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Vision Marine Technologies(VMAR) - 2024 Q4 - Annual Report
VMARVision Marine Technologies(VMAR)2024-12-20 21:54

Leases and Property - The company leases a kiosk and two slips at Ventura Portside Marina for USD2,200permonth,withtheleaseexpiringonMarch31,2027[73]−Thecompanyleasesa5,000squarefeetwarehouseinMiramar,FloridaforUSD2,200 per month, with the lease expiring on March 31, 2027[73] - The company leases a 5,000 square feet warehouse in Miramar, Florida for USD6,500 per month, primarily used for boat inventory storage and occasional assembly, with the lease expiring on May 31, 2025[75] - The company does not own any real property and leases only the properties mentioned above[75] - The company's right-of-use asset for the Boisbriand premises lease was nil as of August 31, 2024, compared to 1,270,955in2023[188]−Thecompany′sleaseliabilityfortheBoisbriandpremisesleasewasnilasofAugust31,2024,comparedto1,270,955 in 2023[188] - The company's lease liability for the Boisbriand premises lease was nil as of August 31, 2024, compared to 1,395,732 in 2023[188] - The company recorded rent expense of 22,446undertherenegotiatedleaseforthefiscalyearendedAugust31,2024[188]−Thecompanypaid22,446 under the renegotiated lease for the fiscal year ended August 31, 2024[188] - The company paid 309,715 in rent to California Electric Boat Company in fiscal year 2024, compared to 381,555in2023and381,555 in 2023 and 358,111 in 2022[186] Executive Compensation - Alexandre Mongeon, CEO, received a total compensation of USD585,146in2024,withnoshare−basedoroption−basedawards[94]−XavierMontagne,CTOandCOO,receivedatotalcompensationofUSD585,146 in 2024, with no share-based or option-based awards[94] - Xavier Montagne, CTO and COO, received a total compensation of USD403,103 in 2024, including USD53,638inoption−basedawards[94]−RaffiSossoyan,CFOsinceMarch1,2024,receivedatotalcompensationofUSD53,638 in option-based awards[94] - Raffi Sossoyan, CFO since March 1, 2024, received a total compensation of USD333,228 in 2024, including USD39,698inshare−basedawardsandUSD39,698 in share-based awards and USD23,850 in other compensation[94] - Kulwant Sandher, former CFO, received a total compensation of USD227,768in2024beforeresigningonFebruary29,2024[94]−PatrickBobby,formerHeadofPerformanceandSpecialProjects,receivedatotalcompensationofUSD227,768 in 2024 before resigning on February 29, 2024[94] - Patrick Bobby, former Head of Performance and Special Projects, received a total compensation of USD245,894 in 2024 before resigning on April 16, 2024[94] - Alexandre Mongeon's executive employment agreement includes an annual base salary of USD400,000,eligibilityforadiscretionarybonusof50400,000, eligibility for a discretionary bonus of 50% to 100% of his base salary, and four weeks of paid annual vacation[96][97] - Mr. Mongeon is eligible for up to 40,000 restricted common shares if the company achieves a market capitalization of 100,000,000 for a 21-day period[101] - Mr. Mongeon can receive up to 500,000incashbonusesifthecompanyachievesEBITDAof500,000 in cash bonuses if the company achieves EBITDA of 10,000,000 in a fiscal year[101] - Mr. Sossoyan's annual base salary is 260,000withasigningbonusof260,000 with a signing bonus of 50,000 in common shares if he remains in service for at least 12 months[102] - Mr. Sossoyan is eligible for a discretionary bonus of up to 25% of his annual base salary[102] - Mr. Montagne's annual base salary was increased to CAD302,000inJune2023[107]−Mr.MontagneiseligibleforUS302,000 in June 2023[107] - Mr. Montagne is eligible for US20,000 worth of restricted common shares for each patent application filed for the E-Motion™ 180e outboard electric powertrain system[115] - The company granted Mr. Montagne 100,000 options under the Share Option Plan[112] Share Options and Equity - The company's 2020 Share Option Plan allows for the issuance of up to 13,074 shares[125] - The company has 7,858 securities available for issuance upon exercise of outstanding options, with a weighted average exercise price of 657.77[124]−AsofAugust31,2024,thecompanyhad7,858stockoptionsoutstandingunderthestockoptionplan[130]−InMay2020,thecompanyissued2,478optionstopurchasecommonsharesat657.77[124] - As of August 31, 2024, the company had 7,858 stock options outstanding under the stock option plan[130] - In May 2020, the company issued 2,478 options to purchase common shares at 499.50 per share and 815 options at 375.30pershare[131]−InNovember2020,thecompanyissued260optionstopurchasecommonsharesat375.30 per share[131] - In November 2020, the company issued 260 options to purchase common shares at 2,199.15 per share[131] - In March 2023, the company issued 3,004 options to purchase common shares at 777.60pershareand2,912optionsat777.60 per share and 2,912 options at 