | ||||||||
| Gain on revaluation of property (net of deferred tax) | ||||||||
| Items that may be reclassified to Profit and Loss | ||||||||
| Cumulative translation adjustment | ( | ) | ||||||
| Other comprehensive income (loss) for the year | ( | ) | ||||||
| Total comprehensive income (loss) for the year | ( | ) | ||||||
| See accompanying notes to consolidated financial statements. | ||||||||
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ELECTROVAYA INC.
Consolidated Statements of Changes in Equity
(Expressed in thousands of U.S. dollars)
For the years ended September 30, 2024 and September 30, 2023
| Share Capital | Contributed Surplus | Warrants | Accumulated other Comprehensive Income | Deficit | Total | |||||||||||||||||||
| Balance – October 01, 2022 | ( | ) | ( | ) | ||||||||||||||||||||
| Stock-based compensation | ||||||||||||||||||||||||
| Issuance of shares | ||||||||||||||||||||||||
| Exercise of options | ( | ) | ||||||||||||||||||||||
| Exercise of warrants | ||||||||||||||||||||||||
| Revaluation of property | ||||||||||||||||||||||||
| Cumulative translation adjustment | ||||||||||||||||||||||||
| Net loss for the year | ( | ) | ( | ) | ||||||||||||||||||||
| Balance – September 30, 2023 | ( | ) | ||||||||||||||||||||||
| Balance – October 01, 2023 | ( | ) | ||||||||||||||||||||||
| Stock-based compensation | ||||||||||||||||||||||||
| Issuance of shares | ||||||||||||||||||||||||
| Exercise of options | ( | ) | ||||||||||||||||||||||
| Cumulative translation adjustment | ( | ) | ( | ) | ||||||||||||||||||||
| Net loss for the year | ( | ) | ( | ) | ||||||||||||||||||||
| Balance – September 30, 2024 | ( | ) | ||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
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ELECTROVAYA INC.
Consolidated Statement of Cash Flows
(Expressed in thousands of U.S. dollars)
For the years ended September 30, 2024 and September 30, 2023
| Notes | September 30, 2024 | September 30, 2023 | |||||||||
| Cash and cash equivalents provided by (used in) | |||||||||||
| Operating activities | |||||||||||
| Net loss for the year | ( | ) | ( | ) | |||||||
| Add: | |||||||||||
| Amortization | |||||||||||
| Stock based compensation expense | |||||||||||
| Interest expense and other financing charges | Note 13 | ||||||||||
| Non-cash foreign exchange | ( | ) | |||||||||
| Gain on debt extinguishment | ( | ) | |||||||||
| Bad debt expense / recovery | |||||||||||
| Premium on purchase of SEJ | |||||||||||
| Deferred tax recovery | Note 24 | ( | ) | ||||||||
| Cash provided by operating activities | |||||||||||
| Net Changes in the working capital | Note 17 | ( | ) | ( | ) | ||||||
| Cash from (used in) operating activities | ( | ) | |||||||||
| Investing activities: | |||||||||||
| Purchase of property, plant and equipment | Note 9 | ( | ) | ( | ) | ||||||
| Change in long term deposits | ( | ) | ( | ) | |||||||
| Cash used in investing activities | ( | ) | ( | ) | |||||||
| Financing activities | |||||||||||
| Issuance of shares | |||||||||||
| Issuance of warrants | |||||||||||
| Exercise of options | |||||||||||
| Exercise of warrants | |||||||||||
| Proceeds from working capital facilities | Note 11(a) | ||||||||||
| Repayment of working capital facilities | Note 11(a) | ( | ) | ( | ) | ||||||
| Repayment of vendor take back loan | Note 12 | ( | ) | ( | ) | ||||||
| Repayment of promissory note | Note 11(b), 12 | ( | ) | ||||||||
| Interest and other finance cost | Note 13 | ( | ) | ( | ) | ||||||
| Government assistance | ( | ) | ( | ) | |||||||
| Lease payments | Note 14 | ( | ) | ( | ) | ||||||
| Cash from (used in) financing activities | ( | ) | |||||||||
| Increase (decrease) in cash and cash equivalents | ( | ) | |||||||||
| Cash and cash equivalents, beginning of year | |||||||||||
| Effect of movements in exchange rates on cash held | ( | ) | |||||||||
| Cash and cash equivalents at end of year | |||||||||||
Supplemental cash flow disclosures: | |||||||||||
| Interest paid | |||||||||||
| Income tax paid | |||||||||||
See accompanying notes to consolidated financial statements.
Some comparative figures have been adjusted to make it consistent with current year presentation.
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ELECTROVAYA INC.
Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
| 1. | Reporting Entity |
Electrovaya Inc. (the “Company”) is domiciled in Ontario, Canada, and is incorporated under the Business Corporations Act (Ontario). The Company’s registered office is at 6688 Kitimat Road, Mississauga, Ontario, L5N 1P8, Canada. The Company’s common shares trade on the Toronto Stock Exchange and NASDAQ under the symbol ELVA.TO and ELVA, respectively. The Company has no immediate or ultimate controlling parent.
These consolidated financial statements comprise the Company and its subsidiaries (together referred to as the “Group” or “Company”). The Company is primarily involved in the design, development, manufacturing and sale of Lithium-Ion batteries, battery systems and battery-related products for energy storage, clean electric transportation, and other specialized applications.
| 2. | Basis of Presentation |
| a. | Statement of Compliance |
These consolidated financial statements have been prepared based on the principles of International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and the Interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”). The consolidated financial statements have been prepared on a historical cost basis, except for property, plant and equipment and derivative financial instruments that have been measured at fair value.
These consolidated financial statements were authorized for issuance by the Company’s Board of Directors on December 12, 2024.
| b. | Basis of Accounting |
These consolidated financial statements have been prepared on the going concern basis, which contemplates the realization of assets and settlement of liabilities as they fall due in the normal course of business.
During the year ended September 30, 2024, the Company generated cash from operations of $ million (September 30, 2023: $( million). As of September 30, 2024, the Company has working capital of $ million (September 30, 2023: $() million) and a net loss of $ million (2023: $ million).
| c. | Functional and Presentation Currency |
These consolidated financial statements are presented in U.S. dollars and have been rounded to the nearest thousands, except per share amounts and when otherwise indicated. The functional currency of the Electrovaya Inc. is the Canadian dollar and the functional currencies of the all the Group’s companies is US Dollars. Below are the companies within Group -
Electrovaya Corp., Electrovaya Company, Sustainable Energy Jamestown LLC, Electrovaya USA Inc.
7 | P a g e
ELECTROVAYA INC.
Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
| d. | Use of Judgements and Estimates |
The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.
Information about significant areas of estimation uncertainty that have the most significant effect on the amounts recognized in the consolidated financial statements relate to the following (assumptions made are disclosed in individual notes throughout the consolidated financial statements where relevant):
| ● | Estimates used in determining the net realizable values of inventories, taking into account the most reliable evidence available at each reporting date. The future realization of these inventories may be affected by future technology or other market-driven changes that may reduce future selling prices. |
| ● | Estimates used in testing non-financial assets for impairment including determination of the recoverable amount of a cash generating unit. |
| ● | Estimates used in determining the fair value of stock option grants and warrants. These estimates include assumptions about the volatility of the Company’s stock and forfeiture. |
| ● | Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits, together with future tax planning strategies. Information on tax losses carried forward is presented in Note 24. |
Allowance for expected credit losses
The allowance for expected credit losses is based on the assessment of the collectability of customer accounts and the aging of the related invoices and represents the best estimate of probable credit losses in the existing trade accounts receivable. The Company regularly reviews the allowance by considering factors such as historical experience, credit quality, the age of the account receivable balances, and current economic conditions that may affect a customer’s ability to pay.
Stock-Based Compensation
The Company account for stock-based compensation costs in accordance with the accounting standards for stock-based compensation, which require that all stock-based payments to employees be recognized in the audited consolidated statements of earnings based on their fair values. The fair value of stock options on the grant date is estimated using the Black-Scholes option-pricing model using the single-option approach and the Monte Carlo valuation method depending on the type of option granted. The Black Scholes and Monte Carlo option pricing models require the use of highly subjective and complex assumptions, including the option’s expected term and the price volatility of the underlying stock, to determine the fair value of the award.
8 | P a g e
ELECTROVAYA INC.
Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
Warrants
The Company accounts for warrants in accordance with the accounting standards for warrants, which requires all warrants to be recognized in the audited consolidated statement of financial position based on their fair values. The fair value of warrants on the grant date is estimated using the Black-Scholes pricing model approach. The Black Scholes pricing model requires the use of highly subjective and complex assumptions, including the warrant’s expected term and the price volatility of the underlying stock, to determine the fair value of the award.
| 3. | Material Accounting Policies |
The accounting policies below are in compliance with IFRS and have been applied consistently to all periods presented in these consolidated financial statements.
| a. | Basis of consolidation |
| i. | Subsidiaries |
These consolidated financial statements include direct and indirect subsidiaries, all of which are wholly owned. Any subsidiaries that are formed or acquired during the year are consolidated from their respective dates of formation or acquisition. Inter-company transactions and balances are eliminated on consolidation.
