6-K - VMAR - Equibles

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

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of December 2024

Commission File No. 001-39730

VISION MARINE TECHNOLOGIES INC.

(Translation of registrant’s name into English)

730 Boulevard du Curé-Boivin

Boisbriand, Québec, J7G 2A7, Canada

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F

Form 20-F ☒ Form 40-F ☐

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) ☐

General

We release as exhibits hereto our audited consolidated financial statements for the fiscal year ended August 31, 2024 as well as management’s discussion and analysis of financial condition and results of operations for the fiscal year ended August 31, 2024. We note that following our US$3.4 million capital raise on September 16, 2024, we believe that we meet the US$2,500,000 minimum stockholders’ equity requirement for continued listing on the Nasdaq Capital Market set forth in Listing Rule 5550(b)(1) based on our audited consolidated financial statements for the fiscal year ended August 31, 2024.

The information contained in this Report on Form 6-K is hereby incorporated by reference into our Registration Statement on Form F-3 (File No. 333-267893), Registration Statement on Form F-3 (File No. 333-274882) and Registration Statement on Form S-8 (File No. 333-264089).

Exhibit No.	****	Exhibit
99.1		Audited consolidated financial statements for the years ended August 31, 2024, 2023, 2022
99.2		Management’s Discussion and Analysis for the year ended August 31, 2024
99.3		Form 52-109F1 Certification of Annual Filings – CEO
99.4		Form 52-109F1 Certification of Annual Filings – CFO
99.5		Consent of M&K CPAs, PLLC
99.6		Consent of Ernst & Young LLP
101.INS		XBRL Instance*
101.SCH		XBRL Taxonomy Extension Schema*
101.CAL		XBRL Taxonomy Extension Calculation*
101.DEF		XBRL Taxonomy Extension Definition*
101.LAB		XBRL Taxonomy Extension Labels*
101.PRE		XBRL Taxonomy Extension Presentation*

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	VISION MARINE TECHNOLOGIES INC.

Date: December 2, 2024	By:	/s/ Raffi Sossoyan
	Name:	Raffi Sossoyan
	Title:	Chief Financial Officer

Exhibit 99.1

Vision Marine Technologies Inc.

Consolidated financial statements

August 31, 2024 and 2023

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Vision Marine Technologies Inc.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statement of financial position of Vision Marine Technologies Inc. (the Company) as of August 31, 2024, and the related consolidated statements of comprehensive loss, changes in equity (deficit), and cash flows for the year ended August 31, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of August 31, 2024, and the results of its operations and its cash flows for the year ended August 31, 2024, in conformity with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. The consolidated financial statements of Vision Marine Technologies Inc. as of August 31, 2023 and 2022 were audited by other auditors whose report dated November 27, 2023 expressed an unqualified opinion on those statements.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has limited cash and working capital available, has suffered recurring losses, has not achieved profitable operations and has an accumulated deficit, and has stated that a substantial doubt exists about the Company’s ability to continue as a going concern. Management’s plans regarding those matters are discussed in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and the significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe our audit provides a reasonable basis for our opinion.

M&K CPAS, PLLC

We have served as the Company’s auditor since 2024

The Woodlands, TX

December 2, 2024

PCAOB ID #2738

F-2

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of

Vision Marine Technologies Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of financial position of Vision Marine Technologies Inc. [the “Company”] as of August 31, 2023, the related consolidated statements of changes in shareholders’ equity (deficit), comprehensive loss and cash flows for each of the two years in the period ended August 31, 2023, and the related notes [collectively referred to as the “consolidated financial statements”]. In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at August 31, 2023, and the results of its operations and its cash flows for each of the two years in the period ended August 31, 2023, in conformity with International Financial Reporting Standards [“IFRS”] as issued by the International Accounting Standards Board.

The Company’s Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations, and has stated that substantial doubt exists about the Company’s ability to continue as a going concern. Management’s evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) [“PCAOB”] and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young LLP

We have served as the Company’s auditor from 2021 to 2023.

Montréal, Canada

November 27, 2023, except for the effects of the reverse stock splits described in Note 2, as to which the date is December 2, 2024

F-3

Vision Marine Technologies Inc.

Consolidated statements of financial position

[Going concern uncertainty – see note 2]

As at August 31,


	2024	2023
		$
Assets
Current
Cash	63,126	3,359,257
Trade and other receivables [note 6]	138,656	550,836
Income tax receivable	6,454	98,540
Inventories [note 7]	6,209,287	2,445,554
Prepaid expenses [note 7]	2,156,844	1,973,591
Grants and investment tax credits receivable [note 22]	—	—
Share subscription receivable [note 18]	39,200	39,200
Advances to related parties [note 18]	—	20,135
Total current assets	8,613,567	8,487,113
Right-of-use assets [note 9]	260,807	2,414,593
Property and equipment [note 10]	1,578,422	2,313,926
Intangibles [note 11]	868,543	966,724
Deferred income taxes [note 24]	92,973	68,460
Goodwill [note 5]	—	9,680,941
Other financial assets	5,929	114,755
Total assets	11,420,241	24,046,512

Liabilities and shareholders’ equity
Current
Credit facility [note 12]	—	155,000
Trade and other payables [notes 13 & 18]	4,497,508	1,754,900
Provision on onerous contracts	91,667	91,667
Contract liabilities [note 14]	827,642	1,815,731
Advances from related parties [note 18]	84,616	—
Current portion of lease liabilities [note 15]	122,077	647,638
Current portion of long-term debt [note 16]	101,397	271,546
Other financial liabilities	—	113,695
Total current liabilities	5,724,907	4,850,177
Lease liabilities [note 15]	137,715	1,994,156
Long-term debt [note 16]	357,243	33,783
Derivative liabilities [note 17]	2,180,389	5,558,822
Deferred income taxes [note 23]	—	45,137
Total liabilities	8,400,254	12,482,075

Shareholders’ equity
Capital stock [note 19]	55,421,479	50,395,717
Contributed surplus [note 20]	12,080,817	11,684,829
Accumulated other comprehensive income	1,127,048	1,032,628
Deficit	(65,609,357)	(51,548,737)
Total shareholders’ equity	3,019,987	11,564,437
	11,420,241	24,046,512

All values are in US Dollars.

See accompanying notes

F-4

Vision Marine Technologies Inc.

Consolidated statements of changes in equity (deficit)

[Going concern uncertainty – see note 2]

Year ended August 31,

									Accumulated	****
									other	****
							Contributed		comprehensive	****
	Common shares			Pre-funded warrants			surplus	Deficit	income	Total
	Units	****		Units	****					$
Shareholders’ equity as at August 31, 2021	61,669		42,834,982	—		—	7,861,405	(17,559,766)	388,566	33,525,187
Total comprehensive loss	—		—	—		—	—	(13,111,785)	309,105	(12,802,680)
Securities issuance, net of transaction costs of nil [note 19]	696		606,609	—		—	—	—	—	606,609
Share-based compensation [note 20]	—		—	—		—	2,699,481	—	—	2,699,481
Shareholders’ equity as at August 31, 2022	62,365		43,441,591	—		—	10,560,886	(30,671,551)	697,671	24,028,597
Total comprehensive loss	—		—	—		—	—	(20,877,186)	334,957	(20,542,229)
Securities issuance – options exercised	427		175,699	—		—	(12,239)	—	—	163,460
Securities issuance, net of transaction costs of 800,744 [note 19]	20,003		6,778,427	—		—	—	—	—	6,778,427
Share-based compensation [note 20]	—		—	—		—	1,136,182	—	—	1,136,182
Shareholders’ equity as at August 31, 2023	82,795		50,395,717	—		—	11,684,829	(51,548,737)	1,032,628	11,564,437
Total comprehensive loss	—		—	—		—	—	(14,060,620)	94,420	(13,966,200)
Securities issuance – preferred shares converted	11,642		301,997	—		—	—	—	—	301,997
Securities issuance – warrants exchanged	41,858		2,406,645	475		38,725	—	—	—	2,445,370
Securities issuance, net of transaction costs of 246,298 [note 19]	27,108		2,278,395	—		—	—	—	—	2,278,395
Share-based compensation - warrants [note 20]	—		—	—		—	175,236	—	—	175,236
Share-based compensation – stock options [note 20]	—		—	—		—	220,752	—	—	220,752
Shareholders’ equity as at August 31, 2024	163,403		55,382,754	475		38,725	12,080,817	(65,609,357)	1,127,048	3,019,987

All values are in US Dollars.

See accompanying notes

F-5

Vision Marine Technologies Inc.

Consolidated statements of comprehensive loss

[Going concern uncertainty – see note 2]

Year ended August 31,


	****	2024	****	2023	****	2022
		$		$		$
Revenues [note 21]		3,794,345		5,651,502		7,350,946
Cost of sales [note 7]		2,296,907		4,115,076		4,065,381
Gross profit		1,497,438		1,536,426		3,285,565
		****
Expenses		****
Research and development [note 18]		2,739,022		5,704,912		2,242,794
Office salaries and benefits [note 18]		3,307,420		4,014,181		3,335,799
Selling and marketing expenses		2,021,930		3,470,772		1,972,306
Professional fees		3,251,172		3,764,465		3,590,816
Office and general		2,360,816		3,100,024		1,949,583
Share-based compensation [note 20]		220,752		1,136,182		2,699,481
Impairment loss on debentures [note 8]		—		2,637,000		—
Depreciation and amortization		830,876		588,957		268,490
Goodwill impairment loss [note 5]		8,704,182		—		—
Gain on deconsolidation of subsidiary [note 30]		(175,589)		—		—
Net finance (income) expense [note 23]		(7,480,761)		(1,604,536)		223,660
Other expense (income)		33,701		(117,470)		(143,922)
		15,813,521		22,694,487		16,139,007
Loss before tax		(14,316,083)		(21,158,061)		(12,853,442)
Income taxes [note 24]		****
Current tax expense (recovery)		9,913		(70,607)		182,854
Deferred tax expense (recovery)		(265,376)		(210,268)		75,489
		(255,463)		(280,875)		258,343
Net loss for the period		(14,060,620)		(20,877,186)		(13,111,785)
		****
Items of comprehensive income that will be subsequently reclassified to earnings:		****
Foreign currency translation differences for foreign operations, net of tax		94,420		334,957		309,105
Other comprehensive income, net of tax		94,420	****	334,957	****	309,105
Total comprehensive loss for the year, net of tax		(13,966,200)		(20,542,229)		(12,802,680)
		****
Weighted average shares outstanding		91,529		69,587		61,961
Basic and diluted loss per share		(153.62)		(300.02)		(211.61)

See accompanying notes

F-6

Vision Marine Technologies Inc.

Consolidated statements of cash flows

[Going concern uncertainty – see note 2]

Year ended August 31,


	****	2024	****	2023	****	2022
		$		$		$
Operating activities
Net loss		(14,060,620)		(20,877,186)		(13,111,785)
Depreciation		1,022,437		1,060,897		955,513
Accretion on long-term debt and lease liability		161,930		166,719		157,270
Share-based compensation – options and warrants		395,988		1,136,182		2,699,481
Shares issued for services		1,262,934		1,670,415		596,608
Net loss on debentures		—		2,435,000		330,000
Goodwill impairment loss [note 5]		8,704,182		—		—
Transaction costs – Preferred Shares [note 17]		1,535,627		—		—
Loss on disposal of property and equipment		199,224		173,375		—
Interest income received		—		—		85,000
Income tax expense		(255,463)		(280,875)		258,343
Income tax paid		(9,219)		(14,040)		(373,196)
Income tax recovered		8,802		—		—
Gain on derivative liabilities		(12,081,094)		(1,770,689)		—
Loss on securities exchange		1,715,543		—		—
Loss on warrant re-pricing		887,827		—		—
Gain on deconsolidation of subsidiary [note 30]		(175,589)		—		—
Gain on lease termination		(168,030)		(50,329)		(5,652)
Effect of exchange rate fluctuation		(42,279)		49,670		17,398
		(10,897,800)		(16,300,861)		(8,391,020)
Net change in non-cash working capital items		****
Trade and other receivables		253,232		(78,288)		(152,808)
Provision for onerous contracts		—		91,667		—
Inventories		(3,778,018)		(351,778)		(117,692)
Grants and investment tax credits receivable		—		681,663		(573,361)
Other financial assets		25,101		4,121		(85,597)
Prepaid expenses		(215,317)		498,710		(1,927,459)
Trade and other payables		3,075,003		724,569		182,277
Contract liabilities		(59,256)		786,413		130,605
Other financial liabilities		(45,149)		(64,139)		(61,764)
Cash used in operating activities		(11,642,204)		(14,007,923)		(10,996,819)
		****
Investing activities		****
Proceeds from sale of subsidiary [note 30]		1,089,302		—		—
Additions to property and equipment		(536,946)		(938,802)		(1,175,931)
Proceeds from the disposal of property and equipment		126,568		401,782		243,630
Additions to intangible assets		(63,316)		—		(32,202)
Cash provided by (used in) investing activities		615,608		(537,020)		(964,503)
		****
Financing activities		****
Increase (Decrease) in credit facility		(155,000)		155,000		—
Addition in long-term debts		527,000		258,000		282,424
Repayment of long-term debt		(419,449)		(207,607)		(135,230)
Advances from related parties		101,883		—		176,771
Issuance of Convertible Preferred Shares and Warrants [note 17]		6,545,298		—		—
Issuance of Voting Common Shares and Warrants – net of transaction costs [note 19]		1,781,194		12,437,523		—
Shares issued upon options conversion		—		163,461		10,001
Repayment of lease liabilities		(650,461)		(726,893)		(695,749)
Cash provided by (used in) financing activities		7,730,465		12,079,484		(361,783)
Net decrease in cash during the year		(3,296,131)		(2,465,459)		(12,323,105)
Cash, beginning of year		3,359,257		5,824,716		18,147,821
Cash, end of year		63,126		3,359,257		5,824,716

See accompanying notes

F-7

Table of Contents

Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024

1. Incorporation and nature of business

Vision Marine Technologies Inc. [the “Company”] was incorporated on August 29, 2012 and its principal business is to manufacture and sell or rent electric boats. The Voting Common Shares of the Company are listed under the trading symbol “VMAR” on Nasdaq.

The Company is incorporated in Canada and its head office and registered office is located at 730 Curé-Boivin boulevard, Boisbriand, Quebec, J7G 2A7.

Business seasonality

The Company’s operating results generally vary from quarter to quarter as a result of changes in general economic conditions and seasonal fluctuations, among other things, in each of its reportable segments. This means the Company’s results in one quarter are not necessarily indicative of how the Company will perform in a future quarter.

Sale of electric boats

The sale of electric boats segment has a seasonal aspect to its operations. Most customers purchase their electric boats from the Company with the intention of utilizing them during the summer period which typically runs from early June to late August and corresponds to the Company’s fourth quarter of a financial year. As such, the revenues in this operating segment fluctuate based on the level of boat deliveries, with a high and a low in the fourth quarter and the first quarter, respectively.

Rental of electric boats

Revenue generated by the rental of electric boats segment also has a seasonal aspect to its operations. Boat rental as an activity is highly sought by customers when the weather is milder, which is typically the case during the period from May to August. A colder-than-expected or rainier summer in any given year could have an impact on the segment’s revenues and hence on its profitability. Revenue from the boat club memberships is not impacted by seasonality as the memberships are typically on an annual basis.

2. Basis of preparation and going concern uncertainty

Compliance with IFRS

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards [“IFRS”] as issued by the International Accounting Standards Board [“IASB”] and interpretations issued by the International Financial Reporting Interpretations Committee [“IFRIC”] in effect on August 31, 2024.

The consolidated financial statements were authorized for issue by the Board of Directors on December 2, 2024.

Going concern uncertainty

As of August 31, 2024, the Company has cash of $63,126 and working capital of $2,888,660. The Company has incurred recurring losses, has not yet achieved profitable operations and has a deficit of $65,609,357 since its inception. The cash flows from operations were negative for the three years ended August 31, 2024. Additional financing will be needed by the Company to fund its operations and to commercialize the E-Motion powertrain business. These matters, when considered in aggregate, indicate the existence of a material uncertainty that raises substantial doubt about the Company’s ability to continue as a going concern for at least 12 months from the issuance of these consolidated financial statements. In view of these matters, continuation as a going concern is dependent upon the continued operations of the Company which will be determined by the Company’s ability to meet its financial requirements, including its ability to raise additional capital. F-8

Table of Contents

Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024

The Company is evaluating several different strategies and is actively pursuing actions that are expected to increase its liquidity position, including, but not limited to, pursuing additional cost savings initiatives and seeking additional financing from both the public and private markets through the issuance of equity securities. For the year ended August 31, 2024, the Company was able to raise net proceeds from issuance of shares of $8,326,492. However, the Company’s management cannot provide assurances that the Company will be successful in accomplishing any of its proposed financing plans. Management also cannot provide any assurance as to unforeseen circumstances that could occur within the next 12 months which could increase the Company’s need to raise additional capital on an immediate basis, which additional capital may not be available to the Company.

The accompanying consolidated financial statements have been prepared on a going concern basis, which assumes the Company will continue its operations for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. These consolidated financial statements as at and for the year ended August 31, 2024 do not include any adjustments to the carrying amounts and classification of assets, liabilities and reported expenses that may otherwise be required if the going concern basis was not appropriate. Such adjustments could be material.

Basis of consolidation

The consolidated financial statements include the accounts of the Company, and the subsidiaries that it controls. Control exists when the Company has the power over the subsidiary, when it is exposed or has rights to variable returns from its involvement with the subsidiary and when it has the ability to use its power to affect its returns. Subsidiaries that the Company controls are consolidated from the effective date of acquisition up to the effective date of disposal or loss of control.

Details of the Company’s significant subsidiaries at the end of the reporting period are set out below.

Name of subsidiary	Principal activity	Country of<br>incorporation and <br>operation	Proportion of<br>ownership held by the <br>Company
7858078 Canada Inc.	Owns an electric boat rental center	Canada	100%
EB Rental, Ltd.	Operates an electric boat rental center	United States	nil
EB Rental Ventura Corp.	Operates an electric boat rental center	United States	100%
EB Rental FL Corp.	Operates an electric boat rental center	United States	100%
EBR Palm Beach Inc.	Operates an electric boat rental center	United States	100%
Vision Marine Technologies Corp.	Operates an electric boat service center	United States	100%

On April 25, 2024, the Company disposed of its 100% ownership in EB Rental Ltd., which was deconsolidated at that date. See note 30 for details.

Use of estimates and judgments

The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management’s best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates. Areas where estimates are significant to the consolidated financial statements are disclosed in note 4.

Reverse stock splits

On August 22, 2024, the Company implemented a reverse stock split, consolidating every 15 Voting Common Shares into 1 Voting Common Share. On October 8, 2024, the Company implemented a subsequent reverse stock split, consolidating every 9 Voting Common Shares into 1 Voting Common Share. In accordance with IFRS, all references to common shares, Pre-Funded Warrants, Series A and B Convertible Preferred Shares, warrants and options have been adjusted to reflect both reverse stock splits, despite the fact that the latter occurred in the subsequent period. Comparative references to the above have also been adjusted to reflect the two reverse stock splits. F-9

Table of Contents

Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024

3. Significant accounting policies

Cash and cash equivalents

Cash and cash equivalents include cash on hand, cash held on trust, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less.

Trade and other receivables

Trade receivables are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30 days.

The Company has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance. To measure the expected credit loss, trade receivables have been grouped based on days overdue.

Other receivables are recognized at amortized cost, less any allowance for expected credit loss.

Inventories

Inventories are stated at the lower of cost and net realizable value. Raw materials are valued on a first-in first-out basis. Cost of work in progress and finished goods comprises direct materials and delivery costs, direct labour, import duties and other taxes, and appropriate proportion of variable and fixed overhead expenditure based on normal operating capacity. Cost of purchased inventory is determined after deducting rebates and discounts received or receivable.

Net realizable value is the estimated selling price in the ordinary course of business less estimated costs of completion and the estimated costs necessary to make the sale.

Grants and investment tax credits

Government grants are recognized where there is reasonable assurance that the grant will be received, and all attached conditions will be complied with. When the grant relates to an expense item, it is recognized as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. Where retention of a government grant is dependent on the Company satisfying certain criteria, it is initially recognized as deferred income. When the criteria for retention have been satisfied, the deferred income balance is released to the statement of consolidated comprehensive loss or netted against the asset purchased.

Leases

Right-of-use assets

The Company recognizes right-of-use assets at the commencement date of the lease [i.e., the date the underlying asset is available for use]. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless the Company is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognized right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term ranging from two to six years. Right-of-use assets are subject to impairment. F-10

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Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024

Lease liabilities

At the commencement date of the lease, the Company recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments [including in-substance fixed payments] less any lease incentives receivable and variable lease payments that depend on an index or a rate. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating a lease, if the lease term reflects the Company exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognized as expense in the period on which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Company uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. Interest accretion is recorded as interest expense in finance costs. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset.

Short-term leases and leases of low-value assets

The Company applies the short-term lease recognition exemption to its short-term leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option. It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered of low value [i.e., below $5,000]. Lease payments on short-term leases and leases of low-value assets are recognized as expense on a straight-line basis over the lease term. For the year-ended August 31, 2024, the expense for leases of low-value assets is insignificant.

Property and equipment

Property and equipment is stated at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes expenditures that are directly attributable to the acquisition of the asset.

Depreciation is recorded to recognize the cost of assets over their useful lives. The estimated useful lives and depreciation methods are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

Asset type	Methods	Rates
Computer equipment	Declining balance method	55%
Machinery and equipment	Declining balance method	20%
Rolling stock	Declining balance method	30%
Leasehold improvements	Straight-line method	Over the term of the lease
Boat rental fleet	Straight-line method	15 years
Moulds	Straight-line method	25 years

Any item of property and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales and proceeds and the carrying amount of the asset and is recognized in profit or loss.

Repairs and maintenance costs that do not improve or extend productive life are recognized in profit or loss in the period in which the costs are incurred. F-11

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Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024

Intangible assets and goodwill

Expenditure on research activities is recognized in net earnings as incurred.

Development expenditure is capitalized only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Company intends to and has sufficient resources to complete development and to use or sell the asset. Otherwise, it is recognized in net earnings as incurred. The Company has not capitalized any development costs. When awarded with government grants and income tax credits, the Company recognizes the income either in net loss, netted with the related expenses, or as a reduction of the cost, when related with capitalized development expenditure.

Goodwill arising from business combinations is initially recognized when the fair value of the separately identifiable assets the Company acquired and liabilities the Company assumed is lower than the consideration paid [including the recognized amount of the non-controlling interest, if any]. If the fair value of the consideration transferred is lower than that of the separately identified assets and liabilities, the Company immediately recognizes the difference as a gain in the consolidated statement of comprehensive loss.

Other intangible assets, including intellectual property, software, trade name, backlog and website that have finite useful lives are measured at cost less accumulated amortization and accumulated impairment losses.

Amortization is calculated over the cost of the asset less its residual value. Amortization is recognized in net earnings on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use. The estimated useful lives are as follows:

Asset type	Methods	Rates
Intellectual property	Straight-line method	10 years
Software	Straight-line method	7 years
Trade name	Straight-line method	5 years
Backlog	Straight-line method	3 years
Website	Straight-line method	5 years

Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

Impairment of non-financial assets

Non-financial assets other than goodwill

At the end of each reporting period, the Company reviews the carrying amounts of its non-financial assets, other than goodwill, to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is estimated. Where it is not possible to estimate the recoverable amount of an individual asset, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets [the “cash-generating unit”, or “CGU”].

Recoverable amount is the greater of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. If the recoverable amount of an asset or CGU is lower than its carrying amount, the carrying amount is reduced to its recoverable amount. An impairment loss is recognized immediately in the consolidated statement of comprehensive loss.

Where an impairment loss subsequently reverses, the carrying amount of the asset or CGU is increased to the revised recoverable amount, to the extent that the carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized. A reversal of an impairment loss is recognized immediately in the consolidated statement of comprehensive loss. F-12

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Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024

Goodwill

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For purposes of impairment testing, goodwill is allocated to each of the Company’s CGU [or groups of CGUs] that is expected to benefit from the synergies of the combination. A CGU to which goodwill has been allocated is tested for impairment annually, or more frequently when there is indication that the CGU may be impaired. If the recoverable amount of the CGU is less than its carrying amount, the impairment loss is allocated first to reduce the goodwill allocated to the CGU and then, to reduce the carrying amounts of the other assets in the CGU on a pro-rata basis. Any impairment loss is recognized in the consolidated statement of comprehensive loss. An impairment loss recognized for goodwill is not reversed in subsequent periods.

