LeddarTech(LDTC) - 2025 Q2 - Quarterly Report

Interim Condensed Consolidated Financial Statements This section presents LeddarTech's unaudited interim financial statements, including the balance sheet, changes in equity, income statement, and cash flows, along with detailed explanatory notes Consolidated Statements of Financial Position LeddarTech's financial position deteriorated by March 31, 2025, with total assets increasing to $23.0 million while liabilities surged to $134.9 million, worsening the shareholders' deficiency to ($111.9 million) Consolidated Statement of Financial Position (Unaudited) | | March 31, 2025 ($) | September 30, 2024 ($) | | :--- | :--- | :--- | | Total Current Assets | 14,275,913 | 10,058,565 | | Total Assets | 22,970,573 | 18,927,222 | | Total Current Liabilities | 71,766,077 | 25,929,538 | | Total Liabilities | 134,886,899 | 107,561,916 | | Total Shareholders' Deficiency | (111,916,326) | (88,634,694) | - Key changes from September 30, 2024 to March 31, 2025 include: - Cash increased from $5.3 million to $9.2 million[5] - A new contract liability of $11.5 million was recorded[5] - The current portion of credit facilities increased from zero to $29.4 million[5] Consolidated Statements of Changes in Shareholders' Deficiency Shareholders' deficiency increased to ($111.9 million) for the six months ended March 31, 2025, primarily due to a $42.4 million net loss partially offset by $16.6 million in SEPA capital Changes in Shareholders' Deficiency (Six Months Ended March 31, 2025) | Description | Amount ($) | | :--- | :--- | | Balance as of Sep 30, 2024 | (88,634,694) | | Standby Equity Purchase Agreement (SEPA) | 16,609,780 | | Stock-based compensation | 2,712,350 | | Net loss and comprehensive loss | (42,430,248) | | Other changes | (142,814) | | Balance as of Mar 31, 2025 | (111,916,326) | Consolidated Statements of Loss and Comprehensive Loss The company reported a net loss of $42.4 million for the six months ended March 31, 2025, a significant reduction from the prior year's $77.9 million loss primarily due to the absence of a $59.1 million listing expense Statement of Loss Highlights (Six Months Ended March 31) | Metric | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | Revenues | 290,792 | 174,101 | | Loss from operations | (26,566,811) | (76,483,797) | | Listing expense | — | 59,139,572 | | Finance costs, net | 16,457,396 | 2,318,678 | | Net loss | (42,430,248) | (77,863,292) | Loss Per Share (Six Months Ended March 31) | Metric | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | Net loss per common share, basic and diluted | (1.23) | (4.81) | | Weighted average common shares outstanding | 34,508,393 | 16,110,444 | Consolidated Statements of Cash Flows Operating activities used $14.8 million in cash for the six months ended March 31, 2025, offset by $18.9 million from financing, resulting in a $3.9 million net cash increase Cash Flow Summary (Six Months Ended March 31) | Activity | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | Net cash flows from operating activities | (14,807,373) | (32,271,562) | | Net cash flows from investing activities | (165,133) | (4,885,976) | | Net cash flows from financing activities | 18,915,053 | 46,575,384 | | Net increase in cash | 3,942,547 | 9,266,754 | | Cash, end of period | 9,211,631 | 14,322,794 | - Financing activities in the six months to March 31, 2025, were driven by proceeds from the Standby Equity Purchase Agreement (SEPA) of $16.0 million and bridge loan proceeds of $3.8 million[13] Notes to the Financial Statements The notes provide detailed explanations of significant accounting policies, business combinations, debt instruments, and capital structure, highlighting key financial events and risks Note 1: Reporting Entity, Nature of Operations and Going Concern Uncertainty The company faces substantial going concern uncertainty due to an accumulated deficit of $685.8 million, a $42.4 million net loss, and a recent debt covenant breach - The company has an accumulated deficit of $685,755,318 as of March 31, 2025, and incurred a net loss of $42,430,248 for the six months then ended[18] - Management's cash flow projections indicate insufficient resources for the upcoming year, raising substantial doubt about the company's ability to continue as a going concern[20] - On May 2, 2025, the company breached a credit facility covenant, giving the lender the right to demand immediate repayment, and is negotiating for a waiver or amendment[21][22] Note 3: Acquisition of Prospector Capital Corp. The December 2023 reverse asset acquisition of Prospector Capital Corp. resulted in a non-cash listing expense of $59.1 million due to the fair value of shares issued exceeding net assets acquired Reverse Asset Acquisition Reconciliation | | Amount ($) | | :--- | :--- | | Fair value of consideration transferred | 65,372,812 | | Fair value of net assets acquired | 6,233,240 | | Listing expense | 59,139,572 | Note 4: Discontinued Operations Modules operations ceased in September 2024, reporting $1.15 million in revenue and $497,340 net income for the six months ended March 31, 2025 Discontinued Operations Performance (Six Months Ended March 31) | Metric | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | Revenue | 1,154,670 | 3,388,142 | | Net Income | 497,340 | 866,129 | Note 5: Bridge Loans and Long-term Debt Total debt reached $105.4 million as of March 31, 2025, with the company facing a critical May 16, 2025, deadline to produce a refinancing plan to avoid default Total Debt as of March 31, 2025 | Debt Instrument | Amount ($) | | :--- | :--- | | Convertible loan | 48,213,422 | | Credit facility | 29,361,336 | | Term loan | 12,704,969 | | Bridge loan | 15,086,759 | | Total debt | 105,366,486 | - The company amended its Bridge Loan and Credit Facility, extending the maturity date to May 23, 2025, contingent on completing specific financing transactions[55][47] - Failure to produce a satisfactory refinancing plan by May 16, 2025, will constitute a liquidity event, potentially leading to default and acceleration of debt repayment[49][56] Note 8: Capital Stock Common shares outstanding increased to 37.6 million by March 31, 2025, primarily from issuing 7.2 million SEPA shares that raised $16.6 million - The company issued 7,195,222 common shares under the Standby Equity Purchase Agreement (SEPA), raising $16,609,780 in capital[68][70][71] - As of March 31, 2025, there were 37,613,792 common shares and 7,031,065 non-voting special shares outstanding[76] Note 9: Stock-Based Compensation Stock-based compensation expense totaled $2.7 million for the six months ended March 31, 2025, with 1.23 million new options granted and the Equity Incentive Plan amended - Total stock-based compensation expense for the six months ended March 31, 2025, was $2,712,350[9] - The company granted 1,230,900 new stock options and had 2,639,500 options outstanding as of March 31, 2025[86] - The Equity Incentive Plan was amended in March 2025 to increase the share pool and add an evergreen provision for automatic annual increases[81] Note 13: Strategic Collaboration with Texas Instruments LeddarTech entered a strategic collaboration with Texas Instruments in December 2024, receiving $8.0 million in advance royalty payments recorded as a contract liability - The company entered into a strategic collaboration and software license agreement with Texas Instruments (TI) to develop an integrated ADAS platform[100] - TI agreed to pay $9.89 million in advance royalties, with $8.0 million received by January 7, 2025, and the remaining $1.89 million contingent on securing a client contract with an OEM[101] - The advance payments received from TI were recorded as a contract liability until the company fulfills its related obligations[102]