Electrovaya : Financial Statement (ELVA FS Q2 2025)

Published: 2025-05-14 17:02:15 ET ELVA.TO

Published on 05/14/2025 at 17:02

As at

Notes

March 31, 2025

September 30, 2024

Assets

Current assets

Cash and cash equivalents

283

781

Trade and other receivables

Note 4

18,073

11,292

Inventories

Note 5

7,980

9,698

Prepaid expenses

Note 6

8,966

7,647

Total current assets

35,302

29,418

Non-current assets

Property, plant and equipment

Note 7

10,036

9,979

Long-term deposit

Total non-current assets

10,121

10,064

Total assets

45,423

39,482

Liabilities and Equity

Current liabilities

Trade and other payables

Note 8

8,529

9,473

Working capital facilities

Note 9 (a)

16,283

Promissory notes

Note 9 (b)

519

Short term loans

Note 10

1,630

Derivative liability

Note 16

113

155

Lease liability

Note 12

426

471

Total current liabilities

9,068

28,531

Non-current liabilities

Lease liability

Note 12

1,564

1,871

Long term loan

Note 9 (a)

13,087

Government assistance payable

200

152

Other payables

Note 19

374

343

Total non-current liabilities

15,225

2,366

Equity

Share capital

Note 13

128,062

116,408

Contributed surplus

11,577

10,904

Warrants

Note 13

4,725

Accumulated other comprehensive income

5,602

5,792

Deficit

(128,836)

(129,244)

Total Equity

21,130

8,585

Total liabilities and equity

45,423

39,482

See accompanying notes to unaudited condensed interim consolidated financial statements

Signed on behalf of the Board of Directors

Chair of the Board

Sankar Das Gupta, Director

Chair of Audit Committee

James K Jacobs, Director

Three months ended March 31,

Six months ended March 31,

Notes

2025

2024

2025

2024

Revenue

Note 18

15,018

10,695

26,187

22,786

Direct manufacturing costs

Note 5(b)

10,345

6,970

18,106

15,532

Gross margin

4,673

3,725

8,081

7,254

Expenses

Research and development

1,070

642

2,054

1,606

Government assistance

(19)

(29)

(84)

(87)

Sales and marketing

504

708

1,284

1,438

General and administrative

1,106

921

2,273

2,309

Stock based compensation

288

480

703

849

Depreciation and amortization

Note 7

328

300

645

536

3,277

3,022

6,875

6,651

Income from operations

1,396

703

1,206

603

Net finance charges

Note 11

632

1,535

1,334

1,554

Foreign exchange loss (gain) and interest

income

(64)

(536)

Net income (loss) for the period

828

(839)

408

(1,047)

Basic income (loss) per share

0.02

(0.02)

0.01

(0.03)

Diluted income (loss) per share

0.02

0.01

Weighted average number of shares

Outstanding, basic and fully diluted

40,097,115

34,019,482

37,509,735

33,926,815

See accompanying notes to unaudited condensed interim consolidated financial statements.

Three months ended March 31,

Six months ended March 31,

2025

2024

2025

2024

Net income (loss) for the period

828

(839)

408

(1,047)

Items that may be reclassified to Profit and Loss

Cumulative translation adjustment

(87)

(233)

(190)

(54)

Other comprehensive income (loss) for the period

741

(1,072)

218

(1,101)

See accompanying notes to unaudited condensed interim consolidated financial statements.

Share Capital

Contributed Surplus

Warrants

Accumulated other Comprehensive

Income

Deficit

Total

Balance - October 01, 2023

115,041

9,249

4,725

5,890

(127,759)

7,146

Stock-based compensation

849

Issue of shares

199

Exercise of options

1,161

(498)

663

Cumulative translation adjustment

(54)

Net loss for the period

(1,047)

Balance - March 31, 2024

116,401

9,600

4,725

5,836

(128,806)

7,756

Balance - October 01, 2024

116,408

10,904

4,725

5,792

(129,244)

8,585

Stock-based compensation

703

Issuance of shares

11,624

Exercise of options

(30)

Cumulative translation adjustment

(190)

Net income for the period

408

Balance - March 31, 2025

128,062

11,577

4,725

5,602

(128,836)

21,130

See accompanying notes to unaudited condensed interim consolidated financial statements.