Trade and other payables

These amounts represent liabilities for goods and services provided to the entity prior to the end of the financial year and which are unpaid. Due to their short-term nature, they are measured at amortized cost and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.

Provisions

Provisions are recognized when the Company has a present obligation as a result of a past event, it is probable the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. If the time value of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The increase in the provision resulting from the passage of time is recognized as a finance cost.

Onerous contracts

An onerous contract is a contract under which the unavoidable costs (i.e., the costs that the Company cannot avoid because it has the contract) of meeting the obligations under the contract exceed the economic benefits expected to be received under it. The unavoidable costs under a contract reflect the least net cost of exiting from the contract, which is the lower of the cost of fulfilling it and any compensation or penalties arising from failure to fulfil it. The cost of fulfilling a contract comprises the costs that relate directly to the contract (i.e., both incremental costs and an allocation of costs directly related to contract activities).

When the Company has a contract that is onerous, the present obligation under the contract is recognized and measured as a provision. However, before a separate provision for an onerous contract is established, the Company recognizes any impairment loss that has occurred on assets used in fulfilling the contract.

Fair value measurement

When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; and assumes that the transaction will take place either: in the principal market; or in the absence of a principal market, in the most advantageous market.

Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the fair value measurement. F-13

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Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024

Financial instruments

Classification and measurement of financial instruments

The Company measures its financial assets and financial liabilities at fair value on initial recognition, which is typically the transaction price unless a financial instrument contains a significant financing component. Subsequent measurement is dependent on the financial instrument’s classification which in the case of financial assets, is determined by the context of the Company’s business model and the contractual cash flow characteristics of the financial asset. Financial assets are classified into two categories: [1] measured at amortized cost and [2] fair value through profit and loss [“FVTPL”]. Financial liabilities are subsequently measured at amortized cost at the effective interest rate, other than financial liabilities that are measured at FVTPL or designated as FVTPL where any change in fair value resulting from an entity’s own credit risk is recorded as other comprehensive income [“OCI”].

The Company assesses the classification of warrants to purchase common shares of the Company, whether the warrants issued meet the criteria of an equity instrument (i.e. the warrants would be settled by the issuance of fixed number of common shares of the Company at a fixed exercise price) or a financial liability. Since the exercise price of these warrants is denominated in U.S. dollars, while the functional currency of the Company is Canadian dollar, the value of the proceeds on exercise of the warrants is not fixed and will vary based on the foreign exchange rate movements. As such, the Company classified the warrants, other than warrants issued as compensation for goods and services, as derivative liabilities, measured at fair value at initial recognition and at each reporting period. Any changes in fair value are recorded as gain or loss in the consolidated statement of comprehensive loss. Refer to note 20 and 26 for details on the warrants issued and outstanding for the year ended August 31, 2024, the derivative liabilities recorded and the assumptions used to determine the fair value.

The Company assesses the classification of the Series A and B Convertible Preferred Shares of the Company, whether these securities meet the criteria of an equity instrument (i.e. they would be settled by the issuance of fixed number of common shares of the Company upon conversion) or a financial liability. Since the conversion price of these securities is denominated in U.S. dollars, while the functional currency of the Company is Canadian dollar, the number of common shares to be issued on conversion is not fixed and will vary based on the foreign exchange rate movements. As such, the Company classified the Series A and B Convertible Preferred Shares as derivative liabilities, measured at fair value at initial recognition and at each reporting period. The fair value gain or loss determined at the initial recognition date of these securities is amortized over the period between the initial recognition date and the forced conversion date. Any subsequent changes in fair value are recorded as gain or loss in the consolidated statement of comprehensive loss. Refer to notes 17 and 26 for details on the Series A and B Convertible Preferred Shares issued and outstanding for the year ended August 31, 2024, the derivative liabilities recorded and the assumptions used to determine the fair value.

Amortized cost

The Company classifies trade and other receivables, other financial assets, trade and other payables, other financial liabilities, long-term debt and advances to/from related parties as financial instruments measured at amortized cost. The contractual cash flows received from the financial assets are solely payments of principal and interest and are held within a business model whose objective is to collect the contractual cash flows.

Fair value through profit and loss

The Company classifies debentures as financial instruments measured at fair value through profit and loss since the contractual cash flows received from the financial asset are not solely payments of principal and interest.

Impairment of financial assets

The Company recognizes a loss allowance for expected credit losses on financial assets measured at amortized cost. The measurement of the loss allowance depends upon the Company’s assessment at the end of each reporting period as to whether the financial instrument’s credit risk has increased significantly since initial recognition, based on reasonable and supportable information that is available, without undue cost or effort to obtain. Where there has not been a significant increase in exposure to credit risk, a 12-month expected credit loss F-14

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Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024

allowance is estimated. The amount of expected credit loss recognized is measured on the basis of the probability weighted present value of anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate. Impairment provisions for current and non-current trade receivables are recognized based on the simplified approach within IFRS 9 using a provision matrix in the determination of the lifetime expected credit losses.

Equity instruments

Financial instruments issued by the Company are classified as equity only to the extent that they do not meet the definition of a financial liability or financial asset. An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received, net of direct issuance costs.

The Company’s common shares and Pre-Funded Warrants are classified as equity instruments.

Revenue recognition

Revenue is recognized at an amount that reflects the consideration to which the Company is expected to be entitled in exchange for transferring goods or services to a customer. For each contract with a customer, the Company:

●	identifies the contract with the customer;
●	identifies the performance obligations in the contract;
---	---
●	determines the transaction price which takes into account estimates of variable consideration and the time value of money;
---	---
●	allocates the transaction price to separate performance obligations on the basis of relative stand-alone selling price of each distinct good or service to be delivered; and,
---	---
●	recognizes revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods or services promised.
---	---

The Company enters into contracts with customers, as well as distributor agreements with specific distributors for the sale of boats.

Sale of boats

Revenue from the sale of boats, including incidental shipping fees, is recognized at the point in time when the customer obtains control of the goods, which is generally at the shipping point. In the context of its distributor agreements, control is passed at the shipping point to the distributor as the Company has no further performance obligations at that point. The Company concluded that it is the principal in its revenue arrangements, because it typically controls the boats before transferring them to the customer. The amount of consideration the Company receives, and the revenue recognized varies with volume rebate programs offered to distributors. When the Company offers retrospective volume rebates, it estimates the expected volume rebates based on an analysis of historical experience, to the extent that it is highly probable that a significant reversal will not occur. The Company adjusts its estimate of revenue related to volume rebates at the earlier of when the most likely amount of consideration expected to be received changes or when the consideration becomes fixed.

The Company recognizes customer deposits on the sale of boats as contract liabilities.

Boat rental and boat club membership revenue

Revenue from boat rentals is recognized at a point in time when the services are completed given the short term rental period. Boat club membership revenue is recognized over time as the service is provided. These services are typically provided, and thus revenue is typically recognized, on a monthly basis.

The Company recognizes customer prepayments on boat rentals and boat club memberships as contract liabilities. F-15

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Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024

Sale of parts and boat maintenance

Revenue from the sale of parts and related maintenance services are recognized at the point in time when the customer obtains control of the parts and when services are completed.

Other

Other revenue is recognized when it is received or when the right to receive payment is established.

Contract liabilities

A contract liability is recognized if a payment is received, or a payment is due [whichever is earlier] from a customer before the Company transfers the related goods or services. Contract liabilities are recognized as revenue when the Company performs under the contract [i.e., transfers control of the related goods or services to the customer].

Share-based payments

The Company has a share option plan for key employees, consultants, advisors, officers and directors from which options to purchase common stock of the Company are issued. The Company also issues warrants to non-employees granting the right to purchase common stock of the Company at a determined exercise price. Share-based compensation costs are accounted for on a fair value basis, as measured at the grant date, using the Black-Scholes option pricing model taking into account the terms and conditions upon which the options were granted. An individual is classified as an employee when the individual is an employee for legal or tax purposes or provides services similar to those performed by an employee. In situations where options or warrants have been issued to non-employees and some or all of the services received by the Company can be specifically identified, the options or warrants are measured at the fair value of the services received. If the services cannot be specifically identified, the options or warrants are measured at the fair value of the options issued.

All share-based remuneration is ultimately recognized as an expense in profit or loss with a corresponding credit to contributed surplus. If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options expected to vest. Any adjustment to cumulative share-based compensation resulting from a revision is recognized in the current period. The number of vested options ultimately exercised by holders does not impact the expense recorded in any period.

Foreign currency translation

The Company’s consolidated financial statements are presented in Canadian dollars, which is also the parent company’s functional currency. The functional currency of 7858078 Canada Inc. is the Canadian dollar while the functional currencies for EB Rental, Ltd., EB Rental Ventura Corp., EB Rental FL Corp., EBR Palm Beach Inc. and Vision Marine Technologies Corp. are the US dollar. The Company and its subsidiaries each determine their functional currency based on the currency of the primary economic environment in which they operate. Transactions denominated in a currency other than the functional currency of an entity are translated at the exchange rate in effect on the transaction date. The resulting exchange gains and losses are included in each entity’s net loss in the period in which they arise.

The Company’s foreign operations are translated to the Company’s presentation currency, for inclusion in the consolidated financial statements. Foreign-denominated monetary and non-monetary assets and liabilities of foreign operations are translated at exchange rates in effect at the end of the reporting period and revenue and expenses are translated at exchange rates in effect at the transaction date. The resulting translation gains and losses are included in other comprehensive income with the cumulative gain or loss reported in accumulated other comprehensive income. On disposal of a foreign operation, the component of OCI relating to that particular foreign operation is reclassified to profit or loss. F-16

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Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024

The exchange rates for the currencies used in the preparation of the consolidated financial statements were as follows:


		Exchange rate as at				Average exchange rate for year ended
	****	August 31,	****	August 31,	****	August 31,	****	August 31,
		2024		2023		2024		2023
US dollar	****	1.3491	****	1.3535	****	1.3601	****	1.3465

Taxes

Tax expense comprises current and deferred tax. Tax is recognized in net loss except to the extent it relates to items recognized in other comprehensive income or directly in equity.

Current tax

Current tax expense is based on the results for the period as adjusted for items that are not taxable or not deductible. Current tax is calculated using tax rates and laws that were enacted or substantively enacted at the end of the reporting period. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities.

Deferred tax

Deferred taxes are the taxes expected to be payable or recoverable on differences between the carrying amounts of assets in the statement of financial position and their corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences between the carrying amounts of assets and their corresponding tax bases. Deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized. Such assets and liabilities are not recognized if the temporary difference arises from the initial recognition of goodwill or from the initial recognition [other than in a business combination] of other assets in a transaction that affects neither the taxable profit nor the accounting profit.

The Company offsets deferred tax assets and deferred tax liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realize the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

Earnings per share

Basic earnings per share is calculated by dividing the profit or loss attributable to equity holders of the Company by the weighted average number of common stock outstanding during the year.

Diluted income per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of common stock outstanding, adjusted for the effects of all dilutive potential common stock. For the purpose of calculating diluted earnings per share, the Company assumes the exercise of dilutive options and warrants of the entity. The assumed proceeds from these instruments are regarded as having been received from the issue of common stock at the average market price of common shares during the period. The difference between the number of common shares issued and the number of common shares that would have been issued at the average market price of common shares during the period is treated as an issue of common shares for no consideration. F-17

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Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024

Standards issued but yet not effective

The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Company’s financial statements are disclosed below. The Company intends to adopt these new and amended standards and interpretations, if applicable, when they become effective.

Amendments to IFRS 16: Lease Liability in a Sale and Leaseback

In September 2022, the IASB issued amendments to IFRS 16, Leases, to specify the requirements that a seller- lessee uses in measuring the lease liability arising in a sale and leaseback transaction, to ensure the seller-lessee does not recognize any amount of the gain or loss that relates to the right of use it retains. The amendments are effective for annual reporting periods beginning on or after 1 January 2024 and must applied retrospectively to sale and leaseback transactions entered into after the date of initial application of IFRS 16. The amendments are not expected to have a material impact on the Company’s consolidated financial statements.

Amendments to IAS 1: Classification of Liabilities as Current or Non-current

In January 2020 and October 2022, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as current or non-current. The amendments clarify:

●	What is meant by a right to defer settlement
●	That a right to defer must exist at the end of the reporting period
---	---
●	That classification is unaffected by the likelihood that an entity will exercise its deferral right
---	---
●	That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification
---	---

In addition, a requirement has been introduced to require disclosure when a liability arising from a loan agreement is classified as non-current and the entity’s right to defer settlement is contingent on compliance with future covenants within twelve months. The amendments are effective for annual reporting periods beginning on or after 1 January 2024 and must be applied retrospectively.

This will result in reclassification of the Company's derivative liabilities from long-term to short-term liabilities [note 17].

Amendments to IAS 7 and IFRS 7: Supplier Finance Arrangements

The amendments clarify the characteristics of supplier finance arrangements and require additional disclosure of such arrangements. The disclosure requirements in the amendments are intended to assist users of financial statements in understanding the effects of supplier finance arrangements on an entity’s liabilities, cash flows and exposure to liquidity risk. The amendments are effective for annual reporting periods beginning on or after 1 January 2024 and must be applied retrospectively to sale and leaseback transactions entered into after the date of initial application of IFRS 16. The amendments are not expected to have a material impact on the Company’s consolidated financial statements.

Amendments to IAS 1 - Non-current liabilities with agreements

In October 2022, amendments to IAS 1 were issued to clarify that only covenants with which an entity must comply on or before the reporting date will affect a liability's classification as current or non-current. When noncurrent liabilities from loan arrangements are subject to future covenants, a company now needs to disclose information in the notes to help users of financial statements understand the risk that those liabilities could become repayable within 12 months after the reporting date. The amendments clarify that only covenants with which an entity must comply on or before the reporting date will affect a liability’s classification as current or non-current The amendments will be effective for annual reporting periods beginning on or after 1 January 2024. The amendments are not expected to have a material impact on the Company’s financial statements. F-18

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Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024

Amendments to IAS 21 - Effect of variations in exchange rates - Lack of interchangeability

In August 2023, the IASB issued amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates to specify how an entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate when exchangeability is lacking. The amendments also require disclosure of information that enables users of its financial statements to understand how the currency not being exchangeable into the other currency affects, or is expected to affect, the entity’s financial performance, financial position and cash flows. The amendments will be effective for annual reporting periods beginning on or after 1 January 2025. Early adoption is permitted but will need to be disclosed. When applying the amendments, an entity cannot restate comparative information. The amendments are not expected to have a material impact on the Company’s financial statements.

IFRS 18 Presentation and Disclosure in Financial Statements

In April 2024, the IASB issued IFRS 18, which replaces IAS 1 Presentation of Financial Statements. IFRS 18 introduces new requirements for presentation within the statement of profit or loss, including specified totals and subtotals. Furthermore, entities are required to classify all income and expenses within the statement of profit or loss into one of five categories: operating, investing, financing, income taxes and discontinued operations, whereof the first three are new. IFRS 18 also requires disclosure of newly defined management-defined performance measures, subtotals of income and expenses, and includes new requirements for aggregation and disaggregation of financial information based on the identified ‘roles’ of the primary financial statements and the notes. In addition, narrow-scope amendments have been made to IAS 7 Statement of Cash Flows, which include changing the starting point for determining cash flows from operations under the indirect method, from ‘profit or loss’ to ‘operating profit or loss’ and removing the optionality around classification of cash flows from dividends and interest. In addition, there are consequential amendments to several other standards. IFRS 18, and the amendments to the other standards, are effective for reporting periods beginning on or after 1 January 2027, but earlier application is permitted and must be disclosed. IFRS 18 will apply retrospectively. The Company is currently working to identify all impacts that the amendments will have on the primary financial statements and notes to the financial statements.

4. Significant accounting estimates and assumptions

The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and judgments are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual outcomes can differ from these estimates.

Going concern uncertainty

In assessing whether the going concern assumption is appropriate and whether there are material uncertainties that raise substantial doubt about the Company’s ability to continue as a going concern, management must estimate future cash flows for a period of at least twelve months following the end of the reporting period by considering relevant available information about the future. In addition, management must make assumptions about what actions it will take to increase the Company’s liquidity position. Given that it is difficult to adequately predict future cash flows and the Company’s ability to raise additional financing, management has concluded that there are material uncertainties related to events or conditions that raise substantial doubt upon the Company’s ability to continue as a going concern for at least the next twelve months.

Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The Company concluded the fair value less costs of disposal will yield a higher recoverable amount, which is based on a discounted cash flow (“DCF”) model. The fair value measurement is categorized within Level 3 of the fair value hierarchy. The cash flows are derived from cash flow projections over a 5-year period, including future investments and expansion activities that will enhance the performance of the assets of the CGU. F-19

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Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024

As at August 31, 2024, all of the Company’s goodwill is allocated to the boat rental operation CGU, which represents the lowest level within the Company at which the goodwill is monitored for internal management purposes. For the year ended August 31, 2024, the Company recorded a goodwill impairment loss of $8,704,182. See note 5 for details.

The recoverable amount is sensitive to the discount rate used for the DCF model, as well as the expected future cash-inflows, gross profit and the growth rate used for extrapolation purposes. The post-tax discount rate of 28% used in the DCF is based on a weighted average cost of capital calculated using observable market-based inputs or a benchmark of a sample of representative publicly traded companies. The long-term growth rate of 2% used for extrapolation purposes is based on published research growth rates. Any reasonable negative change in the key assumptions used could cause the carrying value of this CGU to exceed its recoverable amount.

Financial instruments measured at fair value

In measuring financial instruments at fair value, the Company makes estimates and assumptions, including estimates and assumptions about interest rates, credit spreads and other market conditions. Financial instruments measured at fair value include derivative liabilities [note 17] and investment in Limestone [note 8].

Provision for impairment of inventories

The provision for impairment of inventories assessment requires a degree of estimation and judgment. The level of the provision is assessed by taking into account the recent sales experience, the ageing of inventories and other factors that affect inventory obsolescence.

Income tax

Provisions for taxes are made using the best estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors. The Company reviews the adequacy of these provisions at the end of the reporting period. However, it is possible that at some future date an additional liability could result from audits by taxing authorities. Where the final outcome of these tax-related matters is different from the amounts that were initially recorded, such differences will affect the tax provisions in the period in which such determination is made.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

In assessing the recoverability of deferred tax assets, the Company relies on the same forecast assumptions used elsewhere in the financial statements and in other management reports, which, among other things, reflect the potential impact of climate-related development on the business.

Share-based payments

The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instrument at the date at which they are granted. The fair value is determined by using the Black-Scholes model taking into account the terms and conditions upon which the instruments were granted. Judgment is exercised in determining the expected life and historical volatility. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities but may impact profit or loss and equity. F-20

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Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024

Lease term

The lease term is a significant component in the measurement of both the right-of-use asset and lease liability. Judgment is exercised in determining whether there is reasonable certainty that an option to extend the lease will be exercised, when ascertaining the periods to be included in the lease term. In determining the lease term, all facts and circumstances that create an economical incentive to exercise an extension option are considered at the lease commencement date. The Company reassesses whether it is reasonably certain to exercise an extension option if there is a significant event or significant change in circumstances.

Incremental borrowing rate

Where the interest rate implicit in the lease cannot be readily determined, an incremental borrowing rate is estimated to discount future lease payments to measure the present value of the lease liability at the lease commencement date. Such a rate is based on what the Company estimates it would have to pay a third party to borrow the funds necessary to obtain an asset of a similar value to the right-of-use asset, with similar terms, security and economic environment.

5. Goodwill

On June 3, 2021, the Company completed the acquisition of EB Rental Ltd. [“EBR”] by acquiring all the issued and outstanding shares of 7858078 Canada Inc. EBR operates an electric boat rental operation located in Newport beach, California, with a fleet of over 20 ships. All boats operated by EBR are supplied by the Company, which offers the Company the ability to showcase its products and provide brand awareness. Before the acquisition, the Company and EBR were related through common ownership.

EBR was acquired for cash consideration of U.S.$4,582,367 ($5,546,039), financed entirely by the Company’s available cash on hand, and equity consideration of $3,474,232 representing 2,108 shares at U.S.$1,362.15 [approximately $1,648.35] per share.

Goodwill impairment test as at February 29, 2024

Assets that have an indefinite life, such as goodwill, are tested annually by the Company for impairment, or more frequently if events or circumstances indicate there may be impairment. During the three-month period ended February 29, 2024, the Company noted certain events and circumstances which indicated that there may be an impairment of the goodwill associated with its boat rental operation CGU (see detailed description below).

As a result of these triggering events and circumstances, the Company performed an impairment analysis for the boat rental operation CGU as at February 29, 2024. As a result of this analysis, the Company determined that the carrying amount of the goodwill associated with the boat rental operation CGU exceeded its recoverable amount and, accordingly, the Company recorded a goodwill impairment loss of $4,274,000 for the six-month period ended February 29, 2024. As a result of this loss, the carrying amount of the goodwill associated with this CGU had been reduced to $5,431,975 as at February 29, 2024 [August 31, 2023 - $9,680,941]. Note that the goodwill was further reduced to $4,430,182 on April 25, 2024 following the sale of EB Rental, Ltd. See note 29 for details.

The recoverable amount was determined based on the fair value less costs of disposal approach using a discounted cash flow model. The fair value measurement is categorized within Level 3 of the fair value hierarchy. The model included forecasted cash flows based on updated financial plans prepared by management covering a five-year period taking into consideration future investments and expansion activities that will enhance the performance of the assets of the CGU and the following key assumptions:

-	Expected earnings before interest, taxes, depreciation and amortization (“EBITDA”) as a percentage of revenues for the CGU of 12.7% for the remainder of 2024, 15.8% in 2025, 19.3% in 2026, 19.9% in 2027, 20.7% in 2028 and 21.5% in 2029 and thereafter.
-	Expected working capital cash absorption ratio for the CGU of 20% of annual incremental sales increases.
---	---
-	Expected annual capital expenditure needs for the CGU of US$56,500 for the remainder of 2024, US$126,000 in 2025, US$346,800 in 2026, US$594,259 in 2027, US$229,820 in 2028, US$234,310 in 2029 and US$238,876 annually thereafter.
---	---

F-21

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Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024

The discounted cash flow model was established using a post-tax discount rate of 28.0% based on the weighted average cost of capital calculated using observable market-based inputs or benchmark of a sample of representative publicly traded companies. The terminal growth rate of 2% used is based on published long-term growth rates.

Any reasonable negative change in these key assumptions could cause additional impairment of the CGU.

In prior periods, management had based its selection of assumptions upon its assessment of the ability of the CGU to maintain the levels of growth and profitability experienced during the COVID-19 pandemic, despite the unfavourable weather conditions experienced in its key markets over the course of the fiscal year ended August 31, 2023. However, continued unfavourable weather conditions and a recent general downturn in the boating industry have had a negative impact on the CGU’s revenues and EBITDA over the first six months of the current fiscal year. In addition, management’s attempts to sell all or a portion of the Company’s boat rental operation over the current quarter have been largely unsuccessful, indicating a possible decline in value of the CGU. Therefore, the impairment charge was the result of management’s revised assumptions related to revenues and the expected EBITDA as a percentage of sales taking into account the current economic environment.

Annual goodwill impairment test as at August 31, 2024

During the three-month period ended August 31, 2024, the Company conducted its annual impairment test on the carrying value of the goodwill associated with the boat rental operation CGU in accordance with the requirements under IFRS. As a result of this analysis, the Company determined that the carrying amount of the goodwill associated with the boat rental operation CGU exceeded its recoverable amount and, accordingly, the Company recorded an additional goodwill impairment loss of $4,430,182 for the fiscal year ended August 31, 2024, which was recognized during the three-month period ended August 31, 2024. As a result of this loss, the carrying amount of the goodwill associated with this CGU has been reduced to nil as at August 31, 2024 [August 31, 2023 - $9,680,941].

The recoverable amount was determined based on the fair value less costs of disposal approach using a discounted cash flow model. The fair value measurement is categorized within Level 3 of the fair value hierarchy. The model included revised forecasted cash flows based on updated financial plans prepared by management covering a five-year period taking into consideration the performance of the CGU since the previous impairment test conducted as at February 29, 2024. The following key assumptions were used:

-	Expected earnings before interest, taxes, depreciation and amortization (“EBITDA”) as a percentage of revenues for the CGU of -11% in 2025, 4% in 2026, and 10% in 2027 and thereafter.
-	Expected working capital cash absorption ratio for the CGU of 10% of annual incremental sales increases.
---	---
-	Expected annual capital expenditure needs for the CGU of US$185,000 in 2025, US$98,040 in 2026, US$47,000 in 2027, US$63,000 in 2028, US$71,000 in 2029 and US$71,680 annually thereafter.
---	---

The discounted cash flow model was established using a post-tax discount rate of 29.0% based on the weighted average cost of capital calculated using observable market-based inputs or benchmark of a sample of representative publicly traded companies. The terminal growth rate of 2% used is based on published long-term growth rates.

