Electrovaya Inc 6-K, filed Feb 14, 2025
Electrovaya Inc. (ELVA)
About this 6-K
Electrovaya Inc filed this 6-K on February 14, 2025.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of February 2025
Commission File Number: 001-41726
| ELECTROVAYA INC. |
| (Registrant) |
6688 Kitimat Road
Mississauga, Ontario, Canada L5N 1P8
(Address of Principal Executive Offices)
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 ☒
Indicate by check mark if the Registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the Registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
SIGNATURES
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: February 13, 2025 | By | /s/ Raj Das Gupta | |
| Raj Das Gupta | |||
| Chief Executive Officer | |||
| 2 |
EXHIBIT INDEX
| Exhibit |
| Description of Exhibit |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
| ||
|
|
|
|
|
|
| 3 |
EXHIBIT 99.1
Electrovaya Reports Q1 Fiscal Year 2025 Results
Revenue of $11.2M and Positive Adjusted EBITDA for Seventh Consecutive Quarter
Strengthened Balance Sheet and improved financial position
Significant Progress in Closing EXIM and Bank Financing to support US Manufacturing Expansion and Overall Growth Plans
Reaffirms Fiscal 2025 Revenue Guidance Exceeding $60M, Driven by Strong Order Pipeline
Electrovaya Inc. ("Electrovaya" or the "Company") (NASDAQ:ELVA)(TSX:ELVA), a leading lithium-ion battery technology and manufacturing company, today reported its financial results for the first quarter of the fiscal year ending September 30, 2025 ("Q1 2025"). All dollar amounts are in U.S. dollars unless otherwise noted.
Financial Highlights:
|
| · | Revenue for Q1 2025 was $11.2 million, compared to $12.1 million in the fiscal year ended December 31, 2023 ("Q1 2024"). |
|
|
|
|
|
| · | Gross margin was 30.5% in Q1 2025, an improvement of 130 basis points compared to Q1 2024. Battery system margins remained strong at 30.8% for the quarter. |
|
|
|
|
|
| · | Adjusted EBITDA1 was $0.6 million. Q1 2025 was the Company's seventh consecutive quarter of positive Adjusted EBITDA1. |
|
|
|
|
|
| · | The Company had positive working capital of $12.6 million for Q1 2025 compared to negative working capital of $0.4 million in Q1 2024. |
|
|
|
|
|
| · | Cash in hand was $8.2 million at the end of Q1 2025 compared to $0.6 million for Q1 2024. |
|
|
|
|
|
| · | The Company paid off all debts associated with its property in Jamestown, New York, including the existing mortgage and promissory notes. |
Key Operational and Strategic Highlights - Q1 2025
|
| · | Received Direct Loan Approval from Export-Import Bank of the United States: On November 14, 2024, the Company announced that it had secured approval for 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 is expected to fund Electrovaya's battery manufacturing buildout in Jamestown, New York including equipment, engineering and setup costs for the facility. |
|
|
|
|
|
| · | Completed an Equity Offering with Gross Proceeds of $12.8 million: On December 18, 2024, the Company, after giving effect to the full exercise of the Over-Allotment Option, sold 5,951,250 Common Shares under a public offering, for aggregate gross proceeds of US$12,795,188.00. The Company intends to use the net proceeds from the Offering to satisfy conditions associated with the loan approved by EXIM, repayment of amounts under the Company's existing working capital facility in advance of proposed bank refinancing and for the costs of such financing, and satisfaction of certain outstanding amounts in connection with the purchase of the Company's Jamestown, New York manufacturing facility. |
|
|
|
|
|
| · | Continued Growth from OEM Partners & Leading End-Customers: The Company continues to see good momentum from its key OEM partners and end customers of its material handling products. A recently introduced leasing program with one of the Company's OEM partners has demonstrated high sales interest and has already led to encouraging order traction. Furthermore, the Company has seen momentum growing from one of its key end customers for repowering existing warehouse infrastructure with Electrovaya batteries. Finally, the Company's current largest operator of battery equipment, a Fortune 100 retailer, has indicated renewed demand for Electrovaya's products. |
|
|
|
|
|
| · | Accelerated Battery Assembly Plans in Jamestown, New York: The Company has accelerated its plans for battery system assembly operations at its Jamestown facility. Assembly equipment that is used at its existing Ontario facility has been procured and hiring key personnel is underway. The Company anticipates being able to commence commercial operations in April 2025, however has capability to further accelerate if necessary. The start of assembly in Jamestown will help support ramp up in overall production while also supporting the Company's mitigation strategy with respect to potential trade barriers. |
|
|
|
|
|
| · | Progress in Closing EXIM & Bank Financing: Electrovaya is currently in the process of finalizing loan documentation with both EXIM and a leading North American bank for their respective financing packages to support both the Jamestown expansion as well as improve the Company's overall working capital position. The anticipated closing and funding date is in the current quarter, Q2 FY 2025. |
Management Commentary:
"Q1 2025 was a successful and pivotal quarter for the Company, marked by significant financial and operational progress." stated Dr. Raj DasGupta, Electrovya's CEO. "This included receiving approval from EXIM for a $51 million direct loan and completing a successful $12.8 million equity round with excellent institutional investors. The added equity capital strengthened the Company's balance sheet and fortified our financial position, providing the necessary capital to accelerate our U.S. expansion and scale production at our Jamestown facility. With growing demand from both existing and new customers, we are confident in our trajectory for sustained growth and innovation in the lithium-ion battery sector."
"Despite the typical weaker seasonality of Q1, we delivered strong financial performance, achieving over 30% margins and our seventh consecutive quarter of positive Adjusted EBITDA," stated John Gibson, Electrovaya's CFO. "This solid start to the fiscal year reinforces our financial strength and positions us well for continued growth. With a fortified balance sheet and increasing customer demand, we remain confident in our ability to achieve $60 million in revenue for FY 2025 while advancing profitability and scaling operations."
Positive Financial Outlook & Fiscal 2025 Guidance:
The Company anticipates strong growth into FY 2025 with estimated revenues to exceed $60 million driven by renewed demand from the Company's largest end users of material handling batteries. This guidance considers its existing purchase orders, along with anticipated orders in its pipeline from key end users and customers. This guidance also takes into consideration a percentage of anticipated revenue that may be deferred to FY 2026 (please see Forward Looking Statements for further clarification).
Selected Financial Information for the quarters ended December 31, 2024 and 2023:
Results of Operations
(Expressed in thousands of U.S. dollars)
Adjusted EBITDA1
(Expressed in thousands of U.S. dollars)
____________
1 Non-IFRS Measure: Adjusted EBITDA is defined as income/(loss) from operations, plus stock-based compensation costs and depreciation and amortization costs. Adjusted EBITDA does not have a standardized meaning under IFRS. Therefore it is unlikely to be comparable to similar measures presented by other issuers. Management believes 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 IFRS measures. The most directly comparable measure to Adjusted EBITDA calculated in accordance with IFRS is income (loss) from operations.
Summary Financial Position|
(Expressed in thousands of U.S. dollars)
The Company's complete Financial Statements and Management Discussion and Analysis for the quarter ended December 31, 2024 are available on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov, as well as on the Company's website at www.electrovaya.com.
Conference Call details:
|
| · | Date: Thursday, February 13, 2025 |
|
|
|
|
|
| · | Time: 5:00 pm. Eastern Time (ET) |
|
|
|
|
|
| · | Toll Free: 888-506-0062 |
|
|
|
|
|
| · | International: 973-528-0011 |
|
|
|
|
|
| · | Participant Access Code: 253979 |
To help ensure that the conference begins in a timely manner, please dial in 10 minutes prior to the start of the call.
For those unable to participate in the conference call, a replay will be available for two weeks beginning on February 13, 2025 through February 27, 2025. To access the replay, the dial-in number is 877-481-4010 and 919-882-2331. The replay passcode is 51997.
Investor and Media Contact:
Jason Roy
VP, Corporate Development and Investor Relations=
Electrovaya Inc.
jroy@electrovaya.com
905-855-4618
About Electrovaya Inc.
Electrovaya Inc. (NASDAQ:ELVA) (TSX:ELVA) is a pioneering leader in the global energy transformation, focused on contributing to the prevention of climate change by supplying safe and long-lasting lithium-ion batteries without compromising energy and power. The Company has extensive IP and designs, develops and manufactures proprietary lithium-ion batteries, battery systems, and battery-related products for energy storage, clean electric transportation, and other specialized applications. Electrovaya has two operating sites in Canada and a 52-acre site with a 135,000 square foot manufacturing facility in Jamestown New York state for its planned gigafactory. To learn more about how Electrovaya is powering mobility and energy storage, please explore www.electrovaya.com.
Forward-Looking Statements
This press release contains forward-looking statements, including statements that relate to, among other things, revenue growth and revenue guidance of approximately $60 million in FY 2025, other financial projections, including projected sales, cost of sales, gross margin, working capital, cash flow, and overheads anticipated in FY 2025, the expected timing of deliveries of pre-production battery modules in Japan, anticipated cash needs and the Company's requirements for additional financing, purchase orders, mass production schedules, funding from EXIM and the ability to satisfy the conditions to drawing on any facility entered into with EXIM,, use of proceeds of the EXIM facility,, ability to deliver to customer requirements. 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, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors and assumptions are applied in making forward looking statements, and actual results may differ materially from those expressed or implied in such statements. In making the forward-looking statements included in this news release, the Company has made various material assumptions, including but not limited to assumptions with respect to the Company's customers deploying its products in accordance with communicated intentions, the Company's customers completing new distribution centres in accordance with communicated expectations, intentions and plans, 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 together 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, delivery of ordered products on a basis consistent with past deliveries, and that the Company's customer counterparties will meet their production and demand growth targets, ]the Company's ability to successfully execute its plans and intentions, including with respect to the entry into new business segments and servicing existing customers, the availability to obtain financing on reasonable commercial terms, including any EXIM facility. 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, macroeconomic effects on the Company and its business, and on the lithium battery industry generally, not being able to obtain financing on reasonable commercial terms or at all, including not being able to satisfy any condition of drawdowns under any EXIM facility if entered into, that the Company's products will not perform as expected, supply and demand fundamentals for lithium-ion batteries, the risk of interest rate increases, persistent inflation in the United States and Canada and other macroeconomic challenges, the political, economic, and regulatory and business stability of, or otherwise affecting, the jurisdictions in which the Company operates, including new tariff regimes. There have been indications from the United States government of potential tariffs on Canada, Mexico and other countries, which if enacted would have a material impact on the Company. 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, 2024 under "Risk Factors", 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 and filed or furnished with the SEC.. 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.