Notes

March 31, 2025

March 31, 2024

Cash and cash equivalents provided by (used in)

Operating activities

Net income (loss) for the period

408

(1,047)

Add :

Depreciation and amortization

645

590

Stock based compensation expense

703

849

Interest expense and other financing charges

Note 11

1,334

1,554

Unrealized foreign exchange

133

Cash provided by (used in) operating activities

3,223

1,946

Net changes in the working capital

Note 15

(7,975)

(1,624)

Cash from (used in) operating activities

(4,752)

322

Investing activities:

Purchase of property, plant and equipment

Note 7

(889)

(395)

Cash from (used in) investing activities

(889)

(395)

Financing activities

Issuance of shares

Note 13

11,582

Exercise of options

Note 13

180

Proceeds from working capital facilities

Note 9(a)

29,531

30,434

Repayment of working capital facilities

Note 9(a)

(32,202)

(27,510)

Repayment of vendor take back loan

Note 10

(1,630)

(702)

Repayment of promissory note

Note 9(b)

(533)

(507)

Interest and other finance cost

Note 11

(1,209)

(1,595)

Government assistance

(13)

(28)

Lease payments

Note 12

(358)

(186)

Cash from (used in) financing activities

5,198

Increase (decrease) in cash and cash equivalents

(443)

Cash and cash equivalents, beginning of period

781

1,032

Effect of movements in exchange rates on cash held

(55)

Cash and cash equivalents at end of period

283

1,116

Supplemental cash flow disclosures:

Interest paid

1,046

872

Income tax paid

See accompanying notes to unaudited condensed interim consolidated financial statements.

Some comparative figures have been adjusted to make it consistent with current period presentation.

Electrovaya Inc. (the "Company") is domiciled in Ontario, Canada, and is incorporated under the Business Corporations Act (Ontario). The Company's registered office is at 6688 Kitimat Road, Mississauga, Ontario, L5N 1P8, Canada. The Company's common shares trade on the Toronto Stock Exchange and NASDAQ under the symbol ELVA.TO and ELVA, respectively. The Company has no immediate or ultimate controlling parent.

These unaudited condensed interim consolidated financial statements comprise the Company and its subsidiaries (together referred to as the "Group" or "Company"). The Company is primarily involved in the design, development, manufacturing and sale of Lithium-Ion batteries, battery systems and battery-related products for energy storage, clean electric transportation, and other specialized applications.

These unaudited condensed interim consolidated financial statements have been prepared based on the principles of International Accounting Standard 34, "Interim Financial Reporting" as issued by the International Accounting Standards Board ("IASB"). These unaudited condensed interim consolidated financial statements do not include all of the information required for full annual financial statements and should be read in conjunction with the Company's September 30, 2024 audited annual consolidated financial statements and accompanying notes.

These unaudited condensed interim consolidated financial statements were authorized for issuance by the Company's

Board of Directors on May 14, 2025.

These unaudited condensed interim consolidated financial statements have been prepared on the going concern basis, which contemplates the realization of assets and settlement of liabilities as they fall due in the normal course of business.

During the six month periods ended March 31, 2025, the Company had cash (used)/ provided by in operations of $(4,752) (six month period ended March 31, 2024: $322). As of March 31, 2025, the Company had working capital of $26,234 (September 30, 2024: $887) and the net profit for the six-month period ended March 31, 2025 was $408 (six-month period ended March 31, 2024: net loss of $(1,047)).

The Company's equity was in surplus of $21,130. As of March 31, 2025, the Company had cash and cash equivalents of

$283.

These consolidated financial statements are presented in U.S. dollars and have been rounded to the nearest thousands, except per share amounts and when otherwise indicated. The functional currency of the Electrovaya Inc. is the Canadian dollar and the functional currencies of all the Group's companies is US Dollars. Below are the companies within the Group

Electrovaya Corp., Electrovaya Company, Sustainable Energy Jamestown LLC, Electrovaya USA Inc.

The preparation of the unaudited condensed interim consolidated financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Information about significant areas of estimation uncertainty that have the most significant effect on the amounts recognized in the unaudited condensed interim consolidated financial statements relate to the following (assumptions made are disclosed in individual notes throughout the unaudited condensed interim consolidated financial statements where relevant):

Estimates used in determining the net realizable values of inventories, taking into account the most reliable evidence available at each reporting date. The future realization of these inventories may be affected by future technology or other market-driven changes that may reduce future selling prices.

Estimates used in determining the allowance for expected credit losses based on the assessment of the collectability of customer accounts and the aging of the related invoices and represents the best estimate of probable credit losses in the existing trade accounts receivable.

Estimates used in testing non-financial assets for impairment including determination of the recoverable amount of a cash generating unit.

Estimates used in determining the fair value of stock option grants and warrants. These estimates include assumptions about the volatility of the Company's stock and forfeiture.

The material accounting policies adopted in these unaudited condensed interim consolidated financial statements are the same as those applied in the Company's consolidated financial statements as at and for the year ended September 30, 2024. Unless otherwise stated, these policies have been consistently applied to all periods presented.