Subsidiaries are entities controlled by the Company. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Company. All subsidiaries have the same reporting dates as their parent Company.
| ii. | Transactions eliminated on consolidation |
Intra-company balances and transactions, and any unrealized income and expenses arising from intra-company transactions, are eliminated in preparing the consolidated financial statements.
| b. | Foreign currency |
Each subsidiary of the Company maintains its accounting records in its functional currency. A Company’s functional currency is the currency of the principal economic environment in which it operates.
| i. | Foreign currency transactions |
Transactions carried out in foreign currencies are translated using the exchange rate prevailing at the transaction date. Monetary assets and liabilities denominated in a foreign currency at the reporting date are translated at the exchange rate at that date. The foreign currency gain or loss on such monetary items is recognized as income or expense for the period. Non-monetary assets and liabilities denominated in a foreign currency are translated at the historical exchange rate prevailing at the transaction date.
9 | P a g e
ELECTROVAYA INC.
Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
| ii. | Translation of financial statements of foreign operations |
The assets and liabilities of subsidiaries whose functional currency is not the U.S. dollar are translated into U.S. dollars at the exchange rate prevailing at the reporting date. The income and expenses of foreign operations whose functional currency is not the U.S. dollar are translated to U.S dollars at the exchange rate prevailing on the date of transaction. Foreign currency differences on translation are recognized in other comprehensive income in the cumulative translation account net of income tax.
Foreign exchange gains or losses arising from a monetary item receivable from or payable to a foreign operation, the settlement of which is neither planned nor likely to occur in the foreseeable future and which in substance is considered to form part of the net investment in the foreign operation, are recognized in other comprehensive income in the foreign currency translation reserve.
| c. | Financial instruments |
Recognition
Financial assets and financial liabilities are recognized in the Company’s consolidated statement of financial position when the Company becomes a party to the contractual provisions of the instrument. On initial recognition, all financial assets and financial liabilities are recorded at fair value, net of attributable transaction costs, except for financial assets and liabilities classified as at fair value through profit or loss (‘FVTPL’). The directly attributable transactions costs of financial assets and liabilities as at FVTPL are expensed in the period in which they are incurred.
Subsequent measurement of financial assets and liabilities depends on the classification of such assets and liabilities.
Classification and Measurement
The Company determines the classification of its financial instruments at initial recognition. Financial assets and financial liabilities are classified according to the following measurement categories:
| ● | those to be measured subsequently at fair value either through profit or loss (“FVTPL”) or through other comprehensive income (“FVTOCI”); and, |
| ● | those to be measured subsequently at amortized cost. |
The classification and measurement of financial assets after initial recognition at fair value depends on the business model for managing the financial asset and the contractual terms of the cash flows. Financial assets that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding, are generally measured at amortized cost at each subsequent reporting period. All other financial assets are measured at their fair values at each subsequent reporting period, with any changes recorded through FVTPL or through FVTOCI (which designation is made as an irrevocable election at the time of recognition).
After initial recognition at fair value, financial liabilities are classified and measured at either:
| ● | amortized cost. |
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ELECTROVAYA INC.
Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
| ● | FVTPL, if the Company has made an irrevocable election at the time of recognition, or when required (for items such as instruments held for trading or derivatives); or, |
| ● | the Company reclassifies financial assets when and only when its business model for managing those assets changes. Financial liabilities are not reclassified. |
The Company’s financial assets consist of cash and cash equivalents, trade and other receivables and prepaid expenses, which are classified and subsequently measured at amortized cost. The Company’s financial liabilities consist of trade and other payables, working capital facilities, promissory notes, short term loans, lease liability, relief and recovery fund payable, and other payables, which are classified and measured at amortized cost using the effective interest method. Derivative liability is classified and measured at fair value through profit and loss. Interest expense is reported in profit or loss.
| d. | Cash equivalents |
Cash equivalents include short-term investments with original maturities of three months or less.
| e. | Inventories |
Inventories are stated at the lower of cost and net realizable value. Cost of raw material is determined using the average cost method. Cost of semi-finished and finished goods are determined using the First in First out (FIFO) method. Cost includes all expenses directly attributable to the manufacturing process as well as appropriate portions of related production overheads. Net realizable value is the estimated selling price in the ordinary course of business less any applicable selling expenses.
| f. | Property, plant and equipment |
Recognition and measurement
Items of property, plant and equipment (other than land and buildings) are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes the cost of material and labor and other costs directly attributable to bringing the asset to a working condition for its intended use.
When significant components of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognized net within profit or loss.
The Company capitalizes borrowing costs directly attributable to the acquisition, construction or production of qualifying property, plant and equipment as part of the cost of that asset, if applicable. Capitalized borrowing costs are amortized over the useful life of the related asset.
The Company adopted the revaluation method of accounting for the newly acquired building and land. Land and building measured using the revaluation method is initially measured at cost and subsequently carried at its revalued amount, being the fair value at the date of the revaluation less any subsequent accumulated depreciation and any accumulated impairment losses. Revaluations are made on an annual basis to ensure that the carrying amount does not differ significantly from fair value. Where the carrying amount of an asset increases as a result of revaluation, the increase is recognized in other comprehensive income or loss and accumulated in equity in revaluation surplus, unless the increase reverses a previously recognized impairment recorded through net income, in which case that portion of the increase is recognized in net income. Where the carrying amount of an asset decreases, the decrease is recognized in other comprehensive income to the extent of any balance existing in revaluation surplus in respect of the asset, with the remainder of the decrease recognized in profit or loss. Material residual value estimates and estimates of useful life are updated as required, but at least annually. Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between the disposal proceeds and the carrying amounts of the assets and are recognized in profit or loss within “other income” or “other expenses.
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ELECTROVAYA INC.
Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
Subsequent costs
The cost of replacing a part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company, and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. Maintenance and repair costs are expensed as incurred, except where they serve to increase productivity or to prolong the useful life of an asset, in which case they are capitalized.
Depreciation is provided on a straight-line basis over the estimated useful lives of the assets.
The following useful lives are applied:
Schedule Of Property, Plant and Equipment Useful Lives
| Item | Life (in years) |
| Leasehold improvements | |
| Production equipment | |
| Office furniture and equipment | |
| Building | |
| Right of use assets | Over the lease term |
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted prospectively, if appropriate.
| g. | Leases |
Where the Company has entered a lease, the Company has recognized a right-of-use asset representing its rights to use the underlying assets and a lease liability representing its obligation to make lease payments. The right-of-use asset, where it relates to an operating lease, has been presented net of accumulated depreciation and is disclosed in the consolidated statement of financial position. The lease liability has been disclosed as a separate line item, allocated between current and non-current liabilities. The lease liability associated with all leases is measured at the present value of the expected lease payments at inception and discounted using the interest rate implicit in the lease. If the rate cannot be readily determined, the Company’s incremental borrowing rate is used to discount the lease liability. Judgement is required to determine the incremental borrowing rate.
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ELECTROVAYA INC.
Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
| h. | Impairment |
| ● | Financial assets |
The Company recognizes an allowance for credit losses equal to lifetime credit losses for trade and other receivables. None of these assets include a financing component. Significant receivable balances are assessed for impairment individually based on information specific to the customer. The remaining receivables are grouped, where possible, based on shared credit risk characteristics, and assessed for impairment collectively. The allowance assessment incorporates past experience, current and expected future conditions.
| ● | Non-financial assets |
The carrying amounts of the Company’s non-financial assets, other than inventories and deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For intangible assets that are not yet available for use, the recoverable amount is estimated each year at the same time.
An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognized in profit or loss. Impairment losses recognized in respect of CGUs are allocated to the carrying amounts of the assets in the unit (group of units).
In respect of other assets, impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation, if no impairment loss had been recognized.
| i. | Provisions |
Legal
Provisions are recognized for present legal or constructive obligations arising from past events when the amount can be reliably estimated, and it is probable that an outflow of resources will be required to settle an obligation. Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the reporting date, including the risks and uncertainties associated with the present obligation. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. Provisions are discounted to their present values, where the time value of money is material.
At the end of each reporting period, the Company evaluates the appropriateness of the remaining balances. Adjustments to the recorded amounts may be required to reflect actual experience or to reflect the current best estimate.
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ELECTROVAYA INC.
Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
In the normal course of operations, the Company may be subject to lawsuits, investigations and other claims, including environmental, labor, product, customer disputes and other matters. The ultimate outcome or actual cost of settlement may vary significantly from the original estimates. Material obligations that have not been recognized as provisions, as the outcome is not probable or the amount cannot be reliably estimated, are disclosed as contingent liabilities, unless the likelihood of outcome is remote.
| j. | Share-based payments |
The Company accounts for all share-based payments to employees and non-employees using the fair value-based method of accounting. The Company measures the compensation cost of stock-based option awards to employees at the grant date using the Black-Scholes option pricing model to determine the fair value of the options. The share-based compensation cost of the options is recognized as stock-based compensation expense over the relevant vesting period of the stock options.
Under the Company`s stock option plan, all options granted under the plan have a maximum term of 10 years and have an exercise price per share of not less than the market value of the Company’s common shares on the date of grant. The Board of Directors has the discretion to accelerate the vesting of options or stock appreciation rights granted under the plan in accordance with applicable laws and the rules and policies of any stock exchange on which the Company’s common shares are listed.
The Company has an option plan whereby options are granted to employees and consultants as part of the Company’s incentive plans. Stock options vest in installments over the vesting period. Stock options typically vest one third each year over 3 years or immediately as approved by the Board. The Company treats each installment as a separate grant in determining stock-based compensation expense.