Revenue guidance for FY2025 described herein constitutes 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.
Contact Information
Jason Roy
VP, Corporate Development and Investor Relations
jroy@electrovaya.com
905-855-4618
SOURCE: Electrovaya, Inc.
EXHIBIT 99.2
CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
(Expressed in U.S. dollars)
ELECTROVAYA INC.
FOR THE QUARTERS ENDED DECEMBER 31, 2024 and 2023
ELECTROVAYA INC.
Condensed Interim Consolidated Statements of Financial Position
(Expressed in thousands of U.S. dollars)
As at December 31, 2024 and September 30, 2024
|
|
|
| As at |
|
| As at |
| |||
|
|
| Notes |
| December 31, 2024 |
|
| September 30, 2024 |
| ||
| Assets |
|
|
|
|
|
|
|
| ||
| Current assets |
|
|
|
|
|
|
|
| ||
| Cash and cash equivalents |
|
|
|
| 8,170 |
|
|
| 781 |
|
| Trade and other receivables |
| Note 4 |
|
| 11,128 |
|
|
| 11,292 |
|
| Inventories |
| Note 5 |
|
| 8,064 |
|
|
| 9,698 |
|
| Prepaid expenses |
| Note 6 |
|
| 8,138 |
|
|
| 7,647 |
|
| Total current assets |
|
|
|
| 35,500 |
|
|
| 29,418 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Non-current assets |
|
|
|
|
|
|
|
|
|
|
| Property, plant and equipment |
| Note 7 |
|
| 8,809 |
|
|
| 9,202 |
|
| Long-term deposit |
|
|
|
| 758 |
|
|
| 862 |
|
| Total non-current assets |
|
|
|
| 9,567 |
|
|
| 10,064 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total assets |
|
|
|
| 45,067 |
|
|
| 39,482 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Liabilities and Equity |
|
|
|
|
|
|
|
|
|
|
| Current liabilities |
|
|
|
|
|
|
|
|
|
|
| Trade and other payables |
| Note 8 |
|
| 6,979 |
|
|
| 9,473 |
|
| Working capital facilities |
| Note 9 (a) |
|
| 15,278 |
|
|
| 16,283 |
|
| Promissory notes |
| Note 9 (b) |
|
| - |
|
|
| 519 |
|
| Short term loans |
| Note 10 |
|
| - |
|
|
| 1,630 |
|
| Derivative liability |
| Note 16 |
|
| 138 |
|
|
| 155 |
|
| Lease liability |
| Note 12 |
|
| 462 |
|
|
| 471 |
|
| Total current liabilities |
|
|
|
| 22,857 |
|
|
| 28,531 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Non-current liabilities |
|
|
|
|
|
|
|
|
|
|
| Lease liability |
| Note 12 |
|
| 1,634 |
|
|
| 1,871 |
|
| Government assistance payable |
|
|
|
| 170 |
|
|
| 152 |
|
| Other payables |
| Note 19 |
|
| 347 |
|
|
| 343 |
|
| Total non-current liabilities |
|
|
|
| 2,151 |
|
|
| 2,366 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Equity |
|
|
|
|
|
|
|
|
|
|
| Share capital |
| Note 13 |
|
| 127,990 |
|
|
| 116,408 |
|
| Contributed surplus |
|
|
|
| 11,319 |
|
|
| 10,904 |
|
| Warrants |
| Note 13 |
|
| 4,725 |
|
|
| 4,725 |
|
| Accumulated other comprehensive income |
|
|
|
| 5,689 |
|
|
| 5,792 |
|
| Deficit |
|
|
|
| (129,664 | ) |
|
| (129,244 | ) |
| Total Equity |
|
|
|
| 20,059 |
|
|
| 8,585 |
|
| Total liabilities and equity |
|
|
|
| 45,067 |
|
|
| 39,482 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| See accompanying notes to unaudited condensed interim 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 | ||||||
| 1 | Page |
ELECTROVAYA INC.
Condensed Interim Consolidated Statements of Earnings
(Expressed in thousands of U.S. dollars)
For the three-month periods ended December 31, 2024 and 2023
(Unaudited)
|
|
|
|
| Three months ended |
|
| Three months ended |
| ||
|
|
| Notes |
| December 31, 2024 |
|
| December 31, 2023 |
| ||
|
|
|
|
|
|
|
|
|
| ||
| Revenue |
| Note 18 |
|
| 11,169 |
|
|
| 12,091 |
|
| Direct manufacturing costs |
| Note 5(c) |
|
| 7,761 |
|
|
| 8,562 |
|
| Gross margin |
|
|
|
| 3,408 |
|
|
| 3,529 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Expenses |
|
|
|
|
|
|
|
|
|
|
| Research and development |
|
|
|
| 984 |
|
|
| 964 |
|
| Government assistance |
|
|
|
| (65 | ) |
|
| (58 | ) |
| Sales and marketing |
|
|
|
| 780 |
|
|
| 730 |
|
| General and administrative |
|
|
|
| 1,167 |
|
|
| 1,334 |
|
| Stock based compensation |
|
|
|
| 415 |
|
|
| 369 |
|
| Depreciation and amortization |
|
|
|
| 317 |
|
|
| 290 |
|
|
|
|
|
|
| 3,598 |
|
|
| 3,629 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss from operations |
|
|
|
| (190 | ) |
|
| (100 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
| Net finance charges |
| Note 11 |
|
| 702 |
|
|
| 19 |
|
| Foreign exchange loss (gain) and interest income |
|
|
|
| (472 | ) |
|
| 89 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss for the period |
|
|
|
| (420 | ) |
|
| (208 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
| Basic and diluted income (loss) per share |
|
|
|
| (0.01 | ) |
|
| (0.01 | ) |
| Weighted average number of shares |
|
|
|
|
|
|
|
|
|
|
| Outstanding, basic and fully diluted |
|
|
|
| 34,978,603 |
|
|
| 34,012,383 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| See accompanying notes to unaudited condensed interim consolidated financial statements. | ||||||||||
| 2 | Page |
ELECTROVAYA INC.
Condensed Interim Consolidated Statements of Comprehensive income (Loss)
(Expressed in thousands of U.S. dollars)
For the three-month periods ended December 31, 2024 and 2023
(Unaudited)
|
|
| Three months ended December 31, 2024 |
|
| Three months ended December 31, 2023 |
| ||
|
|
|
|
|
|
|
| ||
| Net loss for the period |
|
| (420 | ) |
|
| (208 | ) |
|
|
|
|
|
|
|
|
|
|
| Items that may be reclassified to Profit and Loss |
|
|
|
|
|
|
|
|
| Cumulative translation adjustment |
|
| (103 | ) |
|
| 971 |
|
|
|
|
|
|
|
|
|
|
|
| Other comprehensive income (loss) for the period |
|
| (523 | ) |
|
| 763 |
|
|
|
|
|
|
|
|
|
|
|
| See accompanying notes to unaudited condensed interim consolidated financial statements. | ||||||||
| 3 | Page |
ELECTROVAYA INC.
Condensed Interim Consolidated Statements of Changes in Equity
(Expressed in thousands of U.S. dollars)
For the three-month periods ended December 31, 2024 and 2023
|
|
| Share Capital |
|
| Contributed Surplus |
|
| Warrants |
|
| Accumulated other Comprehensive Income |
|
|
Deficit |
|
|
Total |
| ||||||
| Balance – October 01, 2023 |
|
| 115,041 |
|
|
| 9,249 |
|
|
| 4,725 |
|
|
| 5,890 |
|
|
| (127,759 | ) |
|
| 7,146 |
|
| Stock-based compensation |
|
| - |
|
|
| 369 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 369 |
|
| Issuance of shares |
|
| 30 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 30 |
|
| Cumulative translation adjustment |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 971 |
|
|
| - |
|
|
| 971 |
|
| Net loss for the period |
|
| - |
|
|
| - |
|
| ` | - |
|
|
| - |
|
|
| (208 | ) |
|
| (208 | ) |
| Balance – December 31, 2023 |
|
| 115,071 |
|
|
| 9,618 |
|
|
| 4,725 |
|
|
| 6,861 |
|
|
| (127,967 | ) |
|
| 8,308 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance – October 01, 2024 |
|
| 116,408 |
|
|
| 10,904 |
|
|
| 4,725 |
|
|
| 5,792 |
|
|
| (129,244 | ) |
|
| 8,585 |
|
| Stock-based compensation |
|
| - |
|
|
| 415 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 415 |
|
| Issuance of shares |
|
| 11,582 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 11,582 |
|
| Cumulative translation adjustment |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (103 | ) |
|
| - |
|
|
| (103 | ) |
| Net loss for the period |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (420 | ) |
|
| (420 | ) |
| Balance – December 31, 2024 |
|
| 127,990 |
|
|
| 11,319 |
|
|
| 4,725 |
|
|
| 5,689 |
|
|
| (129,664 | ) |
|
| 20,059 |
|
See accompanying notes to unaudited condensed interim consolidated financial statements.
| 4 | Page |
ELECTROVAYA INC.