March 31, 2025

September 30, 2024

Trade receivables, gross

16,979

10,577

Expected credit losses

(44)

(64)

Net trade receivables

16,935

10,513

Other receivables

1,138

779

Trade and other receivables

18,073

11,292

As at March 31, 2025 0.71% of the Company's accounts receivable is over 90 days past due (September 30, 2024 - 0.77 %)

Current

31-60

61-90

>90 days

total

84.90%

9.75%

4.63%

0.71%

100%

Gross Trade receivable

14,416

1,656

786

121

$16,979

Current

31-60

61-90

>90 days

total

Trade receivable (net of specific provision)

14,416

1,656

786

121

16,979

Expected loss rate

0.05%

0.24%

0.42%

24.79%

0.09%

Expected loss provision

$30

$44

As at September 30, 2024 0.77% of the Company's accounts receivable is over 90 days past due.

Current

31-60

61-90

>90 days

total

78.52%

20.61%

0.10%

0.77%

100%

Gross Trade receivable

8,305

2,180

10,577

Current

31-60

61-90

>90 days

total

Trade receivable (net of specific provision)

8,305

2,180

10,577

Expected loss rate

0.05%

0.24%

0.42%

66.67%

0.60%

Expected loss provision

The movement in the allowance for credit losses can be reconciled as follows:

March 31, 2025

September 30, 2024

Beginning balance

257

Write off

(244)

Allowance

provided/(recovery)

(20)

Ending balance

Total inventories on hand as at March 31, 2025 and September 30, 2024 are as follows:

March 31, 2025

September 30, 2024

Raw materials

7,025

8,433

Semi-finished

324

Finished goods

942

941

7,980

9,698

During the period ended March 31, 2025, the provision for slow moving and obsolete inventories amounted to $212 (September 30, 2024: $225), which was also included in direct manufacturing costs.

During the three and six month periods ended March 31, 2025, materials amounted to $10,306 and $17,400 (three and six month periods ended March 31, 2024: $6,871 and $15,063) was expensed through direct manufacturing costs.

March 31, 2025

September 30, 2024

Prepaid expenses

1,076

612

Prepaid insurance

Prepaid purchases

7,840

6,981

8,966

7,647

Prepaid purchases are comprised of vendor deposits on inventory orders for the future acquisition of inventories.

March 31, 2025

Land &

Building

Right of Use

Asset

Leasehold

Improvement

Production

Equipment

Office Furniture

& Equipment

Battery

technology

Total

Gross carrying amount

Balance beginning

7,700

3,202

1,808

105

862

13,753

Additions

544

290

889

Exchange differences

(191)

(4)

(108)

(6)

(290)

Balance ending

7,700

3,011

118

2,244

108

1,171

14,352

Depreciation and impairment

Balance beginning

(793)

(1,583)

(48)

(1,193)

(71)

(168)

(3,856)

Additions

(187)

(213)

(7)

(121)

(13)

(104)

(645)

Exchange differences

185

Balance ending

(980)

(1,701)

(52)

(1,243)

(80)

(260)

(4,316)

Net Book Value ending

6,720

1,310

1,001

911

10,036

September 30, 2024

Land & Building

Right of Use Asset

Leasehold Improvement

Production Equipment

Office Furniture & Equipment

Battery technology

Total

Gross carrying amount

Balance beginning

7,700

3,197

1,712

401

13,159

Additions

540

665

Exchange differences

Balance ending

7,700

3,203

1,809

105

993

13,886

Depreciation and impairment

Balance beginning

(419)

(1,127)

(33)

(970)

(60)

(154)

(2,763)

Additions

(374)

(454)

(15)

(221)

(11)

(114)

(1,189)

Exchange differences

(3)

(1)

Balance ending

(793)

(1,584)

(48)

(1,194)

(72)

(215)

(3,907)

Net Book Value ending

6,907

1,619

615

778

9,979

March 31, 2025

September 30, 2024

Trade payables

6,110

7,073

Accruals

1,791

1,745

Employee payables

628

655

8,529

9,473

March 31, 2025

September 30, 2024

Opening provision

1,072

250

Utilised during the period

(301)

(672)

Provided during the period

262

1,494

Closing balance

1,033

1,072

As at March 31, 2025, the balance owing under the facility is $13.61 million (Cdn $19.57 million). The maximum credit available under the facility is $20 million.

Cortland

The interest on the revolving credit facility is the greater of a) 7.05% per annum above the Prime Rate or b) 12% per annum. Interest is payable monthly.

Bank of Montreal

The interest rate is 7.45%, interest is payable monthly.