The grant date fair value of options granted to employees is recognized as stock-based compensation expense, with a corresponding charge to contributed surplus, over the vesting period. The expense is adjusted to reflect the estimated number of options expected to vest at the end of the vesting period, adjusted for the estimated forfeitures during the period. Any cumulative adjustment prior to vesting is recognized in the current period. No adjustment is made to any expense recognized in the prior periods if share options ultimately exercised are different to that estimated on vesting. The fair value of options is measured using the Black-Scholes option pricing model. Measurement inputs include the price of Common shares on the measurement date, exercise price of the option, expected volatility (based on weighted average historic volatility), weighted average expected life of the option (based on historical experience and general option holder behavior), expected dividends, estimated forfeitures and the risk-free interest rate.
Upon exercise of options, the proceeds received net of any directly attributable transaction costs up to the nominal value of the shares issued are allocated to share capital with any excess being recorded in retained earnings or deficit.
| k. | Income taxes |
Tax expense recognized in profit or loss comprises the sum of deferred tax and current tax not recognized in other comprehensive income or directly in equity. Current income tax assets and/or liabilities comprise those obligations to, or claims from, fiscal authorities relating to the current or prior reporting periods, that are unpaid at the reporting date. Current tax is payable on taxable profit, which differs from profit or loss in the financial statements. Calculation of current tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.
14 | P a g e
ELECTROVAYA INC.
Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
Deferred income taxes are calculated using the liability method on temporary differences between the carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit or transactions that at the time of the transaction, does not give rise to equal taxable and deductible temporary differences. Deferred tax on temporary differences associated with investments in subsidiaries and joint ventures is not provided if reversal of these temporary differences can be controlled by the Company and it is probable that reversal will not occur in the foreseeable future. Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their respective period of realization, provided they are enacted or substantively enacted by the end of the reporting period. Deferred tax assets are recognized to the extent that it is probable that they will be able to be utilized against future taxable income, based on the Company’s forecast of future operating results which is adjusted for significant non-taxable income and expenses and specific limits to the use of any unused tax loss or credit.
Deferred tax assets and liabilities are offset only when the Company has a right and intention to set off current tax assets and liabilities from the same taxation authority. Changes in deferred tax assets or liabilities are recognized as a component of tax income or expense in profit or loss, except where they relate to items that are recognized in other comprehensive income or directly in equity, in which case the related deferred tax is also recognized in other comprehensive income or equity, respectively. A valuation allowance is recorded against any deferred income tax asset if it is more likely than not that the asset will be realized.
| l. | Revenue |
Revenue arises from the sale of goods and the rendering of services. It is measured by reference to the fair value of consideration received or receivable, excluding sales taxes, rebates, and trade discounts. The Company often enters sales transactions involving a range of the Company’s products and services, for example for the delivery of battery systems and related services.
Sale of goods
Sale of goods and services is recognized when the Company has transferred to the buyer the significant risks and rewards of ownership, generally when the customer has taken undisputed delivery of the goods and services. For contracts that permit the customer to return an item, revenue is recognized to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Therefore, the amount of revenue recognized is adjusted for expected returns, which are estimated based on the historical data for specific types of products.
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ELECTROVAYA INC.
Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
Advance payments by customers - Any advance receipts from customers are included in contract liabilities until the revenue recognition criteria is met.
Warranty provision
A provision for warranty costs is recorded on product sales at the time the sale is recognized. In establishing the warranty provision, management estimates the likelihood that products sold will experience warranty claims and the estimated cost to resolve claims received, taking into account the nature of the contract and past and projected experience with the products.
Government Grants
Government grants are recognized when there is reasonable assurance that the Company has met the requirements of the approved grant program and there is reasonable assurance that the grant will be received. Government grants that compensate for expenses already incurred are recognized in income on a systematic basis in the same year in which the expenses are incurred. Government grants for immediate financial support, with no future related costs, are recognized in income when receivable. Government grants that compensate the Company for the cost of an asset are recognized on a systematic basis over the useful life of the asset. Government grants consisting of investment tax credits are recorded as a reduction of the related expense or cost of the asset acquired. If a government grant becomes repayable, the repayment is treated as a change in estimate. Where the original grant related to income, the repayment is applied first against any related deferred government grant balance, and any excess as an expense. Where the original grant related to an asset, the repayment is treated as an increase to the carrying amount of the asset or as a reduction to the deferred government grant balance.
| m. | Research and development |
Expenditure on research is recognized as an expense in the period in which it is incurred.
Costs that are directly attributable to the development phase are recognized as intangible assets provided, they meet the following recognition requirements:
| ● | completion of the intangible asset is technically feasible so that it will be available for use or sale. |
| ● | the Company intends to complete the intangible asset and use or sell it. |
| ● | the Company has the ability to use or sell the intangible asset. |
| ● | the intangible asset will generate probable future economic benefits. Among other things, this requires that there is a market for the output from the intangible asset or for the intangible asset itself, or, if it is to be used internally, the asset will be used in generating such benefits. |
| ● | there are adequate technical, financial and other resources to complete the development and to use or sell the intangible asset. |
| ● | the expenditure attributable to the intangible asset during its development can be measured reliably. |
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ELECTROVAYA INC.
Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
Development costs not meeting these criteria for capitalization are expensed in profit or loss as incurred.
| n. | Finance income and expense, foreign currency gains and losses |
Interest income is reported on an accrual basis using the effective interest method.
Finance costs are comprised of interest expense on promissory notes, short term loans and working capital facilities. Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognized in profit or loss using the effective interest method. Foreign currency gains and losses are reported on a net basis.
| o. | Earnings per share (EPS) |
The Company presents basic and diluted earnings per share (“EPS”) data for its common shares. Basic EPS is calculated by dividing the profit or loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to common shareholders and the weighted average number of common shares outstanding, adjusted for own shares held, for the effects of all dilutive potential common shares, which comprise share options granted to employees. In a period of losses, the dilutive instruments comprising warrants and stock options are excluded for the determination of dilutive net loss per share because their effect is anti-dilutive.
| p. | Segment reporting |
An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company’s other components. All operating segments’ operating results are regularly reviewed by the Company’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.
| 4. | Standards issued but not yet effective |
The IASB and the IFRIC have issued the following new and revised standards and interpretations that are not yet effective for the relevant reporting periods and the Company has not early adopted these standards, amendments and interpretations. However, the Company is currently assessing what impact the application of these standards or amendments will have on the Consolidated Financial Statements of the Company. The Company intends to adopt these standards, if applicable, when the standards become effective:
| a. | Lease Liability in a Sale and Leaseback (Amendments to IFRS 16) |
The amendments address the measurement requirements for sale and leaseback transactions. The amendments require a seller-lessee to subsequently measure lease liabilities arising from a leaseback in a way that it does not recognize any amount of the gain or loss that relates to the right of use it retains. The amendments are effective for annual reporting periods beginning on or after January 1, 2024. Earlier application is permitted. A seller-lessee shall apply the amendments retrospectively to sale and leaseback transactions entered into after the date of initial application. The date of initial application is the beginning of the annual reporting period in which an entity first applies IFRS 16.
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ELECTROVAYA INC.
Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
| b. | Classification of Liabilities as Current or Non-Current and Non-Current Liabilities with Covenants (Amendments to IAS 1) |
| ● | Liabilities are classified as either current or non-current depending on the existence at the end of the reporting period of a right to defer settlement of the liability for at least twelve months after the reporting period. The amendments also clarify that only covenants that an entity must comply with on or before the reporting date would affect a liability’s classification as current or non-current, even if compliance with the covenant is only assessed after the entity’s reporting date. Classification is unaffected by the likelihood that an entity will settle the liability within 12 months after the reporting date; and |
| ● | How an entity classifies debt an entity may settle by converting it into equity. |
Additionally, the amendments added new disclosure requirements for situations where a liability is classified as non-current and the entity’s right to defer settlement is contingent on compliance with future covenants within twelve months after the reporting date. The disclosure should enable users of financial statements to understand the risk that the liability classified as non-current could become repayable within 12 months after the reporting period. Amendments are effective for annual reporting periods beginning on or after January 1, 2024, and do not have any impact on the Company’s reporting requirements.
| c. | Lack of Exchangeability (Amendments to IAS 21) |
The amendments specify how to determine whether a currency is exchangeable into another currency and how to determine the spot exchange rate when a currency lacks exchangeability.
The amendments are effective for annual reporting periods beginning on or after January 1, 2025. In applying the amendments, an entity shall not restate comparative periods but will follow the specific transitional provisions included in the amendments.
| d. | IFRS 18 Presentation and Disclosure in Financial Statements (New) |
IFRS 18 replaces IAS 1 Presentation of Financial Statements, and for all entities will-
| ● | Introduce a new defined structure for the statement of profit and loss and require the classification of income and expenses in that statement into one of five categories: operating; investing; financing; income taxes; and discontinued operations. IFRS 18 introduces definitions of these categories for purposes of the statement of profit and loss. Specific categorization requirements will apply to entities whose ‘main business activity’ is to provide financing to customers or to invest in specified assets. Entities will also be required to present new subtotals for ‘operating profit or loss’ and ‘profit or loss before financing and income taxes. |
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ELECTROVAYA INC.
Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
| ● | Require disclosure of ‘management-defined performance measures’ (MPMs) in a single note to the financial statements. MPMs are subtotals of income and expenses that an entity uses in public communications outside of its financial statements, to communicate management’s view of an aspect of the financial performance of the entity as a whole to users. Entities must disclose a reconciliation between the measure and the most directly comparable total or subtotal specifically required to be disclosed by IFRS Accounting Standards or subtotal listed in IFRS 18. |
| ● | Enhance guidance about how to group information within the financial statements; and |
| ● | For the statement of cash flows, require that ‘operating profit or loss’ be used as the starting point for determining cash flows from operating activities under the indirect method, and remove the optionality around classification of cash flows from interest and dividends. |
IFRS 18 is effective for annual reporting periods beginning on or after January 1, 2027, including for interim financial statements. Earlier application is permitted. The new standard is to be applied retrospectively, and, in the year of adoption, a reconciliation is required between how the statement of profit or loss was presented in the comparative period under IAS 1 and how it is presented in the current year under IFRS 18.
| 5. | Trade and Other Receivables |
Trade and Other Receivables
| September 30, 2024 | September 30, 2023 | |||||||
| Trade receivables, gross | ||||||||
| Expected credit losses | ( | ) | ( | ) | ||||
| Trade receivables | ||||||||
| Other receivables | ||||||||
| Trade and other receivables | ||||||||
As
at September 30, 2024,
Accounts receivable
| Particulars | Current | 31-60 | 61-90 | 91-120 | >120 | Total |
| % | ||||||
| Gross Trade receivable |
| Particulars | Current | 31-60 | 61-90 | 91-180 | 181-365 | >365 | Total |
| Trade receivable (net of specific provision) | |||||||
| Expected loss rate (%) | |||||||
| Expected loss provision |
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ELECTROVAYA INC.
Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
The movement in the allowance for credit losses can be reconciled as follows:
Allowance for Credit Losses
September 30, 2024 | September 30, 2023 | |||||||
| Beginning balance | ||||||||
| Write off | ( | ) | ||||||
| Allowance provided | ||||||||
| Ending balance | ||||||||
| 6. | Inventories |
| a. | Total inventories on hand as at September 30, 2024 and September 30, 2023 are as follows: |
Schedule of Inventories
| September 30, 2024 | September 30, 2023 | |||||||
| Raw materials | ||||||||
| Semi-finished | ||||||||
| Finished goods | ||||||||
| 9,698 | 8,266 | |||||||
| b. | During
the year ended September 30, 2024, the provision for slow moving and obsolete inventories amounted to $ |
| c. | During the year ended September 30, 2024, materials amounted to $ million (September 30, 2023: $ million) was expensed through direct manufacturing costs. |
| 7. | Revaluation of land and building |
The
Company has revalued its land and building as at March 31, 2023, and recognized a revaluation surplus of $
Schedule of Revaluation of Land And Building
| High | Low | |||||||
| Market rent ($ sq ft) | $ | $ | ||||||
| Capitalisation rate | % | % | ||||||
| Sales ($ sq ft) | $ | $ | ||||||
The Company’s estimates are, by their nature, subject to change. Changes in the capitalization rate would represent a change in the value of the land and buildings. The Company performed a sensitivity analysis on the value of the land and buildings based on changes to the capitalisation rate.
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ELECTROVAYA INC.
Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
As
at March 31, 2023,
| 8. | Prepaid expenses |
Schedule of Prepaid Expenses
| September 30, 2024 | September 30, 2023 | |||||||
| Prepaid expenses | ||||||||
| Prepaid insurance | ||||||||
| Prepaid purchases | ||||||||
| Total | ||||||||
Prepaid purchases are comprised of vendor deposits on inventory orders for the future acquisition of inventories.
| 9. | Property, plant and equipment |
Schedule Of Property, Plant and Equipment
| September 30, 2024 | ||||||||||||||||||||||||
| Land & Building | Right of Use Asset | Leasehold Improvement | Production Equipment | Office Furniture & Equipment | Total | |||||||||||||||||||
| Gross carrying amount | ||||||||||||||||||||||||
| Balance beginning | ||||||||||||||||||||||||
| Additions | ||||||||||||||||||||||||
| Exchange differences | ||||||||||||||||||||||||
| Balance ending | ||||||||||||||||||||||||
| Depreciation and impairment | ||||||||||||||||||||||||
| Balance beginning | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Additions | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Exchange differences | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Balance ending | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Net Book Value ending | ||||||||||||||||||||||||
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ELECTROVAYA INC.
Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
| September 30, 2023 | ||||||||||||||||||||||||
| Land & Building | Right of Use Asset | Leasehold Improvement | Production Equipment | Office Furniture & Equipment | Total | |||||||||||||||||||
| Gross carrying amount | ||||||||||||||||||||||||
| Balance beginning | ||||||||||||||||||||||||
| Additions | ||||||||||||||||||||||||
| Exchange differences | ||||||||||||||||||||||||
| Balance ending | ||||||||||||||||||||||||
| Depreciation and impairment | ||||||||||||||||||||||||
| Balance beginning | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Additions | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Exchange differences | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Balance ending | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Net Book Value ending | ||||||||||||||||||||||||
For the year ended September 30, 2023, the additions include revaluation adjustment of $M to land and building.
| 10. | Trade and Other Payables |
Schedule of Trade and Other Payables
| September 30, 2024 | September 30, 2023 | |||||||
| Trade payables | ||||||||
| Accruals | ||||||||
| Employee payables | ||||||||
| Total | ||||||||
Warranty provision is included in accruals and the continuity schedule is as follows:
Schedule of Warranty Provisions
| September 30, 2024 | September 30, 2023 | |||||||
| Opening provision | ||||||||
| Warranty expenses during the year | ( | ) | ( | ) | ||||
| Additional provision during the year | ||||||||
| Closing balance | ||||||||
| 11. | Working Capital Facilities |
| a. | Revolving Credit Facility |
As at September 30, 2024 the balance owing under the facility is $16.28 million (Cdn $22 million). The maximum credit available under the facility is $ million (Cdn $22 million).
The interest on the revolving credit facility is the greater of a) 7.05% per annum above the Prime Rate or b) 12% per annum. Interest is payable monthly.
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ELECTROVAYA INC.
Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
Schedule Of Revolving Credit Facility
| September 30, 2024 | September 30, 2023 | |||||||
| Opening balance | ||||||||
| Exchange difference | ||||||||
| Payments made during the period | ( | ) | ( | ) | ||||
| Cash drawn during the period | ||||||||
| Closing balance | ||||||||
On December 20, 2022, the Company renewed its revolving facility and extended the term of the facility by six months to June 30, 2023, with the Company having the option to extend the facility by a further six months to December 31, 2023. In exchange for this renewal and amendment to the definition of “Credit Facility Advance Rate Limit”, the Company issued shares at Cdn $5.55 (as determined by five-day volume weighted average) as compensation for Canadian $80 amendment fee. This was included within finance costs on the statement of earnings. The terms include a reduction in the interest rate calculation by 1%. All other terms and conditions are unchanged.
On June 30, 2023, the Company renewed its revolving facility and extended the term of the facility by three months to September 29, 2023, with the Company having the option to extend the facility by a further three months to December 31, 2023. In exchange for this renewal, the Company issued shares at Cdn $4.77 (as determined by five-day volume weighted average) as compensation for Cdn $40 amendment fee. This was included within finance costs on the statement of earnings. All other terms and conditions are unchanged.
On September 29, 2023, the Company renewed its revolving facility and extended the term of the facility by three months to December 29, 2023. In exchange for this renewal, the Company issued shares at Cdn $3.83 (as determined by five-day volume weighted average) as compensation for Cdn $40 amendment fee. This was included within finance costs on the statement of earnings. All other terms and conditions are unchanged.
On
February 12, 2024, the Company revised its revolving facility, expanding its maximum principal amount to $22 million and extending
its term to July 29, 2025. As part of this adjustment, a commitment fee of $
| b. | Promissory Note |
Schedule Of finance cost and credited
| September 30, 2024 | September 30, 2023 | |||||||
| Promissory Note opening balance | ||||||||
| Finance cost | ||||||||
| Repayment of Promissory Note | ( | ) | ||||||
| Repayment of Promissory Note(i) | ( | ) | ||||||
| Finance cost paid with options(i) | ( | ) | ||||||
| Promissory Note(ii) issued | ||||||||
| Repayment of Promissory Note(i) | ( | ) | ||||||
| Promissory Note Ending balance | $ | $ | ||||||
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ELECTROVAYA INC.
Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
| i. | On November 14, 2022, the Company repaid the promissory note in the amount of approximately $4.4 million (Cdn $6 million) via the proceeds of an equity raise. Upon repayment, the pledge of 27,500,000 Common Shares by Dr. Das Gupta on the share certificates was cancelled. |
On February 16, 2024, the Executive Chairman and Chief Executive Officer both exercised options of Electrovaya Inc. A sum of $507 from the promissory note was utilized to cover portion of the options’ purchase price. The remaining balance of the promissory note, amounting to $519, was then substituted with a new promissory note on February 28, 2024, carrying a 14% interest rate and maturing on July 31, 2025. The interest accrued on the new promissory note is US $ 0.43 million
| ii. | On March 31, 2023, the Company purchased 100% of the membership interest in Sustainable Energy Jamestown LLC (‘SEJ”), a New York incorporated company controlled by the majority shareholders of the Company. In return, the Company issued a promissory note for $1.05 million to the members of SEJ, with a term of 365 days bearing interest at 7.5% annually payable at maturity. Interest recorded for the year is $0.76 million (September 30, 2023: $0.39 million). |
| 12. | Short term loans |
The
short-term loan, having a principal amount of $
The
short-term loans, having principal amount of $
On May 16, 2022, the Company acquired the assets and liabilities of Sustainable Energy Jamestown (“SEJ”), including a Vendor Take Back (‘VTB”) note relating to the purchase of the property by SEJ. The secured VTB has a two-year term with repayment starting on July 1, 2022, and expiring on December 18, 2024, and carries interest at 2% per annum. The VTB note is secured against the real estate property that was acquired as part of the SEJ transaction. On October 1, 2024, the VTB was further extended to December 18, 2024.