When reviewing the performance of the boat rental operation CGU since the sale of EB Rental, Ltd. (note 30), management revised its forecasted cash flows downward following disappointing results over the last two quarters at its rental locations, particularly at its Palm Beach, Florida location where the Company had projected strong EBITDA due to its unique revenue sharing model which was expected to generate greater margins then the Company’s other locations. Specifically, management revised downward the forecasted revenues and EBITDA in future periods due to continued unfavourable weather conditions, particularly in the peak summer months. It has now become more likely than not that such weather conditions will be the norm rather than an anomaly as was determined in the past. In addition, the boat rental operation at Palm Beach, Florida has also had to deal with more days of high winds and tides due to its closer proximity to the ocean which has resulted in its inability to operate on those days. Finally, the opening of the Dania Beach, Florida facility has been delayed by a further three months than previously forecasted which had a negative impact on the forecasted cash flows. Therefore, as a result of these new factors, management revised its assumptions related to revenues and the expected EBITDA as a percentage of sales which resulted in the goodwill impairment loss.

F-22

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Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024

6. Trade and other receivables


	****	2024	****	2023
		$		$
Trade receivables		26,222		59,364
Sales taxes receivable		104,270		159,114
Other receivables		8,164		332,358
		138,656		550,836

Trade receivable disclosed above include amounts that are past due at the end of the reporting period for which the Company has not recognized an allowance for expected credit losses because there has not been a significant change in credit quality and the amounts are still considered recoverable.

As at August 31, 2024, trade receivables of $26,222 [2023 – $59,364] were past due but not impaired. They relate to customers with no default history. The aging analysis of these receivables is as follows:


	****	2024	****	2023
		$		$
0 – 30		—		13,986
31 – 60		21,603		—
61 – 90		—		—
91 and over		4,619		45,378
		26,222		59,364

There were no movements in the allowance for expected credit losses for the fiscal years ended August 31, 2024 and August 31, 2023.

7. Inventories


	2024	2023
		$
Raw materials	5,456,935	1,553,501
Work-in-process	383,968	369,753
Finished goods	368,384	522,300
	6,209,287	2,445,554

All values are in US Dollars.

For the year ended August 31, 2024, inventories recognized as an expense amounted to $2,296,907 [2023 – $4,023,409; 2022 – $4,065,381].

For the year ended August 31, 2024, cost of sales includes depreciation of $190,618 [2023 – $471,940; 2022 - $687,023].

For the year ended August 31, 2024, prepaid expenses included deposits to suppliers for future inventory purchases of $1,780,430.

8. Investment in Limestone

On May 14, 2021, the Company subscribed for and purchased 3,400 senior unsecured subordinated convertible debentures of The Limestone Boat Company Limited [“Limestone”], a publicly traded company listed under the trading symbol “BOAT” on the TSX Venture Exchange [the “Debentures”], for an aggregate amount of $3,400,000.

The Debentures bear interest at a rate of 10% per annum, payable annually in arrears, and have a 36-month term [the “Term”]. The Debentures are convertible at any time at the option of the Company into common shares of Limestone [“Common Shares”] at a conversion price of $0.36 per Common Share [the “Conversion Price”]. If at any time following 120 days from the date of issuance of F-23

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Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024

the Debentures [the “Closing Date“] and prior to the date that is 30 days prior to the end of the Term, the volume weighted average closing price of the Common Shares on the TSX Venture Exchange, or such other exchange on which the Common Shares may be listed, is equal to or higher than $0.50 per Common Share for 20 consecutive trading days, Limestone may notify the Company that the Debentures will be automatically converted into Common Shares at the Conversion Price 30 days following the date of such notice.

The Debentures are carried at fair value through profit and loss and are considered as Level 2 financial instruments in the fair value hierarchy.

On January 20, 2023, Limestone announced that Limestone’s U.S. subsidiaries filed for voluntary petitions for relief under Chapter 7 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Middle District of Tennessee. As a result, the Company recorded an impairment on the entire value of the Debentures at the amount $2,637,000 for the year ended August 31, 2023 [2022 – nil].

For the year ended August 31, 2024, the Company recorded a loss of nil [2023 – $88,866; 2022 – $670,000] for the change in fair value of the Debentures and interest income of nil [2023 – $113,334; 2022 – $340,000] in net loss as a net financial income (expense).

On July 18, 2023, the Company agreed with Limestone to convert the Debentures into common shares of Limestone at a conversion price of $0.071, which was approved by the shareholders of Limestone and awaiting the issuance of the Company’s shareholder certificate. The Company maintained the fair value of its investment in Limestone at nil as at August 31, 2024.

9. Right-of-use assets


			Computer			Boat rental
	Premises	Moulds	equipment	Rolling stock	****	fleet	Total
				$			$
Cost
Balance at August 31, 2022	2,880,039	—	3,646	88,020		211,459	3,183,164
Additions	921,498	—	—	—		—	921,498
Disposals	—	—	—	(46,200)		(170,298)	(216,498)
Transferred to Property and equipment	—	—	(3,646)	—		(41,161)	(44,807)
Currency translation	38,255	—	—	2,099		—	40,354
Balance at August 31, 2023	3,839,792	—	—	43,919		—	3,883,711
Additions	—	67,432	—	170,037		—	237,469
Disposals	(2,186,552)	—	—	—		—	(2,186,552)
Deconsolidation on sale of subsidiary	(1,549,425)	—	—	(46,656)		—	(1,596,081)
Currency translation	9,433	—	—	1,113		—	10,546
Balance at August 31, 2024	113,248	67,432	—	168,413		—	349,093

Accumulated depreciation
Balance at August 31, 2022	822,407	—	2,878	20,315		76,464	922,064
Depreciation	615,937	—	768	23,934		21,442	662,081
Disposal	—	—	(3,646)	(13,475)		(97,906)	(115,027)
Balance at August 31, 2023	1,438,344	—	—	30,774		—	1,469,118
Depreciation	524,772	8,429	—	71,385		—	604,586
Disposal	(1,193,933)	—	—	—		—	(1,193,933)
Deconsolidation on sale of subsidiary	(748,972)	—	—	(42,513)		—	(791,485)
Balance at August 31, 2024	20,211	8,429	—	59,646		—	88,286
Net carrying amount
As at August 31, 2023	2,401,448	—	—	13,145		—	2,414,593
As at August 31, 2024	93,037	59,003	—	108,767		—	260,807

All values are in US Dollars.

F-24

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Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024

During the year ended August 31, 2023, the Company exercised a purchase option and paid in full a lease liability related to a computer and boat rental fleet that was previously included in the right-of-use assets. As a result, the Company transferred the assets to property and equipment assets at its net book value of $44,807 [note 10].

During the year ended August 31, 2024, the Company sold its subsidiary EB Rental, Ltd., which resulted in the deconsolidation of the subsidiary’s right-of-use assets. As a result, the Company deconsolidated right-of-use assets with a net book value of $804,596 [note 30].

10. Property and equipment


	****	Machinery	****		****		****		****		****
		and		Rolling		Computer				Leasehold		Boat	****
		equipment		stock		equipment		Moulds		improvements		rental fleet		Total
		$		$		$		$		$		$		$
Cost
Balance at August 31, 2022		333,084		118,664		21,032		911,924		264,356		971,477		2,620,537
Additions		62,409		69,029		565		30,501		97,699		678,599		938,802
Transferred from Right-of-use assets		—		—		3,646		—		—		41,161		44,807
Disposals		—		(136,072)		—		—		—		(499,770)		(635,842)
Currency translation		—		(2,347)		—		—		—		(70,115)		(72,462)
Balance at August 31, 2023		395,493		49,274		25,243		942,425		362,055		1,121,352		2,895,842
Additions		30,845	****	3,088	****	—	****	236,654	****	10,000	****	318,991	****	599,578
Transferred to Inventory		—		—		—		—		—		(154,912)		(154,912)
Disposals		—	****	(6,213)	****	—	****	(62,632)	****	—	****	(360,881)	****	(429,726)
Deconsolidation on sale of subsidiary		—	****	—	****	—	****	—	****	—	****	(635,327)	****	(635,327)
Balance at August 31, 2024		426,338	****	46,149	****	25,243	****	1,116,447	****	372,055	****	289,223	****	2,275,455

Accumulated depreciation
Balance at August 31, 2022		197,804		29,999		12,803		73,028		44,505		43,416		401,555
Depreciation		31,495		25,875		4,485		37,696		69,332		72,163		241,046
Disposal		—		(21,864)		—		—		—		(38,821)		(60,685)
Balance at August 31, 2023		229,299		34,010		17,288		110,724		113,837		76,758		581,916
Depreciation		38,522	****	4,574	****	4,374	****	40,949	****	101,665	****	67,908	****	257,992
Disposals		—	****	(3,655)	****	—	****	(728)	****	—	****	(37,646)	****	(42,029)
Transferred to Inventory		—		—		—		—		—		(21,394)		(21,394)
Deconsolidation on sale of subsidiary		—		—		—		—		—		(79,452)		(79,452)
Balance at August 31, 2024		267,821	****	34,929	****	21,662	****	150,945	****	215,502	****	6,174	****	697,033

Net carrying amount
As at August 31, 2023		166,194		15,264		7,955		831,701		248,218		1,044,594		2,313,926
As at August 31, 2024		158,517	****	11,220	****	3,581	****	965,502	****	156,553	****	283,049	****	1,578,422

As at August 31, 2024, moulds of nil [August 31, 2023 – $377,253] are not depreciated because they are not ready for use.

F-25

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Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024

11. Intangible assets


	****	Intellectual	****			****	Trade	****		****		****
		Property		Software	Patents		name		Backlog		Website		Total
		$		$	$		$		$		$		$
Cost
Balance at August 31, 2022		1,035,070		101,775	—		98,294		79,550		18,858		1,333,547
Currency translation		—		—	—		6,057		4,556		1,211		11,824
Balance at August 31, 2023		1,035,070		101,775	—		104,351		84,106		20,069		1,345,371
Additions		—	****	—	63,316	****	—	****	—	****	—	****	63,316
Currency translation		—	****	—	—	****	(862)	****	(604)	****	(172)	****	(1,638)
Balance at August 31, 2024		1,035,070	****	101,775	63,316	****	103,489	****	83,502	****	19,897	****	1,407,049

Accumulated depreciation
Balance at August 31, 2022		159,089		24,700	—		14,439		19,830		2,819		220,877
Depreciation		103,508		12,920	—		20,426		16,911		4,005		157,770
Balance at August 31, 2023		262,597		37,620	—		34,865		36,741		6,824		378,647
Depreciation		103,507	****	12,920	1,277	****	21,028	****	17,082	****	4,045	****	159,859
Balance at August 31, 2024		366,104	****	50,540	1,277	****	55,893	****	53,823	****	10,869	****	538,506

Net carrying amount
As at August 31, 2023		772,473	****	64,155	—	****	69,486	****	47,365	****	13,245	****	966,724
As at August 31, 2024		668,966	****	51,235	62,039	****	47,596	****	29,679	****	9,028	****	868,543

During the fiscal year ended August 31, 2024, the Company completed five patent applications for a cash consideration of $63,316.

12. Credit facility

The Company had an authorized line of credit of $250,000, renewable annually, bearing interest at prime rate plus 1%, secured by a first ranking movable hypothec of $750,000 on all present and future accounts receivable and inventory. Effective March 31, 2024, the line of credit was not renewed and closed. As at August 31, 2024, the Company has drawn an amount of nil [August 31, 2023 – $155,000] on the line of credit.

13. Trade and other payables


	****	2024	****	2023
		$		$
Trade payables		3,883,020		1,107,310
Sales taxes payable		—		62,398
Salaries, vacation and other employee benefits payables		614,488		585,192
		4,497,508		1,754,900

F-26

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Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024

14. Contract liabilities


	****	2024	****	2023
		$		$
Opening balance		1,815,731		1,029,318
Payments received in advance		924,913		3,330,235
Boat sale deposits		—		151,572
Payments reimbursed		—		(8,131)
Transferred to revenues		(997,224)		(2,718,943)
Deconsolidation on sale of subsidiary		(928,833)		—
Currency translation		13,055		31,680
Closing balance		827,642		1,815,731

15. Lease liabilities


	****	2024	****	2023
		$		$
Opening balance		2,641,794		2,415,549
Additions		237,469		921,498
Repayment		(650,461)		(726,893)
Interest on lease liability		116,170		139,132
Lease termination		(1,160,649)		(151,800)
Deconsolidation on sale of subsidiary		(937,427)		—
Currency translation		12,896		44,308
Closing balance		259,792		2,641,794
		****
Current		122,077		647,638
Non-current		137,715		1,994,156
		259,792		2,641,794

Future undiscounted lease payments as at August 31, 2024 are as follows:


		$
Less than one year	****	125,719
One to five years	****	147,878
	****	273,597

Included in rent expense is $915,532 of short-term lease expense [2023 – $127,511, 2022 - $58,663]. The lease liabilities have a weighted average interest rate of 5.01% [2023 – 5.79%, 2022 – 5.40%]. F-27

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Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024

16. Long-term debt


	2024	2023
		$
The government assistance loan is non-interest bearing until December 31, 2022 at which time the loan bears interest at 5% per annum. The loan must be repaid by December 31, 2025.	—	40,000


Term loans, bearing interest at rates varying between 9.44% and 13.87%, repayable in monthly instalments of 13,609, ending December 2026.	458,640	265,329

	458,640	305,329
Current portion of long-term debt	101,397	271,546
	357,243	33,783

All values are in US Dollars.

17. Derivative liabilities

Warrants issued to common shareholders

On January 19, 2023, as part of a share subscription*,* the Company issued warrants with the option to purchase 4,108 Voting Common Shares of the Company for a period of three years from the grant date at an original exercise price of U.S. $568.35 ($760.05).

On February 17, 2023, as part of a share subscription*,* the Company issued warrants with the option to purchase 3,520 Voting Common Shares of the Company for a period of three years from the grant date at an original exercise price of U.S. $568.35 ($765.45).

On April 19, 2023, as part of a share subscription*,* the Company issued warrants with the option to purchase 2,826 Voting Common Shares of the Company for a period of three years from the grant date at an original exercise price of U.S. $568.35 ($761.40).

On June 16, 2023, as part of a share subscription, the Company issued warrants with the option to purchase 3,659 Voting Common Shares of the Company for a period of three years from the grant date at an original exercise price of U.S. $546.75 ($722.25).

On August 2, 2023, as part of a share subscription, the Company issued warrants with the option to purchase 3,662 Voting Common Shares of the Company for a period of three years from the grant date at an original exercise price of U.S. $546.75 ($724.95).

On September 20, 2023, as part of a share subscription [note 19], the Company issued warrants with the option to purchase 2,763 Voting Common Shares of the Company for a period of three years from the grant date at an original exercise price of U.S. $546.75 ($734.40).

On December 13, 2023, the Company agreed to reduce the exercise price of 20,358 of its previously issued warrants to U.S. $141.75 ($191.23). For the fiscal year ended August 31, 2024, the Company recorded a loss of $896,458 related to the re-pricing of these instruments in net finance (income) expense [August 31, 2023 – nil] [note 23]. F-28

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Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024

The table below lists the assumptions used to determine the fair value of these warrant grants or issuances. Volatility is based on the historical share price volatility of the Company and other public companies with characteristics similar to the Company.

Issuance date	Original Exercise price	Market price	Expected volatility	Risk-free interest rate	Expected life
	$	$	%	%	[years]

January 19, 2023	760.05	760.05	100	3.4	3
February 17, 2023	765.45	816.75	100	4.0	3
April 19, 2023	761.40	749.25	75	3.9	3
June 16, 2023	722.25	742.50	75	4.1	3
August 2, 2023	724.95	688.50	75	4.8	3
September 20, 2023	734.40	594.00	75	4.8	3

Issuance date	Revised Exercise price	Number of warrants outstanding	Weighted average remaining contractual life
	$	#	[years]

January 19, 2023	191.23	4,108	1.39
February 17, 2023	191.23	3,520	1.47
April 19, 2023	191.23	2,826	1.63
June 16, 2023	191.23	3,659	1.79
August 2, 2023	191.23	3,662	1.92
September 20, 2023	191.23	2,763	2.05

As at August 31, 2024, the derivative liabilities related to the warrants issued to common shareholders amounted to $30,564 [August 31, 2023 – $5,558,822]. For the fiscal year ended August 31, 2024, the Company allocated transaction costs of $149,472 related to the warrants issued to common shareholders during the period, which were recorded in net finance (income) expense [August 31, 2023 – $718,546] [note 23].

The table below summarizes the movement in the derivative liabilities related to the warrants issued to common shareholders during the fiscal years ended August 31, 2024 and 2023:

	As at August 31, 2024	As at August 31, 2023
	$	$

Opening balance	5,558,822	—
Additions	765,733	7,614,510
Effect on fair value of repricing of warrants	896,458	—
Change in estimate of fair value	(7,190,449)	(2,055,688)
Closing balance	30,564	5,558,822

For the fiscal year ended August 31, 2024, the Company recorded a gain of $7,190,449 related to the valuation of these instruments in net finance (income) expense [August 31, 2023 – $2,055,688] [note 23].

Series A Convertible Preferred Shares

On December 13, 2023, the Company authorized the issuance of Series A Convertible Preferred Shares. This class of shares ranks senior to the Voting Common Shares but retains no voting rights. They have a stated value of US$1,000 per share and are convertible into Voting Common Shares of the Company at the election of the holder at any time at a price of US$141.75 per share, exercise price subject F-29

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Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024

to adjustment. The Series A Convertible Preferred Shares are convertible at the election of its holder into that number of Voting Common Shares determined by dividing its stated value (plus any and all other amounts which may be owing in connection therewith) by the exercise price, subject to certain beneficial ownership limitations which prohibit any holder from converting into an amount of Voting Common Shares that would cause such holder to beneficially own more than 4.99% of the then outstanding Voting Common Shares). On the one-year anniversary of the original issuance date, the Series A Convertible Preferred Shares will automatically convert into Voting Common Shares at the lesser of the then exercise price, and 80% of the average volume-weighted average price of the Company’s Voting Common Shares during the five trading days ending on, and including, such date. In no event shall the conversion price for the Series A Convertible Preferred Shares be less than US$40.50, subject to adjustment herein. The holder also receives 7 warrants to purchase Voting Common Shares per US$1,000 stated value of the Series A Convertible Preferred Shares held that are exercisable for a period of 5 years from the issuance date at a price of US$141.75 per share. In addition, the holder receives an option to purchase one additional Series A Convertible Preferred Share and 7 warrants to purchase Voting Common Shares per each Series A Convertible Preferred Share held for a period of 6 months from the issuance date at the stated value of US$1,000.

On December 21, 2023, the Company issued 3,000 Series A Convertible Preferred Shares and 21,169 warrants to purchase Voting Common Shares for a total cash consideration of $4,036,025 (US$3,000,000). For the fiscal year ended August 31, 2024, the Company incurred transaction costs of $615,306 related to this issuance, which were recorded in net finance (income) expense [August 31, 2023 – Nil] [note 23].

During the fiscal year ended August 31, 2024, 650 Series A Convertible Preferred Shares were converted into 11,642 Voting Common Shares at a value of $301,997 [Note 19].

On August 16, 2024, 21,169 warrants to purchase Voting Common Shares issued to Series A Convertible Preferred shareholders were exchanged for 41,858 Voting Common Shares and 475 Pre-Funded Warrants [Note 19]. As a result of this transaction, the Company recorded a loss of $1,715,543 in net finance (income) expense [August 31, 2023 – nil] [note 23] with a corresponding increase in Capital Stock [Note 19].

Given the variability associated with the various components of this instrument, these instruments were recorded as derivative liabilities and will be subject to fair value adjustments at the issuance date and at subsequent balance sheet dates. The fair value was determined using the Monte Carlo simulation run under the Geometric Brownian Motion. Since the fair value is based on valuation using unobservable market inputs, the Company did not recognize the loss on initial recognition. The difference between the fair value at initial recognition and the transaction price was deferred and is recognized over time based on the individual terms of each financial instrument. This difference determined was due to delays in negotiations, the changes in the capital market and the Company’s liquidity situation.

The table below summarizes the movement in the derivative liabilities related to the Series A Convertible Preferred Shares including the related warrants and option to purchase additional Series A Convertible Preferred Shares and related warrants during the fiscal years ended August 31, 2024 and 2023:

	As at August 31, 2024	As at August 31, 2023
	$	$

Opening balance	—	—
Fair value at issuance	12,744,593	—
Deferred loss at issuance	(8,737,194)	—
Revaluation at the end of the period	(10,336,357)	—
Amortization of the deferred loss during the period	7,325,187	—
Conversion to Voting Common Shares during the period [Note 19]	(301,997)	—
Closing balance	694,232	—

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Notes to the consolidated financial statements

August 31, 2024

For the fiscal year ended August 31, 2024, the Company recorded a gain of $3,011,170 related to the valuation of these instruments in net finance (income) expense [August 31, 2023 – nil] [note 23].

Series B Convertible Preferred Shares

On December 13, 2023, the Company authorized the issuance of Series B Convertible Preferred Shares. This class of shares ranks senior to the Voting Common Shares but retains no voting rights. They have a stated value of US$1,000 per share and are convertible into Voting Common Shares of the Company at the election of the holder at any time at a price of US$141.75 per share, exercise price subject to adjustment. The Series B Convertible Preferred Shares are convertible at the election of its holder into that number of Voting Common Shares determined by dividing its stated value (plus any and all other amounts which may be owing in connection therewith) by the exercise price, subject to certain beneficial ownership limitations which prohibit any holder from converting into an amount of Voting Common Shares that would cause such holder to beneficially own more than 4.99% of the then outstanding Voting Common Shares). On the one-year anniversary of the original issuance date, the Series B Convertible Preferred Shares will automatically convert into Voting Common Shares at the lesser of the then exercise price, and 80% of the average volume-weighted average price of the Company’s Voting Common Shares during the five trading days ending on, and including, such date. In no event shall the conversion price for the Series B Convertible Preferred Shares be less than US$40.75, subject to adjustment herein. The holder also receives 7 warrants to purchase Voting Common Shares per US$1,000 stated value of the Series B Convertible Preferred Shares held that are exercisable for a period of 5 years from the issuance date at a price of US$141.75 per share.

On January 17, 2024, the Company issued 3,000 Series B Convertible Preferred Shares and 21,165 warrants to purchase Voting Common Shares for a total cash consideration of $4,044,900 (US$3,000,000). For the fiscal year ended August 31, 2024, the Company incurred transaction costs of $839,195 related to this issuance, which were recorded in net finance (income) expense [August 31, 2023 – Nil] [note 23].

The table below summarizes the movement in the derivative liabilities related to the Series B Convertible Preferred Shares including the related warrants during the fiscal years ended August 31, 2024 and 2023:

	As at August 31, 2024	As at August 31, 2023
	$	$

Opening balance	—	—
Fair value at issuance	6,888,006	—
Deferred loss at issuance	(2,841,008)	—
Revaluation at the end of the period	(4,642,780)	—
Amortization of the deferred loss during the period	1,674,778	—
Accelerated amortization of the deferred loss during the period	376,598	—
Closing balance	1,455,594	—

For the fiscal year ended August 31, 2024, the Company recorded a gain of $2,591,404 related to the valuation of these instruments in net finance (income) expense [August 31, 2023 – nil] [note 23]. F-31

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Notes to the consolidated financial statements

August 31, 2024

With respect to the deferred loss at issuance, the portion of this balance that was applicable to the warrants issued to the Series B Convertible Preferred shareholders was written off completely at August 31, 2024 because the amount of the deferred loss balance at year-end exceeded the fair value attributable to these instruments at that date. As such, the Company recorded an accelerated loss of $376,598 on these warrants at August 31, 2024 [August 31, 2023 – Nil].

18. Related party transactions

Companies related through common ownership

EB Rental Ltd. [prior to June 3, 2021] [note 5]

7858078 Canada Inc. [prior to June 3, 2021] [note 5]

Montana Strategies Inc. [prior to April 25, 2024]

Strategies EB Inc. [prior to April 25, 2024] [note 30]

Key management personnel of the Company have control over the following entities

California Electric Boat Company Inc.

9335-1427 Quebec Inc.

9519-0682 Quebec Inc.

Hurricane Corporate Services Ltd.

Mac Engineering, SASU – Since February 16, 2021

Ultimate founder shareholders and their individually controlled entities

Alexandre Mongeon

Patrick Bobby

Robert Ghetti

Immobilier R. Ghetti Inc.