March 31, 2025

September 30, 2024

Opening balance

16,283

11,821

Exchange difference

(980)

Payments made during the period

(31,222)

(47,805)

Loan fees

(525)

Cash drawn during the period

29,531

52,247

Closing balance

13,087

16,283

On September 29, 2023, the Company renewed its revolving facility and extended the term of the facility by three months to December 29, 2023. In exchange for this renewal, the Company issued 10,443 shares at Cdn $3.83 (as determined by five-day volume weighted average) as compensation for Cdn $40 amendment fee. This was included within finance costs in the statement of earnings. All other terms and conditions are unchanged.

On February 12, 2024, the Company revised its revolving facility, expanding its maximum principal amount to $22 million and extending its term to July 29, 2025. As part of this adjustment, a commitment fee of $303 Canadian was paid in cash on the closing date and amortised over the term of the facility.

On March 07, 2025, the Company entered into a three year credit agreement with Bank of Montreal as lender to provide working capital facilities with outstanding amount not exceeding $20 million and a $5 million accordion. As a part of this agreement, the balance outstanding with Cortland working capital facility has been paid off in full. The company paid an early termination fee to Cortland for the amount of $375. Legal and professional fees in relation to the new facility have been capitalised and will be amortised over the period of the facility. The working capital facility provides the Bank with security over the assets of the Company.

During the month of March 2025, the Company took a loan approval from Export-Import Bank of the United States for the amount of $51 million for the Jamestown facility with a term of 6.5 years. As of March 31, 2025, the Company has not drawn down on this loan.

March 31, 2025

September 30, 2024

Promissory Note opening balance

519

1,026

Finance cost

Repayment of Promissory Note (ii)

(533)

Repayment of Promissory Note(i)

(507)

Finance cost paid with options

(37)

$519

On February 16, 2024, the Executive Chairman and Chief Executive Officer both exercised options of Electrovaya Inc. A sum of $507 from the promissory note was utilized to cover portion of the options' purchase price. The remaining balance of the promissory note, amounting to $519, was then substituted with a new promissory note on February 28, 2024, carrying a 14% interest rate and paid off in the month of December 2024.

On March 31, 2023, the Company purchased 100% of the membership interest in Sustainable Energy Jamestown LLC ('SEJ"), a New York incorporated company controlled by the majority shareholders of the Company. In return, the Company issued a promissory note for $1,050 to the members of SEJ, with a term of 365 days bearing interest at 7.5% annually payable at maturity. Interest recorded for the three and six month periods ended March 31, 2025 is $nil and $17 (Three and six month periods ended March 31, 2024: $18 and $37).

As of March 31, 2025, and September 30, 2024, short term loans consist of:

March 31, 2025

September 30, 2024

Short term loans

Vendor take

back

1,630

The company paid back the VTB liability along with interest in the month of December 2024.

Closing balance as at September 30, 2023 (Short term: $3,457. Long term: $nil)

3,457

Repaid in period

(1,879)

Interest accretion

Closing balance as at September 30, 2024 (Short term: $1,630 Long term: $nil)

1,630

Interest accretion

Repaid in period

(1,646)

Closing balance as at December 31, 2024 (Short term: $1,630 Long term: $nil)

During the three and six-month periods ended March 31, 2025 and 2024, the Company incurred both cash and non-cash

finance costs. The following table shows the split as included on the statement of earnings.

Three months period ended

Six months period ended

31-Mar-25

31-Mar-24

31-Mar-25

31-Mar-24

Cash

Non-Cash

Total

Cash

Non-Cash

Total

Cash

Non-Cash

Total

Cash

Non-Cash

Total

Working capital facility

504

534

705

1,030

1,085

1,146

Shares issued

180

199

Promissory notes

Interest on VTB loan (note

10)

Lease interest (note 12)

145

(75)

181

(93)

145

181

Equity issuance cost

219

Changes in FV of derivative

warrants

(59)

155

(42)

(564)

Accretion on government

payable

258

667

(35)

632

1,137

398

1,535

1,209

125

1,334

1,594

(40)

1,554

As of March 31, 2025, lease liability consists of:

March 31, 2025

September 30, 2024

Current

426

471

Non-current

1,564

1,871

1,990

2,342

Information about leases for which the Company is a lessee is as follows:

March 31, 2025

September 30, 2024

Interest on lease liabilities

145

349

Incremental borrowing rate at time of transition

14%

Cash outflow for the lease

358

735

The Company's future undiscounted minimum lease payments for the period ended March 31, 2025, for the continued operations are as under:

Year

Amount

2025

667

2026

513

2027

529

2028

544

2029

417

The Company entered into a lease agreement for 61,327 sq. ft for its premises as its headquarters in Mississauga, Ontario at 6688 Kitimat Road. The lease is for 10 years starting January 1, 2020, with expiry December 31, 2029. In addition, the Company is required to pay certain occupancy costs.

The lease agreement for the Company's lab facility has been renewed for an additional three years, commencing from

January 2023.