Condensed Interim Consolidated Statement of Cash Flows
(Expressed in thousands of U.S. dollars)
For the three-month periods ended December 31, 2024 and 2023
(Unaudited)
|
|
| Notes |
| Three months ended December 31, 2024 |
|
| Three months ended December 31, 2023 |
| ||
|
|
|
|
|
|
|
|
|
| ||
| Cash and cash equivalents provided by (used in) |
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||
| Operating activities |
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||
| Net income (loss) for the period |
|
|
|
| (420 | ) |
|
| (208 | ) |
| Add : |
|
|
|
|
|
|
|
|
|
|
| Depreciation and Amortization |
|
|
|
| 317 |
|
|
| 290 |
|
| Stock based compensation expense |
|
|
|
| 415 |
|
|
| 369 |
|
| Interest expense and other financing charges |
| Note 11 |
|
| 702 |
|
|
| 19 |
|
| Unrealized foreign exchange |
|
|
|
| (10 | ) |
|
| - |
|
| Cash provided by (used in) operating activities |
|
|
|
| 1,004 |
|
|
| 470 |
|
| Net Changes in the working capital |
| Note 15 |
|
| (1,281 | ) |
|
| 55 |
|
| Cash from (used in) operating activities |
|
|
|
| (277 | ) |
|
| 525 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Investing activities: |
|
|
|
|
|
|
|
|
|
|
| Purchase of property, plant and equipment |
| Note 7 |
|
| (10 | ) |
|
| (95 | ) |
| Change in long term deposits |
|
|
|
| - |
|
|
| (153 | ) |
| Cash from (used in) investing activities |
|
|
|
| (10 | ) |
|
| (248 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
| Financing activities |
|
|
|
|
|
|
|
|
|
|
| Issuance of shares |
|
|
|
| 11,582 |
|
|
| - |
|
| Proceeds from working capital facilities |
| Note 9(a) |
|
| 11,554 |
|
|
| 13,659 |
|
| Repayment of working capital facilities |
| Note 9(a) |
|
| (12,559 | ) |
|
| (13,248 | ) |
| Repayment of vendor take back loan |
| Note 10 |
|
| (1,630 | ) |
|
| (300 | ) |
| Repayment of promissory note |
| Note 9(b) |
|
| (533 | ) |
|
| - |
|
| Interest and other finance cost |
| Note 11 |
|
| (542 | ) |
|
| (457 | ) |
| Government assistance |
|
|
|
| (13 | ) |
|
| (2 | ) |
| Lease payments |
| Note 12 |
|
| (178 | ) |
|
| (181 | ) |
| Cash from (used in) financing activities |
|
|
|
| 7,681 |
|
|
| (529 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
| Increase (decrease) in cash and cash equivalents |
|
|
|
| 7,394 |
|
|
| (252 | ) |
| Cash and cash equivalents, beginning of period |
|
|
|
| 781 |
|
|
| 1,032 |
|
| Effect of movements in exchange rates on cash held |
|
|
|
| (5 | ) |
|
| (152 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
| Cash and cash equivalents at end of period |
|
|
|
| 8,170 |
|
|
| 628 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Supplemental cash flow disclosures: |
|
|
|
|
|
|
|
|
|
|
| Interest paid |
|
|
|
| 527 |
|
|
| 427 |
|
| Income tax paid |
|
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
| See accompanying notes to unaudited condensed interim consolidated financial statements. |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
| Some comparative figures have been adjusted to make it consistent with current period presentation. | ||||||||||
| 5 | Page |
| ELECTROVAYA INC. Notes to unaudited condensed interim consolidated financial statements (Expressed in thousands of U.S. dollars) For the three-month periods ended December 31, 2024 and 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 unaudited condensed interim 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 unaudited condensed interim consolidated financial statements have been prepared based on the principles of International Accounting Standard 34, “Interim Financial Reporting” as issued by the International Accounting Standards Board ("IASB"). These unaudited condensed interim consolidated financial statements do not include all of the information required for full annual financial statements and should be read in conjunction with the Company’s September 30, 2024 audited annual consolidated financial statements and accompanying notes.
These unaudited condensed interim consolidated financial statements were authorized for issuance by the Company’s Board of Directors on February 10, 2025. |
| b. | Basis of Accounting |
|
|
|
|
| These unaudited condensed interim 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 three-month period ended December 31, 2024, the Company had cash (used)/ provided by in operations of $(277) (Three-month period ended December 31, 2023: $525). As of December 31, 2024, the Company had working capital of $12,643 (December 31, 2023: working capital deficiency of $(442)) and the net loss for the three-month period ended December 31, 2024 was $420 (three-month period ended December 31, 2023: $208).
The Company’s equity was in surplus of $20,059. As of December 31, 2024, the Company had cash and cash equivalents of $8,170. |
| 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 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. |
| 6 | Page |
| ELECTROVAYA INC. Notes to unaudited condensed interim consolidated financial statements (Expressed in thousands of U.S. dollars) For the three-month periods ended December 31, 2024 and 2023 |
| d. | Use of Judgements and Estimates |
|
|
|
|
| The preparation of the unaudited condensed interim 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 unaudited condensed interim consolidated financial statements relate to the following (assumptions made are disclosed in individual notes throughout the unaudited condensed interim 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. |
|
| 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 unaudited condensed interim 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. | |
| 7 | Page |
| ELECTROVAYA INC. Notes to unaudited condensed interim consolidated financial statements (Expressed in thousands of U.S. dollars) For the three-month periods ended December 31, 2024 and 2023 |
|
| Warrants |
|
|
|
| The Company accounts for warrants in accordance with the accounting standards for warrants, which requires all warrants to be recognized in the unaudited condensed interim 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 material accounting policies adopted in these unaudited condensed interim consolidated financial statements are the same as those applied in the Company’s consolidated financial statements as at and for the year ended September 30, 2024. Unless otherwise stated, these policies have been consistently applied to all periods presented. | |
|
|
|
| 4. | Trade and Other Receivables |
|
|
| December 31, 2024 |
|
| September 30, 2024 |
| ||
| Trade receivables, gross |
|
| 10,457 |
|
|
| 10,577 |
|
| Expected credit losses |
|
| (56 | ) |
|
| (64 | ) |
| Net trade receivables |
|
| 10,401 |
|
|
| 10,513 |
|
| Other receivables |
|
| 727 |
|
|
| 779 |
|
| Trade and other receivables |
|
| 11,128 |
|
|
| 11,292 |
|
| As at December 31, 2024, 1.71% of the Company’s accounts receivable is over 90 days past due (September 30, 2024 – 0.77 %) |
| Current | 31-60 | 61-90 | 91-120 | >120 | Total | |
| % | 85.49% | 12.04% | 0.76% | 1.17% | 0.54% | 100% |
| Gross Trade receivable | $8,940 | $1,259 | $79 | $122 | $57 | $10,457 |
|
| Current | 31-60 | 61-90 | 91-180 | 181-365 | > 365 | total |
| Trade receivable (net of specific provision) | 8,940 | $1,259 | $79 | $133 | $1 | $7 | 10,419 |
| Expected loss rate | 0.11% | 0.24% | 0.42% | 17.58% | 19.62% | 100.00% | 0.17% |
| Expected loss provision | $5 | $3 | - | $3 | - | $7 | $18 |
| 8 | Page |
| ELECTROVAYA INC. Notes to unaudited condensed interim consolidated financial statements (Expressed in thousands of U.S. dollars) For the three-month periods ended December 31, 2024 and 2023 |
As at September 30, 2024, 0.77% of the Company’s accounts receivable is over 90 days past due.