Société de Placement Robert Ghetti Inc.

The following table summarizes the Company’s related party transactions for the fiscal years ended August 31,:


	****	2024	****	2023	****	2022
		$		$		$
Expenses		****
Research and Development		****
Mac Engineering, SASU		2,759,362		545,892		666,178
		****
Office salaries and benefits		****
Montana Strategies Inc.		—		29,059		62,462

The Company leases its Boisbriand premises from California Electric Boat Company Inc. Prior to August 1, 2024, this lease was accounted for as a right-of-use asset and lease liability. However, on August 1, 2024, the lease was renegotiated for a one year term only and ceased to be accounted for as a right-of-use asset and lease liability. As such, as at August 31, 2024, the right-of-use asset for this lease was nil [August 31, 2023 – $1,270,955] and the lease liability was nil [August 31, 2023 – 1,395,732] [notes 9 and 15]. For the fiscal year ended August 31, 2024, rent expense of $22,446 [August 31, 2023 – nil] was recorded under the renegotiated lease. F-32

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Notes to the consolidated financial statements

August 31, 2024

Remuneration of directors and key management of the Company


	****	2024	****	2023	****	2022
		$		$		$
Wages		1,856,453		2,447,827		2,324,770
Share-based payments – capital stock		115,577		433,263		—
Share-based payments – stock options		141,797		382,196		2,560,031
		2,113,827		3,263,286		4,884,801

At the end of the year, the amounts due to and from related parties are as follows:


	****	2024	****	2023
		$		$
Share subscription receivable
9335-1427 Quebec Inc.		25,000		25,000
Alexandre Mongeon		14,200		14,200
		39,200		39,200
		****
Current advances to (from) related party		****
Alexandre Mongeon		(84,616)		20,135
		****
Amounts due to related parties included in trade and other payable		****
Alexandre Mongeon		86,152		19,384
Xavier Montagne		11,615		10,454
Raffi Sossoyan		11,500		—
Patrick Bobby		—		13,847
Kulwant Sandher		—		8,654
California Electric Boat Company		197,862		—
Mac Engineering, SASU		1,006,541		9,935
		1,313,670		62,274

Advances from related parties are non - interest bearing and have no specified terms of repayment.

19. Capital stock

Authorized

Voting Common Shares – Series Founder, Series Investor 1, Series Investor 2, voting and participating

Non-Voting Common Shares, non-voting

Preferred shares, without par value, non-cumulative annual dividend, redeemable at their issue price, non-participating, non-voting

Pre-Funded Warrants, exercisable at the option of the holder into Voting Common Shares of the Company at an exercise price of CAD$0.001 on a one-for-one basis with no expiry date F-33

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Notes to the consolidated financial statements

August 31, 2024

Issued


	****	2024	****	2023
		$		$
163,403 Voting Common Shares [2023 – 82,795]		55,382,754		50,395,717
475 Pre-Funded Warrants [2023 – nil]		38,725		—
		55,421,479		50,395,717

Subscription and issuance of Voting Common Shares

During the year ended August 31, 2023, the Company issued a total of 2,229 Voting Common Shares to third parties in exchange for marketing services and board fees provided to the Company valued at $1,670,415. For such transactions, the value of the services was paid for with shares, the number of shares being determined by dividing the value of the services provided by the price of the shares on the stock exchange at time of their issuance.

During the year ended August 31, 2023, the Company issued 426 Voting Common Shares upon the exercises of two former employees and a consultant’s stock options.

During the year ended August 31, 2023, the Company issued 17,775 Voting Common Shares and warrants to purchase Voting Common Shares, respectively as part of the financing rounds for a total cash consideration price of $12,012,591, net of transaction costs of $1,225,676. The warrants issued are to purchase 17,775 Voting Common Shares of the Company for a period of three years from the issuance date at an exercise price at U.S. $568.35 [note 17].

During the year ended August 31, 2024, the Company issued a total of 7,545 Voting Common Shares to third parties in exchange for marketing, management consulting services, and board fees provided to the Company valued at $1,262,934. For such transactions, the value of the services was paid for with shares, the number of shares being determined by dividing the value of the services provided by the price of the shares on the stock exchange at time of their issuance.

During the year ended August 31, 2024, the Company issued 2,763 Voting Common Shares and warrants to purchase Voting Common Shares, as part of the financing rounds for a total cash consideration price of $1,781,194, net of transaction costs of $246,298. The warrants issued are to purchase 2,763 Voting Common Shares of the Company for a period of three years from the issuance date at an exercise price at U.S. $546.75 [note 17].

During the year ended August 31, 2024, the Company issued a total of 11,642 Voting Common Shares upon the conversion of 650 Series A Convertible Preferred Shares [note 17].

On August 22, 2024, On August 22, 2024, the Company implemented a reverse stock split, consolidating every 15 Voting Common shares into 1 Voting Common Share. As a result of the round up feature for fractional shares, the Company issued an additional 16,800 Voting Common Shares.

20. Share-based payments

Description of the plan

The Company has a fixed option plan. The Company’s stock option plan is administered by the Board of Directors. Under the plan, the Company’s Board of Directors may grant stock options to employees, advisors and consultants, and designates the number of options and the share price pursuant to the new options, subject to applicable regulations. The options, when granted, will have an exercise price of no less than the estimated fair value of shares at the date of grant. F-34

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Notes to the consolidated financial statements

August 31, 2024

Stock options

On multiple grant dates, the Company granted stock options at exercise prices varying between $138.47 and $2,199.15 per share to directors, officers, employees and consultants of the Company. The stock options will expire 5 to 10 years from the grant dates.

The Company recognizes share-based payments expense for option grants based on the fair value at the date of grant using the Black-Scholes valuation model. The share-based payments expense recognized for the year ended August 31, 2024 amounts to $220,752 [2023 – $1,136,182; 2022 - $2,699,481]. The table below lists the assumptions used to determine the fair value of these option grants. Volatility is based on the historical share price volatility of the Company and other public companies with characteristics similar to the Company.


	****	Exercise	Market	Expected	****	Risk-free	****	Expected
Grant date		price	price	volatility		interest rate		life
				%		%		[years]
May 27, 2020		499.50	499.50	84		0.4		5
May 27, 2020		375.30	499.50	84		0.4		5
October 23, 2020		499.50	499.50	97		0.4		5
November 24, 2020		2,199.15	1,759.05	101		0.4		5
November 24, 2020		766.80	772.20	75		3.6		4
February 23, 2021		2,126.25	2,031.75	103		0.6		5
May 14, 2021		766.80	772.20	75		3.6		3
July 14, 2021		1,248.75	1,216.35	105		0.7		5
September 21, 2021		1,194.75	1,158.30	106		0.9		5
January 22, 2022		762.75	745.20	107		1.5		5
November 30, 2022		822.15	822.15	107		3.1		5
December 1, 2022		787.05	787.05	107		3.0		5
March 22, 2023		777.60	693.90	75		3.6		2
March 25, 2023		778.95	706.05	75		3.6		3
March 25, 2023		778.95	706.05	75		3.6		4
April 20, 2023		781.65	711.45	75		3.6		5
December 29, 2023		612.43	199.80	76		3.1		5
January 26, 2024		138.47	145.80	76		3.5		5

All values are in US Dollars.

The following tables summarize information regarding the option grants outstanding as at August 31, 2024:


	****		****	Weighted
		Number of		average
		options		exercise price
		#		$
Balance at August 31, 2022		12,664		1,273.40
Granted		666		785.25
Forfeited	****	(1,991)		1,302.08
Stock options modifications	****	(2,741)		780.30
Exercised	****	(427)		386.64
Balance at August 31, 2023	****	8,171		704.76
Granted		742		375.98
Forfeited	****	(1,055)		823.16
Balance at August 31, 2024	****	7,858		657.77

On March 25, 2023, 3,334 options previously granted to directors and officers of the Company with exercise price ranging from U.S. $1,001.70 ($1,212.30) to U.S. $1,687.50 ($2,199.15) and five-year term were cancelled and the Company agreed to issue 1,889 stock options with an exercise price of U.S. $568.35 ($780.30). The modification of these stock options granted resulted in an increase in the F-35

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Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024

fair value of the stock options at the date of modification of $129,800, recorded as stock-based compensation expense for the year ended August 31, 2023.


	Number of	Weighted average	Weighted average
Exercise price	options	grant date	remaining	Exercisable
range	outstanding	fair value	contractual life	options
	#		[years]	#
138.47 – 499.50	3,679	309.59	1.12	3,553
612.43 – 787.05	3,881	336.47	3.51	3,574
822.15 – 1,194.75	38	646.65	3.25	19
2,199.15	260	1,259.55	6.25	260

All values are in US Dollars.

Warrants

On November 23, 2020, the Company granted the underwriter the option to purchase 1,125 Voting Common Shares of the Company for a period of five years from the date of the initial public offering at an exercise price of U.S. $1,687.50 ($2,276.61).

On August 5, 2022, the Company granted the underwriter the option to purchase 371 Voting Common Shares of the Company for a period of four years from the grant date at an exercise price of U.S. $1,080.00 ($1,457.03).

On December 21, 2023, the Company granted the underwriter the option to purchase 1,023 Voting Common Shares of the Company for a period of five years from the grant date at an exercise price of U.S. $141.75 ($191.23).


			****	Number of	****	Weighted average
				warrants		remaining
Grant date	****	Exercise price		outstanding		contractual life
		$		#		[years]
November 23, 2020		2,276.61		1,125		1.23
August 5, 2022		1,457.03		371		0.93
December 21, 2023		191.23		1,023		4.31

The Company recognizes share-based payments expense for warrant grants based on the fair value at the date of grant using the Black-Scholes valuation model. The share-based payments expense recognized for the fiscal year ended August 31, 2024 amounts to $175,236 [August 31, 2023 – nil]. The table below lists the assumptions used to determine the fair value of these warrant grants. Volatility is based on the historical share price volatility of the Company and other public companies with characteristics similar to the Company.


	****						****	Risk-free	****	****
	****	Exercise	****	Market	****	Expected		interest	****	Expected
Grant date		price		price		volatility		rate		life
		$		$		%		%		[years]
November 23, 2020		2,276.61		1,759.05		100		0.4		5
August 5, 2022		1,457.03		972.00		100		2.9		3
December 21, 2023		191.23		247.05		76		4.0		5

21. Revenues


	****	2024	****	2023	****	2022
		$		$		$
Sales of boats		1,752,750		1,287,979		2,459,365
Sales of parts and boat maintenance		95,168		324,720		97,721
Boat rental and boat club membership revenue		1,946,427		4,038,803		4,793,860
		3,794,345		5,651,502		7,350,946

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Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024

Revenues from external customers for the fiscal year ended August 31, 2024 were primarily from the U.S. The table below provides the breakdown disclosed in comparative periods:


	Sale of	Rental of	2023
	electric boats	electric boats	Total
			$
Canada	348,570	—	348,570
USA	1,078,124	4,038,803	5,116,927
Other	186,005	—	186,005
	1,612,699	4,038,803	5,651,502

All values are in US Dollars.

<br><br><br><br><br><br><br><br><br><br><br><br>
	****	Sale of	Rental of	2022
		electric boats	electric boats	Total
				$
Canada		557,639	—	557,639
USA		1,292,666	4,793,861	6,086,527
Other		706,780	—	706,780
		2,557,085	4,793,861	7,350,946

All values are in US Dollars.

22. Grants and investment tax credits

During the year ended August 31, 2024, the Company recognized grants and investment tax credits amounting to $66,761 [August 31, 2023 – $232,882; August 31, 2022 - $1,458,632], of which nil are presented against research and development expenses [August 31, 2023 – $144,032; August 31, 2022 – $1,408,840], nil against cost of sales [August 31, 2023 – nil; August 31, 2022 - $8,535] and nil as a reduction of property and equipment and intangible assets [August 31, 2023 – nil; August 31, 2022 - $40,584]. Office salaries and benefits are presented net of $66,761 [August 31, 2023 – $88,850; August 31, 2022 - nil] of grants.

23. Net finance (income) expense


	****	2024	****	2023	****	2022
		$		$		$
Interest and bank charges		249,627		142,117		184,895
Interest income		(64,118)		(113,334)		(379,288)
Foreign currency exchange gain		(48,881)		(208,132)		(251,947)
Transaction costs [note 17]		1,860,335		719,167		—
Gain on derivative liabilities [note 17]		(12,081,094)		(2,055,688)		—
Loss on securities exchange [note 17]		1,715,543		—		—
Loss on warrant re-pricing [note 17]		887,827		—		—
Loss (gain) on Debentures [note 8]		—		(88,666)		670,000
		(7,480,761)		(1,604,536)		223,660

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Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024

24. Income taxes

The income tax expense on the Company’s loss before tax differs from the theoretical amount that would arise using the federal, provincial and foreign statutory tax rates applicable. The difference is as follows:


	****	2024	****	2023	****	2022
		$		$		$
Income taxes at the applicable tax rate of 26.5% [2023 – 26.5%; 2022 – 26.5%]		(3,793,762)		(5,606,886)		(3,406,162)
Adjustment in respect of current and deferred income tax of previous year		789,334		(72,894)		(4,396)
Permanent differences		2,526		70,418		823,119
Change in recognition of deferred income tax assets		2,746,439		5,328,487		2,816,417
Other		—		—		29,365
Total income tax (recovery) expense		(255,463)		(280,875)		258,343

Deferred income taxes reflect the net tax impact of temporary differences between the value of assets and liabilities for accounting and tax purposes. The main components of the deferred tax expense and deferred tax assets and liabilities were as follows:


	Balance as at	Recognized			Balance as at
	August 31,	in net			August 31,
	2023	loss	Deconsolidated	Other	2024
					$
Temporary differences
Property and equipment	(184,176)	(50,882)	198,275	(3,686)	(40,469)
Intangibles	(255,278)	26,428	(2,594)	36	(231,408)
Net operating losses	9,354,764	3,019,259	(120,802)	—	12,253,221
Financing fees	732,369	140,459	—	—	872,828
Research and development	987,997	79,352	—	—	1,067,349
Difference in timing of recognition	755,900	34,737	(233,328)	2,569	559,878
Right-of-use asset	(603,989)	340,679	222,297	(3,446)	(44,459)
Lease liability	664,308	(363,979)	(261,506)	6,458	45,281
Net capital losses	50,418	—	—	—	50,418
Unrecognized deferred tax assets	(11,478,990)	(2,960,676)	—	—	(14,439,666)
Deferred tax liability	23,323	265,377	(197,658)	1,931	92,973

All values are in US Dollars.

The net operating losses carried forward and deductible temporary differences for which deferred tax assets have not been recognized amounted to $54,489,000 as at August 31, 2024 [2023 - $45,415,000]. Of these amounts, $46,369,000 [2023 - $35,333,000] relates to net operating losses carried forward, that will expire between 2040 and 2044 and $4,271,000 [2023 - $3,541,000] relates to research and development expenditures, which can be carried forward indefinitely.

As of August 31, 2024, the Company has available Canadian federal non-refundable investment tax credits of $678,000 [2023 - $642,000] related to research and development expenditures which may be used to reduce Canadian federal income taxes payable in future years. These non-refundable investment tax credits will expire between 2041 and 2043. The benefits of these non-refundable investment tax credits have not been recognized in the consolidated financial statements.

25. Capital disclosures

The Company’s objectives in managing capital are:

a.	to safeguard the entity’s ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders; and
b.	to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.
---	---

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Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024

Capital is regarded as total equity, as recognized in the statement of financial position, plus net debt. Net debt is calculated as total borrowings less cash and cash equivalents.

The Company manages and adjusts its capital structure considering changes in economic conditions. To maintain or adjust its capital structure, the Company may issue debt or new shares. Financing decisions are generally made on a specific transaction basis and depend on such things as the Company’s needs, capital markets and economic conditions at the time of the transaction. Management reviews its capital management approach on an ongoing basis and believes that this approach is reasonable, given the size of the Company.

The Company does not have any externally imposed capital compliance requirements at August 31, 2024.

26. Financial risk management and fair value measurement

Fair value measurement and hierarchy

The fair value measurement of the Company’s financial and non-financial assets and liabilities utilizes market observable inputs and data as far as possible. Inputs used in determining fair value measurements are categorized into different levels based on how observable the inputs used in the valuation technique utilized are (the “fair value hierarchy”):

a.	Level 1: Quoted prices in active markets for identical items [unadjusted];
b.	Level 2: Observable direct or indirect inputs other than Level 1 inputs; and
---	---
c.	Level 3: Unobservable inputs [i.e., not derived from market data].
---	---

The classification of an item into the above levels is based on the lowest level of the inputs used that has a significant effect on the fair value measurement of the item. Transfers of items between levels are recognized in the period they occur.

The carrying amount of trade and other receivables, advances from related parties and trade and other payables are assumed to approximate their fair value due to their short-term nature.

The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market interest rate that is available for similar financial liabilities.

Classified as Level 3, the fair value of Debentures was estimated using the partial differential equation model to value convertible debentures that include a call feature. Key assumptions used in the model include volatility, which was based on actual trading data, difference in volatility since initial issuance of the instrument and similar instruments on the market, and credit spread, which was based on corporate bond yield spreads in the market and credit spread data for similar public companies. The model included a fair value adjustment based on an initial calibration exercise. During the fiscal year ended August 31, 2023, the Company recorded an impairment loss on the Debentures based on the estimated recoverable amount of the financial asset [note 8].

The fair value of the derivative liabilities related to the warrants issued is classified as Level 3 in the fair value hierarchy and is calculated using the Black-Scholes Option Pricing Model using the historical volatility of comparable companies as an estimate of future volatility. As at August 31, 2024, the Company used volatility of approximately 83% to 88% over the remaining contractual life in order to determine the fair value of the derivative liabilities.

The fair value of the derivative liabilities related to the Series A and B Convertible Preferred Shares is classified as Level 3 in the fair value hierarchy and is calculated using the Monte Carlo simulation run under the Geometric Brownian Motion model. The significant input assumptions into the model for each valuation date include the starting share price, a 70% volatility applied to the Series A and Series B Convertible Preferred Shares as at the issuance date, a 75% volatility applied to the Series A and Series B Convertible Preferred Shares as at August 31, 2024 and a risk-free rate based on the U.S. treasury rates matching the duration of each component of the Series A and Series B Convertible Preferred Shares. F-39

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Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024

Financial risk management

The Company is exposed to risks that arise from its use of financial instruments. This note describes the Company’s objectives, policies and processes for managing those risks and the methods used to measure them.

[a] Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has a strict code of credit, including obtaining instalment payments, obtaining agency credit information and setting appropriate credit limits. The maximum exposure to credit risk at the reporting date, is the carrying amount of financial assets. The Company does not hold any collateral.

Credit risk related with the Debentures is reflected in the fair value of the instrument [note 8].

Trade and other receivables are generally written off when there is no reasonable expectation of recovery. Indicators of this include the failure for a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual payments.

[b] Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting its financial obligations as they fall due. The Company is exposed to liquidity risk primarily from its trade and other payables, other financial liabilities and long-term debt.


	****	Contractual	Less than
		cash flows	one year	1-5 years
				$
August 31, 2024
Trade and other payables		2,062,044	2,062,044	—
Long-term debt		458,640	101,397	357,243
		2,520,684	2,163,441	357,243

August 31, 2023
Trade and other payables		550,836	550,836	—
Other financial liabilities		113,694	113,694	—
Long-term debt		305,329	231,546	73,783
		969,859	896,076	73,783

All values are in US Dollars.

[c] Interest rate risk

The Company is exposed to interest rate risk on its variable rate bank indebtedness and variable and fixed rate long-term debt. Fixed-rate borrowings expose the Company to fair value risk while variable rate borrowings expose the Company to cash flow risk.

[d] Foreign exchange risk

Foreign exchange risk is the risk that future cash flows or fair value of a financial instrument will fluctuate due to changes in foreign exchange rates.

The Company is exposed to transactional foreign currency risk to the extent that there is a mismatch between the currencies in which sales, purchases, receivables and borrowings are denominated and the respective functional currencies of the Company and its subsidiaries. F-40

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Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024

The Company has certain financial assets and liabilities denominated in United States dollars. The Canadian dollar equivalent carrying amounts of these assets and liabilities are as follows:


	****	2024	****	2023
		$		$
Cash		38,107		3,258,419
Trade and other receivables		28,488		188,001
Trade and other payables		2,224,737		800,149

Sensitivity

A reasonably possible 5% strengthening (weakening) of the U.S. dollar against the Canadian Dollar at the reporting date would have increased (decreased) net loss and other comprehensive loss by the amounts shown below. This analysis assumes that all other variables remain constant.


	****	Net Loss			****	Other Comprehensive Income
		+ 5%	****	- 5%		+ 5%	****	- 5%
		$		$		$		$
August 31, 2024		107,907		(107,907)		(17,658)		17,658

27. Segment information

The Company operates in two reportable business segments.

The two reportable business segments offer different products and services, require different processes and are based on how the financial information is produced internally for the purposes of monitoring operating results and making decisions about resource allocation and performance assessment by the Company’s Chief Operating Decision Maker.

The following summary describes the operations of each of the Company’s reportable business segments:

a.	Sale of electric boats – manufacture of customized electric boats for consumer market and sale of boat parts maintenance, and
b.	Rental of electric boats – short-term rental operation and boat club membership.
---	---

Sales between segments are accounted for at prices that approximate fair value. No business segments have been aggregated to form the above reportable business segments. F-41

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Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024


	****	Year ended August 31, 2024
	****	Sale of	****	Rental of	****	Inter-segment		****
		electric boats		electric boats		eliminations	****	Total
		$		$		$		$
Revenue from external customers		1,847,918		1,946,427		—		3,794,345
Revenue from other segments		487,000		16,962		(503,962)		—
Segment revenues		2,334,918	****	1,963,389	****	(503,962)	****	3,794,345
Segment gross profit (loss)		570,268	****	1,095,179	****	(168,009)	****	1,497,438

Segment loss before tax		(4,180,670)	****	(9,078,914)	****	(1,056,499)	****	(14,316,083)
Research and development		2,739,022	****	—	****	—	****	2,739,022
Office salaries and benefits		2,890,588	****	416,832	****	—	****	3,307,420


	Year ended August 31, 2023
	Sale of	Rental of	Inter-segment
	electric boats	electric boats	eliminations	Total
				$
Revenue from external customers	1,612,699	4,038,803	—	5,651,502
Revenue from other segments	867,097	336,683	(1,203,780)	—
Segment revenues	2,479,796	4,375,486	(1,203,780)	5,651,502
Segment gross profit (loss)	(242,590)	1,966,466	(187,450)	1,536,426

Segment loss before tax	(20,363,838)	(623,856)	(170,367)	(21,158,061)
Research and development	5,938,010	—	(233,098)	5,704,912
Office salaries and benefits	2,769,196	1,237,246	7,739	4,014,181

All values are in US Dollars.


	August 31, 2022
	Sale of	Rental of	Inter-segment
	electric boats	electric boats	eliminations	Total
				$
Revenue from external customers	2,557,086	4,793,860	—	7,350,946
Revenue from other segments	820,383	80,842	(901,225)	—
Segment revenues	3,377,469	4,874,702	(901,225)	7,350,946
Segment gross profit (loss)	596,570	2,839,970	(150,975)	3,285,565

Segment (loss) profit before tax	(13,632,377)	872,787	(93,852)	(12,853,442)
Research and development	2,242,794	—	—	2,242,794
Office salaries and benefits	2,384,746	951,053	—	3,335,799

All values are in US Dollars.


	August 31, 2024
	Sale of	Rental of	Inter-segment
	electric boats	electric boats	Eliminations	Total
				$
Segment assets	19,737,669	2,960,124	(11,277,388)	11,420,241
Cash	28,108	35,018	—	63,126
Additions to property and equipment	280,587	487,000	(185,744)	599,578
Segment liabilities	8,306,618	1,151,501	(1,013,824)	8,400,254

All values are in US Dollars.

F-42

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Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024


	August 31, 2023
	Sale of	Rental of	Inter-segment
	electric boats	electric boats	Eliminations	Total
				$
Segment assets	20,344,002	13,941,898	(10,239,388)	24,046,512
Cash	3,025,565	333,692	—	3,359,257
Additions to property and equipment	194,820	974,533	(185,744)	983,609
Segment liabilities	10,154,031	3,341,868	(1,013,824)	12,482,075

All values are in US Dollars.

The Company has disclosed the above amounts for each reportable segment because they are regularly reviewed by the Chief Operating Decision Maker.