The terms of the renewed lease entail a fixed monthly rent as follows:

CAD $25,625 for the first year,

CAD $26,265 for the second year, and

CAD $26,922 for the third year.

Common Shares

Number

Amount

Balance, September 30, 2023

Note

33,832,784

115,041

Issuance of shares

(i)

10,024

Issuance of shares

(ii)

42,157

169

Transfer from contributed surplus

501

Exercise of options

252,700

667

Balance, September 30, 2024

34,137,665

$116,408

Issuance of shares

(iii) (iv)

5,951,250

11,582

Balance, December 31, 2024

40,088,915

127,990

Stock option exercised

18,000

Balance, March 31, 2025

40,106,915

128,062

In December 2023, additional shares were issued as extension fee for the revolving facility on December 20, 2023. All terms and conditions were unchanged. In exchange for the extension, the Company issued 10,024 shares at Cdn $3.99 (as determined by a five-day volume weighted average) as compensation for Cdn $40 extension fee.

On March 07, 2024, the Company issued 42,157 shares for consulting for investor relations. The Company issued the shares at Cdn $ 5.43 as compensation.

In December 2024, the company issued 5,175,000 common shares at $2.15 for a total equity raise of $11,789 and share

issuance cost of $206. The proceeds were recognised net of legal and consulting fees.

Over allotment option for the option shares 776,250 was exercised by the underwriters in the month of December

2024.

Options to purchase common shares of the Company under its stock option plan may be granted by the Board of Directors of the Company to certain full-time and part-time employees, directors and consultants of the Company and its affiliates. Stock options are non-assignable and may be granted for terms of up to 10 years. Stock options vest at various periods from zero to three years. As a result of the reverse stock split, every five options were consolidated into one option without any action from option holders, reducing the number of outstanding options from approximately 23.5 million to 4.7 million.

On February 17, 2021, at a Special Meeting of the Shareholders, a resolution was passed to (i) authorize amendments to the Company's Stock Option Plan to increase the maximum number of common shares issuable upon the exercise of stock options thereunder from 3,020,000 to 4,600,000.

On March 25, 2022, at a Special Meeting of the Shareholders, a resolution was passed to (i) authorize amendments to the Company's Stock Option Plan to increase the maximum number of common shares issuable upon the exercise of stock options thereunder from 4,600,000 to 6,000,000.

Number outstanding

Weighted average exercise price

Outstanding, September 30,

2023

4,714,388

2.44

Exercised during the period

(252,700)

2.65

Expired during the period

(24,400)

2.87

Granted

443,000

3.42

Outstanding, September 30,

2024

4,880,288

2.52

Expired during the period

(2,000)

3.42

Granted

Outstanding, December 31, 2024

4,878,288

2.37

Exercised during the period

(18,000)

3.25

Expired during the period

(17,499)

3.42

Granted

Outstanding, March 31, 2025

4,842,789

2.37

Exercise price

Number Outstanding

Weighted average remaining life

(years)

Number exercisable

Weighted average

exercise price

$3.26

(Cdn4.68)

441,000

9.01

87,000

3.26

$3.72

(Cdn5.35)

1,002,000

8.03

161,338

3.72

$1.98

(Cdn2.85)

298,000

7.22

234,675

1.98

$4.00

(Cdn5.75)

20,000

6.66

20,000

4.00

$3.48

(Cdn5)

1,494,667

6.45

694,667

3.48

$2.30

(Cdn3.3)

270,268

5.45

270,268

2.30

$1.04

(Cdn1.5)

1,024,000

4.33

1,024,000

1.04

$0.97

(Cdn1.4)

116,566

2.90

116,566

0.97

$4.24

(Cdn6.1)

10,667

2.34

10,667

4.24

$7.41

(Cdn10.65)

101,121

1.75

101,121

7.41

$2.75

(Cdn3.95)

9,600

0.87

9,600

2.75

$2.40

(Cdn3.45)

42,900

0.50

42,900

2.40

$3.16

(Cdn4.55)

12,000

0.14

12,000

3.16

4,842,789

2,784,802

2.37

For the options exercised, the share price at the time of exercise was between CDN $3.35-$3.77. Total stock-based compensation expense recognized during the three and six months periods ended March 31, 2025 was $288 and $703 (three and six months periods ended March 31, 2024 : $480 and $849).

The Company amortize the estimated grant date fair value of stock options to expense over the vesting period (generally three years). The grant date fair value of outstanding stock options was determined using the Black-Scholes option pricing model which uses highly subjective and complex assumptions, including the option's expected term and the price volatility of the underlying stock based on historical stock prices, to determine the fair value of the option.