| Current | 31-60 | 61-90 | 91-120 | >120 | Total | |
| % | 78.52% | 20.61% | 0.02% | 0.04% | 0.75% | 100% |
| Gross Trade receivable | $8,305 | $2,180 | $11 | $4 | $77 | $10,577 |
| Current | 31-60 | 61-90 | 91-180 | 181-365 | > 365 | total | |
| Trade receivable (net of specific provision) | 8,305 | 2,180 | 11 | 4 | 29 | 48 | 10,577 |
| Expected loss rate | 0.05% | 0.24% | 0.42% | 1.06% | 19.62% | 100.00% | 0.61% |
| Expected loss provision | 4 | 6 | - | - | 6 | 48 | 64 |
The movement in the allowance for credit losses can be reconciled as follows:
|
|
| December 31, 2024 |
|
| September 30, 2024 |
| ||
| Beginning balance |
|
| 64 |
|
|
| 257 |
|
| Write off |
|
| - |
|
|
| (244 | ) |
| Allowance provided/(recovery) |
|
| (8 | ) |
|
| 51 |
|
| Ending balance |
|
| 56 |
|
|
| 64 |
|
| 5. | Inventories |
|
|
|
| a. | Total inventories on hand as at December 31, 2024 and September 30, 2024 are as follows: |
|
|
| December 31, 2024 |
|
| September 30, 2024 |
| ||
| Raw materials |
|
| 7,127 |
|
|
| 8,433 |
|
| Semi-finished |
|
| 18 |
|
|
| 324 |
|
| Finished goods |
|
| 919 |
|
|
| 941 |
|
|
|
|
| 8,064 |
|
|
| 9,698 |
|
| b. | As at December 31, 2024, the provision for slow moving and obsolete inventories amounted to $211 (September 30, 2024: $225), which was also included in direct manufacturing costs. |
|
|
|
| c. | During the three-month period ended December 31, 2024, materials amounted to $6,874 (Three-month period ended December 31, 2023: $8,192) was expensed through direct manufacturing costs. |
| 9 | Page |
| ELECTROVAYA INC. Notes to unaudited condensed interim consolidated financial statements (Expressed in thousands of U.S. dollars) For the three-month periods ended December 31, 2024 and 2023 |
| 6. | Prepaid expenses |
|
|
| December 31, 2024 |
|
| September 30, 2024 |
| ||
| Prepaid expenses |
|
| 563 |
|
|
| 612 |
|
| Prepaid insurance |
|
| 48 |
|
|
| 54 |
|
| Prepaid purchases |
|
| 7,527 |
|
|
| 6,981 |
|
|
|
|
| 8,138 |
|
|
| 7,647 |
|
|
| Prepaid purchases are comprised of vendor deposits on inventory orders for the future acquisition of inventories. |
|
|
|
| 7. | Property, plant and equipment |
| December 31, 2024 | ||||||||||||||||||||||||
|
|
| Land & Building |
|
| Right of Use Asset |
|
| Leasehold Improvement |
|
| Production Equipment |
|
| Office Furniture & Equipment |
|
|
Total |
| ||||||
| Gross carrying amount |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| Balance beginning |
|
| 7,700 |
|
|
| 3,202 |
|
|
| 76 |
|
|
| 1,808 |
|
|
| 105 |
|
|
| 12,891 |
|
| Additions |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 3 |
|
|
| 7 |
|
|
| 10 |
|
| Exchange differences |
|
| - |
|
|
| (196 | ) |
|
| (4 | ) |
|
| (111 | ) |
|
| (6 | ) |
|
| (317 | ) |
| Balance ending |
|
| 7,700 |
|
|
| 3,006 |
|
|
| 72 |
|
|
| 1,700 |
|
|
| 106 |
|
|
| 12,584 |
|
| Depreciation and impairment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance beginning |
|
| (793 | ) |
|
| (1,583 | ) |
|
| (48 | ) |
|
| (1,193 | ) |
|
| (71 | ) |
|
| (3,688 | ) |
| Additions |
|
| (94 | ) |
|
| (107 | ) |
|
| (4 | ) |
|
| (53 | ) |
|
| (6 | ) |
|
| (264 | ) |
| Exchange differences |
|
| - |
|
|
| 97 |
|
|
| 3 |
|
|
| 73 |
|
|
| 4 |
|
|
| 177 |
|
| Balance ending |
|
| (887 | ) |
|
| (1,593 | ) |
|
| (49 | ) |
|
| (1,173 | ) |
|
| (73 | ) |
|
| (3,775 | ) |
| Net Book Value ending |
|
| 6,813 |
|
|
| 1,413 |
|
|
| 23 |
|
|
| 527 |
|
|
| 33 |
|
|
| 8,809 |
|
| September 30, 2024 | ||||||||||||||||||||||||
|
|
| Land & Building |
|
| Right of Use Asset |
|
| Leasehold Improvement |
|
| Production Equipment |
|
| Office Furniture & Equipment |
|
| Total |
| ||||||
| Gross carrying amount |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| Balance beginning |
|
| 7,700 |
|
|
| 3,197 |
|
|
| 76 |
|
|
| 1,712 |
|
|
| 73 |
|
|
| 12,758 |
|
| Additions |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 94 |
|
|
| 31 |
|
|
| 125 |
|
| Exchange differences |
|
| - |
|
|
| 6 |
|
|
| - |
|
|
| 3 |
|
|
| 1 |
|
|
| 10 |
|
| Balance ending |
|
| 7,700 |
|
|
| 3,203 |
|
|
| 76 |
|
|
| 1,809 |
|
|
| 105 |
|
|
| 12,893 |
|
| Depreciation and impairment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance beginning |
|
| (419 | ) |
|
| (1,127 | ) |
|
| (33 | ) |
|
| (970 | ) |
|
| (60 | ) |
|
| (2,609 | ) |
| Additions |
|
| (374 | ) |
|
| (454 | ) |
|
| (15 | ) |
|
| (221 | ) |
|
| (11 | ) |
|
| (1,075 | ) |
| Exchange differences |
|
| - |
|
|
| (3 | ) |
|
| - |
|
|
| (3 | ) |
|
| (1 | ) |
|
| (7 | ) |
| Balance ending |
|
| (793 | ) |
|
| (1,584 | ) |
|
| (48 | ) |
|
| (1,194 | ) |
|
| (72 | ) |
|
| (3,691 | ) |
| Net Book Value ending |
|
| 6,907 |
|
|
| 1,619 |
|
|
| 28 |
|
|
| 615 |
|
|
| 33 |
|
|
| 9,202 |
|
| 10 | Page |
| ELECTROVAYA INC. Notes to unaudited condensed interim consolidated financial statements (Expressed in thousands of U.S. dollars) For the three-month periods ended December 31, 2024 and 2023 |
| 8. | Trade and Other payables |
|
|
| December 31, 2024 |
|
| September 30, 2024 |
| ||
| Trade payables |
|
| 4,745 |
|
|
| 7,073 |
|
| Accruals |
|
| 1,790 |
|
|
| 1,745 |
|
| Employee payables |
|
| 444 |
|
|
| 655 |
|
|
|
|
| 6,979 |
|
|
| 9,473 |
|
|
| Warranty provision continuity schedule is as follows: |
|
|
| December 31, 2024 |
|
| September 30, 2024 |
| ||
| Opening provision |
|
| 1,072 |
|
|
| 250 |
|
| Utilised during the period |
|
| (95 | ) |
|
| (672 | ) |
| Provided during the period |
|
| 223 |
|
|
| 1,494 |
|
| Closing balance |
|
| 1,200 |
|
|
| 1,072 |
|
| 9. | Working Capital Facilities |
|
|
|
| a. | Revolving Credit Facility |
|
|
|
| As at December 31, 2024 the balance owing under the facility is $15,278 (Cdn $22,000). The maximum credit available under the facility is $15,278 (Cdn $22,000). | |
|
|
|
| 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. |
|
|
| December 31, 2024 |
|
| September 30, 2024 |
| ||
| Opening balance |
|
| 16,283 |
|
|
| 11,821 |
|
| Exchange difference |
|
| (1,005 | ) |
|
| 20 |
|
| Payments made during the period |
|
| (11,554 | ) |
|
| (47,805 | ) |
| Cash drawn during the period |
|
| 11,554 |
|
|
| 52,247 |
|
| Closing balance |
|
| 15,278 |
|
|
| 16,283 |
|
| 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 14,414 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 in the statement of earnings. The terms include a reduction in the interest rate by 1%. All other terms and conditions are unchanged. |
| 11 | Page |
| ELECTROVAYA INC. Notes to unaudited condensed interim consolidated financial statements (Expressed in thousands of U.S. dollars) For the three-month periods ended December 31, 2024 and 2023 |
|
| 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 8,376 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 in 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 10,443 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 in 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 $303 Canadian was paid in cash on the closing date and amortised over the term of the facility. |
|
|
|
| b. | Promissory Note |
|
|
| December 31, 2024 |
|
| September 30, 2024 |
| ||
| Promissory Note opening balance |
|
| 519 |
|
|
| 1,026 |
|
|
|
|
|
|
|
|
|
|
|
| Finance cost |
|
| 14 |
|
|
| 37 |
|
| Repayment of Promissory Note (ii) |
|
| (533 | ) |
|
| - |
|
| Repayment of Promissory Note(i) |
|
| - |
|
|
| (507 | ) |
| Finance cost paid with options |
|
| - |
|
|
| (37 | ) |
|
|
|
| - |
|
| $ | 519 |
|
| i. | 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 $43. |
|
|
|
| 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 $1,050 to the members of SEJ, with a term of 365 days bearing interest at 7.5% annually payable at maturity. Interest recorded for the period ended December 31, 2024 is 17 (December 31, 2023: $19). |
| 12 | Page |
| ELECTROVAYA INC. Notes to unaudited condensed interim consolidated financial statements (Expressed in thousands of U.S. dollars) For the three-month periods ended December 31, 2024 and 2023 |
| 10. | Short term loans |
|
|
|
| As of December 31, 2024, and September 30, 2024, short term loans consist of: |
|
|
| December 31, 2024 |
|
| September 30, 2024 |
| ||
| Short term loans |
|
| - |
|
|
| - |
|
| Vendor take back |
|
| - |
|
|
| 1,630 |
|
|
|
|
| - |
|
|
| 1,630 |
|
The company paid back the VTB liability along with interest in the month of December 2024.