28. Additional cash flows information

Financing and investing activities not involving cash:


	****	2024	****	2023	****	2022
		$		$		$
Additions to right-of-use assets		237,469		921,498		234,608
Lease termination		1,160,649		101,471		273,652

29. Commitments

In addition to the obligations under leases [note 15], the Company is subject to supply agreements with minimum spend commitments. The amount of the minimum fixed and determinable portion of the unconditional purchase obligations over the next years, is as follows:


		$
2025		3,180,531
2026		1,283,257

In October 2021, EB Rental FL Corp. has entered into lease arrangement for premises, which have not commenced yet and therefore related right-of-use asset and lease liability are not recorded as at August 31, 2024. The lease offers EB Rental FL Corp. a termination clause in case certain contractual requirements are not met by the lessor at the lease commencement date.

The Company’s undiscounted lease commitments related to this lease are as follows as at August 31, 2024:


		$
2025		53,964
2026		162,971
2027		166,231
2028 and thereafter		459,320
		842,486

30. Deconsolidation of subsidiary

On April 25, 2024, the Company sold 100% of the shares of EB Rental, Ltd., which previously facilitated its electric boat rental operations located in Newport Beach, California, to EB Strategies Inc. for $1,089,302. The Company continues to own and operate its electric boat rental operations in Ventura, California and Palm Beach, Florida. Up until April 25, 2024, EB Strategies Inc was considered a related party whose controlling shareholder was a member of management of the Company’s boat rental operation. His employment and association with the Company ended at the close of this transaction. F-43

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Vision Marine Technologies Inc.

Notes to the consolidated financial statements

August 31, 2024

These consolidated financial statements have been prepared based on the books and records maintained by the Company, and the subsidiaries that it controls. However, due to the above sale of EB Rental, Ltd., the control over this subsidiary was deemed to have been lost as of April 25, 2024. As such, the Company ceased consolidating this subsidiary as at April 25, 2024.

The gain on the disposal of EB Rental, Ltd. at the deconsolidation date was determined as follows:



Fair Value Consideration received		1,089,302

Add: EB Rental, Ltd. net deficit at disposal
- EB Rental Ltd. share capital at disposal	(100)
- EB Rental Ltd. deficit at disposal	165,427	165,327

Less: Goodwill attributable to EB Rental, Ltd.		(1,079,040)

Total gain on deconsolidation date		175,589

All values are in US Dollars.

On the deconsolidation date, EB Rental, Ltd.’s net assets (liabilities) were determined as follows:




Current assets		363,825
Right of use assets		804,596
Property, plant and equipment		555,875
Other assets		83,726
Current liabilities		(1,132,115)
Lease liabilities		(937,427)
Other comprehensive income		96,193

		(165,327)

All values are in US Dollars.

31. Subsequent events

On September 16, 2024, the Company issued 377,778 Voting Common Shares as part of a public offering for a total cash consideration of $4,621,620, net of transaction costs of $1,088,964.

During the month of September 2024, 400 Series A Convertible Preferred Shares were converted into 9,877 Voting Common Shares

During the months of September, October and November 2024, the Company issued a total of 124,642 Voting Common Shares to third parties in exchange of sub-contracting services provided to the Company related to marketing and investor relations.

During the months of October and November 2024, the Company issued 695,583 Voting Common Shares as part of an “at the market” public offering for a total cash consideration of US$2,572,680, less transaction costs of US$77,252. The Company is entitled to issue up to US$11.75 million worth of Voting Common Shares under this offering.

On October 8, 2024, the Company implemented a reverse stock split, consolidating every 9 Voting Common shares into 1 Voting Common Share. As a result of the round up feature for fractional shares, the Company issued an additional 195,203 Voting Common Shares.

F-44

Exhibit 99.2

VISION MARINE TECHNOLOGIES INC.

Form 51-102F1 Management's Discussion & Analysis

For the year ended August 31, 2024

1.1 Date December 2, 2024

Introduction

The following management’s discussion and analysis (“MD&A”), prepared for the year ended “August 31, 2024, is a review of operations, current financial position and outlook for Vision Marine Technologies Inc. (the “Company”), and should be read in conjunction with the Company’s audited consolidated financial statements for the years ended August 31, 2024 and 2023 and the notes thereto. Amounts are reported in Canadian dollars based upon the consolidated financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”), as adopted by the International Accounting Standards Board.

Forward-Looking Statements

Certain statements contained in the following Management’s Discussion and Analysis (“MD&A”) constitute forward-looking statements. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements.

Risks and Uncertainties

There is limited public information on our operating history.

Our limited public operating history makes evaluating our business and prospects difficult. Although we were formed in 2012, we did not provide public reports on the results of operations until our 2020 fiscal year. We only have six years of audited financial statements.

We currently have a net loss, and if we are unable to achieve and grow a net income in the future our ability to grow our business as planned will be adversely affected.

We have made significant up-front investments in research and development, sales and marketing, and general and administrative expenses to rapidly develop and expand our business. We had a net loss of $14,060,620 in our 2024 fiscal year as compared to a net loss of $20,877,186 in our 2023 fiscal year and a net loss of $13,111,785 in our 2022 fiscal year. We may never achieve net income or if we do it may fail to grow or even decline in certain circumstances, many of which are beyond our control. Our revenues might not ever significantly exceed our expenses, and may even be lower than our expenses. It may take us longer to obtain net income than we anticipate, if at all, or we may only do so at a much lower rate than we anticipate. Failure to obtain net income may mean that we will have to curtail our planned growth in operations or resort to financings to fund such growth in the future.

Our plan of operations entails promoting a product that we may never launch or which may not be commercially accepted if launched.

We have concentrated the majority of our research and development efforts on developing electric powertrain systems that we intend to rent and sell to Original Equipment Manufacturers (“OEM”) of boats. We expect the electric powertrain systems to represent the majority of our revenue in our coming accounting periods. We have built prototypes of our electronic powertrain. We do not know if OEMs will find our product candidate to be an attractive component in their boats or if they will find the price of our electric powertrains to be acceptable. We do not currently have any significant customers for our electric powertrains. Although we have received LOIs from OEMs for over 1,000 powertrains through the year ended August 31, 2024, such LOIs are non-binding and may never result in any actual sales. Even if we do develop such relationships, we might not be able to maintain them or grow them as anticipated. At the time of our initial public offering, we had expected to begin the commercialization of our electric powertrains in 2020 but were not able to meet that preferred timeline and we may not meet our new timelines. Additionally, we had anticipated developing a 335 horsepower within 18 months of our annual report filed in 2022 failed to meet that anticipated date and might never develop such a powertrain. If we are not successful in commercializing our product or if sales of our electric powertrain are less than we estimate, our business may not grow as expected, if at all, and we may fail.

To carry out our proposed business plan to build up inventory for order fulfilment, increase brand awareness and develop a new powertrain for our engines, we will require a significant amount of capital.

If current cash, cash equivalents and revenue from our business are not sufficient to cover our cash requirements, we will need to raise additional funds through the sale of debt or equity securities, in either private placements or additional registered offerings. If we are unsuccessful in raising enough funds through such capital-raising efforts, we may review other financing possibilities such as bank loans. Financing might not be available to us or, if available, only on terms that are not favorable or acceptable to us.

Our ability to obtain the necessary financing to carry out our business plan is subject to a number of factors, including general market conditions and investor acceptance of our business plan. These factors may make the timing, amount, terms and conditions of such financing unattractive or unavailable to us. If we are unable to raise sufficient funds, we will have to significantly reduce our spending, delay or cancel our planned activities, sell non-essential assets or substantially change our current corporate structure. We might not be able to obtain any funding, and we might not have sufficient resources to conduct our business as projected, both of which could mean that we would be forced to curtail or discontinue our operations.

Terms of subsequent financings may adversely impact your investment.

We may have to engage in common equity, debt, or preferred share financings in the future, and we have been active in using our at-the-market offering set up in October 2024. As a result, your rights and the value of your investment in our securities could be reduced. Interest on debt securities could increase costs and negatively impact operating results. Preferred shares could be issued in one or more series from time to time with such designation, rights, preferences, and limitations as determined by the Board. The terms of preferred shares could be more advantageous to those investors than to the holders of common shares. In addition, if we need to raise more equity capital from the sale of common shares, institutional or other investors may negotiate terms at least as, and possibly more, favorable than the terms of your investment in our common shares.

Our future growth depends upon consumers’ willingness to purchase electric powerboats.

Our growth highly depends upon the adoption by consumers of, and we are subject to an elevated risk of any reduced demand for, electric powerboats. Without such growth, sales of our electric powertrain, if any, and our electric boats may not grow at the rate that we anticipate, if such sales grow at all. If the market for electric powerboats does not develop as we expect or develops more slowly than we expect, our business, prospects, financial condition and operating results will be negatively impacted. Despite the long history of electric powerboats, the market for them is relatively new, rapidly evolving, characterized by rapidly changing technologies, price competition, additional competitors, evolving government regulation and industry standards, frequent new electric powerboat announcements and changing consumer demands and behaviors. Powerboats with conventional gas-powered motors may be deemed preferable to electric powerboats as they tend to be more powerful, have a longer range and/or cost less. Other factors that may influence the adoption of electric powerboats include:

●	the decline of an electric powerboats range resulting from deterioration over time in the battery’s ability to hold a charge;
●	concerns about electric grid capacity and reliability, which could derail our efforts to promote electric powerboats as a practical solution to powerboats which require gasoline;
---	---
●	improvements in the fuel economy of the internal combustion engine;
---	---
●	the availability of service for electric powerboats;
---	---
●	the environmental consciousness of consumers;
---	---
●	volatility in the cost of oil and gasoline;
---	---
●	consumers’ perceptions about convenience and cost to charge an electric powerboat;
---	---
●	the availability of tax and other governmental incentives to manufacture electric powerboats; and
---	---
●	perceptions about and the actual cost of alternative fuel.
---	---

Any of the factors described above may cause current or potential customers not to purchase our electric powerboat, which would materially adversely affect our business, operating results, financial condition and prospects.

Our future growth depends upon consumers’ preference for outboard motors.

We envision the majority of our growth deriving from the sale of our electric powertrain for an outboard motor. If consumer preferences lead to a decline in outboard motors, the OEMs we intend to sell our electric powertrain to may produce less electric boats, and we may not be able to sell as many electric powertrains as we anticipate, if we sell any at all. We may not be able to adapt the technology behind this powertrain for inboard motors or may only be able to do so in a way that is not cost effective.

We rely on a limited number of suppliers for key components of our finished products.

Although we manufacture all of our powerboats, we do so by assembling the component parts that we acquire from third-party suppliers rather than by producing any of those component parts ourselves. We materially depend on some of those third-party suppliers for certain components that we obtain from a limited number of suppliers, namely:

●	hulls: we purchase all of our hulls from Manunor Inc.;
●	Motors: for our electric powertrains, we purchase motors from Danfoss Technologies and E-Propulsion for all of our boats;
---	---
●	powertrains: we purchase approximately 100% of our low powered powertrains from E-Propulsion, a Chinese company specialized in the research, development and production of components for electric outboard engines;
---	---
●	battery packs: we purchase 100% of our lithium-ion batteries from Neogy who in turn rely upon Samsung cells, We have an agreement with Octillion Power Systems (“Octillion”) to provide marine specific batteries to power the E-Motion™ powertrain; and
---	---
●	casings: we purchase the casings for our powertrains from Tohatsu Corporation, a Japanese company.
---	---

As we purchase our components and parts through purchase orders and informal arrangements rather than long-term purchase agreements, we have not contractually secured a supply chain for these components and parts. Some of our third-party suppliers may experience delays in delivering parts and components for our products. If we experience delays in receiving our supplies from these third-parties, if they significantly increase the cost of these components or if they cease offering us these components, we may have to find new suppliers, which might not be possible on a timely basis, or cease production of the products in which the components are included.

Revenues from our electric boat rental business may be affected by a variety of factors that are outside of our control.

Revenues from our electric boat rental business represented 51% of our total revenues in our fiscal year 2024. Future revenues from our electric boat rental business may be affected by the sale in April 2024 of our electric boat rental operations located in Newport Beach, California as well as factors that are outside of our control, including:

●	the appearance, safety, economic health and ability to continue to attract visitors willing to rent electric vehicles at the Portside Ventura marina;
●	the ability to successfully operate our rental operation in Ventura, California that was opened during the quarter ending May 31, 2023, with 6 boats;
---	---
●	the ability to successfully operate our rental operation in Palm Beach, Florida that was opened during the current year with 6 boats initially;
---	---
●	the continued desirability of boat rentals as a leisure activity;
---	---
●	prolonged unfavourable weather conditions may lead to reduced demand for boat rentals; and
---	---
●	the local economic condition in and around the areas we offer rentals or may offer rentals in the future.
---	---

If revenues from our electric boat rental business decrease significantly, it may cease to be profitable or our revenues may not be as large as we currently project which may have a negative impact on the book value of the goodwill associated with the boat rental operations. See Goodwill Impairment Loss section below.

The range of electric powerboats on a single charge declines over time which may negatively influence potential customers’ decisions whether to purchase our boats or boats containing our electric powertrains.

The range of electric powerboats on a single charge declines principally as a function of usage, time and charging patterns. For example, a customer’s use of their powerboat as well as the frequency with which they charge the battery can result in additional deterioration of the battery’s ability to hold a charge. During the lifetime of the lead acid batteries in powerboats, 500 to 1,000 recharge cycles are possible, and our lithium battery pack will retain approximately 85% of its ability to hold its initial charge after approximately 3,000 charge cycles and 8 years, which will result in a decrease to the boat’s initial range. Such battery deterioration and the related decrease in range may negatively influence potential customer decisions whether to purchase an electric boat, which may harm our ability to market and sell our boats. Likewise, if such reasoning deters potential customers from purchasing boats made by OEMs that use our electric powertrains, they may order fewer electric powertrains from us, if they ever order any at all.

Developments in alternative technologies or improvements in the internal combustion engine may materially adversely affect the demand for our electric powerboats.

Significant developments in alternative technologies, such as advanced diesel, ethanol, fuel cells or compressed natural gas, or improvements in the fuel economy of the internal combustion engine, may materially and adversely affect our business and prospects in ways we do not currently anticipate. For example, fuel which is abundant and relatively inexpensive in North America, such as compressed natural gas, may emerge as consumers’ preferred alternative to petroleum-based propulsion. Any failure by us to develop new or enhanced technologies or processes, or to react to changes in existing technologies, could materially delay our development and introduction of new and enhanced electric powerboats, which could result in the loss of competitiveness of our boats, decreased revenue and a loss of market share to competitors.

If we are unable to keep up with advances in electric powerboat technology, we may lose our competitive position in the industry.

We may be unable to keep up with changes in electric powerboats technology, particularly developments with powertrains. As a result, we may lose our competitive position in the industry. Any failure to keep up with advances in electric powerboat technology could result in a loss of our competitive position which would materially and adversely affect our business, prospects, operating results and financial condition. Our research and development efforts may not be sufficient to adapt to changes in electric powerboat technology. As technologies change, we plan to upgrade or adapt our electric powertrain. We would additionally upgrade our boats and introduce new models to take advantage of these changes. However, our technology and boats may not compete effectively with alternative technology or powerboats if we are not able to source and integrate the latest technology. For example, we do not manufacture lead or lithium battery cells, and as a result, we are dependent on suppliers of battery cell technology for our battery packs.

Demand in the powerboat industry is highly volatile.

Fluctuations in demand for recreational powerboats and electric powerboats may materially and adversely affect our business, prospects, operating results and financial condition. The markets in which we compete have been subject to considerable volatility in demand in recent periods. Demand for recreational powerboat and electric powerboat sales depends to a large extent on general, economic and social conditions in a given market. Historically, sales of recreational powerboats decrease during economic downturns. We have fewer financial resources than more established powerboat manufacturers to withstand adverse changes in the market and disruptions in demand.

Unfavorable weather conditions may have a material adverse effect on our business, financial condition, and results of operations, especially during the peak boating season.

Adverse weather conditions in any year, in any particular geographic region, may adversely affect sales in that particular geographic region, especially during the peak boating season in such particular geographic region. Sales of our products are generally stronger just before and during spring and summer, which represent the peak boating months in most of our markets, and favorable weather during these months generally has a positive effect on consumer demand for our products. Conversely, unseasonably cool weather, excessive rainfall, reduced rainfall levels, or drought conditions during these periods may close area boating locations or render boating dangerous or inconvenient, thereby generally reducing consumer demand for our products. Our annual results would be materially and adversely affected if our net sales were to fall below expected seasonal levels during these periods. We may also experience more pronounced seasonal fluctuation in net sales in the future as we continue to expand our businesses. Additionally, to the extent that unfavorable weather conditions are exacerbated by global climate change or otherwise, our sales may be affected to a greater degree than we have previously experienced. Adverse weather could also affect income from our rental business as we tend to rent significantly less boats on rainy or otherwise unappealing days than on sunny and attractive ones. If we experience more rainy or otherwise unappealing days at our marinas than normal, our income from the rental of electric boats could materially decline.

We intend to increasingly use our network of independent dealers, and we will face increasing competition for dealers and have little control over their activities.

In the past, most of our sales were directly placed with us online, but approximately 70% of our sales of electric boats in the 2024 fiscal year were derived from our network of independent dealers. We have agreements with dealers in our network that typically provide for terms of between 1 and 3 years. While we will continue to market direct sales through our website, we seek to increase revenues and diversify our sales points by expanding our network of independent dealers. We envision an increase in the number of dealers supporting our products and the quality of their marketing and servicing efforts being essential to our ability to increase sales. We may not be successful in our effort to grow our network of independent dealers.

Competition for dealers among recreational powerboat manufacturers continues to increase based on the quality, price, value and availability of the manufacturers’ products, the manufacturers’ attention to customer service and the marketing support that manufacturers provide to dealers. We will face intense competition from other recreational powerboat manufacturers in attracting and retaining dealers, and we might not be able to attract or retain relationships with qualified and successful dealers as well as our competition, if at all. We might not be able to maintain or improve our relationship with dealers or our market share position. In addition, independent dealers in the recreational powerboat industry have experienced significant consolidation in recent years, which could inhibit our ability to retain them or result in the loss of one or more of our dealers in the future if the surviving entity in any such consolidation purchases similar products from a competitor. If we do not establish a significant network of dealers, our future sales could fail to meet our projections, and our business, financial condition and results of operations may be adversely affected.

We envision that our success will depend, in part, upon the financial health of our dealers and their continued access to financing.

We seek to increase revenues and diversify our sales points by expanding our network of independent dealers. The financial health of our current and any future dealers is critical to our success. Our business, financial condition and results of operations may be adversely affected if the financial health of dealers that sell our products suffers. Their financial health may suffer for a variety of reasons, including a downturn in general economic conditions, rising interest rates, higher rents, increased labor costs and taxes, compliance with regulations and personal financial issues.

In addition, dealers require adequate liquidity to finance operations, including purchases of our products. Dealers are subject to numerous risks and uncertainties that could unfavorably affect their liquidity positions, including, among other things, continued access to adequate financing sources on a timely basis on reasonable terms. These sources of financing are vital to our ability to sell products through our distribution network. Access to floor plan financing generally facilitates dealers’ ability to purchase powerboats from us, and their financed purchases reduce our working capital requirements. If floor plan financing were not available to our dealers, our sales and our working capital levels could be adversely affected. The availability and terms of financing offered by dealers’ floor plan financing providers will continue to be influenced by:

●	their ability to access certain capital markets and to fund their operations in a cost-effective manner;
●	the performance of their overall credit portfolios;
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●	their willingness to accept the risks associated with lending to dealers; and
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●	the overall creditworthiness of those dealers.
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Changes to trade policies, tariffs, and import/export regulations may have a material adverse effect on our business, financial condition, and results of operations.

Although we manufacture our products in Canada, in our last fiscal year approximately 94% of our sales and rentals occurred in the United States, a percentage that could increase as our operations expand. Changes in laws and policies governing foreign trade could adversely affect our business. Such policy changes may place greater restrictions and economic disincentives on international trade and may have the potential to adversely impact the global and local economies, our industry and global demand for our products and, as a result, could have a material adverse effect on our business, financial condition and results of operations.

Interest rates and energy prices affect marine products’ sales

Although our products are not frequently financed by our dealers and retail powerboat consumers, we envision this becoming more common as we expand our operations and grow our network of distributors. This may not occur if interest rates rise because higher rates increase the borrowing costs and, as a result, the cost of doing business for dealers and the cost of powerboat purchases for consumers. Energy costs can represent a large portion of the costs to manufacture our products and can increase their ultimate sales price. Therefore, higher interest rates and fuel costs can adversely affect consumers’ decisions relating to recreational powerboating purchases.

We have a large fixed cost base that will affect our profitability if our sales decrease.

The fixed cost levels of operating a recreational powerboat manufacturer can put pressure on profit margins when sales and production decline. Our profitability depends, in part, on our ability to spread fixed costs over a large number of products sold and shipped, and if we decide to reduce our rate of production, gross or net margins could be negatively affected. Consequently, decreased demand or the need to reduce production can lower our ability to absorb fixed costs and materially impact our financial condition or results of operations.

We depend on certain key personnel, and our success will depend on our continued ability to retain and attract such qualified personnel.

Our success depends on the efforts, abilities and continued service of Alexandre Mongeon, our Chief Executive Officer, Xavier Montagne, our Chief Operating Officer and Chief Technology Officer, and Raffi Sossoyan, our Chief Financial Officer. A number of these key employees and consultants have significant experience in the recreational boating, manufacturing and electric vehicle industries. A loss of service from any one of these individuals may adversely affect our operations, and we may have difficulty locating, or may not be able to locate and hire a suitable replacement. We have not obtained any “key person” insurance on certain key personnel.

We are subject to numerous environmental, health and safety laws and any breach of such laws may have a material adverse effect on our business and operating results.

We are subject to numerous environmental, health and safety laws, including statutes, regulations, bylaws and other legal requirements. These laws relate to the generation, use, handling, storage, transportation and disposal of regulated substances, including hazardous substances (such as batteries), dangerous goods and waste, emissions or discharges into soil, water and air, including noise and odors (which could result in remediation obligations), and occupational health and safety matters, including indoor air quality. These regulations also apply to any contamination that our powerboats cause in the lakes and rivers in which they operate. These legal requirements vary by location and can arise under federal, provincial, state or municipal laws. Any breach of such laws and/or requirements could have a material adverse effect on our company and its operating results.

Our powerboats are subject to mandated safety standards and failure to meet those standards could have a material adverse effect on our business and operating results.

Given the inherent dangers involved with powerboats, all powerboats sold must comply with federal, state and provincial safety standards. Additionally, most powerboats sold in the United States meet the safety standards set by the American Boat and Yacht Counsel (“ABYC”), a non-profit, member organization that develops voluntary safety standards for the design, construction, maintenance, and repair of recreational powerboats and the National Marine Manufacturers Association (“NMMA”). Our powerboats have been certified by the United States Coast Guard and the Canadian Coast Guard, meet the ABYC safety standards and have received CE marking indicating their conformity with health, safety, and environmental protection standards within the European Economic Area. Loss of any of these certifications or failure to obtain them for future products could have a material adverse effect on our business and operating results.

We intend to rely on a third-party for the manufacture of what we envision will become our principal product.

If we are able to commercialize our E-Motion™ electric powertrain system, we intend to use a third-party to mass produce our powertrains. In October 2021, we entered into a Manufacture and Supply Agreement with Linamar Corporation, a provider of manufacturing solutions and a developer of highly engineered products. Under the terms of the agreement, we intend for McLaren Engineering, Linamar’s technology and product development team for its advanced mobility segment, to manufacture and assemble our E-Motion™ technology through testing, parts, tooling development, and designing the union assembly for mass production of our electric powertrain at Linamar’s facility in Canada. Once we have scaled up the production of our electric powertrain, we intend for the Linamar Corporation to produce our electric powertrain for mass commercialization. If Linamar Corporation is unable to satisfactorily manufacture our E-Motion™ powertrains, we will be forced to find a new third-party manufacturer or to produce such powertrains inhouse (with our current facilities we believe that we are limited to producing 300 electric powertrains per year in addition to producing 150 boats per year). Any such change in manufacturers could lead to a delay in our ability to deliver on purchase orders or the loss of such purchase orders, which in turn could adversely affect our revenue or the timing of our revenue.

If we are unable to meet the service requirements of our customers, our business will be materially and adversely affected.

We do not offer warranties or provide service for our boats and do not intend to offer warranties on our powertrains systems. Instead, the purchasers of our boats and of our powertrains may rely upon the warranties and services of the manufacturers of the components used in our boats and powertrains. As all such warranties are provided by third-party suppliers, the quality and timeliness of such service is outside of our control. Additionally, the terms of such warranties, including the length of time of coverage, and servicing terms, including locations and labor cost, are not uniform. If our purchasers and potential purchasers believe that warranties and servicing

capabilities provided by our third-party suppliers are inadequate, the reputation of our brand will suffer and business and prospects could be materially and adversely affected.