Details of Share Warrants

Number Outstanding

Exercise Price

Outstanding, September 30, 2023

1,711,924

$2.38

Expired

(291,924)

$5.92

Outstanding, September 30, 2024

1,420,000

$0.63

Outstanding, December 31, 2024

1,420,000

$0.63

Outstanding, March 31, 2025

1,420,000

$0.63

Additionally, the number of derivative warrants at March 31, 2025 were 912,841 (September 30, 2024: 912,841).

The grant date fair value of outstanding share warrants was determined using the Black-Scholes pricing model using the

following assumptions in the year of the grant:

Risk-free interest rate (based on U.S. government bond yields) of 2.50% (March 31, 2024 : 3.80%), expected volatility of the market price of our shares (based on historical volatility of our share price) of 58.30%, (March 31, 2024 : 56.87%) and the expected warrant life (in years) of 0.61 (March 31, 2024 : 1.60). As a result of the reverse stock split, every five warrants were consolidated into one warrant without any action from warrant holders, reducing the number of outstanding warrants from approximately 13.1 million to 2.6 million. A 10% of change in any assumption would result in the change in derivative warrant liability between $(30) (March 31, 2024 : ($208)) and $33 (March 31, 2024 : $321).

Units

Fair Value

Closing balance (September 30, 2023)

912,841

1,489

Fair value adjustment

(1,334)

Closing balance (September 30, 2024)

912,841

155

Fair value adjustment

(17)

Closing balance (December 31, 2024)

912,841

138

Fair value adjustment

(25)

Closing balance (March 31, 2025)

912,841

113

Management compensation

Key management compensation comprises the following:

Three month periods ended

Six month periods ended

March 31, 2025

March 31, 2024

March 31, 2025

March 31, 2024

Salaries, bonus and other benefits

181

150

431

432

Share based compensation

253

486

181

159

684

918

Personal Guarantees

March 31, 2025

September 30, 2024

Promissory Note

519

In May 2021, Electrovaya entered a month-to-month Facility Usage Agreement for the use of space and allocated staff of a third-party research firm providing access to laboratory facilities, primarily for research. The laboratory and pilot plant facilities have certain equipment and permits for research and developments with chemicals. The term of the agreement was for six months and could be terminated by either party upon 90 days notice.

In July 2021, the facility was acquired by an investor group controlled by the family of Dr. Sankar Das Gupta, which includes its CEO, Dr. Rajshekar Das Gupta. The Facility Usage Agreement was not changed on the change of ownership and remains in effect between the Company and the owner, such that the monthly payment of Cdn $25,265 is now made to a related party of Electrovaya.

On June 7, 2023, the Facility Usage Agreement was retroactively extended from January 1, 2023, for an additional three

years. The lease has been recognized as a lease liability and corresponding right of use asset.

In September 2021, on the recommendation of the Compensation Committee of the Company, a committee composed entirely of independent directors, the Board of Directors of the Company determined that it is advisable and in the best interests of the Company to amend the terms of the compensation of certain key personnel to incentivize future performance, to encourage retention of their services, and to align their interests with those of the Company's shareholders.

Dr. Sankar Das Gupta was granted 700,000 options which vest in two tranches of 200,000 options and one tranche of 300,000 options, based on reaching specific target market capitalizations. The fair value of these options on the day of grant is calculated using the Monte Carlo method of option valuation and expensed over the mean vesting period in accordance with IFRS 2. The expense of $66 and $175 is recorded within stock-based compensation in the unaudited condensed interim consolidated statement of earnings for the three and six month periods ended March 31, 2025 (three and six month periods ended March 31, 2024: $Nil and $115)

Dr. Rajshekar Das Gupta was granted 900,000 options which vest in three tranches of 300,000 options based on reaching specific target market capitalizations. The fair value of these options on the day of issuance is calculated using the Monte Carlo method of option valuation and expensed over the mean vesting period in accordance with IFRS 2. The expense of

$Nil and $Nil is recorded within stock-based compensation in the unaudited condensed interim consolidated statement

of earnings for the three and six month periods ended March 31, 2025 (three and six month periods ended March 31, 2024: $Nil and $Nil).

In April 2023, following the suggestion of the Company's Compensation Committee, consisting entirely of independent directors, the Company's Board of Directors awarded Dr. Rajshekar Das Gupta a total of 600,000 options. These options will vest in two phases: 300,000 options and 300,000 options, contingent upon achieving certain target market capitalizations. The expense of $Nil and $78 is recorded within stock-based compensation in the unaudited condensed interim consolidated statement of earnings for the three and six month periods ended March 31, 2025 (three and six month periods ended March 31, 2024: $243 and $486).