The VTB carries a balloon payment of $ million. At September 30, 2023 the balance of the VTB was $ million.
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ELECTROVAYA INC.
Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
Schedule Of Short term loans
| September 30, 2024 | September 30, 2023 | |||||||
| Vendor take back | ||||||||
Schedule Of Short term VTB continuity
The VTB continuity is as follows:
| ||||
| Opening balance as at May 22, 2022 (Short term: $419. Long term: $3,826) | ||||
| Repaid in year | ( | ) | ||
| Interest accretion | ||||
| Closing balance as at September 30, 2022 (Short term: $673. Long term: $3,457) | ||||
| Repaid in year | ( | ) | ||
| Interest accretion | ||||
| Closing balance as at September 30, 2023 (Short term: $3,457. Long term: $nil) | ||||
| Repaid in year | ( | ) | ||
| Interest accretion | ||||
| Closing balance as at September 30, 2024 (Short term: $1,630 Long term : $nil) | ||||
| 13. | Finance costs |
During the year, the Company incurred both cash and non-cash finance costs. The following table shows the split as included on the statement of earnings.
Schedule Of cash and non-cash finance costs
| September 30, 2024 | September 30, 2023 | |||||||||||||||||||||||
| Cash | Non-Cash | Total | Cash | Non-Cash | Total | |||||||||||||||||||
| Working capital facility | ||||||||||||||||||||||||
| Issued to lender (note 15a) | ||||||||||||||||||||||||
| Shares issued to consultants | ||||||||||||||||||||||||
| Promissory notes, accretion on promissory note and settlement fee on promissory note | ||||||||||||||||||||||||
| Interest on VTB loan (note 12) | ||||||||||||||||||||||||
| Lease interest (note 14) | ||||||||||||||||||||||||
| Equity issuance costs | ||||||||||||||||||||||||
| Warrant issuance costs | ||||||||||||||||||||||||
| Changes in FV of derivative warrants | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Accretion on government assistance | ||||||||||||||||||||||||
| Accretion on government loans – TPC | ||||||||||||||||||||||||
| ( | ) | |||||||||||||||||||||||
| 14. | Lease liability |
As of September 30, 2024, lease liability consists of:
Schedule Of Lease liability
| September 30, 2024 | September 30, 2023 | |||||||
| Current | ||||||||
| Non-current | ||||||||
| Carrying amount - lease liability | ||||||||
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ELECTROVAYA INC.
Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
Information about leases for which the Company is a lessee is as follows:
Schedule Of Lease
| September 30, 2024 | September 30, 2023 | |||||||
| Interest on lease liabilities | ||||||||
| Incremental borrowing rate at time of transition | % | % | ||||||
| Cash outflow for the lease | ||||||||
The Company’s future minimum lease payments for the years ended September 30, 2024, for the continued operations are as under:
Schedule Of minimum lease payments
| Year | Amount |
| 2025 | |
| 2026 | |
| 2027 | |
| 2028 | |
| 2029 | |
| 2030 and beyond |
The Company entered into a lease agreement for 61,327 sq. ft for its premises as its headquarters in Mississauga, Ontario at 6688 Kitimat Road. The lease is for 10 years starting January 1, 2020, with expiry December 31, 2029. In addition, the Company is required to pay certain occupancy costs.
The lease agreement for the Company’s lab facility has been renewed for an additional three years, commencing from January 2023.
The terms of the renewed lease entail a fixed monthly rent as follows:
| ● | CAD
$ |
| ● | CAD
$ |
| ● | CAD
$ |
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ELECTROVAYA INC.
Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
| 15. | Share capital |
| a. | Authorized and issued capital stock |
| Common Shares | |||||||||||
| Number | Amount | ||||||||||
| Balance, September 30, 2022 | Note | $ | |||||||||
| Issuance of shares | (i) | ||||||||||
| Exercise of options | Note 15(b) | ||||||||||
| Issuance of shares | (ii) | ||||||||||
| Transfer from contributed surplus | — | ||||||||||
| Exercise of options | Note 15(b) | ||||||||||
| Transfer from contributed surplus | — | ||||||||||
| Issuance of shares note | (iii) | ||||||||||
| Issuance of shares note | (iv) | ||||||||||
| Exercise of warrants | Note 15(c) | ||||||||||
| Transfer from derivative liability | — | ||||||||||
| Balance, September 30, 2023 | |||||||||||
| Issuance of shares | (v) | ||||||||||
| Issuance of shares | (vi) | ||||||||||
| Transfer from contributed surplus | — | ||||||||||
| Exercise of options | Note 15(b) | ||||||||||
| Balance, September 30, 2024 | |||||||||||
| i. | The
Company completed a non-brokered private placement of units at a price of Cdn $ per Unit for aggregate gross proceeds
of CAD$14.8 million. Each Unit comprised of one common share of the Company and one-half of one common share purchase warrant.
The Company issued share purchase warrants on November 09, 2022. The expiry date of these warrants was November 09,
2025. |
| ii. | On December 20, 2022, the revolving facility note which was due to mature on December 31, 2022, was amended to June 30, 2023, with an option to renew for further six months until December 31, 2023. The terms include a reduction in the interest rate calculation by 1%. All other terms and conditions were unchanged. In exchange for the extension, the Company issued shares at Cdn $ (as determined by a five-day volume weighted average) as compensation for Canadian $80 extension fee. The fee is recorded in finance costs on the consolidated statement of earnings. |
| iii. | The revolving facility, which was due to mature on June 30, 2023, was amended to September 29, 2023 with an option to renew for further three months until December 31, 2023. All other terms and conditions were unchanged. In exchange for the extension, the Company issued shares at Cdn $4.77 (as determined by a five-day volume weighted average) as compensation for Canadian $ extension fee. The fee is recorded in finance costs on the consolidated statement of earnings. |
| iv. | The revolving facility, which was due to mature on September 29, 2023, was amended to December 29, 2023. All other terms and conditions are unchanged. In exchange for the extension, the Company issued shares at Cdn $ (as determined by a five-day volume weighted average) as compensation for Canadian $ extension fee. The fee is recorded in finance costs on the consolidated statement of earnings. |
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ELECTROVAYA INC.
Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
| v. | In December 2023, additional shares were issued as extension fee for the revolving facility on December 20, 2023. All terms and conditions were unchanged. In exchange for the extension, the Company issued shares at Cdn $ (as determined by a five-day volume weighted average) as compensation for Cdn $ extension fee. |
| vi. | On March 07, 2024, the Company issued 42,157 shares for consulting for investor relations. The Company issued the shares at Cdn $ 5.43 as compensation. |
| vii. | On
June 13, 2023, the Company completed a reverse split of its issued and outstanding common stock at a ratio of 1 consolidated for
5 pre-consolidated shares. The Company initiated the reverse stock split in connection with its intention to meet the minimum
bid price requirement and list the Common Shares for trading on the Nasdaq Capital Market. As a result of the reverse stock split,
every five outstanding Common Shares were consolidated into one Common Share without any action from stockholders, |
| b. | Stock Options |
Options to purchase common shares of the Company under its stock option plan may be granted by the Board of Directors of the Company to certain full-time and part-time employees, directors and consultants of the Company and its affiliates. Stock options are non-assignable and may be granted for terms of up to 10 years. Stock options vest at various periods from zero to three years. As a result of the reverse stock split, every five options were consolidated into one option without any action from option holders, .
On
February 17, 2021, at a Special Meeting of the Shareholders, a resolution was passed to (i) authorize amendments to the Company’s
On
March 25, 2022, at a Special Meeting of the Shareholders, a resolution was passed to (i) authorize amendments to the Company’s
Schedule Of Stock Options
| Note | Number outstanding | Weighted average exercise price | |||||||||
| Outstanding, September 30, 2022 | |||||||||||
| Exercised | Note 15(a) | ( | ) | ||||||||
| Exercised | Note 15(a) | ( | ) | ||||||||
| Expired | Note 15(a) | ( | ) | ||||||||
| Granted | |||||||||||
| Cancelled | ( | ) | |||||||||
| Outstanding, September 30, 2023 | |||||||||||
| Exercised during the year | Note 15(a) | ( | ) | ||||||||
| Expired during the year | Note 15(a) | ( | ) | ||||||||
| Granted | |||||||||||
| Outstanding, September 30, 2024 | |||||||||||
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Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
| Exercise price | Number Outstanding | Weighted average remaining life (years) | Number exercisable | Weighted average exercise price | |||||||||||||||||
| $ | 3.46 | (Cdn 4.68) | 3.46 | ||||||||||||||||||
| $ | 3.96 | (Cdn 5.35) | 3.96 | ||||||||||||||||||
| $ | 2.11 | (Cdn 2.85) | 2.11 | ||||||||||||||||||
| $ | 4.26 | (Cdn 5.75) | 4.26 | ||||||||||||||||||
| $ | 3.70 | (Cdn 5) | 3.70 | ||||||||||||||||||
| $ | 2.44 | (Cdn 3.3) | 2.44 | ||||||||||||||||||
| $ | 1.11 | (Cdn 1.5) | 1.11 | ||||||||||||||||||
| $ | 1.04 | (Cdn 1.4) | 1.04 | ||||||||||||||||||
| $ | 4.51 | (Cdn 6.1) | 4.51 | ||||||||||||||||||
| $ | 7.88 | (Cdn 10.65) | 7.88 | ||||||||||||||||||
| $ | 2.92 | (Cdn 3.95) | 2.92 | ||||||||||||||||||
| $ | 2.55 | (Cdn 3.45) | 2.55 | ||||||||||||||||||
| $ | 3.37 | (Cdn 4.55) | 3.37 | ||||||||||||||||||
| $ | 2.41 | (Cdn 3.25) | 2.41 | ||||||||||||||||||
| 2.52 | |||||||||||||||||||||
For
the
The Company amortize the estimated grant date fair value of stock options to expense over the vesting period (generally three years). The grant date fair value of outstanding stock options was determined using the Black-Scholes option pricing model which uses highly subjective and complex assumptions, including the option’s expected term and the price volatility of the underlying stock based on historical stock prices, to determine the fair value of the option.