If we are unable to meet our production and development goals, we may need to change our business plans or the timeline in which we expect to carry them out.

Our ability to carry out our business plans depends upon meeting our production and development goals. Delays or failures in meeting these goals could require us to reassess our business plans and the timeline that it will take us to implement those plans. In the past, we have not always met our production and development goals. For example, we expected to manufacture approximately 50 powerboats, and begin commercialization of our electric powertrains in calendar 2023, and we did not meet these goals. If any such delays or failures were to cause a material change to our proposed business plans, such change could result in materially adverse changes in our projected revenues or expenses.

We may not succeed in establishing, maintaining and strengthening the Vision Marine brand, which could materially and adversely affect customer acceptance of our boats and components and our business, revenues and prospects.

Our business and prospects heavily depend on our ability to develop, maintain and strengthen the Vision Marine brand and the brands of our powerboat models. Any failure to develop, maintain and strengthen these brands may materially and adversely affect our ability to sell our products. If we are not able to establish, maintain and strengthen our brands, we may lose the opportunity to build our customer base. We expect that our ability to develop, maintain and strengthen the Vision Marine brand will also depend heavily on the success of our marketing efforts. To further promote our brand, we may be required to change our marketing practices, which could result in substantially increased advertising expenses, including the need to use traditional media such as television, radio and print. Many of our current and potential competitors have greater name recognition, broader customer relationships and substantially greater marketing resources than we do. If we do not develop and maintain strong brands, our business, prospects, financial condition and operating results will be materially and adversely impacted.

Increases in costs, disruption of supply or shortage of raw materials, in particular lithium-ion cells, could harm our business.

Although we do not materially use raw materials in the production of our electronic powerboats, we purchase the necessary parts and components for our boats from third-party suppliers that do. Were those third-party suppliers to experience increases in the cost or a sustained interruption in the supply or shortage of raw materials, the corresponding parts and components could become more costly or less available (if still available at all). We are particularly exposed to a supply-chain risk as we have not contractually secured long-term supply commitments at fixed prices with our third-party suppliers. The prices for these raw materials fluctuate depending on market conditions and global demand for these materials and price fluctuations and material shortages could adversely affect our business and operating results. For instance, we are exposed to multiple risks relating to price fluctuations for lithium-ion cells. These risks include:

●	the inability or unwillingness of current battery manufacturers to build or operate battery cell manufacturing plants to supply the numbers of lithium-ion cells required to meet demand;
●	disruption in the supply of cells due to quality issues or recalls by the battery cell manufacturers; and
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●	an increase in the cost of raw materials, such as cobalt, used in lithium-ion cells.
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Our business depends on the continued supply of battery cells for our boats. We do not currently have any agreements for the supply of batteries and depend upon the open market for their procurement. Any disruption in the supply of battery cells from our supplier could temporarily disrupt the planned production of our boats until such time as a different supplier is fully qualified. Moreover, battery cell manufacturers may choose to refuse to supply electric boat manufacturers to the extent they determine that the boats are not sufficiently safe. Furthermore, current fluctuations or shortages in petroleum and other economic conditions may cause us to experience significant increases in freight charges and raw material costs. Substantial increases in the prices for our raw materials would increase our operating costs and could reduce our margins if we cannot recoup the increased costs through increased electric boat prices. We might not be able to recoup increasing costs of raw materials by increasing boat prices. We publish the price for the base model of our powerboats. However, any attempts to increase the published prices in response to increased raw material costs could be viewed negatively by our potential customers, result in cancellations of orders and could materially adversely affect our brand, image, business, prospects and operating results.

If our suppliers sell us parts or components containing conflict minerals, we may be required at significant expense to find suppliers that do not use conflict minerals.

In 2010, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) requiring the Securities and Exchange Commission (“SEC”) to issue rules specifically relating to the use of “Conflict Minerals” within manufactured products. Conflict Minerals are currently defined by U.S. Law as tin, tantalum, tungsten and gold (also known as “3TG”) and related derivatives.

Within a year of becoming a public company, the SEC rules require any SEC registrant whose commercial products contain any 3TG (“3TG Product”) to file a special report on Form SD and to disclose whether the 3TG in the 3TG Product originated from the Democratic Republic of the Congo (“DRC”) or adjoining countries (collectively, the “DRC Region”) and, if so, whether the 3TG is “conflict free”. “3TG Conflict Free” means that the supply chain is transparent and the 3TG in 3TG Products does not directly or indirectly benefit armed groups responsible for serious human rights abuses in the DRC Region. By enacting this provision, Congress intends to further the humanitarian goal of ending the extremely violent conflict in the DRC Region, which has been partially financed by the exploitation and trade of 3TG originating in the DRC Region.

We have not determined whether we need to file a report on Form SD, and we have yet to file a Form SD. We will need to expend time and money on determining whether our products contain conflict minerals. If our suppliers use conflict minerals in the production of the parts and components that we purchase from them, we may need to find alternative suppliers. If possible, this may only be possible at significant expense or with material delays in production.

Our software to control our electric powertrain systems contains “open source” software, and any failure to comply with the terms of one or more of these open-source licenses could negatively affect our business.

We use software to control our electric powertrain systems that relies upon “open source” licenses and intend to use such software in the future. Although we do not believe that the open source code we have used imposes any limitations on the use of the software that we have developed, the terms of many open source licenses have not been interpreted by United States or other courts, and there is a risk that these licenses could be construed in a manner that could impose unanticipated conditions or restrictions on our ability to commercialize our solutions including requirements that we make available source code for modifications or derivative works we create based upon the open source software or license such modifications or derivative works. In addition to risks related to license requirements, usage of open-source software can lead to greater risks than use of third-party commercial software, as open-source licensors generally do not provide warranties or controls on origin of the software. We cannot be sure that all open source is submitted for approval prior to use in our solutions. In addition, many of the risks associated with use of open source cannot be eliminated, and could, if not properly addressed, negatively affect the performance of our electric powertrains and our business.

We rely on network and information systems and other technologies for our business activities and certain events, such as computer hackings, viruses or other destructive or disruptive software or activities may disrupt our operations, which could have a material adverse effect on our business, financial condition and results of operations.

Network and information systems and other technologies are important to our business activities and operations. Network and information systems-related events, such as computer hackings, cyber threats, security breaches, viruses, or other destructive or disruptive software, process breakdowns or malicious or other activities could result in a disruption of our services and operations or improper disclosure of personal data or confidential information, which could damage our reputation and require us to expend resources to remedy any such breaches. Moreover, the amount and scope of insurance we maintain against losses resulting from any such events or security breaches may not be sufficient to cover our losses or otherwise adequately compensate us for any disruptions to our businesses that may result, and the occurrence of any such events or security breaches could have a material adverse effect on our business and results of operations. The risk of these systems-related events and security breaches occurring has intensified, in part because we maintain certain information necessary to conduct our businesses in digital form stored on cloud servers. While we develop and maintain systems seeking to prevent systems-related events and security breaches from occurring, the development and maintenance of these systems is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated. Despite these efforts, there can be no assurance that disruptions and security breaches will not occur in the future. Moreover, we may provide certain confidential, proprietary and personal information to third parties in connection with our businesses, and while we obtain assurances that these third parties will protect this information, there is a risk that this information may be compromised. The occurrence of any of such network or information systems-related events or security breaches could have a material adverse effect on our business, financial condition and results of operations.

If the governmental grants and tax credits that we receive were to be no longer available, our net earnings would be materially reduced.

We receive governmental benefits in connection with our operations. In connection with the production of our powerboats and our research into green technology, we have been able to receive tax credits and grants provided by the Quebec provincial government and the Canadian federal government. In our 2024, 2023, and 2022 fiscal years, we recognized grants and investment tax credits amounting to $66,761, $232,882, and $1,458,632, respectively. We intend to continue applying for such grants and receiving such tax credits. Without such grants and tax credits, our net loss in each of the past three fiscal years would have been larger. If they were no longer available, our business, prospects, financial condition and operating results could be adversely affected.

Additionally, the amount of the grants and investment tax credits that we received in our 2024 fiscal year were 29% of what we received in our 2023 fiscal year and 5% of what we received in our 2022 fiscal year. We might never be able to increase the grants and investment tax credits that we received to the levels that we received in the past.

The unavailability, reduction or elimination of government economic incentives could have a material adverse effect on our business, financial condition, operating results and prospects.

Although we are unaware of substantial governmental economic incentives, such as tax credits and rebates, that customers may receive in connection with the purchase of our products, there are certain governmental regulations whose repeal could affect the desirability of our powerboats. In particular, local and regional restrictions of internal combustion engines on certain waterways, make electric boats an attractive alternative for use in such lakes and rivers. Any reduction, elimination or discriminatory application of such rules because of policy changes or other reasons may result in the diminished competitiveness of electric boats generally. This could materially and adversely affect the growth of our market and our business, prospects, financial condition and operating results.

If we fail to manage future growth effectively, we may not be able to market or sell our powerboats or powertrains successfully.

Any failure to manage our growth effectively could materially and adversely affect our business, prospects, operating results and financial condition. We plan to expand our operations in the near future. Our future operating results depend to a large extent on our ability to manage this expansion and growth successfully. Risks that we face in undertaking this expansion include:

●	training new personnel;
●	forecasting production and revenue;
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●	expanding our marketing efforts, including the marketing of a new powertrain that we use;
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●	controlling expenses and investments in anticipation of expanded operations;
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●	establishing or expanding design, manufacturing, sales and service facilities;
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●	implementing and enhancing administrative infrastructure, systems and processes; and
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●	addressing new markets.
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We intend to continue to hire a number of additional personnel, including design and manufacturing personnel and service technicians for our electric boats and powertrains. Competition for individuals with experience designing, manufacturing and servicing electric boats is intense, and we may not be able to attract, assimilate, train or retain additional highly qualified personnel in the future. The failure to attract, integrate, train, motivate and retain these additional employees could seriously harm our business and prospects.

Our business may be adversely affected by labor and union activities.

None of our employees are currently represented by a labor union. It is common in Quebec for employees of manufacturers of a certain size to belong to a union. Although we do not believe that we are currently of a size where our employees will unionize, were they to do so now or in the future, we would be at risk for higher employee costs and increased risk of work stoppages. We also directly and indirectly depend upon other companies with unionized work forces, such as parts suppliers and trucking and freight companies, and work stoppages or strikes organized by such unions could have a material adverse impact on our business, financial condition or operating results. If a work stoppage occurs among our key suppliers or our network of distributors, it could materially reduce the manufacture and sale of our boats and have a material adverse effect on our business, prospects, operating results or financial condition.

Our ability to meet our manufacturing workforce needs is crucial to our results of operations and future sales and profitability.

We rely on the existence of an available hourly workforce to manufacture our products. We cannot assure you that we will be able to attract and retain qualified employees to meet current or future manufacturing needs at a reasonable cost, or at all. For instance, the demand for skilled employees has increased recently with the low unemployment rates in the regions where we have manufacturing facilities. Also, although none of our employees are currently covered by collective bargaining agreements, we cannot assure you that our employees will not elect to be represented by labor unions in the future. Additionally, competition for qualified employees could require us to pay higher wages to attract a sufficient number of employees. Significant increases in manufacturing workforce costs could materially adversely affect our business, financial condition or results of operations.

We compete with a variety of other activities for consumers’ leisure time.

Our powerboats are used for recreational and sport purposes, and demand for our powerboats may be adversely affected by competition from other activities that occupy consumers’ leisure time and by changes in consumer lifestyle, usage pattern or taste. Similarly, an overall decrease in consumer leisure time may reduce consumers’ willingness to purchase and enjoy our products.

Product liability, warranty, personal injury, property damage and recall claims may materially affect our financial condition and damage our reputation.

We are engaged in a business that exposes us to claims of product liability and warranty claims in the event our products actually or allegedly fail to perform as expected or the use of our products results, or is alleged to result, in property damage, personal injury or death. Our products involve kinetic energy, produce physical motion and are to be used on the water, factors which increase the likelihood of injury or death. Our products contain Lithium-ion batteries, which have been known to catch fire or vent smoke and flame, and chemicals which are known to be, or could later be proved to be, toxic carcinogenic. Any personal injury or wrongful death claim could, even if not justified, prove expensive to contest.

We do not provide warranties for our powerboats but instead rely upon the warranties provided by the third-party manufacturers from whom we purchase the components for our powerboats. Although we maintain product and general liability insurance of the types and in the amounts that we believe are customary for the industry, we are not fully insured against all such potential claims. We may experience legal claims in excess of our insurance coverage or claims that are not covered by insurance, either of which could adversely affect our business, financial condition and results of operations. Adverse determination of material product liability and warranty claims made against us could have a material adverse effect on our financial condition and harm our reputation. In addition, if any of our products or components in our products are, or are alleged to be, defective, we may be required to participate in a recall of that product or component if the defect or alleged defect relates to safety. Any such recall and other claims could be costly to us and require substantial management attention.

Our intellectual property is not protected through patents or formal copyright registration. As a result, we do not have the full benefit of patent or copyright laws to prevent others from replicating our products, product candidates and brands.

Apart from trademark applications that we filed with the Canadian Intellectual Property Office and the U.S. Patent and Trademark Office for our logo and the brand name “E-Motion”, we have not protected our intellectual property rights through patents or formal copyright or trademark registration, and we do not currently have any patent applications pending. As we intend to transition into the production of electric powertrains to OEMs, we envision our intellectual property and its security becoming more vital to our future. Until we protect our intellectual property through patent, trademarks and registered copyrights, we may not be able to protect our intellectual property and trade secrets or prevent others from independently developing substantially equivalent proprietary information and techniques or from otherwise gaining access to our intellectual property or trade secrets. In such an instance, our competitors could produce products that are nearly identical to ours resulting in us selling less products or generating less revenue from our sales.

Confidentiality agreements with employees and others may not adequately prevent disclosure of trade secrets and other proprietary information.

We rely on trade secrets, know-how and technology, which are not protected by patents, to protect the intellectual property behind our electric powertrain and for the construction of our boats. We do not yet use confidentiality agreements with our collaborators, employees, consultants, outside scientific collaborators and sponsored researchers and other advisors to protect our proprietary technology and processes. We intend to use such agreements in the future, but these agreements may not effectively prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. In addition, others may independently discover trade secrets and proprietary information, and in such cases we could not assert any trade secret rights against such party. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position.

Any patent applications that we file may not result in issued patents, which may have a material adverse effect on our ability to prevent others from interfering with our commercialization of our products

Although we have retained a patent lawyer to begin the process of filing patent applications for up to 24 patents related to our E-Motion™ electric powertrain system, to date, we have filed five completed patent applications. The registration and enforcement of patents involves complex legal and factual questions and the breadth and effectiveness of patented claims is uncertain. If we file patent applications in connection with our electric outboard powertrain systems or other matters, we cannot be certain that we will be first to file patent applications on those or other inventions, nor can we be certain that such patent applications will result in issued patents or that any of our issued patents will afford sufficient protection against someone creating competing products, or as a defensive portfolio against a competitor who claims that we are infringing its patents. In addition, patent applications filed in foreign countries are subject to laws, rules and procedures that differ from those of the United States, and thus we cannot be certain that foreign patent applications, if any, will result in issued patents in those foreign jurisdictions or that such patents can be effectively enforced, even if they relate to patents issued in the United States.

We have limited registered trademarks for our products and trade names

We have submitted applications for registered trademarks for our name and some of our brands, and, while such applications have been granted, not all of our brands currently have registered trademark protection. Any future trademark applications that we file with a

relevant governmental authority for brand names/logos might not be approved. Failure to obtain such approval could limit our ability to use the brand names/logos in those territories or lead our products to be confused with, and/or tarnished by, competing products. Even if appropriate applications were made and approved, third parties may oppose or otherwise challenge such applications or registrations.

We may need to defend ourselves against patent or trademark infringement claims, which may be time-consuming and would cause us to incur substantial costs.

The status of the protection of our intellectual property is unsettled as we do not have any patents, trademarks or registered copyrights and have not applied for the same. Companies, organizations or individuals, including our competitors, may hold or obtain patents, trademarks or other proprietary rights that would prevent, limit or interfere with our ability to make, use, develop, sell or market our powerboats and electric powertrains or use third-party components, which could make it more difficult for us to operate our business. From time to time, we may receive communications from third parties that allege our products or components thereof are covered by their patents or trademarks or other intellectual property rights. Companies holding patents or other intellectual property rights may bring suits alleging infringement of such rights or otherwise assert their rights. If we are determined to have infringed upon a third party’s intellectual property rights, we may be required to do one or more of the following:

●	cease making, using, selling or offering to sell processes, goods or services that incorporate or use the third-party intellectual property;
●	pay substantial damages;
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●	seek a license from the holder of the infringed intellectual property right, which license may not be available on reasonable terms or at all;
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●	redesign our boats or other goods or services to avoid infringing the third-party intellectual property;
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●	establish and maintain alternative branding for our products and services; or
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●	find-third providers of any part or service that is the subject of the intellectual property claim.
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In the event of a successful claim of infringement against us and our failure or inability to obtain a license to the infringed technology or other intellectual property right, our business, prospects, operating results and financial condition could be materially adversely affected. In addition, any litigation or claims, whether or not valid, could result in substantial costs, negative publicity and diversion of resources and management attention.

You may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited because we are incorporated under the laws of the Province of Quebec, a substantial portion of our assets are in Canada and the majority of our directors and executive officers reside outside the United States.

We are constituted under the laws of the Business Corporations Act (Quebec) (the “Business Corporation Act”), and our executive offices are located outside of the United States in Boisbriand, Quebec. Our officers and the majority of our directors reside outside the United States. In addition, a substantial portion of their assets and our assets are located outside of the United States. As a result, you may have difficulty serving legal process within the United States upon us or any of these persons. You may also have difficulty enforcing, both in and outside of the United States, judgments you may obtain in U.S. courts against us or these persons in any action, including actions based upon the civil liability provisions of U.S. Federal or state securities laws. Furthermore, there is substantial doubt as to the enforceability in Canada against us or against any of our directors and officers who are not residents of the United States, in original actions or in actions for enforcement of judgments of U.S. courts, of liabilities based solely upon the civil liability provisions of the U.S. federal securities laws. In addition, shareholders in Quebec corporations may not have standing to initiate a shareholder derivative action in U.S. federal courts.

As a result, our public shareholders may have more difficulty in protecting their interests through actions against us, our management, our directors or our major shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States.

Global economic conditions could materially adversely impact demand for our products and services.

Our operations and performance depend significantly on economic conditions. Global financial conditions continue to be subject to volatility arising from international geopolitical developments and global economic phenomenon, as well as general financial market turbulence, including growing inflationary concerns, resulting in a significant reduction in many major market indices. Uncertainty about global economic conditions could result in:

●	customers postponing purchases of our products and services in response to tighter credit, unemployment, negative financial news and/or declines in income or asset values and other macroeconomic factors, which could have a material negative effect on demand for our products and services; and
●	third-party suppliers being unable to produce parts and components for our products in the same quantity or on the same timeline or being unable to deliver such parts and components as quickly as before or subject to price fluctuations, which could have a material adverse effect on our production or the cost of such production; and
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accordingly, on our business, results of operations or financial condition. Access to public financing and credit can be negatively affected by the effect of these events on Canadian, U.S. and global credit markets. The health of the global financing and credit markets may affect our ability to obtain equity or debt financing in the future and the terms at which financing or credit is available to us. These instances of volatility and market turmoil could adversely affect our operations and the trading price of our common shares.

Our business may be materially affected by future pandemics

Potential future pandemics may disrupt our business and operational plans. These disruptions may include disruptions resulting from (i) shortages of employees, (ii) unavailability of contractors and subcontractors, (iii) interruption of, or price fluctuations in, supplies from third parties upon which we rely, (iv) restrictions that governments impose to address the pandemic, and (v) restrictions that we and our contractors and subcontractors impose to ensure the safety of employees and others. Such pandemics may disrupt our supply chain by increasing the amount of time between ordering third-party materials needed for our boats and their delivery. Delays in our supply chain could adversely impact our production and, in turn, our revenues. These disruptions may have a material adverse effect on our business, financial condition and results of operations. Such adverse effect could be rapid and unexpected.

Fluctuations in currency exchange rates may significantly impact our results of operations.

Our operations are conducted in the United States and Canada, but approximately 94% of our sales and rentals for our 2024 fiscal year occurred in the United States. As a result, we are exposed to an exchange rate risk between the U.S. and Canadian dollars. The exchange rates between these currencies in recent years have fluctuated significantly and may continue to do so in the future. In our fiscal 2024, the monthly average exchange rate as published by the Bank of Canada ranged from a high of US1.3717:$1.00 to a low of US$1.3425:$1.00. An appreciation of the Canadian dollar against the U.S. dollar could increase the relative cost of our products outside of Canada, which could lead to decreased sales. Conversely, to the extent that we are required to pay for goods or services in U.S. dollars, the depreciation of the Canadian dollar against the U.S. dollar would increase the cost of such goods and services.

We do not hedge our currency exposure and, therefore, we incur currency transaction risk whenever we enter into either a purchase or sale transaction using a currency other than the Canadian dollar. Given the volatility of exchange rates, we might not be able to effectively manage our currency transaction risks, and volatility in currency exchange rates might have a material adverse effect on our business, financial condition or results of operations.

If we experience material weaknesses or otherwise fail to maintain an effective system of internal controls over financial reporting, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect investor confidence in us and, as a result, the value of our common shares.

As a result of the year-end assessment process for the year ended August 31, 2024, we identified that we did not maintain effective processes and controls over the accounting for and reporting of complex and non-routine transactions due to a material weakness. Specifically, we determined that there was a lack of sufficient accounting and finance personnel to enable appropriate level of internal controls within the financial statement close process, including performing in-depth analysis and review of complex accounting matters and non-routine transactions within the timeframes set by us for filing our consolidated financial statements. As a result of our ineffective system of internal controls over financial reporting, we had to restate our condensed interim consolidated financial statements for the three- and nine-months ended May 31, 2024 to amend a prior classification of a sale of a subsidiary as discontinued operations. We are currently working on remediating the identified material weakness. Because of this deficiency, we concluded there was a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis at August 31, 2024.

If we fail to identify or remediate any current or future material weaknesses in our internal controls over financial reporting, we are unable to conclude that our internal controls over financial reporting are effective or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal controls over financial reporting when we are no longer an emerging growth company, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common shares could be negatively affected. As a result of such failures, we could also become subject to investigations by Nasdaq, the SEC or other regulatory authorities, and become subject to litigation from investors and shareholders, which could harm our reputation and financial condition or divert financial and management resources from our regular business activities.

Our financial statements have been prepared on a going concern basis and our financial status creates a substantial doubt whether we will continue as a going concern.

Our financial statements have been prepared on a going concern basis under which an entity is considered to be able to realize its assets and satisfy its liabilities in the ordinary course of business. Our future operations are dependent upon the identification and successful completion of equity or debt financing and the achievement of profitable operations at an indeterminate time in the future. There can be no assurances that we will be successful in completing an equity or debt financing or in achieving or maintaining profitability. The financial statements do not give effect to any adjustments relating to the carrying values and classification of assets and liabilities that would be necessary should we be unable to continue as a going concern.

We have been notified by Nasdaq that we are not in compliance with certain standards which Nasdaq requires listed companies meet for their respective securities to continue to be listed and traded on its exchange. If we are unable to regain compliance with such continued listing requirements, Nasdaq may choose to delist our securities from its exchange or may subject us to additional restrictions, which may adversely affect the liquidity and trading price of our securities.

Our securities are currently listed on Nasdaq Capital Market maintained by The Nasdaq Stock Market LLC (“Nasdaq”). On February 16, 2024, we received written notice (the “Notice”) from the Listing Qualifications Department of Nasdaq notifying us that, based on the closing bid price of our common shares for the last 30 consecutive trading days, we no longer complied with the minimum bid price requirement for continued listing on the Nasdaq Capital Market. Nasdaq Listing Rule 5450(a)(1) requires listed securities to maintain a minimum bid price of US$1.00 per share (the “Minimum Bid Price Requirement”), and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the Minimum Bid Price Requirement exists if the deficiency continues for a period of 30 consecutive trading days. Pursuant to the Nasdaq Listing Rules, we were provided an initial compliance period of 180 calendar days to regain compliance with the Minimum Bid Price Requirement. To regain compliance, the closing bid price of the Common Shares had to be at least US$1.00 for a minimum of 10 consecutive trading days prior to August 14, 2024, and we had to otherwise satisfy The Nasdaq Capital Market’s requirements for listing.