778.95 per share[131] - In December 2023, the company issued 371 options to purchase common shares at 612.43pershare[131]−InJanuary2024,thecompanyissued371optionstopurchasecommonsharesat612.43 per share[131] - In January 2024, the company issued 371 options to purchase common shares at 138.47 per share[131] - As of December 17, 2024, directors and executive officers as a group owned 61,559 common shares, representing 2.2% of outstanding shares[152] - KPAC Holdings Ltd. owned 180,000 common shares, representing 6.3% of outstanding shares as of December 17, 2024[152] Financial Reporting and Standards - The company's financial statements are prepared in accordance with International Financial Reporting Standards (IFRS), with estimates and assumptions based on historical experience and reasonable circumstances[77][78] - The company's consolidated financial statements for the years ended August 31, 2024, 2023, and 2022 were prepared in accordance with IFRS[190] Employee and Workforce - As of August 31, 2024, the company employed 20 full-time employees, with 13 in administration and 7 in manufacturing[147][149] Share Issuance and Offerings - The company issued 11,439 common shares and 1,465 pre-funded warrants in the January 2023 Registered Direct Offering, raising approximately US2.3millionfromthesaleof4,108commonsharesandwarrants[207]−IntheFebruary2023RegisteredDirectOffering,thecompanysold3,520commonsharesatUS2.3 million from the sale of 4,108 common shares and warrants[207] - In the February 2023 Registered Direct Offering, the company sold 3,520 common shares at US568.35 per share, raising approximately US2.0million,andissuedwarrantstopurchaseupto3,520commonshares[215]−TheApril2023RegisteredDirectOfferinginvolvedthesaleof2,826commonsharesatUS2.0 million, and issued warrants to purchase up to 3,520 common shares[215] - The April 2023 Registered Direct Offering involved the sale of 2,826 common shares at US568.35 per share, raising approximately US1.6million,withwarrantsissuedtopurchaseupto2,826commonshares[217]−IntheJune2023RegisteredDirectOffering,thecompanysold3,659commonsharesatUS1.6 million, with warrants issued to purchase up to 2,826 common shares[217] - In the June 2023 Registered Direct Offering, the company sold 3,659 common shares at US546.75 per share, raising approximately US2.0million,andissuedwarrantstopurchaseupto3,659commonshares[218][219]−TheJuly2023RegisteredDirectOfferingincludedthesaleof3,662commonsharesatUS2.0 million, and issued warrants to purchase up to 3,659 common shares[218][219] - The July 2023 Registered Direct Offering included the sale of 3,662 common shares at US546.75 per share, raising approximately US2.0million,withwarrantsissuedtopurchaseupto3,662commonshares[222]−TheSeptember2023PrivatePlacementinvolvedthesaleof2,763commonsharesatUS2.0 million, with warrants issued to purchase up to 3,662 common shares[222] - The September 2023 Private Placement involved the sale of 2,763 common shares at US546.75 per share, raising approximately US1.5million,withwarrantsissuedtopurchaseonecommonsharepersharesold[224]−IntheDecember2023PrivatePlacement,thecompanysold3,000SeriesAConvertiblePreferredSharesatUS1.5 million, with warrants issued to purchase one common share per share sold[224] - In the December 2023 Private Placement, the company sold 3,000 Series A Convertible Preferred Shares at US1,000 per share, raising US3.0million,andissuedwarrantstopurchaseupto21,169commonshares[228]−TheJanuary2024PrivatePlacementwiththeGovernmentofQuebecinvolvedthesaleof3,000SeriesBConvertiblePreferredSharesatUS3.0 million, and issued warrants to purchase up to 21,169 common shares[228] - The January 2024 Private Placement with the Government of Quebec involved the sale of 3,000 Series B Convertible Preferred Shares at US1,000 per share, raising US3.0million,andissuedwarrantstopurchaseupto21,165commonshares[230]−Thecompanypaidplacementagentsfeesrangingfrom33.0 million, and issued warrants to purchase up to 21,165 common shares[230] - The company paid placement agents fees ranging from 3% to 6.5% of gross proceeds in various offerings, with additional warrants issued to placement agents in some cases[208][216][221][223][225][229] - In the September 2024 Private Placement, the company sold 377,778 common shares at US9.00 per share, raising approximately US3.4million[232]−ThecompanypaidThinkEquityLLCacashfeeof7.53.4 million[232] - The company paid ThinkEquity LLC a cash fee of 7.5% of the gross proceeds, amounting to an unspecified total, and issued warrants to purchase 18,896 common shares at an exercise price of US11.25 per share[233] - The company established an "at-the-market" facility with ThinkEquity LLC for the sale of up to US11.75millionofVotingCommonShares,issuing1,854,957sharesforatotalcashconsiderationofUS11.75 million of Voting Common Shares, issuing 1,854,957 