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ELECTROVAYA INC.
Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
| i. | The following table summarizes the assumptions used with the Black-Scholes valuation model for the determination of the stock-based compensation costs for the stock options granted during the year ended September 30, 2024: |
Schedule Of stock-based compensation costs
| Grant date | April 05, 2024 | |||
| No of options | ||||
| Share price | $ | |||
| Exercise price | $ | |||
| Average expected life in years | ||||
| Volatility | % | |||
| Risk-free weighted interest rate | % | |||
| Dividend yield | — | |||
| Fair-value of options granted | $ | |||
| ii. | The following table summarizes the assumptions used with the Black-Scholes valuation model for the determination of the stock-based compensation costs for the stock options granted during the year ended September 30, 2023: |
| Grant date | April 10, 2023 | |||
| No of options | ||||
| Share price | $ | |||
| Exercise price | $ | |||
| Average expected life in years | ||||
| Volatility | % | |||
| Risk-free weighted interest rate | % | |||
| Dividend yield | — | |||
| Fair-value of options granted | $ | |||
| c. | Warrants |
Details of Share Warrants
Schedule Of Warrants
| Number Outstanding | Exercise Price | |||||||
| Outstanding, September 30, 2023 | $ | |||||||
| Expired | ( | ) | $ | |||||
| Outstanding, September 30, 2024 | $ | |||||||
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Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
Additionally, the number of derivative warrants at September 30, 2024 were (September 30, 2023: 912,841).
The grant date fair value of outstanding share warrants was determined using the Black-Scholes pricing model using the following assumptions in the year of the grant:
Risk-free
interest rate (based on U.S. government bond yields) of % (September 30, 2023: 3.80%), expected volatility of the market price
of shares (based on historical volatility of share price) of %, (September 30, 2023: 85.58%) and the expected warrant life
(in years) of 1.1 (September 30, 2023: 3). As a result of the reverse stock split, every five warrants were consolidated into
one warrant without any action from warrant holders,
Warrant continuity schedule is as follows:
Schedule Of Warrant continuity
| Units | Fair Value | |||||||
| Opening valuation as at Nov 9, 2022 | ||||||||
| Warrants exercised as at July 28, 2023 | ( | ) | ( | ) | ||||
| Fair value adjustment | ( | ) | ||||||
| Closing balance (September 30, 2023) | ||||||||
| Fair value adjustment | — | ( | ) | |||||
| Closing balance (September 30, 2024) | ||||||||
| d. | Details of Compensation options: |
Schedule Of Details of Compensation options
| Number Outstanding | Exercise Price | |||||||
| Outstanding, September 30, 2023 | ||||||||
| Expired during the year | ( | ) | ||||||
| Outstanding, September 30, 2024 | ||||||||
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Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
| 16. | Related Party Transactions |
Management compensation
Key management compensation comprises the following:
| September 30, 2024 | September 30, 2023 | |||||||
| Salaries, bonus and other benefits | ||||||||
| Share based compensation | ||||||||
| Key Management Personnel Compensation | ||||||||
Share based compensation includes a portion of options that are granted but have not vested and are valued using the Monte Carlo valuation method. See details in Special Option Grants below:
Personal Guarantees
Schedule of accrued interest
| September 30, 2024 | September 30, 2023 | |||||||
| Promissory Note (note 11(b)) | ||||||||
Research Lab – Facility Usage Agreement
In May 2021, Electrovaya entered a month-to-month Facility Usage Agreement for the use of space and allocated staff of a third-party research firm providing access to laboratory facilities, primarily for research. The laboratory and pilot plant facilities have certain equipment and permits for research and developments with chemicals. The term of the agreement was for six months and could be terminated by either party upon 90 days notice.
In July 2021, the facility was acquired by an investor group controlled by the family of Dr. Sankar Das Gupta, which includes its CEO, Dr. Rajshekar Das Gupta. The Facility Usage Agreement was not changed on the change of ownership and remains in effect between the Company and the owner, such that the monthly payment of Cdn $25,265 is now made to a related party of Electrovaya.
On June 7, 2023, the Facility Usage Agreement was retroactively extended from January 1, 2023, for an additional three years. The lease has been recognized as a lease liability and corresponding right of use asset.
Special Options Grants
In September 2021, on the recommendation of the Compensation Committee of the Company, a committee composed entirely of independent directors, the Board of Directors of the Company determined that it is advisable and in the best interests of the Company to amend the terms of the compensation of certain key personnel to incentivize future performance, to encourage retention of their services, and to align their interests with those of the Company’s shareholders.
Dr. Sankar Das Gupta was granted options which vest in two tranches of options and one tranche of options, based on reaching specific target market capitalizations. The fair value of these options on the day of grant are calculated using the Monte Carlo method of option valuation and expensed over the mean vesting period in accordance with IFRS 2. The expense of $ (September 30, 2023: $) is recorded within stock-based compensation in the consolidated statement of earnings.
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ELECTROVAYA INC.
Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
Dr. Rajshekar Das Gupta was granted options which vest in three tranches of options based on reaching specific target market capitalizations. The fair value of these options on the day of issuance is calculated using the Monte Carlo method of option valuation and expensed over the mean vesting period in accordance with IFRS 2. The expense of NIL (September 30, 2023: $) is recorded within stock-based compensation in the consolidated statement of earnings.
In
April 2023, following the suggestion of the Company’s Compensation Committee, consisting entirely of independent directors, the
Company’s Board of Directors awarded Dr. Rajshekar Das Gupta a total of 600,000 options. These options will vest in two phases:
300,000 options and 300,000 options, contingent upon achieving certain target market capitalizations. The expense of $
Investment in Sustainable Energy Jamestown LLC
During
the year ended September 30, 2022, the Company acquired real estate (land and building) through its common control entity Sustainable
Energy Jamestown (“SEJ”), a limited liability company controlled by the major shareholders of the Company. SEJ purchased
the land and buildings for $ million financing the purchase with a deposit of $
During
the year ended September 30, 2023, the Company purchased the membership interest in SEJ from the major shareholders of the Company.
The land and buildings comprising the real estate was revalued by $ million, which was recognised in other comprehensive income.
The purchase price included a premium of $
| 17. | Change in Non-Cash Operating Working Capital |
Schedule Of Change in Non-Cash Operating Working Capital
| September 30, 2024 | September 30, 2023 | |||||||
| Trade and other receivables | ( | ) | ( | ) | ||||
| Inventories | ( | ) | ( | ) | ||||
| Prepaid expenses and other | ( | ) | ( | ) | ||||
| Trade and other payables | ||||||||
| Total | ( | ) | ( | ) | ||||
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Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
| 18. | Relief and Recovery Fund Payable |
The
Relief and recovery fund is created by the Ministry of Economic Development to support the Company to recover from economic disruption
associated with the COVID-19 outbreak. An amount of $
| 19. | Government Assistance |
The
government assistance is related to specific Government supported research and development programs undertaken by Electrovaya.
The National Research Council of Canada Industrial Research Assistance Program (IRAP) has provided $
| 20. | Financial Instruments |
Derivative Liabilities
Warrants
as derivative liability is fair valued using Black Scholes Model (“BSM”). Using this approach, the fair value of the
warrants on November 09, 2022, was determined to be $ million. Key valuation inputs and assumptions used in the BSM are stock
price of CAD $4.55, expected life of
Key
valuation inputs and assumptions used in the BSM when valuing the warrants as at September 30, 2024, were, stock price $3.16,
expected life of
The
Company incurred total issuance costs of $
Fair Value
IFRS 13 “Fair Value Measurement” provides guidance about fair value measurements. Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value are required to maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is based on three levels of inputs. The first two levels are considered observable and the last unobservable. These levels are used to measure fair values as follows:
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Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
| ● | Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities, either directly or indirectly. |
| ● | Level 2 – Inputs, other than Level 1 inputs that are observable for assets and liabilities, either directly or indirectly. Level 2 inputs include quoted market prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
| ● | Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
Schedule Of Warrant Fair Value
| Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||
| Warrants | ||||||||||||||||
Risk Management
The Company may be exposed to risks of varying degrees of significance which could affect its ability to achieve its strategic objectives. The main objectives of the Company’s risk management processes are to ensure that the risks are properly identified and that the capital base is adequate in relation to those risks. The principal risks to which the Company is exposed are described below. There have been no changes in risk exposure since the prior year unless otherwise noted.