| Closing balance as at September 30, 2023 (Short term: $3,457. Long term: $nil) |
|
| 3,457 |
|
| Repaid in period |
|
| (1,879 | ) |
| Interest accretion |
|
| 52 |
|
| Closing balance as at September 30, 2024 (Short term: $1,630 Long term: $nil) |
|
| 1,630 |
|
| Interest accretion |
|
| 16 |
|
| Repaid in period |
|
| (1,646 | ) |
| Closing balance as at December 31, 2024 (Short term: $1,630 Long term: $nil) |
|
| - |
|
| 11. | Finance costs |
|
|
|
| During the three-month period ended December 31, 2024 and 2023, the Company incurred both cash and non-cash finance costs. The following table shows the split as included on the statement of earnings. |
|
|
| December 31, 2024 |
|
| December 31, 2023 |
| ||||||||||||||||||
|
|
| Cash |
|
| Non-Cash |
|
| Total |
|
| Cash |
|
| Non-Cash |
|
| Total |
| ||||||
| Working capital facility |
|
| 526 |
|
|
| 25 |
|
|
| 551 |
|
|
| 441 |
|
|
| - |
|
|
| 441 |
|
| Promissory notes |
|
| - |
|
|
| 17 |
|
|
| 17 |
|
|
| - |
|
|
| 19 |
|
|
| 19 |
|
| Interest on VTB loan (note 10) |
|
| 16 |
|
|
| - |
|
|
| 16 |
|
|
| 16 |
|
|
| - |
|
|
| 16 |
|
| Lease interest (note 12) |
|
| - |
|
|
| 75 |
|
|
| 75 |
|
|
| - |
|
|
| 93 |
|
|
| 93 |
|
| Changes in FV of derivative warrants |
|
| - |
|
|
| 17 |
|
|
| 17 |
|
|
| - |
|
|
| (719 | ) |
|
| (719 | ) |
| Accretion on government payable |
|
| - |
|
|
| 26 |
|
|
| 26 |
|
|
| - |
|
|
| 169 |
|
|
| 169 |
|
|
|
|
| 542 |
|
|
| 160 |
|
|
| 702 |
|
|
| 457 |
|
|
| (438 | ) |
|
| 19 |
|
| 12. | Lease liability |
|
|
|
| As of December 31, 2024, lease liability consists of: |
|
|
| December 31, 2024 |
|
| September 30, 2024 |
| ||
| Current |
|
| 462 |
|
|
| 471 |
|
| Non-current |
|
| 1,634 |
|
|
| 1,871 |
|
|
|
|
| 2,096 |
|
|
| 2,342 |
|
| 13 | Page |
| ELECTROVAYA INC. Notes to unaudited condensed interim consolidated financial statements (Expressed in thousands of U.S. dollars) For the three-month periods ended December 31, 2024 and 2023 |
| Information about leases for which the Company is a lessee is as follows: |
|
|
| December 31, 2024 |
|
| December 31, 2023 |
| ||
| Interest on lease liabilities |
|
| 75 |
|
|
| 93 |
|
| Incremental borrowing rate at time of transition |
|
| 14 | % |
|
| 14 | % |
| Cash outflow for the lease |
|
| 178 |
|
|
| 181 |
|
| The Company’s future undiscounted minimum lease payments for the period ended December 31, 2024, for the continued operations are as under: |
| Year |
| Amount |
| |
| 2025 |
|
| 718 |
|
| 2026 |
|
| 509 |
|
| 2027 |
|
| 524 |
|
| 2028 |
|
| 540 |
|
| 2029 |
|
| 556 |
|
| 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 $25,625 for the first year, |
|
| · | CAD $26,265 for the second year, and |
|
| · | CAD $26,922 for the third year. |
| 14 | Page |
| ELECTROVAYA INC. Notes to unaudited condensed interim consolidated financial statements (Expressed in thousands of U.S. dollars) For the three-month periods ended December 31, 2024 and 2023 |
| 13. | Share capital |
|
|
|
| a. | Authorized and issued capital stock |
|
|
|
|
| Common Shares |
| |||||
|
|
|
|
| Number |
|
| Amount |
| ||
| Balance, September 30, 2023 |
| Note |
|
| 33,832,784 |
|
|
| 115,041 |
|
| Issuance of shares |
| (i) |
|
| 10,024 |
|
|
| 30 |
|
| Issuance of shares |
| (ii) |
|
| 42,157 |
|
|
| 169 |
|
| Transfer from contributed surplus |
|
|
|
| - |
|
|
| 501 |
|
| Exercise of options |
|
|
|
| 252,700 |
|
|
| 667 |
|
| Balance, September 30, 2024 |
|
|
|
| 34,137,665 |
|
| $116,408 |
| |
| Issuance of shares |
| (iii) (iv) |
|
| 5,951,250 |
|
|
| 11,582 |
|
| Balance, December 31, 2024 |
|
|
|
| 40,088,915 |
|
|
| 127,990 |
|
| i. | 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 10,024 shares at Cdn $3.99 (as determined by a five-day volume weighted average) as compensation for Cdn $40 extension fee. |
|
|
|
| ii. | 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. |
|
|
|
| iii. | The company issued 5,175,000 common shares at $2.15 for a total equity raise of $11,789 and share issuance cost of $206. The proceeds were recognised net of legal and consulting fees. |
|
|
|
| iv. | Over allotment option for the option shares 776,250 was exercised by the underwriters in the month of December 2024. |
| 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, reducing the number of outstanding options from approximately 23.5 million to 4.7 million. | |
|
|
|
| On February 17, 2021, at a Special Meeting of the Shareholders, a resolution was passed to (i) authorize amendments to the Company’s Stock Option Plan to increase the maximum number of common shares issuable upon the exercise of stock options thereunder from 3,020,000 to 4,600,000. | |
|
|
|
| On March 25, 2022, at a Special Meeting of the Shareholders, a resolution was passed to (i) authorize amendments to the Company’s Stock Option Plan to increase the maximum number of common shares issuable upon the exercise of stock options thereunder from 4,600,000 to 6,000,000. |
| 15 | Page |
| ELECTROVAYA INC. Notes to unaudited condensed interim consolidated financial statements (Expressed in thousands of U.S. dollars) For the three-month periods ended December 31, 2024 and 2023 |
|
|
| Number outstanding |
|
| Weighted average exercise price |
| ||
| Outstanding, September 30, 2023 |
|
| 4,714,388 |
|
|
| 2.44 |
|
| Exercised during the period |
|
| (252,700 | ) |
|
| 2.65 |
|
| Expired during the period |
|
| (24,400 | ) |
|
| 2.87 |
|
| Granted |
|
| 443,000 |
|
|
| 3.42 |
|
| Outstanding, September 30, 2024 |
|
| 4,880,288 |
|
|
| 2.52 |
|
| Exercised during the |
|
| - |
|
|
| - |
|
| Expired during the period |
|
| 2,000 |
|
|
| 3.42 |
|
| Granted |
|
| - |
|
|
| - |
|
| Outstanding, December 31, 2024 |
|
| 4,878,288 |
|
|
| 2.37 |
|
| Exercise price
|
| Number Outstanding |
|
| Weighted average remaining life (years) |
|
| Number exercisable |
|
| Weighted average exercise price |
| ||||||
| $ | 3.25 | (Cdn4.68) |
|
| 441,000 |
|
|
| 9.26 |
|
|
| 87,000 |
|
|
| 3.25 |
|
| $ | 3.72 | (Cdn5.35) |
|
| 1,002,000 |
|
|
| 8.27 |
|
|
| 161,338 |
|
|
| 3.72 |
|
| $ | 1.98 | (Cdn2.85) |
|
| 298,000 |
|
|
| 7.47 |
|
|
| 234,675 |
|
|
| 1.98 |
|
| $ | 3.99 | (Cdn5.75) |
|
| 20,000 |
|
|
| 6.91 |
|
|
| 20,000 |
|
|
| 3.99 |
|
| $ | 3.47 | (Cdn5) |
|
| 1,494,667 |
|
|
| 6.70 |
|
|
| 694,667 |
|
|
| 3.47 |
|
| $ | 2.29 | (Cdn3.3) |
|
| 270,268 |
|
|
| 5.69 |
|
|
| 270,268 |
|
|
| 2.29 |
|
| $ | 1.04 | (Cdn1.5) |
|
| 1,024,000 |
|
|
| 4.58 |
|
|
| 1,024,000 |
|
|
| 1.04 |
|
| $ | 0.97 | (Cdn1.4) |
|
| 116,566 |
|
|
| 3.14 |
|
|
| 116,566 |
|
|
| 0.97 |
|
| $ | 4.24 | (Cdn6.1) |
|
| 10,667 |
|
|
| 2.58 |
|
|
| 10,667 |
|
|
| 4.24 |
|
| $ | 7.40 | (Cdn10.65) |
|
| 101,121 |
|
|
| 2.00 |
|
|
| 101,121 |
|
|
| 7.40 |
|
| $ | 2.74 | (Cdn3.95) |
|
| 9,600 |
|
|
| 1.11 |
|
|
| 9,600 |
|
|
| 2.74 |
|
| $ | 2.40 | (Cdn3.45) |
|
| 42,900 |
|
|
| 0.75 |
|
|
| 42,900 |
|
|
| 2.40 |
|
| $ | 3.16 | (Cdn4.55) |
|
| 12,000 |
|
|
| 0.38 |
|
|
| 12,000 |
|
|
| 3.16 |
|
| $ | 2.26 | (Cdn3.25) |
|
| 35,499 |
|
|
| 0.13 |
|
|
| 35,499 |
|
|
| 2.26 |
|
|
|
|
|
|
| 4,878,288 |
|
|
|
|
|
|
| 2,820,301 |
|
|
| 2.37 |
|
| For the options exercised, the share price at the time of exercise was between CDN $3.06-$3.97. Total stock-based compensation expense recognized during the three-month period ended December 31, 2024, was $415 (December 31, 2023: $369). |
| 16 | Page |
| ELECTROVAYA INC. Notes to unaudited condensed interim consolidated financial statements (Expressed in thousands of U.S. dollars) For the three-month periods ended December 31, 2024 and 2023 |
| 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. | |
|
|
|
| c. | Warrants |
|
|
|
| Details of Share Warrants |
|
|
| Number Outstanding |
|
| Exercise Price |
| ||
| Outstanding, September 30, 2024 |
|
| 1,420,000 |
|
| $ | 0.63 |
|
| Outstanding, December 31, 2024 |
|
| 1,420,000 |
|
| $ | 0.63 |
|
| Additionally, the number of derivative warrants at December 31, 2024 were 912,841 (September 30, 2024: 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 2.96% (December 31, 2023: 3.8%), expected volatility of the market price of shares (based on historical volatility of share price) of 49.71%, (December 31, 2023: 85.58%) and the expected warrant life (in years) of 0.85 (December 31, 2023 : 1.61). As a result of the reverse stock split, every five warrants were consolidated into one warrant without any action from warrant holders, reducing the number of outstanding warrants from approximately 13.1 million to 2.6 million. A 10% of change in any assumption would result in the change in derivative warrant liability between $(36) (December 31, 2023: ($295)) and $33 (December 31, 2023: $338). | |
|
|
|
|
| Warrant continuity schedule is as follows: |
|
|
| Units |
|
| Fair Value |
| ||
|
|
|
|
|
|
|
| ||
| Closing balance (September 30, 2023) |
|
| 912,841 |
|
|
| 1,489 |
|
| Fair value adjustment |
|
| - |
|
|
| (1,334 | ) |
| Closing balance (September 30, 2024) |
|
| 912,841 |
|
|
| 155 |
|
| Fair value adjustment |
|
|
|
|
|
| (17 | ) |
| Closing balance (December 31, 2024) |
|
| 912,841 |
|
|
| 138 |
|
| 17 | Page |
| ELECTROVAYA INC. Notes to unaudited condensed interim consolidated financial statements (Expressed in thousands of U.S. dollars) For the three-month periods ended December 31, 2024 and 2023 |
| 14. | Related Party Transactions |
|
|
|
| Management compensation | |
|
|
|
| Key management compensation comprises the following: |
|
|
| December 31, 2024 |
|
| December 31, 2023 |
| ||
| Salaries, bonus and other benefits |
|
| 236 |
|
|
| 281 |
|
| Share based compensation |
|
| 267 |
|
|
| 244 |
|
|
|
|
| 503 |
|
|
| 525 |
|
| Personal Guarantees |
|
|
| December 31, 2024 |
|
| September 30, 2024 |
| ||
| Promissory Note |
|
| - |
|
|
| 519 |
|
|
| 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. |
| 18 | Page |