On August 15, 2024, we received a staff determination letter (the “Determination Letter”) from Nasdaq notifying us that we had not regained compliance with the Minimum Bid Price Requirement by August 14, 2024, and are not eligible for a second 180-day period due to our failure to comply with the minimum stockholders’ equity initial listing requirement for The Nasdaq Capital Market. The Determination Letter had no immediate effect on the listing of the Company’s common shares on the Nasdaq Capital Market. We filed a hearing request that automatically stayed the suspension and delisting action pending the hearing and the expiration of any additional extension period granted by the Nasdaq Hearing Panel (the “Panel”) following the hearing. In that regard, pursuant to the Nasdaq Listing Rules, the Panel had the authority to grant an extension not to exceed 180 days from the date of the Determination Letter.

On October 3, 2024, we met with the Panel, and following such meeting it granted our request for the continued listing of our common shares on Nasdaq, subject to our evidencing compliance with all applicable criteria for initial listing on The Nasdaq Capital Market, and certain other interim conditions, which include the implementation of the October 8, 2024 1:9 reverse stock split and satisfaction of Nasdaq continued listing rules including the bid price rule for (i) a minimum of ten consecutive business days following October 8, 2024, and (ii) a minimum of twenty consecutive business days. On November 5, 2024, we were able to satisfy the foregoing criteria for continued listing which was confirmed by the Panel. However, the Panel also advised us that it would impose a Discretionary Panel Monitor, in application of Listing Rule 5815(d)(4)(A), for a period of one year to ensure that the Company maintains long-term compliance with all of the Exchange’s continued listing requirements. Should the Company fail to maintain compliance with any continued listing requirement, Nasdaq may issue another Determination Letter and promptly schedule a new hearing with the Panel. A delisting would likely have a negative effect on the liquidity and market price of our common shares and may impair your ability to sell or purchase our common shares when you wish to do so.

If Nasdaq delists our common shares from trading on its exchange and we are not able to list our common shares on another national securities exchange, our common shares may be quoted on an over-the-counter market. However, if this were to occur, we could face significant material adverse consequences, including:

●	a limited availability of market quotations for our securities;
●	reduced liquidity for our securities;
---	---
●	a determination that our common shares are a “penny stock”, which will require brokers trading in such common shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our common shares;
---	---
●	a limited amount of news and analyst coverage; and
---	---
●	a decreased ability to issue additional securities or obtain additional financing in the future.
---	---

As a result, an investor would likely find it more difficult to trade, or to obtain accurate price quotations for, our securities if our securities are de-listed from Nasdaq. Delisting would likely also reduce the visibility, liquidity and value of our securities, including as a result of reduced institutional investor interest in our company, and may increase the volatility of our securities.

In an effort to regain compliance with the Minimum Bid Price Requirement, we recently enacted two reverse stock splits that had the practical effect of a 1:135 reverse stock split. We may need to enact additional reverse stock splits to regain compliance if we fail to meet the Minimum Bid Price Requirement in the future.

We enacted a 1-for-15 reverse stock split of our common shares on August 22, 2024 in an effort to regain compliance with Nasdaq’s minimum bid price requirement for continued listing on the Nasdaq Capital Market. Nasdaq Listing Rule 5450(a)(1) which requires listed securities to maintain a minimum bid price of US$1.00 per share (the “Minimum Bid Price Requirement”). To regain compliance, the closing bid price of the Common Shares has to be at least US$1.00 per share for a minimum of 10 consecutive trading days and, at Nasdaq’s discretion, up to 20 consecutive trading days. In an effort to regain compliance with the Minimum Bid Price Requirement, we enacted a two reverse stock splits on a cumulative 1-for-135 basis, the last of which occurred on October 8, 2024. While this action was sufficient to ensure that we maintain a minimum bid price for our common shares above US$1.00 for a minimum of twenty consecutive business days by or before November 4, 2024 as required by Nasdaq, there are no assurances that we will maintain such compliance in the future. If we have to enact a third reverse stock split to maintain compliance in the future, we may not be able to do so as the Panel may object to such a third reverse stock split or we may not have sufficient room for a reverse stock split as Nasdaq does not allow for an automatic 180-day compliance period for companies that enact reverse stock splits in a three-year period that aggregate to a total of greater than 1-for-250. Even if we enacted a third reverse stock split, the public markets could view any such future reverse stock split negatively, and the per share price of our common shares could be adversely affected.

In accordance with IFRS, all references to common shares, Pre-Funded Warrants, Series A and B Convertible Preferred Shares, warrants and options have been adjusted to reflect both reverse stock splits, despite the fact that the latter occurred in the subsequent period. Comparative references to the above have also been adjusted to reflect the two reverse stock splits.

1.2 Overall Performance

Description of Business

The Company was incorporated on August 29, 2012, under the laws of the province of Quebec, Canada, and its principal activity is the design, development and manufacturing of electric outboard powertrain systems and electric boats.

The head office and principal address of the Company are located at 730 Boulevard du Cure-Boivin, Boisbriand, Quebec, Canada, V7G 2A7.

Additional information related to the Company is available on SEDAR at www.sedar.com and on the SEC’s website at https://www.sec.gov/edgar/searchedgar/companysearch. The information contained on SEDAR is for your reference and is not incorporated by reference into any filings we have made with the SEC, including our registration statement on Form F-3 (no. 333-267893) and any prospectus supplements thereunder.

Performance Summary

The following is a summary of significant events and transactions that occurred during and subsequent to the fiscal year ended August 31, 2024:

On September 11, 2023, the Company announced the appointment of Dr. Philippe Couillard as an Independent Director to the Board of Directors, effective immediately. Dr. Couillard brings a wealth of knowledge and a diverse range of experiences to his new role, and he will be instrumental in guiding Vision Marine through its next phase of growth and innovation.

On December 4, 2023, the Company announced a strategic partnership with Blue Water Boat Rental, a leader in internal combustion engine boat rentals. The Company has already provided 6 electric boats and share 50% of the revenue generated by the partnership. Blue Water will provide the personnel, sales and marketing, slips and dock space and other items.

On February 13, 2024, the Company announced the appointment of Anthony Cassella as an Independent Director to the Board of Directors, effective immediately. Mr. Cassella brings a wealth of knowledge and experience to the Company’s Board of Directors, having served in roles of increasing responsibility over his 26-year career with MarineMax, Inc. His background and knowledge of the industry will bring incredible value to the next chapter of the Company’s mission to become the leading provider of electric propulsion for the boating industry.

On February 15, 2024, the Company announced the unveiling of the Phantom, a rotomolded, recyclable, and hard-to-damage boat, offering significant market advantages through its economic and environmental benefits. Engineered for efficiency, the Phantom will enable the Company to produce up to an estimated 300 units annually at a cost that is 70% lower than that of fiberglass alternatives, with potential scalability to 1,500 units per year.

On February 23, 2024, the Company announced a groundbreaking partnership with Nautical Ventures Marine Group, a premier provider of maritime products and services. This collaboration marks a significant milestone with an initial purchase order for 50 units of the Company’s new Phantom product and the establishment of an exclusive distributorship agreement for South Florida.

On March 1, 2024, the Company announced the appointment of Raffi Sossoyan as its new Chief Financial Officer, replacing Kulwant Sandher, who remained as a consultant to the Company. The change highlights the Company’s focus on manufacturing, production, and delivery, underlining the Company’s dedication to scaling its operations and enhancing its market footprint.

On March 26, 2024, Mario Saucier resigned as a Director. On April 2, 2024, Carter Murray resigned as Chairman and Director. Both resignations were not the result of any disagreement with the Company on any matter relating to its operations, policies, or practices. As evidenced by the recent appointment of Anthony Cassella, the Company is focused on recruiting Directors from the boating or electric vehicle industry. The Company is currently recruiting a new Chairman with specific industry experience that can help guide the Company to the next phase of commercialization and growth.

On April 3, 2024, the Company announced the commissioning of a new state-of-the-art lithium battery production facility in Pompignac, France by its partner Neogy, a subsidiary of Startek Energy Group. This pivotal development marks a significant milestone in the industrialization of high-tension battery packs designed specifically for the Company’s innovative electric boating solutions.

On April 16, 2024, Patrick Bobby resigned as a Director and as Head of Performance & Special Projects. The resignation was not the result of any disagreement with the Company on any matter relating to its operations, policies, or practices.

On April 24, 2024, the Company filed its first patent application related to its E-Motion™ powertrain technology. Specifically, the patent application was for the Communication Cryptographic System technology, which seeks to enhance security for users, ensure the conformity of all system components, and deliver an elevated boating experience.

On April 25, 2024, the Company sold 100% of the shares of EB Rental, Ltd., which previously facilitated its electric boat rental operations located in Newport Beach, California, to EB Strategies Inc. for $1,089,302. The Company intends to continue to own and operate its electric boat rental operations in Ventura, California and Palm Beach, Florida. In addition, the Company is currently in the process of opening a new electric boat rental facility in Dania Beach, Florida. Part of the proceeds from the sale will be used to apply for up to 24 patents related to the Company’s E-Motion™ electric powertrain system. It is anticipated that the patent applications should be completed by the end of the 2024 calendar year.

On May 1, 2024, the Company filed its second patent application related to its E-Motion™ powertrain technology. Specifically, the patent application was for its innovative method and apparatus for controlling the cooling water system of an electric marine vessel.

On May 6, 2024, the Company was notified by Ernst & Young LLP, its independent registered public accounting firm for its most recently completed fiscal year, that it will not stand for reappointment as the independent registered public accounting firm of the Company for the fiscal year ending August 31, 2024.

On May 7, 2024, the Company filed its third patent application related to its E-Motion™ powertrain technology. Specifically, the patent application was for its innovative Control & Power Management Software, which is pivotal in managing the electric boating experience, offering precision and control over the motor’s impressive torque capabilities, which are crucial for optimizing performance, safety, and enjoyability for users.

On May 22, 2024, the Company filed its fourth patent application related to its E-Motion™ powertrain technology. Specifically, the patent application was for its dedicated high-voltage marine battery pack.

On May 26, 2024, the Company appointed M&K CPAS, PLLC to fill the vacancy created by the resignation of Ernst & Young LLP, to be its independent registered public accounting firm until the close of the next annual meeting of its shareholders. The appointment of M&K CPAS, PLLC was considered and approved by the Company’s Audit Committee and Board of Directors.

On June 3, 2024, the Company filed its fifth patent application related to its E-Motion™ powertrain technology. Specifically, the patent application was for its vehicle control unit apparatus that maximizes the functionality of an intelligent electric marine powertrain.

On June 20, 2024, the Company announced its partnership with JetRide Holding, LLC, a Florida members-only boat club. This strategic alliance marks the Company’s expansion in the burgeoning electric boat rental market, leveraging JetRide Holding LLC’s extensive network of over 17 boat club locations across Florida.

On September 10, 2024, the Company announced its strategic alliance with ePropulsion to empower the groundbreaking Phantom Boat, crafted from innovative plastic rotomolding technology. Following its debut at the Miami International Boat Show, the Phantom is set to showcase a customized electric ePropulsion system. In this partnership, the Phantom will be available through select ePropulsion dealers, both on request and by recommendation across its dealer network.

On September 23, 2024, the Company announced the launch of its revolutionary E-Motion™ 180e Inboard electric motor system. Delivering an impressive continuous 180hp at the propeller, this new system opens an important market segment for the Company, significantly expanding the range of vessels that can benefit from its advanced electric propulsion technology.

On November 18, 2024, the Company announced a new production initiative with Smoker Craft Inc., a U.S.-based pontoon manufacturer known for its precision engineering and advanced manufacturing capabilities. This collaboration is expected to produce a state-of-the-art pontoon platform specifically designed to integrate Vision Marine’s high-performance (180 HP) electric propulsion systems, specifically the pontoon-designed P-Powerpack. The Company believes the powerpack will merge cutting-edge technology and exceptional craftsmanship into a transformative product for the marine industry.

Financings

During the fiscal year ended August 31, 2024 as well as the period up to the filing date of this MD&A, the Company issued the following securities:

On September 20, 2023 the Company announced that it had entered into subscription agreements with investors to purchase an aggregate of 2,763 units, at a purchase price of US$546.75 per unit. The gross proceeds to the Company from the private placement were US$1,510,124 before deducting the placement agent's fees and other estimated offering expenses. Each of the units issued pursuant to the private placement is comprised of one common share and one common share purchase warrant. Each full warrant will be exercisable six months from the date of issuance and entitle its holder to acquire one additional common share at a price of US$546.75 per common share, subject to adjustments as set forth therein, and will expire three years from the date of issuance. On December 14, 2024, the Company agreed to reduce the exercise price on these warrants from US$546.75 to US$141.75

On December 14, 2023, the Company announced that it entered into definitive securities purchase agreements with several institutional and accredited investors (the "Investors") for the sale of its preferred shares and warrants. Vision Marine sold an aggregate of 3,000 shares of its non-dividend bearing Series A Convertible Preferred Shares, with a stated value of US$1,000 per share, and Warrants to purchase up to 21,169 of its common shares for aggregate gross proceeds of US$3.0 million, before deducting placement agent fees and other offering expenses. Investors were also granted an option to purchase up to an additional 3,000 shares of Series A Convertible Preferred Shares and up to an additional 21,169 Warrants for a period of six (6) months from the execution of the definitive securities purchase agreements. The shares of Series A Convertible Preferred Shares are initially convertible into an aggregate of 21,169 common shares of the Company at a conversion price of US$141.75 per share, as may be adjusted, for a period of twelve (12) months, at which time the Series A Convertible Preferred Shares becomes mandatorily convertible, subject to a potential price adjustment at maturity. The Warrants have an exercise price of US$141.75 per share and will expire five (5) years from the date of issuance. Simultaneously with the execution of the definitive securities purchase agreement, the Company has agreed to reduce the exercise price of 20,358 of its previously issued warrants from US$546.75 and US$568.35 to US$141.75, which includes certain participating investors, who have entered into warrant amendment agreements with the Company. Joseph Gunnar & Co., LLC is acted as the exclusive placement agent for the offering. The offering closed on December 21, 2023.

On January 18, 2024, the Company announced that it had entered into definitive securities purchase agreement with the Government of Quebec, through Investissement Québec (the "Investor") for the sale of its preferred shares and warrants. Vision Marine sold an aggregate of 3,000 shares of its non-dividend bearing Series B Convertible Preferred Shares, with a stated value of US$1,000 per share, and Warrants to purchase up to 21,165 of its common shares for aggregate gross proceeds of US$3.0 million, before deducting placement agent fees and other offering expenses. The shares of Series B Convertible Preferred Shares are initially convertible into an aggregate of 21,165 common shares of the Company at a conversion price of US$141.75 per share, as may be adjusted, for a period of twelve (12) months, at which time the Series B Convertible Preferred Shares become mandatorily convertible, subject to a potential price adjustment at maturity. The Warrants have an exercise price of US$141.75 per share and will expire five (5) years from the date of issuance.

During the fiscal year ended August 31, 2024, the Company issued a total of 7,545 Voting Common Shares to third parties in exchange for marketing and management consulting services provided to the Company valued at $1,262,934. For such transactions, the value of

the services was paid for with shares, the number of shares being determined by dividing the value of the services provided by the price of the shares on the stock exchange at time of their issuance.

During the year ended August 31, 2024, the Company issued a total of 11,642 Voting Common Shares upon the conversion of 650 Series A Convertible Preferred Shares.

On August 16, 2024, 21,169 warrants to purchase Voting Common Shares issued to Series A Convertible Preferred shareholders were exchanged for 41,858 Voting Common Shares and 475 Pre-Funded Warrants.

On September 16, 2024, the Company issued 377,778 Voting Common Shares as part of a public offering for a total cash consideration of US$3,400,000, before deducting the placement agent's fees and other estimated offering expenses.

During the month of September 2024, 400 Series A Convertible Preferred Shares were converted into 9,877 Voting Common Shares.

In October 2024, the Company established an “at-the-market” facility with ThinnkEquity LLC for the sale of up to US$11.75 million of Voting Common Shares. During the months of October and November 2024, the Company issued 695,583 Voting Common Shares as part of the “at the market” public offering for a total cash consideration of US$2,572,680, less transaction costs of US$77,252.

On October 8, 2024, the Company implemented a reverse stock split, consolidating every 9 Voting Common Shares into 1 Voting Common Share. As a result of the round up feature for fractional shares, the Company issued an additional 195,203 Voting Common Shares.

Incentive Stock Options

During the fiscal year ended August 31, 2024, the Company granted the following stock options:

On December 29, 2023, the Company granted 371 options at an exercise price of US$463.05 per share. The stock options will expire 5 years from the grant date.

On January 26, 2024, the Company granted 371 options at an exercise price of US$102.60 per share. The stock options will expire 5 years from the grant date.

During the fiscal year ended August 31, 2024, 1,055 options were forfeited.

1.3 Selected Annual Financial Information


		Year Ended		Year Ended		Year Ended
	****	August 31, 2024	****	August 31, 2023	****	August 31, 2022
		$		$		$
Revenue		3,794,345		5,651,502		7,350,946
Gross Profit		1,497,438		1,536,426		3,285,565

Expenses		(15,813,521)		(22,694,487)		(16,139,007)

Income/(Loss) before Tax		(14,316,083)		(21,158,061)		(12,853,442)

Income Taxes		(255,463)		(280,875)		258,343

Total comprehensive income/(loss)		(13,966,200)		(20,542,229)		(12,802,680)
Basic & Diluted Earnings/(Loss) per Share		(153.62)		(300.02)		(211.61)

Balance Sheet
Working Capital Surplus^(1)^		2,888,660		3,636,936		8,727,011
Total Assets		11,420,241		24,046,512		29,100,209
Total Long-Term Liabilities		2,675,347		7,631,898		2,197,684

^(1)^^^Working capital surplus is calculated using current assets less current liabilities.

Selected Quarterly financial information


			Total	Income
			comprehensive	(Loss)
Quarter end	****	Revenues	income (loss)	per Share
	****			$
August 31, 2024^3^		1,019,189	(3,655,827)	(35.42)
May 31, 2024		1,060,153	(2,949,434)	(33.35)
February 29, 2024^2^		728,611	(8,414,588)	(97.02)
November 30, 2023^1^		986,392	1,053,649	11.97
August 31, 2023		2,120,447	(4,354,706)	(54.59)
May 31, 2023		1,300,100	(3,056,639)	(42.90)
February 28, 2023		831,195	(6,700,505)	(103.39)
November 30, 2022		1,399,760	(6,430,379)	(108.52)
August 31, 2022		3,375,806	(3,740,535)	(64.95)

All values are in US Dollars.

^1^ The Company had a net finance income related to its derivative liabilities of $5,411,168.

^2^ The Company recorded a goodwill impairment loss of $4,274,000 and had a net finance income of $906,760 related to its derivative liabilities.

^3^ The Company recorded a goodwill impairment loss of $4,430,182 and had a net finance income of $3,564,240 related to its derivative liabilities.

1.4 Results of Operations

Goodwill impairment test as at February 29, 2024

Assets that have an indefinite life, such as goodwill, are tested annually by the Company for impairment, or more frequently if events or circumstances indicate there may be impairment. During the three-month period ended May 31, 2024, the Company noted certain events and circumstances which indicated that there may be an impairment of the goodwill associated with its boat rental operation CGU (see detailed description below).

As a result of these triggering events and circumstances, the Company performed an impairment analysis for the boat rental operation CGU as at February 29, 2024. As a result of this analysis, the Company determined that the carrying amount of the goodwill associated with the boat rental operation CGU exceeded its recoverable amount and, accordingly, the Company recorded a goodwill impairment loss of $4,274,000 for the three-month period ended February 29, 2024. As a result of this loss, the carrying amount of the goodwill associated with this CGU had been reduced to $5,431,975 as at February 29, 2024 [August 31, 2023 - $9,680,941]. Note that the goodwill was further reduced in the quarter ended May 31, 2024 following the sale of EB Rental, Ltd. See the next section for details.

-	Expected earnings before interest, taxes, depreciation and amortization (“EBITDA”) as a percentage of revenues for the CGU of 12.7% for the remainder of 2024, 15.8% in 2025, 19.3% in 2026, 19.9% in 2027, 20.7% in 2028 and 21.5% in 2029 and thereafter.
-	Expected working capital cash absorption ratio for the CGU of 20% of annual incremental sales increases.
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-	Expected annual capital expenditure needs for the CGU of US$56,500 for the remainder of 2024, US$126,000 in 2025, US$346,800 in 2026, US$594,259 in 2027, US$229,820 in 2028, US$234,310 in 2029 and US$238,876 annually thereafter.
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Any reasonable negative change in these key assumptions could cause additional impairment of the CGU.

Sale of subsidiary

The Company’s consolidated financial statements have been prepared based on the books and records maintained by the Company, and the subsidiaries that it controls. However, due to the above sale of EB Rental, Ltd., the control over this subsidiary was deemed to have been lost as of April 25, 2024. As such, the Company ceased consolidating this subsidiary as at April 25, 2024.

The gain on the disposal of EB Rental, Ltd. at the deconsolidation date was determined as follows:



Fair Value Consideration received		1,089,302

Less: EB Rental, Ltd. net assets at disposal
-   EB Rental Ltd. share capital at disposal	100
-   EB Rental Ltd. deficit at disposal	(165,427)	(165,327)

Less: Goodwill attributable to EB Rental, Ltd.		1,079,040

Total gain on deconsolidation date		175,589

All values are in US Dollars.

On the deconsolidation date, EB Rental, Ltd.’s net assets (liabilities) were determined as follows:


	****	$
Current assets		363,825
Right of use assets		804,596
Property, plant and equipment		555,875
Other assets		83,726
Current liabilities		(1,132,115)
Lease liabilities		(937,427)
Other comprehensive income		96,193

		(165,327)

The financial performance of EB Rental, Ltd. for the fiscal years ended August 31, 2024, 2023, and 2022 included in these consolidated financial statements are as follows:


		2024	2023	2022
	****			$
Revenues		1,883,674	3,927,953	4,793,860
Cost of sales		1,651,967	2,905,285	3,029,043
Gross profit		231,707	1,022,668	1,764,817
Expenses		965,745	1,523,595	1,042,494
Income (loss) before tax		(734,038)	(500,927)	722,323
Income tax recovery		(205,367)	(181,661)	217,497
Net income		(528,671)	(319,266)	504,826

All values are in US Dollars.

The Cash flow information related to EB Rental, Ltd. for the fiscal years ended August 31, 2024, 2023, and 2022 are as follows:


		2024	2023	2022
	****			$
Cash provided by (used in) operating activities		247,185	(243,813)	814,056
Cash used in investing activities		(23,336)	(24,852)	(151,569)
Cash used in financing activities		(151,192)	(283,811)	(227,708)

All values are in US Dollars.

Annual goodwill impairment test as at August 31, 2024

During the quarter ended August 31, 2024, the Company conducted its annual impairment test on the carrying value of the goodwill associated with the boat rental operation CGU in accordance with the requirements under IFRS. As a result of this analysis, the Company determined that the carrying amount of the goodwill associated with the boat rental operation CGU exceeded its recoverable amount and, accordingly, the Company recorded an additional goodwill impairment loss of $4,430,182 for the fiscal year ended August 31, 2024, which was recognized during the three-month period ended August 31, 2024. As a result of this loss, the carrying amount of the goodwill associated with this CGU has been reduced to nil as at August 31, 2024 (August 31, 2023 - $9,680,941).

The recoverable amount was determined based on the fair value less costs of disposal approach using a discounted cash flow model. The fair value measurement is categorized within Level 3 of the fair value hierarchy. The model included revised forecasted cash flows based on updated financial plans prepared by management covering a five-year period taking into consideration the performance of the CGU since the previous impairment test conducted as at February 29, 2024. The following key assumptions were used:

-	Expected earnings before interest, taxes, depreciation and amortization (“EBITDA”) as a percentage of revenues for the CGU of -11% in 2025, 4% in 2026, and 10% in 2027 and thereafter.
-	Expected working capital cash absorption ratio for the CGU of 10% of annual incremental sales increases.
---	---
-	Expected annual capital expenditure needs for the CGU of US$185,000 in 2025, US$98,040 in 2026, US$47,000 in 2027, US$63,000 in 2028, US$71,000 in 2029 and US$71,680 annually thereafter.
---	---

When reviewing the performance of the boat rental operation CGU since the sale of EB Rental, Ltd., management revised its forecasted cash flows downward following disappointing results over the last two quarters at its rental locations, particularly at its Palm Beach,

Florida location where the Company had projected strong EBITDA due to its unique revenue sharing model which was expected to generate greater margins then the Company’s other locations.. Specifically, management revised downward the forecasted revenues and EBITDA in future periods due to continued unfavourable weather conditions, particularly in the peak summer months. It has now become more likely than not that such weather conditions will be the norm rather than an anomaly as was determined in the past. In addition, the boat rental operation at Palm Beach, Florida has also had to deal with more days of high winds and tides due to its closer proximity to the ocean which has resulted in its inability to operate on those days. Finally, the opening of the Dania Beach, Florida facility has been delayed by a further three months than previously forecasted which had a negative impact on the forecasted cash flows. Therefore, as a result of these new factors, management revised its assumptions related to revenues and the expected EBITDA as a percentage of sales which resulted in the goodwill impairment loss.