March 31, 2025

March 31, 2024

Trade and other receivables

(6,781)

1,944

Inventories

1,135

(816)

Prepaid expenses and other

(1,298)

(82)

Trade and other payables

(1031)

(963)

(7,975)

Warrants as derivative liability is fair valued using Black Scholes Model ("BSM"). Using this approach, the assumptions used in determining fair value of the warrants as at March 31, 2025 are : Risk-free interest rate (based on U.S. government bond yields) of 2.50% (September 30, 2024 : 2.94%), expected volatility of the market price of our shares (based on historical volatility of the Company's share price) of 58.30%, (September 30, 2024: 52.72%) and the expected warrant life (in years) of 0.61 (September 30, 2024 : 1.10).

IFRS 13 "Fair Value Measurement" provides guidance about fair value measurements. Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value are required to maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is based on three levels of inputs. The first two levels are considered observable and the last unobservable. These levels are used to measure fair values as follows:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities, either directly or indirectly.

Level 2 - Inputs, other than Level 1 inputs that are observable for assets and liabilities, either directly or indirectly. Level 2 inputs include quoted market prices for similar assets or liabilities; quoted prices in markets that are not

active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The following table shows the levels within the hierarchy of financial assets and liabilities measured at fair value on a recurring basis at March 31, 2025 and September 30, 2024. There were no transfers between Level 1 and Level 2 during the six-month periods to March 31, 2025. There were no changes in the Company's valuation process for derivative liabilities (warrants):

As at March 31, 2025:

Fair Value

Level 1

Level 2

Level 3

Warrants

113

As at September 30, 2024:

Fair Value

Level 1

Level 2

Level 3

Warrants

155

The Company may be exposed to risks of varying degrees of significance which could affect its ability to achieve its strategic objectives. The main objectives of the Company's risk management processes are to ensure that the risks are properly identified and that the capital base is adequate in relation to those risks. The principal risks to which the Company is exposed are described below. There have been no changes in risk exposure since the prior year unless otherwise noted.

The Company manages its capital to ensure that there are adequate capital resources for the Company to maintain and develop its products. The capital structure of the Company consists of shareholders' equity and depends on the underlying profitability of the Company's operations.

The Company manages its capital structure and makes adjustments to it, based on the funds available to the Company, in order to support the development, manufacture and marketing of its products. The Board of Directors does not establish quantitative return on capital criteria for management but rather relies on the expertise of the Company's management to sustain future development of the business.

The Company's capital management objectives are:

to ensure the Company's ability to continue as a going concern.

to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.

The Company monitors capital based on the carrying amount of equity plus its short-term debt comprised of the promissory notes, less cash and cash equivalents as presented in the unaudited condensed interim consolidated statements of financial position.

The Company sets the amount of capital in proportion to its overall financing structure, comprised of equity and long-term debt. The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company issues new shares or increases its long-term debt.

Credit risk is the risk that the counterparty fails to discharge an obligation to the Company. The Company is exposed to this risk due to its cash and cash equivalents, trade and other receivables.

The Company manages its credit risk related to trade and other receivables by establishing procedures to establish credit limits and approval policies. The balance in trade and other receivables is primarily attributable to trade accounts receivables. In the opinion of management, the credit risk is moderate and minimum credit losses are expected. Management is taking appropriate action to mitigate this risk by adjusting credit terms.

The Company is exposed to credit risk in the event of default by its customers. Accounts receivables are recorded at the invoiced amount, do not bear interest, and do not require collateral. For the three and six month periods ended March 31, 2025, one customer accounted for $6,929 and $15,870 or 46% and 61% of revenue (three and six month periods ended March 31, 2024: $6,700 and $17,700 or 63% and 78%). As of March 31, 2025, one customer accounted for 49% of accounts

receivable (September 30, 2024: 71%). Refer note 5 for expected credit loss provision.

Liquidity risk is the risk that the Company may not have cash available to satisfy its financial obligations as they come due. The majority of the Company's financial liabilities recorded in accounts payable, accrued and other current liabilities and provisions are due within 90 days. The Company manages liquidity risk by maintaining a portfolio of liquid funds and having access to a revolving credit facility. The Company believes that cash flow from operating activities, together with cash on hand, cash from its trade and other receivables, and borrowings available under the revolving facility are sufficient to fund its currently anticipated financial obligations and will remain available in the current environment.

The following are the undiscounted contractual maturities of significant financial liabilities and the total contractual obligations of the Company as at March 31, 2025:

2025

2026

2027

2028

2029 &

beyond

Total

Trade and other payables

8,529

Lease liability

359

562

521

536

692

2,670

Working capital facility

13,612

Other payable

172

177

208

245

718

1,520

9,060

739

729

14,393

1,410

26,331

The following are the undiscounted contractual maturities of significant financial liabilities and the total contractual obligations of the Company as at September 30, 2024:

2025

2026

2027

2028

2029 &

beyond

Total

Trade and other payables

9,473

Lease liability

760

598

555

571

588

3,072

Short term loans

1,630

Promissory notes

519

Working capital facility

16,283

Other payable

211

188

208

218

610

1,435

28,876

786

763

789

1,198

32,412

Market risk incorporates a range of risks. Movement in risk factors, such as market price risk and currency risk, affect the fair value of financial assets and liabilities. The Company is exposed to these risks as the ability of the Company to develop or market its products and the future profitability of the Company is related to the market price of its primary competitors for similar products.