| ELECTROVAYA INC. Notes to unaudited condensed interim consolidated financial statements (Expressed in thousands of U.S. dollars) For the three-month periods ended December 31, 2024 and 2023 |
|
| 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 700,000 options which vest in two tranches of 200,000 options and one tranche of 300,000 options, based on reaching specific target market capitalizations. The fair value of these options on the day of grant 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 $109 is recorded within stock-based compensation in the unaudited condensed interim consolidated statement of earnings for the three months period ended December 31, 2024 (Three months period ended December 31, 2023: $115) | |
|
|
|
| Dr. Rajshekar Das Gupta was granted 900,000 options which vest in three tranches of 300,000 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 is recorded within stock-based compensation in the unaudited condensed interim consolidated statement of earnings for the three months period ended December 31, 2024 (Three months period ended December 31, 2023: $NIL). | |
|
|
|
| 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 $78 is recorded within stock-based compensation in the unaudited condensed interim consolidated statement of earnings for the three months period ended December 31, 2024 (Three months period ended December 31, 2023: $243). | |
|
|
|
| 15. | Change in Non-Cash Operating Working Capital |
|
|
| December 31, 2024 |
|
| December 31, 2023 |
| ||
| Trade and other receivables |
|
| 164 |
|
|
| 1,944 |
|
| Inventories |
|
| 1,035 |
|
|
| (816 | ) |
| Prepaid expenses and other |
|
| (585 | ) |
|
| (82 | ) |
| Trade and other payables |
|
| (1,895 | ) |
|
| (963 | ) |
|
|
|
| (1,281 | ) |
|
| 83 |
|
| 16. | Financial Instruments |
|
|
|
|
| Derivative Liabilities |
| Warrants as derivative liability is fair valued using Black Scholes Model ("BSM"). Using this approach, the assumptions used in determining fair value of the warrants as at December 31, 2024 are stock price $3.52, expected life of 0.85 years, annualized volatility of 49.71%, annual risk-free rate of 2.96%. |
| 19 | Page |
| ELECTROVAYA INC. Notes to unaudited condensed interim consolidated financial statements (Expressed in thousands of U.S. dollars) For the three-month periods ended December 31, 2024 and 2023 |
|
| 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: |
| · | 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. |
|
|
|
|
| As at December 31, 2024: |
|
|
| Fair Value |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
| ||||
| Warrants |
|
| 138 |
|
|
| - |
|
|
| 138 |
|
|
| - |
|
| As at September 30, 2024: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
| Fair Value |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
| ||||
| Warrants |
|
| 155 |
|
|
| - |
|
|
| 155 |
|
|
| - |
|
|
| 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. | |
|
|
|
| 20 | Page |
| ELECTROVAYA INC. Notes to unaudited condensed interim consolidated financial statements (Expressed in thousands of U.S. dollars) For the three-month periods ended December 31, 2024 and 2023 |
|
| 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 based on the carrying amount of equity plus its short-term debt comprised of the promissory notes, less cash and cash equivalents as presented in the unaudited condensed interim consolidated statements 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 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. Accounts receivable are recorded at the invoiced amount, do not bear interest, and do not require collateral. For the three-month period ended December 31, 2024, one customer accounted for $8,941 or 80% of revenue (Three-month period ended December 31, 2023: $11,000 or 92%). As of December 31, 2024, one customer accounted for 70% of accounts receivable (September 30, 2024: 71%). Refer note 5 for expected credit loss provision.
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. |
| 21 | Page |
| ELECTROVAYA INC. Notes to unaudited condensed interim consolidated financial statements (Expressed in thousands of U.S. dollars) For the three-month periods ended December 31, 2024 and 2023 |
| The following are the undiscounted contractual maturities of significant financial liabilities and the total contractual obligations of the Company as at December 31, 2024: |
|
|
| 2025 |
|
| 2026 |
|
| 2027 |
|
| 2028 |
|
| 2029 & beyond |
|
| Total |
| ||||||
| Trade and other payables |
|
| 6,979 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 6,979 |
|
| Lease liability |
|
| 718 |
|
|
| 509 |
|
|
| 524 |
|
|
| 540 |
|
|
| 556 |
|
| 2847 |
| |
| Working capital facility |
|
| 15,278 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 15,278 |
|
| Other payable |
|
| 198 |
|
|
| 177 |
|
|
| 220 |
|
|
| 212 |
|
|
| 627 |
|
|
| 1,434 |
|
|
|
|
| 23,173 |
|
|
| 686 |
|
|
| 744 |
|
|
| 752 |
|
|
| 1,183 |
|
|
| 26,538 |
|
| The following are the undiscounted contractual maturities of significant financial liabilities and the total contractual obligations of the Company as at September 30, 2024: |
|
|
| 2025 |
|
| 2026 |
|
| 2027 |
|
| 2028 |
|
| 2029 & beyond |
|
| Total |
| ||||||
| Trade and other payables |
|
| 9,473 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 9,473 |
|
| Lease liability |
|
| 760 |
|
|
| 598 |
|
|
| 555 |
|
|
| 571 |
|
|
| 588 |
|
|
| 3,072 |
|
| Short term loans |
|
| 1,630 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 1,630 |
|
| Promissory notes |
|
| 519 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 519 |
|
| Working capital facility |
|
| 16,283 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 16,283 |
|
| Other payable |
|
| 211 |
|
|
| 188 |
|
|
| 208 |
|
|
| 218 |
|
|
| 610 |
|
|
| 1,435 |
|
|
|
|
| 28,876 |
|
|
| 786 |
|
|
| 763 |
|
|
| 789 |
|
|
| 1,198 |
|
|
| 32,412 |
|
| 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. Changes in interest rates will affect future interest expense and cash flows. The Company does not enter into derivative instruments to reduce this exposure. |
| 22 | Page |
| ELECTROVAYA INC. Notes to unaudited condensed interim consolidated financial statements (Expressed in thousands of U.S. dollars) For the three-month periods ended December 31, 2024 and 2023 |
| 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 our exposures to the above financial assets or liabilities denominated in nonfunctional currencies. Cash held by the Company in US dollars at December 31, 2024 was $7,289 (September 30, 2024: $1,59). | |
|
|
|
| If the US dollar to Canadian foreign exchange rate changed by 2% this would change the recorded net gain(loss) by $320 (December 31, 2023: $123). | |
|
|
|
| 17. | 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 $299 (Cdn$386) and $302 (Cdn$389) including interest respectively. The balance owing has been fully provided for in other payables, and the Company is pursuing the next appropriate step in the appeal process and believes the amounts may be reversed or substantially reduced. The outcome cannot be determined. | |
|
|
|
| b. | Ministry of Energy |
|
|
|
| On May 28, 2018, the Province of Ontario issued a claim against Electrovaya Corp. claiming $655 (Cdn $830) related to a dispute regarding funding and fulfilment of the Intelligent Energy Storage System under the Smart Grid Fund program. A Statement of Defense disputing the claim in its entirety was filed on March 21, 2019. No further steps have been taken by the province to pursue the claim. | |
|
|
|
| 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. | |
|
|
|
| 18. | Segment and Customer Reporting |
|
|
|
|
| The Company develops, manufactures and markets power technology products. There is only a single segment applicable to the Company. |
| 23 | Page |
| ELECTROVAYA INC. Notes to unaudited condensed interim consolidated financial statements (Expressed in thousands of U.S. dollars) For the three-month periods ended December 31, 2024 and 2023 |
| 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 Group's segments, or how segment performance is measured, from that described in the Company’s condensed interim consolidated financial statements as at and for the year ended December 31, 2024. |
|
|
| December 31, 2024 |
|
| December 31, 2023 |
| ||
| Large format batteries |
|
| 10,856 |
|
|
| 11,212 |
|
| Other |
|
| 313 |
|
|
| 879 |
|
|
|
|
| 11,169 |
|
|
| 12,091 |
|
| Revenues can also be analyzed as follows based on the nature of the underlying deliverables: |
|
|
| December 31, 2024 |
|
| December 31, 2023 |
| ||
| Revenue with customers |
|
|
|
|
|
| ||
| Sale of batteries and battery systems |
|
| 10,856 |
|
|
| 11,212 |
|
| Sale of services |
|
| 212 |
|
|
| 667 |
|
| Others |
|
| 101 |
|
|
| 212 |
|
|
|
|
| 11,169 |
|
|
| 12,091 |
|
| Revenues attributed to geographical regions based on the location of the customer were as follows: |
|
|
| December 31, 2024 |
|
| December 31, 2023 |
| ||
| Canada |
|
| 206 |
|
|
| 934 |
|
| United States |
|
| 10,961 |
|
|
| 11,137 |
|
| Others |
|
| 2 |
|
|
| 20 |
|
|
|
|
| 11,169 |
|
|
| 12,091 |
|
| 19. | Other payables |
|
|
|
| Technology Partnerships Canada (“TPC”) projects are 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-recognized and the new debt was recognized with first payment starting in July 2025 and final payment to be discharged in July 2031. |
| 24 | Page |
| ELECTROVAYA INC. Notes to unaudited condensed interim consolidated financial statements (Expressed in thousands of U.S. dollars) For the three-month periods ended December 31, 2024 and 2023 |
| The following table represents changes in the provision for repayments to Industry Canada: |
|
|
| December 31, 2024 |
|
| September 30, 2024 |
| ||
| Opening balance |
|
| 379 |
|
|
| 984 |
|
| Interest accretion |
|
| - |
|
|
| 490 |
|
| Foreign exchange gain / loss |
|
| (24 | ) |
|
| - |
|
| Debt extinguishment |
|
| - |