Three-month period ended August 31, 2024

Revenue for the three-month month period ended August 31, 2024 was $1,019,189 (August 31, 2023: $2,120,447); the decrease of 52% resulted from a decrease in the revenue generated by the Company’s rental operations following the sale of EB Rental, Ltd. and continued unfavourable weather conditions, particularly at the Palm Beach, Florida facility which endured two hurricanes in the quarter. The decrease was partially offset by an increase in sales of electric boats. The Company’s gross profit decreased to $391,790 (August 31, 2023: $1,010,475) due to largely to the decrease in revenues from the Company’s rental operations. The following provides an analysis of the sale of electric boats and revenue from rental operations:


		Three-month			Three-month				****
		period ended			period ended			Increase	****
	****	August 31, 2024		****	August 31, 2023		****	(Decrease)	****
Sale of Electric Boats			953,920			664,762		43	%
Rental of electric boats			65,269			1,455,685		(96)	%
		$	1,019,189		$	2,120,447	****	(52)	%

During the three-month period ended August 31, 2024, the Company incurred a net loss of $3,652,623 compared to a net loss of $4,294,247 for the corresponding prior period. The decrease in net loss was due primarily to lower operating costs and gains attributable to mark to market valuations of its derivative liabilities at the balance sheet date which were partially offset by a goodwill impairment loss of $4,430,182 incurred in the quarter (see explanation above) and decreased gross profit. Overall, the Company’s operating expenses for the three-month period ended August 31, 2024 were $3,294,135 (August 31, 2023: $5,800,974), representing a 43% decrease when compared to the corresponding prior period.

The following variances were observed for the three-month period ended August 31, 2024:

●	Research and development costs for the three-month period ended August 31, 2024 were $791,207 (August 31, 2023: $632,484); the increase was due to a writeoff of a $500,920 deposit to a supplier following the termination of the Company’s contract with the supplier.
●	Office salaries and benefits for three-month period ended August 31, 2024 were $610,785 (August 31, 2023: $1,289,132). The decrease is due to reduced staffing since the beginning of the current fiscal year.
---	---
●	Selling and marketing expenses for the three-month period ended August 31, 2024 decreased to $294,229 (August 31, 2023: $1,710,176) due to less attendance at boat shows, and decreased marketing and investor relations costs.
---	---
●	Professional fees for the three-month period ended August 31, 2024 were $1,056,775 (August 31, 2023: $949,889) due to an increase in temporary consultants used to perform certain tasks that were previously completed by departed staff.
---	---
●	Office and general expenses for the three-month period ended August 31, 2024, were $315,078 (August 31, 2023: $967,777). The decrease is due to cost-cutting measures the Company began implementing since the beginning of the current fiscal year.
---	---
●	Share-based compensation for the three-month period ended August 31, 2024 decreased to $28,130 (August 31, 2023: $84,092). No new stock options were granted during the three-month period ended August 31, 2024. The costs include past grants of stock options which are recognized when the stock options are vested. The Company recognizes compensation expense for option grants based on the fair value at the date of grant using the Black-Scholes valuation model.
---	---
●	Net finance income for the three-month period ended August 31, 2024 amounted to $3,571,659 (August 31, 2023: $374,319). This fluctuation was caused primarily by mark to market valuations of the Company’s derivative liabilities at the balance sheet date.
---	---

Fiscal year ended August 31, 2024

Revenue for the fiscal year ended August 31, 2024 was $3,794,345 (August 31, 2023: $5,651,502); the decrease of 33% resulted from a decrease in the revenue generated by the Company’s rental operations which was partially offset by an increase in sales of electric boats. The Company’s gross profit remained relatively flat at $1,497,438 (August 31, 2023: $1,536,426) despite the decrease in sales due largely to the onerous provision of $91,667 for an expected loss on sales of E-Motion™ recorded during the corresponding prior period. The following provides an analysis of the sale of electric boats and revenue from rental operations:


		Fiscal year ended			Fiscal year ended			Increase	****
	****	August 31, 2024		****	August 31, 2023		****	(Decrease)	****
Sale of Electric Boats			1,847,918			1,612,699		15	%
Rental of electric boats			1,946,427			4,038,803		(52)	%
		$	3,794,345		$	5,651,502	****	(33)	%

During the fiscal year ended August 31, 2024, the Company incurred a net loss of $14,060,620 compared to a net loss of $20,877,186 for the corresponding prior period. The decrease in net loss was due primarily to lower operating costs, as well as non-operating items such as an increase in net finance income offset by a goodwill impairment loss of $8,704,182 incurred in the year (see explanation above). Overall, the Company’s operating expenses for the fiscal year ended August 31, 2024 were $14,731,988 (August 31, 2023: $21,779,493), representing a 32% decrease when compared to the corresponding prior period.

The following variances were observed for the fiscal year ended August 31, 2024:

●	Research and development costs for the fiscal year ended August 31, 2024 were $2,739,022 (August 31, 2023: $5,704,912); the decrease was due to the Company moving towards the production of its E-Motion™ powertrains, thus reducing research and development costs during the period which was partially offset by the fitting of the Company’s E-Motion™ powertrains to third party prototypes for testing purposes.
●	Office salaries and benefits for the fiscal year ended August 31, 2024 were $3,307,420 (August 31, 2023: $4,014,181). The decrease is due to reduced staffing since the beginning of the current fiscal year.
---	---
●	Selling and marketing expenses for the fiscal year ended August 31, 2024 decreased to $2,021,930 (August 31, 2023: $3,470,772) due to less attendance at boat shows, and decreased marketing and investor relations costs.
---	---
●	Professional fees for the fiscal year ended August 31, 2024 decreased to $3,251,172 (August 31, 2023: $3,764,465) due to a decrease in fees paid to advisors to the Company.
---	---
●	Office and general expenses for the fiscal year ended August 31, 2024 were $2,360,816 (August 31, 2023: $3,100,024). The decrease is due to cost-cutting measures the Company began implementing since the beginning of the current fiscal year.
---	---
●	Share-based compensation for the fiscal year ended August 31, 2024 decreased to $220,752 (August 31, 2023: $1,136,182), as the Company granted 742 stock options during the fiscal year ended August 31, 2024. The costs include past grants of stock options which are recognized when the stock options are vested. The Company recognizes compensation expense for option grants based on the fair value at the date of grant using the Black-Scholes valuation model.
---	---
●	For the fiscal year ended August 31, 2024, the Company realized net finance income of $7,480,761 (August 31, 2023: net finance expense of $1,604,536). This positive variance was caused primarily by gains on derivative liabilities related to the fair value adjustments caused by the issuance of warrants and preferred shares which are classified as derivative liabilities for accounting purposes rather than equity, partially offset by transaction costs related primarily to the Series A and B Convertible Preferred Share issuances and a loss incurred on the exchange of warrants which occurred on August 16, 2024 (see Financings section above for details).
---	---

In addition to the above, the Company incurred an impairment on an investment in the corresponding prior period. The Company impaired its investment in convertible debentures in The Limestone Boat Company due to its announcement that its wholly-owned subsidiaries have filed for voluntary petitions for relief under Chapter 7 of the Bankruptcy Code of the U.S. Bankruptcy Court for the Middle District of Tennessee. As a result, the Company had impaired 100% of the value of its investment in Limestone during the fiscal year ending August 31, 2023 realizing a loss of $2,637,000. No loss or gain related to this investment was recognized in the fiscal year ending August 31, 2024.

1.6 Liquidity and Capital Resources

The Company’s operations consist of the designing, developing and manufacturing of electric outboard powertrain systems, rental of electric boats and electric boats sales. The Company’s financial success is dependent upon its ability to market and sell its outboard powertrain systems and electric boats; and to raise sufficient working capital to enable the Company to execute its business plan. The Company’s historical capital needs have been met by internally generated cashflow from operations and the support of its shareholders. During the year ended August 31, 2021, the Company raised gross proceeds of US$27,600,000 from its initial public offering onto the Nasdaq and during the year ended August 31, 2023, the Company raised $12,437,523. In addition, during the fiscal year ended August 31, 2024, the Company raised $8,326,492. However, should the Company need further funding, there is no assurance that equity funding will be possible at the times required by the Company. If no funds can be raised and sales of its outboard powertrain systems and electric boats does not produce sufficient net cash flow, then the Company may require a significant curtailing of operations to ensure its survival.

The consolidated financial statements have been prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company generated net loss before tax of $14,316,083 and net loss of $14,060,620 during the fiscal year ended August 31, 2024 and has a cash balance and a working capital surplus of $63,126 and $2,888,660, respectively, as at August 31, 2024. The Company’s ability to meet its obligations as they fall due and to continue to operate as a going concern depends on the continued financial support of the creditors and the shareholders. In the past, the Company has relied on the support of its shareholders to meet its cash requirements. There can be no assurance that funding from this or other sources will be sufficient in the future to continue its operations. Even if the Company is able to obtain new financing, it may not be on commercially reasonable terms or terms that are acceptable to it. Failure to obtain such financing on a timely basis could cause the Company to reduce or terminate its operations.

The Company is evaluating several different strategies and is actively pursuing actions that are expected to increase its liquidity position, including, but not limited to, pursuing additional cost savings initiatives, seeking additional financing from both the public and private markets through the issuance of equity securities, and potentially selling assets which do not align with the Company’s outlook of future operations. However, the Company's management cannot provide assurances that the Company will be successful in accomplishing any of its proposed financing plans. These matters, when considered in aggregate, indicate the existence of a material uncertainty that raises substantial doubt about the Company’s ability to continue as a going concern for at least 12 months from the issuance of the consolidated financial statements for the fiscal year ended August 31, 2024.

As of December 2, 2024, the Company had 1,566,486 issued and outstanding common shares and 1,762,592 on a fully diluted basis.

The Company had $2,888,660 of working capital surplus as at August 31, 2024 compared to $3,636,936 working capital surplus as at August 31, 2023. The decrease in working capital surplus during the fiscal year ended August 31, 2024 resulted from the cash used in operations of $11,642,204 (August 31, 2023: $14,007,923); cash provided by investing activities of $615,608 (August 31, 2023: cash used in investing activities of $537,020) resulting from the additions to property, equipment and intangibles of $600,262 (August 31, 2023: $938,802); which was offset by proceeds from disposal of equipment of $126,568 (August 31, 2023: $401,782) and net proceeds from the sale of EB Rental, Ltd. of $1,089,302 (August 31, 2023: nil); financing activities provided cash of $7,730,465 (August 31, 2023: $12,079,484), caused by the issuance of preferred shares, common shares and warrants of $8,326,492 (August 31, 2023: $12,437,523) and an increase in long-term debt of $527,000 (August 31, 2023: $258,000). These increases were partially offset by a decrease in the Company’s credit facility of $155,000 (August 31, 2023: increase of $155,000), the repayment of lease liabilities of $650,461 (August 31, 2023: $726,893) and the repayment of long-term debt of $419,449 (August 31, 2023: $207,607).

1.7 Capital Resources

As at August 31, 2024, the Company had cash of $63,126 (August 31, 2023: $3,359,257).

As of the date of this MD&A, the Company has no outstanding commitments, other than rent and lease commitments and purchase commitments as disclosed in Notes 15 and 29 of the Company’s consolidated financial statements for the fiscal year ended August 31, 2024.

1.8 Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements.

1.9 Transactions with Related Parties

Related party balances and transactions

The following table summarizes the Company’s related party transactions for the period:


		Fiscal year ended	Fiscal year ended	Fiscal year ended
		August 31, 2024	August 31, 2023	August 31, 2022
	****			$
Office salaries and benefits
Montana Strategies Inc.		—	29,059	62,462

Research and Development
Mac Engineering, SASU		2,759,362	545,892	666,178

All values are in US Dollars.

The Company leases its Boisbriand premises from California Electric Boat Company Inc. Prior to August 1, 2024, this lease was accounted for as a right-of-use asset and lease liability. However, on August 1, 2024, the lease was renegotiated for a one year term only and ceased to be accounted for as a right-of-use asset and lease liability. As such, as at August 31, 2024, the right-of-use asset for this lease was nil (August 31, 2023 – $1,270,955) and the lease liability was nil (August 31, 2023 – 1,395,732). For the fiscal year ended August 31, 2024, rent expense of $22,446 (August 31, 2023 – nil) was recorded under the renegotiated lease.

Remuneration of directors and key management of the Company for the fiscal years ended August 31,


		2024	2023	2022
	****			$
Wages		1,856,453	2,447,827	2,324,770
Share-based payments – capital stock		115,577	433,263	—
Share-based payments – stock options		141,797	382,196	2,560,031
		2,113,827	3,263,286	4,884,801

All values are in US Dollars.

At the end of the year, the amounts due to and from related parties are as follows:


		2024	2023
	****		$
Share subscription receivable
9335-1427 Quebec Inc.		25,000	25,000
Alexandre Mongeon		14,200	14,200
		39,200	39,200

Current advances to (from) related party
Alexandre Mongeon		(84,616)	20,135

All values are in US Dollars.


		2024	2023
	****		$
Amounts due to related parties included in trade and other payable
Alexandre Mongeon		86,152	19,384
Xavier Montagne		11,615	10,454
Raffi Sossoyan		11,500	—
Patrick Bobby		—	13,847
Kulwant Sandher		—	8,654
California Electric Boat Company		197,862	—
Mac Engineering, SASU		1,006,541	9,935
		1,313,670	62,274

All values are in US Dollars.

Advances from related parties are non-interest bearing and have no specified terms of repayment.

1.10 Critical Accounting Estimates

measurement of derivative liabilities and goodwill. See to notes 4, 5 and 26 to the Company's consolidated financial statements for the year ended August 31, 2024.

1.11 Changes in Accounting Policies including Initial Adoption

See Note 2 of the Company's consolidated financial statements for the year ended August 31, 2024. The accounting policies adopted in the preparation of the consolidated financial statements are consistent with those followed in the preparation of the Company’s annual consolidated financial statements for the year ended August 31, 2023.

1.12 Controls and procedures

Disclosure controls and procedures

The CEO and the CFO have designed disclosure controls and procedures, or have caused them to be designed under their supervision, in order to provide reasonable assurance that:

●	material information relating to the Company has been made known to them; and
●	information required to be disclosed in the Company’s filings is recorded, processed, summarized and reported within the time periods specified in securities legislation.
---	---

An evaluation was carried out, under the supervision of the CEO and the CFO, of the design and effectiveness of our disclosure controls and procedures. Based on this evaluation, the CEO and the CFO concluded that the disclosure controls and procedures at August 31, 2024 were not effective to provide reasonable assurance that material information required to be disclosed by us in the reports that we file with, or submit to, the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in by the SEC’s rules and regulations, solely due to the presence of a material weakness in internal controls over financial reporting as described below, which management is in the process of remediating.

Internal controls over financial reporting

The CEO and the CFO have also designed internal controls over financial reporting or have caused them to be designed under their supervision, in order to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS.

An evaluation was carried out, under the supervision of the CEO and the CFO, of the design and effectiveness of our internal controls over financial reporting, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) on Internal Control – Integrated Framework (2013 Framework).

As a result of the year-end assessment process for the year ended August 31, 2024, we identified that we did not maintain effective processes and controls over the financial statement close process and the accounting for and reporting of complex and non-routine transactions due to a material weakness. Specifically, we determined that there was a lack of sufficient accounting and finance personnel to enable appropriate level of internal controls within the financial statement close process, including performing in-depth analysis and review of complex accounting matters and non-routine transactions within the timeframes set by us for filing our consolidated financial statements. Because of this deficiency, we concluded there was a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis at August 31, 2024.

A material weakness is defined as a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected.

To remediate the identified material weakness, management is in the process of hiring additional personnel and designing and implementing revised controls and procedures which management believes will address the material weakness. These controls and procedures include establishing a more comprehensive schedule for management review of financial information and establishing additional review procedures over the accounting for complex and non-routine transactions. As at August 31, 2024, the Company is working on remediating the identified material weakness.

Notwithstanding the material weakness, management has concluded that the Company’s consolidated financial statements as at and for the year ended August 31, 2024 present fairly, in all material respects, the Company’s financial position, results of operations, changes in equity and cash flows in accordance with IFRS.

Changes in internal controls over financial reporting

Other than as described above, no changes were made to our internal controls over financial reporting that occurred during the year ended August 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

1.14 Financial Instruments and risk management

See Note 26 to the Company's consolidated financial statements for the year ended August 31, 2024.

1.15 Additional Information

HEAD OFFICE	****	CAPITALIZATION

730 Boulevard du Cure-Boivin		(as at December 2, 2024)

Boisbriand, QC		Shares Authorized: Unlimited

J7G 2A7		Shares Issued: 1,566,486

Tel: (450) 951 - 7009

Email: admin@v-mti.com

OFFICERS & DIRECTORS

Steve P. Barrenechea

Director		AUDITORS

Anthony Cassella		M&K CPAS, PLLC
		The Woodlands, Texas
Director

Dr. Philippe Couillard

Director

Luisa Ingargiola

Director

Alexandre Mongeon,

Chief Executive Officer and Director		US LEGAL COUNSEL

Xavier Montagne		Ortoli Rosenstadt LLP
		366 Madison Avenue
Chief Operating Officer and Chief Technology Officer		3rd Floor
		New York, New York 10017
Raffi Sossoyan, CPA

Chief Financial Officer

Exhibit 99.3

Form 52-109F1

Certification of Annual Filings

Full Certificate

I, Alexandre Mongeon, Chief Executive Officer of Vision Marine Technologies Inc., certify the following:

1.	Review: I have reviewed the AIF, if any, annual financial statements and annual MD&A, including, for greater certainty, all documents and information that are incorporated by reference in the AIF (together, the “annual filings”) of Vision Marine Technologies Inc. (the “issuer”) for the financial year ended August 31, 2024.
2.	No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the annual filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, for the period covered by the annual filings.
---	---
3.	Fair presentation: Based on my knowledge, having exercised reasonable diligence, the annual financial statements together with the other financial information included in the annual filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the annual filings.
---	---
4.	Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.
---	---
5.	Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the financial year end
---	---
(a)	designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
---	---
(i)	material information relating to the issuer is made known to us by others, particularly during the period in which the annual filings are being prepared; and
---	---
(ii)	information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
---	---
(b)	designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
---	---
5.1	Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of Treadway Commission (COSO).
---	---
5.2	ICFR – material weakness relating to design: The issuer has disclosed in its annual MD&A for each material weakness relating to design existing at the financial year end
---	---
(a)	a description of the material weakness;
---	---

-2-

(b)	the impact of the material weakness on the issuer’s financial reporting and its ICFR; and
(c)	the issuer’s current plans, if any, or any actions already undertaken, for remediating the material weakness.
---	---
5.3	N/A
---	---
6.	Evaluation: The issuer’s other certifying officer(s) and I have
---	---
(a)	evaluated, or caused to be evaluated under our supervision, the effectiveness of the issuer’s DC&P at the financial year end and the issuer has disclosed in its annual MD&A our conclusions about the effectiveness of DC&P at the financial year end based on that evaluation; and
---	---
(b)	evaluated, or caused to be evaluated under our supervision, the effectiveness of the issuer’s ICFR at the financial year end and the issuer has disclosed in its annual MD&A
---	---
(i)	our conclusions about the effectiveness of ICFR at the financial year end based on that evaluation; and
---	---
(ii)	for each material weakness relating to operation existing at the financial year end
---	---
(A)	a description of the material weakness;
---	---
(B)	the impact of the material weakness on the issuer’s financial reporting and its ICFR; and
---	---
(C)	the issuer’s current plans, if any, or any actions already undertaken, for remediating the material weakness.
---	---
7.	Reporting changes in ICFR: The issuer has disclosed in its annual MD&A any change in the issuer’s ICFR that occurred during the period beginning on September 1, 2023 and ended on August 31, 2024 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
---	---
8.	Reporting to the issuer’s auditors and board of directors or audit committee: The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of ICFR, to the issuer’s auditors, and the board of directors or the audit committee of the board of directors any fraud that involves management or other employees who have a significant role in the issuer’s ICFR.
---	---

Date: December 2, 2024


/s/ Alexandre Mongeon
Alexandre Mongeon
Chief Executive Officer

Exhibit 99.4

Form 52-109F1

Certification of Annual Filings

Full Certificate

I, Raffi Sossoyan, Chief Financial Officer of Vision Marine Technologies Inc., certify the following:

1.	Review: I have reviewed the AIF, if any, annual financial statements and annual MD&A, including, for greater certainty, all documents and information that are incorporated by reference in the AIF (together, the “annual filings”) of Vision Marine Technologies Inc. (the “issuer”) for the financial year ended August 31, 2024.
2.	No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the annual filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, for the period covered by the annual filings.
---	---
3.	Fair presentation: Based on my knowledge, having exercised reasonable diligence, the annual financial statements together with the other financial information included in the annual filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the annual filings.
---	---
4.	Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.
---	---
5.	Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the financial year end
---	---
(a)	designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
---	---
(i)	material information relating to the issuer is made known to us by others, particularly during the period in which the annual filings are being prepared; and
---	---
(ii)	information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
---	---
(b)	designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
---	---
5.1	Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of Treadway Commission (COSO).
---	---
5.2	ICFR – material weakness relating to design: The issuer has disclosed in its annual MD&A for each material weakness relating to design existing at the financial year end
---	---
(a)	a description of the material weakness;
---	---

-2-

(b)	the impact of the material weakness on the issuer’s financial reporting and its ICFR; and
(c)	the issuer’s current plans, if any, or any actions already undertaken, for remediating the material weakness.
---	---
5.3	N/A
---	---
6.	Evaluation: The issuer’s other certifying officer(s) and I have
---	---
(a)	evaluated, or caused to be evaluated under our supervision, the effectiveness of the issuer’s DC&P at the financial year end and the issuer has disclosed in its annual MD&A our conclusions about the effectiveness of DC&P at the financial year end based on that evaluation; and
---	---
(b)	evaluated, or caused to be evaluated under our supervision, the effectiveness of the issuer’s ICFR at the financial year end and the issuer has disclosed in its annual MD&A
---	---
(i)	our conclusions about the effectiveness of ICFR at the financial year end based on that evaluation; and
---	---
(ii)	for each material weakness relating to operation existing at the financial year end
---	---
(A)	a description of the material weakness;
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(B)	the impact of the material weakness on the issuer’s financial reporting and its ICFR; and
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(C)	the issuer’s current plans, if any, or any actions already undertaken, for remediating the material weakness.
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7.	Reporting changes in ICFR: The issuer has disclosed in its annual MD&A any change in the issuer’s ICFR that occurred during the period beginning on September 1, 2023 and ended on August 31, 2024 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
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8.	Reporting to the issuer’s auditors and board of directors or audit committee: The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of ICFR, to the issuer’s auditors, and the board of directors or the audit committee of the board of directors any fraud that involves management or other employees who have a significant role in the issuer’s ICFR.
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Date: December 2, 2024


/s/ Raffi Sossoyan
Raffi Sossoyan
Chief Financial Officer

Exhibit 99.5

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the following Registration Statements: Form S-8 (No. 333-264089), Form F-3 (No. 333-274882), and Form F-3 (No. 333-267893) of Vision Marine Technologies Inc. (the “Company”) of our report dated December 2, 2024 with respect to the consolidated financial statements of the Company as of and for the year period ended August 31, 2024, included in this report on Form 6-K.

/s/ M&K CPAS, PLLC
M&K CPAS, PLLC
The Woodlands, Texas
December 2, 2024

Exhibit 99.6

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements:

1.	Form S-8 (No. 333-264089)
2.	Form F-3 (No. 333-274882)
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3.	Form F-3 (No. 333-267893)
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of Vision Marine Technologies Inc. (the “Company”) of our report dated November 27, 2023, except for the effects of the reverse stock splits described in Note 2, as to which the date is December 2, 2024, with respect to the consolidated statement of financial position as at August 31, 2023 and the consolidated statements of changes in shareholders’ equity (deficit), comprehensive loss and cash flows for each of the years in the two-year period ended August 31, 2023, included in this report on Form 6-K.

/s/ Ernst & Young LLP

Montreal, Canada

December 2, 2024