Capital risk
The Company manages its capital to ensure that there are adequate capital resources for the Company to maintain and develop its products. The capital structure of the Company consists of shareholders’ equity and depends on the underlying profitability of the Company’s operations.
The Company manages its capital structure and makes adjustments to it, based on the funds available to the Company, in order to support the development, manufacture and marketing of its products. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company’s management to sustain future development of the business.
The Company’s capital management objectives are:
| ● | to ensure the Company’s ability to continue as a going concern. |
| ● | to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk. |
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Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
The Company monitors capital based on the carrying amount of equity plus its short-term debt comprised of the promissory notes, less cash and cash equivalents as presented on the face of the consolidated statement of financial position.
The Company sets the amount of capital in proportion to its overall financing structure, comprised of equity and long-term debt. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company issues new shares or increases its long-term debt.
Credit risk and Concentration risk
Credit risk is the risk that the counterparty fails to discharge an obligation to the Company. The Company is exposed to this risk due to its cash and cash equivalents, trade and other receivables.
The Company manages its credit risk related to trade and other receivables by establishing procedures to establish credit limits and approval policies. The balance in trade and other receivables is primarily attributable to trade accounts receivables. In the opinion of management, the credit risk is moderate and minimum credit losses are expected. Management is taking appropriate action to mitigate this risk by adjusting credit terms.
The
Company is exposed to credit risk in the event of default by its customers.
Liquidity risk
Liquidity risk is the risk that the Company may not have cash available to satisfy its financial obligations as they come due. The majority of the Company’s financial liabilities recorded in accounts payable, accrued and other current liabilities and provisions are due within 90 days. The Company manages liquidity risk by maintaining a portfolio of liquid funds and having access to a revolving credit facility. The Company believes that cash flow from operating activities, together with cash on hand, cash from its trade and other receivables, and borrowings available under the revolving facility are sufficient to fund its currently anticipated financial obligations and will remain available in the current environment.
The following are the undiscounted contractual maturities of significant financial liabilities and the total contractual obligations of the Company as at September 30, 2024:
Schedule Of financial liabilities
| 2025 | 2026 | 2027 | 2028 | 2029 & beyond | Total | |||||||||||||||||||
| Trade and other payables | ||||||||||||||||||||||||
| Lease liability | ||||||||||||||||||||||||
| Short term loan | ||||||||||||||||||||||||
| Promissory notes | ||||||||||||||||||||||||
| Working capital facility | ||||||||||||||||||||||||
| Other payable | ||||||||||||||||||||||||
| Total financial liabilities | ||||||||||||||||||||||||
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Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
The following are the undiscounted contractual maturities of significant financial liabilities and the total contractual obligations of the Company as at September 30, 2023:
| 2024 | 2025 | 2026 | 2027 | 2028 & beyond | Total | |||||||||||||||||||
| Trade and other payables | ||||||||||||||||||||||||
| Lease liability | ||||||||||||||||||||||||
| Short term loans | ||||||||||||||||||||||||
| Promissory note | ||||||||||||||||||||||||
| Working capital facility | ||||||||||||||||||||||||
| Other payable | ||||||||||||||||||||||||
| Total financial liabilities | ||||||||||||||||||||||||
Market risk
Market risk incorporates a range of risks. Movement in risk factors, such as market price risk and currency risk, affect the fair value of financial assets and liabilities. The Company is exposed to these risks as the ability of the Company to develop or market its products and the future profitability of the Company is related to the market price of its primary competitors for similar products.
Interest rate risk
The Company has variable interest debt as described in Note 11 and 13. Changes in interest rates will affect future interest expense and cash flows. The Company does not enter into derivative instruments to reduce this exposure.
Foreign currency risk
The Company is exposed to foreign currency risk. The Company’s functional currency is the United States dollar (Electrovaya Inc.’s functional currency is CAD) and the financial statements are presented in United States dollars. Changes in the relative values of these currencies will give rise to changes in other comprehensive income.
Purchases
are transacted in Canadian dollars, United States dollars and Euro. Management believes the foreign exchange risk derived from
any currency conversions may have a material effect on the results of its operations. The financial instruments impacted by a
change in exchange rates include exposures to the above financial assets or liabilities denominated in nonfunctional currencies.
Cash held by the Company in US dollars at September 30, 2024 was $
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ELECTROVAYA INC.
Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
If
the US dollar to
| 21. | Contingencies |
| a. | Refundable Ontario Investment Tax Credits |
On
July 22, 2022, the Company received a Notice of Confirmation from the CRA relating to the 2014 and 2015 SRED reassessment for
$
| b. | Ministry of Energy |
On
May 28, 2018, the Province of Ontario issued a claim against Electrovaya Corp. claiming $
| c. | Other Contingencies |
In the normal course of business, the Company is party to business related claims. The potential outcomes related to existing matters faced by the Company are not determinable at this time. The Company intends to defend these actions, and management believes that the resolution of these matters will not have a material adverse effect on the Company’s financial condition.
| 22. | Segment and Customer Reporting |
The Company develops, manufactures and markets power technology products. There is only a single segment applicable to the Company.
Given the size and nature of the products produced, the Company’s sales are segregated based on large format batteries, with the remaining smaller product line categorized as “Other”.
There has been no change in either the determination of the Company’s segments, or how segment performance is measured, from that described in the Company’s consolidated financial statements as at and for the year ended September 30, 2024.
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Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
Schedule Of segment performance
| 2024 | 2023 | |||||||
| Large format batteries | ||||||||
| Other | ||||||||
| Total of Large format batteries | ||||||||
Revenues can also be analyzed as follows based on the nature of the underlying deliverables:
Schedule Of Revenues
| 2024 | 2023 | |||||||
| Revenue with customers | ||||||||
| Sale of batteries and battery systems | ||||||||
| Sale of services | ||||||||
| Grant income | ||||||||
| Research grant | ||||||||
| Others | ||||||||
| Total of Revenue with customers | ||||||||
Revenues attributed to geographical regions based on the location of the customer were as follows:
Schedule Of Revenues In geographical
| 2024 | 2023 | |||||||
| Canada | ||||||||
| United States | ||||||||
| Others | ||||||||
| 23. | Other payables |
Technology Partnerships Canada (“TPC”) projects were long-term (up to 30 years) commencing with an R&D phase, followed by a benefits phase – the period in which a product, or a technology, could generate revenue for the Company. In such cases, repayments would flow back to the program according to the terms and conditions of the Company’s contribution agreement.
In June 2018, the contribution agreement was amended and is included at its net present value in other payables. Further, in September 2024, the agreement was further amended with amended terms and conditions for the repayment of the debt with new payment schedule. Consequently, the old debt was de-recognised in the books of accounts and the new debt was introduced with first payment starting in July 2025 and final payment to be discharged in July 2031.
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Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
The following table represents changes in the provision for repayments to Industry Canada.
Schedule Of Other payables
| September 30, 2024 | September 30, 2023 | |||||||
| Opening balance | ||||||||
| Interest accretion | ||||||||
| Debt extinguishment | ( | ) | ||||||
| Recognition of new debt | ||||||||
| Interest accretion on new debt | ||||||||
| Ending balance | ||||||||
| Less: current portion of the provision (included in Trade and other payables) | ( | ) | ( | ) | ||||
| Ending balance of long-term portion | ||||||||
Following is the payment schedule for TPC:
Schedule Of latest repayment
| Year | Amount |
| 2025 | |
| 2026 | |
| 2027 | |
| 2028 | |
| 2029 | |
| 2030 | |
| 2031 |
| 24. | Income-tax |
The
income tax recovery differs from the amount computed by applying the Canadian statutory income tax rate of
Schedule of Income Tax
| 2024 | 2023 | |||||||
| Income (Loss) before income taxes | ( | ) | ( | ) | ||||
| Expected recovery of income taxes based on | ( | ) | ( | ) | ||||
| statutory rates | ||||||||
| Reduction in income tax recovery resulting from: | ||||||||
| Lower rate on manufacturing profits | ( | ) | ( | ) | ||||
| Other permanent differences | ||||||||
| Deferred tax benefit not recognized | ( | ) | ||||||
| Income tax recovery | ( | ) | ||||||
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Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
The components of deferred income taxes as at September 30, 2024 and 2023 are as follows:
Schedule of components of deferred tax
| Opening, October 1, 2023 | Recognized in P&L | Recognized in OCI | Closing, September 30, 2024 | |||||||||||||
| Deferred Tax Assets: | ||||||||||||||||
| Canadian non-capital loss carry forwards | ( | ) | ||||||||||||||
| US net operating losses | ( | ) | — | |||||||||||||
| Deferred tax assets recognized | ( | ) | — | |||||||||||||
| Deferred Tax Liabilities | ||||||||||||||||
| Unrealized foreign exchange | ( | ) | ||||||||||||||
| Property, plant and equipment | ( | ) | ( | ) | ||||||||||||
| ( | ) | ( | ) | |||||||||||||
| Net Deferred tax asset (liability) | ||||||||||||||||
| Opening, October 1, 2022 | Recognized in P&L | Recognized in OCI | Closing, September 30, 2023 | |||||||||||||
| Deferred Tax Assets | ||||||||||||||||
| Canadian non-capital loss carry forwards | ||||||||||||||||
| US net operating losses | — | — | ||||||||||||||
| Deferred tax assets recognized | — | |||||||||||||||
| Deferred Tax Liabilities | ||||||||||||||||
| Unrealized foreign exchange | ( | ) | ( | ) | ||||||||||||
| Property, plant and equipment | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
| Net Deferred tax asset (liability) | ( | ) |
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the future tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of deferred taxable income during the year in which those temporary differences become deductible.