The Company has variable interest debt. Changes in interest rates will affect future interest expense and cash flows. The Company does not enter into derivative instruments to reduce this exposure.

The Company is exposed to foreign currency risk. The Company's functional currency is the United States dollar (Electrovaya Inc.'s functional currency is CAD) and the financial statements are presented in United States dollars. Changes in the relative values of these currencies will give rise to changes in other comprehensive income.

Purchases are transacted in Canadian dollars, United States dollars and Euro. Management believes the foreign exchange

risk derived from any currency conversions may have a material effect on the results of its operations. The financial

instruments impacted by a change in exchange rates include our exposures to the above financial assets or liabilities denominated in nonfunctional currencies. Cash held by the Company in US dollars at March 31, 2025 was $58 (September 30, 2024: $159).

If the US dollar to Canadian foreign exchange rate changed by 2% this would change the recorded net gain (loss) by $296

(March 31, 2024: $148).

On July 22, 2022, the Company received a Notice of Confirmation from the CRA relating to the 2014 and 2015 SRED reassessment for $299 (Cdn$386) and $302 (Cdn$389) including interest respectively. The balance owing has been fully provided for in other payables, and the Company is pursuing the next appropriate step in the appeal process and believes the amounts may be reversed or substantially reduced. The outcome cannot be determined.

On May 28, 2018, the Province of Ontario issued a claim against Electrovaya Corp. claiming $655 (Cdn $830) related to a dispute regarding funding and fulfilment of the Intelligent Energy Storage System under the Smart Grid Fund program. A Statement of Defense disputing the claim in its entirety was filed on March 21, 2019. No further steps have been taken by the province to pursue the claim.

In the normal course of business, the Company is party to business related claims. The potential outcomes related to existing matters faced by the Company are not determinable at this time. The Company intends to defend these actions, and management believes that the resolution of these matters will not have a material adverse effect on the Company's financial condition.

The Company develops, manufactures and markets power technology products. There is only a single segment applicable to the Company.

Given the size and nature of the products produced, the Company's sales are segregated based on large format batteries,

with the remaining smaller product line categorized as "Other".

There has been no change in either the determination of the Group's segments, or how segment performance is measured, from that described in the Company's condensed interim consolidated financial statements as at and for the year ended March 31, 2025.

Three months ended March 31,

Six months ended March 31,

2025

2024

2025

2024

Large format batteries

14,604

10,462

25,460

22,341

Other

414

233

727

445

15,018

10,695

26,187

22,786

Revenues can also be analyzed as follows based on the nature of the underlying deliverables:

Three months ended March 31,

Six months ended March 31,

2025

2024

2025

2024

Revenue with customers

Sale of batteries and battery systems

14,604

10,196

25,460

21,408

Sale of services 313 266 525 933

Others 101 233 202 445

Revenues attributed to geographical regions based on the location of the customer were as follows:

2025

2024

2025

2024

Canada

142

186

348

1,120

United States

14,777

10,484

25,738

21,621

Others

101

15,018

10,695

26,187

22,786

Technology Partnerships Canada ("TPC") projects are long-term (up to 30 years) commencing with an R&D phase, followed by a benefits phase - the period in which a product, or a technology, could generate revenue for the Company. In such cases, repayments would flow back to the program according to the terms and conditions of the Company's contribution agreement.

In June 2018, the contribution agreement was amended and is included at its net present value in other payables. Further, in September 2024, the agreement was further amended with amended terms and conditions for the repayment of the debt with new payment schedule. Consequently, the old debt was de-recognized and the new debt was recognized with first payment starting in July 2025 and final payment to be discharged in July 2031.

The following table represents changes in the debt for repayments to Industry Canada:

March 31, 2025

September 30, 2024

Opening balance

379

984

Interest accretion

490

Foreign exchange gain / loss

(23)

Debt extinguishment

(1,474)

Recognition of new debt

370

Interest accretion on new debt

Ending balance

413

379

Less: current portion of the debt (included in Trade and other payables)

(39)

(36)

Ending balance of long-term portion

374

343

Following is the payment schedule for TPC:

Year

Amount

2025

155

2026

132

2027

132

2028

132

2029

132

2030

132

2031

132

Disclaimer

Electrovaya Inc. published this content on May 14, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 14, 2025 at 21:01 UTC.