|
|
| (1,474 | ) |
| Recognition of new debt |
|
| - |
|
|
| 370 |
|
| Interest accretion on new debt |
|
| 28 |
|
|
| 9 |
|
| Ending balance |
|
| 383 |
|
|
| 379 |
|
| Less: current portion of the provision (included in Trade and other payables) |
|
| (36 | ) |
|
| (36 | ) |
| Ending balance of long-term portion |
|
| 347 |
|
|
| 343 |
|
| Following is the payment schedule for TPC: |
| Year |
| Amount |
| |
| 2025 |
|
| 155 |
|
| 2026 |
|
| 132 |
|
| 2027 |
|
| 132 |
|
| 2028 |
|
| 132 |
|
| 2029 |
|
| 132 |
|
| 2030 |
|
| 132 |
|
| 25 | Page |
EXHIBIT 99.3
—————— www.electrovaya.com
ELECTROVAYA INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE QUARTER ENDED DECEMBER 31, 2024
February 13, 2025
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 |
| 15 |
|
| 6. | OUTSTANDING SHARE DATA |
| 16 |
|
| 7. | OFF-BALANCE SHEET ARRANGEMENTS |
| 18 |
|
| 8. | RELATED PARTY TRANSACTIONS |
| 18 |
|
| 9. | CRITICAL ACCOUNTING ESTIMATES |
| 18 |
|
| 10. | CHANGES IN ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS |
| 18 |
|
| 11. | FINANCIAL AND OTHER INSTRUMENTS |
| 18 |
|
| 12. | DISCLOSURE CONTROLS |
| 18 |
|
| 13. | INTERNAL CONTROL OVER FINANCIAL REPORTING |
| 19 |
|
| 14. | QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT RISKS AND UNCERTAINTIES |
| 20 |
|
| 15. | OTHER RISKS |
| 24 |
|
● 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 February 13, 2025 and it is, therefore, dated as at that date. This MD&A includes the operating and financial results for the quarters ending December 31, 2024 and 2023, and should be read in conjunction with our condensed interim 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.
| 2 | Page |
● 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 FY 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, 2024 under “Risk Factors”, in the Company’s base shelf prospectus dated September 17, 2024, and in the Company’s most recent annual 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.
| 3 | Page |
The Company is evaluating the impact of potential tariffs by the US Government on imports from Canada. There is a very high level of uncertainty if the tariffs will be implemented and if they are implemented, the percentage and applicability is also uncertain. The Company has taken steps to mitigate the potential impact of tariffs by several methods including but not limited to commencing assembly operations at its Jamestown facility earlier than initially planned. 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.
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.
| 4 | Page |
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 for Material Handling Electric Vehicles (“MHEV”) and other electric transportation applications, as well for electric stationary storage and other battery markets. Our main businesses include:
|
| (a) | lithium-ion battery systems to power MHEV including fork-lifts as well as accessories such as battery chargers to charge the batteries; |
|
|
|
|
|
| (b) | lithium-ion batteries for robotic applications; |
|
|
|
|
|
| (c) | high voltage battery systems for electric bus, truck 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. In December 2019, Electrovaya moved its corporate head office to 6688 Kitimat Road in Mississauga, Ontario. 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 competitive with currently available advanced lithium ion and non-lithium-ion battery technologies. These characteristics include:
| · | Scalability and pouch cell geometry: We believe that large format pouched prismatic (flat) cells represent the best long-term battery technology for use in large electro-motive and energy storage systems. |
|
|
|
| · | Safety: We believe our batteries provide a high level of safety in a lithium-ion battery. 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. |
| 5 | Page |
| · | Cycle-life: 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 performance 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, |
|
|
|
| · | 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. |
| 6 | Page |
| 3. | RECENT DEVELOPMENTS |
3.1 Business Highlights and 2025 Outlook
Business Highlights – Q1 FY2025:
On October 17, 2024, the Company announced a CDN$2 million investment from the Government of Canada through the Federal Economic Development Agency for Southern Ontario. The funding will be used to support investments in automation, AI and capacity enhancements at the Company’s Mississauga, Ontario manufacturing facility.
On November 12, 2024, the Company announced it has 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.
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 a follow-on order for Infinity-HV battery systems, from a global aerospace and defense company.
On December 3, 2024, the Company announced it has received a purchase order valued at approximately US$4.1 million for immediate delivery of its batteries. The batteries will be used by a leading Fortune 500 retailer in the United States for powering material handling electric vehicles in two existing warehouse sites. Additional sites are also being planned for conversion on top of the two orders received.
On December 16, 2024, the Company announced that its Infinity Series Lithium-Ion Phosphate (LFP) based cell had successfully achieved UL2580 recognition. This milestone underscores the exceptional safety and reliability of Electrovaya's battery technology, meeting the rigorous safety standards set by UL2580, including the stringent external fire test (projectile test).
| 7 | Page |
On December 16, 2024, the Company announced that it is commencing an underwritten public offering (the “Offering”) of its common shares (the “Common Shares”). All of the shares are being offered by the Company. The shares will be offered in the United States pursuant to a shelf registration statement (including a prospectus supplement thereto) previously filed with and declared effective by the Securities and Exchange Commission (the “SEC”) on September 25, 2024 in accordance with the Multijurisdictional Disclosure System established between Canada and the United States, and will be qualified for distribution in the provinces and territories of Canada by way of a prospectus supplement to the Company’s base shelf prospectus dated September 17, 2024, provided that no securities will be sold in the Province of Québec.
Roth Capital Partners, Raymond James Ltd. and Craig-Hallum Capital Group LLC are acting as the co-lead book-running managers for the proposed Offering. The Company intends to use the net proceeds from the Offering to satisfy the cash collateral conditions for the loan approved by the Export-Import Bank of the United States announced by the Company on November 14, 2024, repayment of amounts under the Company’s existing working capital facility in advance of proposed bank refinancing and for the costs of such financing, and satisfaction of certain outstanding amounts in connection with the purchase of the Company’s Jamestown, New York manufacturing facility.
On December 17, 2024, the Company announced the pricing of its previously announced public offering (the “Offering”) of 5,175,000 common shares in the capital of the Company (“Common Shares”) at a price to the public of US$2.15 per Common Share.
Roth Capital Partners (“Roth”) is acting as sole book-running manager, Raymond James Ltd. and Craig-Hallum Capital Group LLC acted as the co-lead book-running managers for the Offering. In addition, the Company granted Roth a 45-day over-allotment option to purchase up to an additional 776,250 Common Shares at the public offering price, less underwriting discounts and commissions.
On December 18, 2024, the Company announced that it had successfully closed its previously announced public offering (the "Offering") of 5,175,000 common shares in the capital of the Company (the "Common Shares") at a price to the public of US$2.15 per Common Share (the "Offering Price") for gross proceeds of approximately US$11.1 million, before deducting the underwriting discounts and commissions and estimated expenses incurred in connection with the Offering.
On December 18, 2024, the Company announced that in connection with its previously completed public offering of 5,175,000 common shares in the capital of the Company (the "Common Shares") at the price of US$2.15 per Common Share (the "Offering Price") for gross proceeds of approximately US$11.1 million (the "Offering") that Roth Capital Partners, acting as sole book-running manager, and Raymond James Ltd. and Craig-Hallum Capital Group LLC acting as the co-lead book-running managers in the Offering, have purchased an additional 776,250 Common Shares at the Offering Price, for additional gross proceeds to the Company of US$1,668,937.50, before deducting the underwriting commissions, pursuant to their exercise in full of the over-allotment option (the "Over-Allotment Option"). After giving effect to the full exercise of the Over-Allotment Option, the Company sold 5,951,250 Common Shares under the Offering, for aggregate gross proceeds of US$12,795,188.00.
| 8 | Page |
Subsequent Events
On January 14, 2025, the Company announced that it has begun making capital investments for its planned Jamestown battery manufacturing facility along with hiring initial personnel. These initial procurements include battery system manufacturing and testing equipment along with awarding engineering work to prepare for further investments pertaining to planned cell manufacturing investments.
Positive Financial Outlook:
The Company anticipates revenue of approximately $60 million for the fiscal year ending September 30, 2025 (“FY 2025”), an increase of between approximately 35% over the revenue generated in FY2024 of $44 million. The revenue is anticipated to be generated primarily from sales of material handling battery systems.