Management considers projected future taxable income, uncertainties related to the industry in which the Company operates and tax planning strategies in making this assessment.
The Company concluded that there is uncertainty regarding the future recoverability of Company’s deferred income tax assets in future periods. Therefore, deferred tax assets have not been recognized in the financial statements with respect to the following deductible temporary differences:
Schedule Of operating deferred tax assets
| September 30, 2024 | September 30, 2023 | |||||||
| Canadian non-capital loss carry forwards | ||||||||
| Canadian capital loss carry forwards | ||||||||
| US net operating losses | ||||||||
| Property, plant and equipment | ||||||||
| Lease liabilities | ||||||||
| Disallowed interest carry forwards | ||||||||
| Unclaimed research and development expenses | ||||||||
| Non-refundable research and development credits | ||||||||
| Other | ||||||||
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Notes to the Consolidated Financial Statements
(Expressed in thousands of U.S. dollars, except where otherwise indicated)
For the years ended September 30, 2024 and September 30, 2023
The Company has Unrecognized losses that expire as early as 2025 as follows:
Schedule of Unrecognized losses
| Year of expiry | Canada | USA | |||||||
| 2025 | |||||||||
| 2026 | |||||||||
| 2027 | |||||||||
| 2028 | |||||||||
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| 2036 | |||||||||
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| 2041 | |||||||||
| 2042 | |||||||||
| 2043 | |||||||||
| 2044 | |||||||||
| Indefinite | |||||||||
| 25. | Subsequent events |
In the month of November 2024, the Export-Import Bank of the United States (EXIM) approved a direct loan in the amount of $ million to fund Electrovaya’s Jamestown Lithium-Ion Battery Expansion. This financing will fund Electrovaya’s battery manufacturing buildout in Jamestown, New York including equipment, engineering and setup costs for the facility.
42 | P a g e
Exhibit 99.3
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference to the Registration Statement on Form F-10 (the “Registration Statement”), of our auditor’s report dated December 12, 2024 relating to the consolidated financial statements of Electrovaya Inc. (the “Company”) as at September 30, 2024 and 2023 and for each of the years in the two-year period ended September 30, 2024, as included in the Form 6-K of the Company for the year ended September 30, 2024, as furnished to the United States Securities and Exchange Commission (“SEC”).
/s/ MNP LLP
Chartered Professional Accountants
Licensed Public Accountants
December 13, 2024
Toronto, Canada
| MNP LLP | |
| 1 Adelaide Street East, Suite 1900, Toronto ON, M5C 2V9 | 1.877.251.2922 T: 416.596.1711 F: 416.596.7894 |
Exhibit 99.4
Form 52-109F1
Certification
of Annual Filings
Full Certificate
I, Raj DasGupta the Chief Executive Officer of Electrovaya Inc, certify the following::
1. Review: I have reviewed the AIF, if any, annual financial statements and annual MD&A, including, for greater certainty, all documents and information that are incorporated by reference in the AIF (together, the “annual filings”) of Electrovaya Inc (the “issuer”) for the financial year ended September 30, 2024.
2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the annual filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, for the period covered by the annual filings.
3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the annual financial statements together with the other financial information included in the annual filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the annual filings.
4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.
5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the financial year end
| (a) | designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that |
| i) | material information relating to the issuer is made known to us by others, particularly during the period in which the annual filings are being prepared; and |
| ii) | information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and |
(b) designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
5.1 Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control over Financial Reporting - Guidance for Smaller Public Companies, issued by The Committee of Sponsoring Organizations of the Treadway Commission.
5.2 ICFR - material weakness relating to design: The issuer has disclosed in its annual MD&A for each material weakness relating to design existing at the financial year end
| (a) | a description of the material weakness; |
| (b) | the impact of the material weakness on the issuer’s financial reporting and its ICFR; and |
| (c) | the issuer’s current plans, if any, or any actions already undertaken, for remediating the material weakness. |
| 5.3 | Limitation on scope of design: The issuer has disclosed in its annual MD&A |
| (a) | the fact that the issuer’s other certifying officer(s) and I have limited the scope of our design of DC&P and ICFR to exclude controls, policies and procedures of |
| (i) | a proportionately consolidated entity in which the issuer has an interest; |
| (ii) | a special purpose entity in which the issuer has an interest; or |
| (iii) | a business that the issuer acquired not more than 365 days before the issuer’s financial year end; and |
(b) summary financial information about the proportionately consolidated entity, special purpose entity or business that the issuer acquired that has been proportionately consolidated or consolidated in the issuer’s financial statements.
| 6. | Evaluation: The issuer’s other certifying officer(s) and I have |
(a) evaluated, or caused to be evaluated under our supervision, the effectiveness of the issuer’s DC&P at the financial year end and the issuer has disclosed in its annual MD&A our conclusions about the effectiveness of DC&P at the financial year end based on that evaluation; and
(b) evaluated, or caused to be evaluated under our supervision, the effectiveness of the issuer’s ICFR at the financial year end and the issuer has disclosed in its annual MD&A
| (i) | our conclusions about the effectiveness of ICFR at the financial year end based on that evaluation; and |
| (ii) | for each material weakness relating to operation existing at the financial year end |
| (a) | a description of the material weakness; |
| (b) | the impact of the material weakness on the issuer’s financial reporting and its ICFR; and |
| (c) | the issuer’s current plans, if any, or any actions already undertaken, for remediating the material weakness. |
7. Reporting changes in ICFR: The issuer has disclosed in its annual MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2024 and ended on ended on September 30, 2024 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
8. Reporting to the issuer’s auditors and board of directors or audit committee: The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of ICFR, to the issuer’s auditors, and the board of directors or the audit committee of the board of directors any fraud that involves management or other employees who have a significant role in the issuer’s ICFR.
Date: December 12, 2024
Raj DasGupta
Chief Executive Officer
Exhibit 99.5
Form 52-109F1
Certification
of Annual Filings
Full Certificate
I, John Gibson, the Chief Financial Officer of Electrovaya Inc, certify the following::
1. Review: I have reviewed the AIF, if any, annual financial statements and annual MD&A, including, for greater certainty, all documents and information that are incorporated by reference in the AIF (together, the “annual filings”) of Electrovaya Inc (the “issuer”) for the financial year ended September 30, 2024.
2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the annual filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, for the period covered by the annual filings.
3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the annual financial statements together with the other financial information included in the annual filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the annual filings.
4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.
5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the financial year end
(a) designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
(i) material information relating to the issuer is made known to us by others, particularly during the period in which the annual filings are being prepared; and
(ii) information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
(b) designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
5.1 Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control over Financial Reporting - Guidance for Samller Public Companies, issued by The Committee of Sponsoring Organizations of the Treadway Commission.
5.2 ICFR - material weakness relating to design: The issuer has disclosed in its annual MD&A for each material weakness relating to design existing at the financial year end
| (a) | a description of the material weakness; |
| (b) | the impact of the material weakness on the issuer’s financial reporting and its ICFR; and |
| (c) | the issuer’s current plans, if any, or any actions already undertaken, for remediating the material weakness. |
| 5.3 | Limitation on scope of design: The issuer has disclosed in its annual MD&A |
(a) the fact that the issuer’s other certifying officer(s) and I have limited the scope of our design of DC&P and ICFR to exclude controls, policies and procedures of
| (i) | a proportionately consolidated entity in which the issuer has an interest; |
| (ii) | a special purpose entity in which the issuer has an interest; or |
| (iii) | a business that the issuer acquired not more than 365 days before the issuer’s financial year end; and |
(b) summary financial information about the proportionately consolidated entity, special purpose entity or business that the issuer acquired that has been proportionately consolidated or consolidated in the issuer’s financial statements.
| 6. | Evaluation: The issuer’s other certifying officer(s) and I have |
(a) evaluated, or caused to be evaluated under our supervision, the effectiveness of the issuer’s DC&P at the financial year end and the issuer has disclosed in its annual MD&A our conclusions about the effectiveness of DC&P at the financial year end based on that evaluation; and
(b) evaluated, or caused to be evaluated under our supervision, the effectiveness of the issuer’s ICFR at the financial year end and the issuer has disclosed in its annual MD&A
| (i) | our conclusions about the effectiveness of ICFR at the financial year end based on that evaluation; and |
| (ii) | for each material weakness relating to operation existing at the financial year end |
| (A) | a description of the material weakness; |
| (B) | the impact of the material weakness on the issuer’s financial reporting and its ICFR; and |
| (C) | the issuer’s current plans, if any, or any actions already undertaken, for remediating the material weakness. |
7. Reporting changes in ICFR: The issuer has disclosed in its annual MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2024 and ended on ended on September 30, 2024 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
8. Reporting to the issuer’s auditors and board of directors or audit committee: The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of ICFR, to the issuer’s auditors, and the board of directors or the audit committee of the board of directors any fraud that involves management or other employees who have a significant role in the issuer’s ICFR.
Date: December 12, 2024
John Gibson
Chief Financial Officer