shares for a total cash consideration of US5,484,874, less transaction costs of US333,130[234]−ThecompanyissuedwarrantstoThinkEquityLLCthatareexercisablesixmonthsafterissuanceandexpirefiveyearsfromthedateofissuance[233]−Thecompany′s"at−the−market"facilityresultedintheissuanceof1,854,957VotingCommonShares,generatingUS333,130[234] - The company issued warrants to ThinkEquity LLC that are exercisable six months after issuance and expire five years from the date of issuance[233] - The company's "at-the-market" facility resulted in the issuance of 1,854,957 Voting Common Shares, generating US5,484,874 in cash consideration[234] Dividends and Shareholder Information - The company has not paid any dividends on its common shares since incorporation and does not intend to declare or pay any cash dividends in the foreseeable future[192] - The company's common shares are traded on the Nasdaq Capital Market under the symbol "VMAR"[161] - Series A Preferred Shares were limited to 6,000 shares with a stated value of 1,000each,totaling1,000 each, totaling 6 million[164] - Series B Preferred Shares were limited to 3,000 shares with a stated value of 1,000each,totaling1,000 each, totaling 3 million[171] Investment Canada Act and Foreign Investment - The Investment Canada Act requires that investments by non-Canadians to acquire control over existing Canadian businesses or to establish new ones be either reviewable or notifiable, with specific thresholds for review based on the value of acquired assets[239] - A non-Canadian acquiring a majority of the company's common shares would be considered to have acquired control under the Investment Canada Act[240] - The acquisition of less than a majority but one-third or more of the company's common shares would be presumed to be an acquisition of control unless proven otherwise[241] - For direct acquisitions by non-WTO investors, the review threshold is 5millionormore,whileforWTOinvestors,thethresholdissignificantlyhigher,currentlyat5 million or more, while for WTO investors, the threshold is significantly higher, currently at 1.075 billion or 1.613billiondependingonfreetradeagreements[244]−ThecompanyisincorporatedinQuebec,Canada,andtherearenoCanadianlawsrestrictingtheexportorimportofcapital,exceptforwithholdingtaxrequirementsonremittancestonon−residents[236]−TheInvestmentCanadaActincludesprovisionsfornationalsecurityreviewsofinvestmentsbynon−Canadians,withguidelinesissuedin2016outliningfactorsforsuchreviews[247]TaxandPFICConsiderations−ThecompanydoesnotbelieveitwasaPFICintheprecedingtaxableyearanddoesnotanticipatebeingaPFICinthecurrentorfuturetaxableyears[262]−AforeigncorporationisconsideredaPFICif751.613 billion depending on free trade agreements[244] - The company is incorporated in Quebec, Canada, and there are no Canadian laws restricting the export or import of capital, except for withholding tax requirements on remittances to non-residents[236] - The Investment Canada Act includes provisions for national security reviews of investments by non-Canadians, with guidelines issued in 2016 outlining factors for such reviews[247] Tax and PFIC Considerations - The company does not believe it was a PFIC in the preceding taxable year and does not anticipate being a PFIC in the current or future taxable years[262] - A foreign corporation is considered a PFIC if 75% or more of its gross income is "passive income" or 50% or more of the average quarterly value of its assets produce "passive income"[262] - U.S. Holders may face adverse tax consequences if the company is classified as a PFIC during their ownership of Common Shares[262] - U.S. Holders are required to report information relating to an interest in Common Shares by attaching IRS Form 8938 with their tax return[263] - Payments of dividends and sales proceeds within the U.S. may be subject to information reporting and backup withholding unless certain conditions are met[264] - Backup withholding is not an additional tax and can be credited against the U.S. Holder's federal income tax liability[264] - The company does not intend to provide the necessary information for U.S. Holders to make a valid "qualified electing fund" election[262] - The determination of PFIC status is based on complex U.S. federal income tax rules and is not determinable until after the end of the taxable year[262] Miscellaneous - The company's documents referred to in the Annual Report can be inspected at its offices in Boisbriand, Quebec, or at the SEC's public reference facility[270] - The company does not have any defined benefit pension plans or retirement payment plans[122] - The company has supply agreements with Mac Engineering, SASU totaling approximately 4.5 million over the next two fiscal years[186] - The company sold 100% of EB Rental, Ltd. shares to EB Strategies Inc. for $1,089,302 on April 25, 2024[186]