The revenue forecast takes into consideration the Company’s existing purchase order backlog, anticipated pipeline, additional demand from its key OEM partner and new products designed for new sectors. This guidance is subject to change and is made barring any unforeseen circumstances. See “Forward-Looking Statements”.
| 9 | Page |
| 4. | SELECTED QUARTERLY 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 Quarterly Financial Results
Our Q1 2025 Interim Financial Statements have been prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting, as issued by the IASB and accounting policies we adopted in accordance with IFRS. The Q1 2025 Interim Financial Statements reflect all adjustments that are, in the opinion of management, necessary to present fairly our financial position as at December 31, 2024 and the financial performance, comprehensive income and cash flows for the three months ended December 31, 2024.
Results of Operations
(Expressed in thousands of U.S. dollars)
| 10 | Page |
Revenue
Revenue decreased to $11.2 million, compared to $12.1 million for the quarter ended December 31, 2024 and 2023 respectively, a decrease of $0.9 million or 8%. The decrease in year-over-year revenue was due to the timing of orders being delivered in December. The Company had over $0.9 million within finished goods at the end of the quarter. This would represent completed units that are in transit to customers but have not yet been delivered.
Revenue was predominantly from the sale of batteries and battery systems for MHEVs. Batteries and battery systems accounted for $10.9 million or 97% of revenue for Q1 2025 and $11.2 million or 93% for Q1 2024. Sale of engineering services and other sources of revenue accounted for the remaining $0.3 million or 3% in Q1 2025 and $0.9 million or 7% in Q1 2024.
For the quarter ended December 31, 2024, revenue attributable to the United States accounted for $10.97 million 98% of total revenue while revenue attributed to Canada and other countries accounted for the remaining $0.23 million or 2%. For the quarter ended December 31, 2023 revenue attributable to the United States accounted for $11.13 million or 92%. This reflects the growing level of interest in our material handling batteries and an increased direct and indirect sales presence in the United States.
Direct Manufacturing Costs (variable 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 remained almost consistent in comparison to the December 2023 quarter. Gross margin for the period ended December 31, 2024 is $3.4 million compared to $3.5 million for the period ended December 31, 2023. The gross margin percentage was 30.5% for the quarter ended December 31, 2024, compared to 29.2% in the comparative period. When reviewing gross margin by revenue stream, the main driver of revenue, Battery Systems, shows a gross margin of 30.8% for the quarter.
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.
| 11 | Page |
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 period; |
|
| · | 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; |
|
| · | Financing costs Financing costs includes the cost of debt, equity or other financing. This includes cash and non-cash interest, legal costs of financing, commissions and fees; and, |
|
| · | Patent and trademark costs Patent and trademark expense recognizes the cost of maintaining the Company’s patent and trademark portfolio. |
Total operating expenses remained level to $3.6 million for the quarters ended December 31, 2024 and 2023 respectively. Within the quarter, general and administrative costs showed the only significant movement decreasing by $0.17 million. No other operating expenses showed significant movements in the quarter.
Net Profit/(Loss)
The net loss increased to $0.42 million from a net loss of $0.21 million for the quarters ended December 31, 2024 and 2023 respectively, a slight increase in loss of $0.21 million. This is due to net increase in finance cost and compensated by gain in foreign exchange. There were also one-off costs included in the quarter totalling $0.4 million. These costs are non-recurring in nature and were they not incurred, would have resulted in an almost breakeven position for the quarter.
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):
| 12 | Page |
Adjusted EBITDA1
(Expressed in thousands of U.S. dollars)
1 Non-IFRS Measure: Adjusted EBITDA is defined as 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.
Adjusted EBITDA1 is marginally decreased by $0.02 million. Management has achieved positive Adjusted EBITDA1 in 2025 through an increase in sales, improving the gross margin and controlling cost of operations.
We continue our efforts for sales growth, control of manufacturing costs and reduction operating expenses.
Quarterly Summary Financial Position and Cash Flow
Summary Financial Position
(Expressed in thousands of U.S. dollars)
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.
| 13 | Page |
Summary Cash Flow
(Expressed in thousands of U.S. dollars)
The Company ended December 31, 2024 with $8.1 million of cash as compared to $0.8 million at September 30, 2024.
For the quarter ended December 31, 2024 the Company had cash provided by operating activities of $1 million, as compared to cash provided of $0.47 million for December 31, 2023. The company continues to utilise its revolving credit line to help fund purchase orders.
Quarterly Comparative Summaries
Quarterly revenue from continued operations are as follows:
| (USD $ thousands) | Q1 | Q2 | Q3 | Q4 |
| 2025 | $11,169 | - | - | - |
| 2024 | $12,091 | $10,695 | $10,274 | $11,555 |
| 2023 | $8,562 | $8,470 | $10,597 | $16,430 |
Quarterly net profits/(losses) from continued operations are as follows:
| (USD $ thousands) | Q1 | Q2 | Q3 | Q4 |
| 2025 | $(420) | - | - | - |
| 2024 | $(208) | $(839) | $(324) | $(114) |
| 2023 | $(2,581) | $(303) | $(557) | $1,962 |
| 14 | Page |
Quarterly net gains (losses) per common share from continued operations are as follows:
|
| Q1 | Q2 | Q3 | Q4 |
| 2025 | $(0.01) | - | - | - |
| 2024 | $(0.01) | $(0.03) | $(0.01) | $(0.00) |
| 2023 | $(0.08) | $(0.01) | $(0.02) | $0.06 |
Quarterly Revenue and Seasonality
In recent periods, revenue has been relatively low in the fiscal first quarter, which management believes reflects some material handling customers’ preference to defer product delivery past the holiday season and into the New Year.
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.
| 5. | LIQUIDITY AND CAPITAL RESOURCES |
During the quarter ended December 31, 2024, the Company used $0.28 million cash in operations (Cash provided from operating activities in December 31, 2023 was $0.53 million). As of December 31, 2024 the company had working capital of $12.6 million (September 30, 2024: $0.9 million) and a net loss of $(0.4) million for quarter ended December 31, 2024 (Quarter ended December 31, 2023: $(0.2) million). The Company’s equity was in surplus of $20.06 million as of December 31, 2024 (September 30, 2024: $8.6 million). As of December 31, 2024 the Company had cash and cash equivalents of $8.2 million (September 30, 2024: $0.8 million). The Company is in the process of closing additional loans to start production in Jamestown, New York (the “Gigafactory”).
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.
| 15 | Page |
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 December 31, 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 December 31, 2024, we had the following contractual obligations:
| Year of Payment Obligation |
| Contractual Obligations |
| |
| 2025 |
|
| 23,173 |
|
| 2026 |
|
| 686 |
|
| 2027 |
|
| 744 |
|
| 2028 |
|
| 752 |
|
| 2029 and thereafter |
|
| 1,183 |
|
| Total |
| $ | 26,538 |
|
| 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 |
| Issuance of shares | 5,951,250 | 11,582 |
| Balance, December 31, 2024 | 40,088,915 | 127,990 |
| 16 | Page |
Details of share warrants
|
| Number Outstanding | Exercise Price |
| Outstanding, December 31, 2024 | 1,420,000 | $0.63 |
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 | - | - |
As of December 31, 2024, the Company had 40,088,915 common shares outstanding, 4,878,288 options to purchase common shares outstanding and 1,420,000 warrants to purchase common shares outstanding.
| 17 | Page |
| 7. | OFF-BALANCE SHEET ARRANGEMENTS |
The Company does not have any off-balance sheet arrangements for the quarter ended December 31, 2024.
| 8. | RELATED PARTY TRANSACTIONS |
Please refer to note 14 to the December 31, 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 condensed interim 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 effective October 1, 2024 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 16 of the December 31, 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.
| 18 | Page |
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 December 31, 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 affected by the Board of Directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of condensed interim 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 December 31, 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 December 31, 2024.
| 19 | Page |
| 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.
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 best optimize and utilize the resources of the Company for sustainable growth of the Company. |
|
|
|
|
|
| · | 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 comprised 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, 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.
| 20 | Page |
Capital for the reporting periods under review is summarized as follows:
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:
| December 31, | September 30, | |||||||
| 2024 | 2024 | |||||||
| Cash and cash equivalents | $ | 8,170 | $ | 781 | ||||
| Trade and other receivables | 11,128 | 11,292 | ||||||
| Carrying amount | $ | 19,298 | $ | 12,073 | ||||
Cash and cash equivalents are comprised of the following:
|
|
| December 31, |
|
| September 30, |
| ||
|
|
| 2024 |
|
| 2024 |
| ||
| Cash |
| $ | 8,170 |
|
| $ | 781 |
|
|
|
| $ | 8,170 |
|
| $ | 781 |
|
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 December 31, 2024 a rating of R-1 mid or above.
| 21 | Page |
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 working capital facilities 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 8.05%, to 12% per annum. 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 December 31, 2023 was $7,289 (September 30, 2024 - $159).
If the US dollar to Canadian foreign exchange rate changed by 2% this would change the recorded net gain(loss) by $320 (December 31, 2023: $123).
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.
| 22 | Page |
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 were effective as at December 31, 2024.
The Company does not believe that it has any material weakness or a weakness in ICFR that are significant.
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.
| 23 | Page |
| 15. | OTHER RISKS |
Political Risk
Political Risk is the risk that political factors outside the Company’s control can have a material impact on the Company. With the recent change in the political leadership of the United States of America, permanent or temporary tariffs on trade between Canada and the United States is a possibility. Any tariff imposed on trade between the two countries could have a material impact on the Company. The Company is evaluating the impact of these tariffs and is committed to finding the best solution to mitigate the impact on its operations.
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.
| 24 | Page |
EXHIBIT 99.4
EXHIBIT 99.5
