Electrovaya(ELVA) - 2025 Q3 - Quarterly Report

UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS Condensed Interim Consolidated Statements of Financial Position Total assets increased by 36.44% to $53,871 thousand, driven by current assets, while total equity rose 160.15% to $22,334 thousand | Metric | June 30, 2025 (thousands USD) | September 30, 2024 (thousands USD) | Change (%) | | :-------------------------- | :----------------------------- | :-------------------------------- | :--------- | | Total Assets | 53,871 | 39,482 | 36.44% | | Total Current Assets | 42,285 | 29,418 | 43.74% | | Total Non-Current Assets | 11,586 | 10,064 | 15.12% | | Total Liabilities | 31,537 | 30,897 | 2.07% | | Total Current Liabilities | 10,490 | 28,531 | -63.24% | | Total Non-Current Liabilities | 21,047 | 2,366 | 789.56% | | Total Equity | 22,334 | 8,585 | 160.15% | - Current liabilities decreased significantly by 63.24% from $28,531 thousand to $10,490 thousand, largely due to the repayment of working capital facilities and short-term loans[2] - Non-current liabilities increased substantially by 789.56% from $2,366 thousand to $21,047 thousand, primarily driven by the reclassification of working capital facilities to a long-term loan[2] Condensed Interim Consolidated Statements of Earnings Net income for the nine months ended June 30, 2025, was $1,315 thousand, a significant turnaround from a prior year net loss | Metric (thousands USD) | Nine months ended June 30, 2025 | Nine months ended June 30, 2024 | Change (%) | | :--------------------- | :------------------------------ | :------------------------------ | :--------- | | Revenue | 43,320 | 33,060 | 31.03% | | Direct manufacturing costs | 29,962 | 22,347 | 34.08% | | Gross margin | 13,358 | 10,713 | 24.69% | | Income (loss) from operations | 3,168 | 19 | 16573.68% | | Net income (loss) for the period | 1,315 | (1,371) | 195.92% | | Basic income (loss) per share | 0.03 | (0.04) | 175.00% | - Revenue for the three months ended June 30, 2025, increased by 66.76% to $17,133 thousand from $10,274 thousand in the same period last year[4] - Income from operations for the nine months ended June 30, 2025, was $3,168 thousand, a substantial increase from $19 thousand in the prior year, indicating improved operational efficiency[4] Condensed Interim Consolidated Statements of Comprehensive Income Other comprehensive income for the nine months ended June 30, 2025, was $879 thousand, a significant improvement from a prior year loss | Metric (thousands USD) | Nine months ended June 30, 2025 | Nine months ended June 30, 2024 | Change (USD) | | :--------------------- | :------------------------------ | :------------------------------ | :----------- | | Net income (loss) for the period | 1,315 | (1,371) | 2,686 | | Cumulative translation adjustment | (436) | (686) | 250 | | Other comprehensive income (loss) for the period | 879 | (2,057) | 2,936 | - For the three months ended June 30, 2025, other comprehensive income was $661 thousand, compared to a loss of $(956) thousand in the same period last year[5] Condensed Interim Consolidated Statements of Changes in Equity Total equity significantly increased to $22,334 thousand as of June 30, 2025, driven by share issuances and net income | Metric (thousands USD) | Balance – June 30, 2025 | Balance – October 01, 2024 | Change (USD) | | :--------------------- | :---------------------- | :------------------------- | :----------- | | Share Capital | 128,062 | 116,408 | 11,654 | | Contributed Surplus | 12,120 | 10,904 | 1,216 | | Warrants | 4,725 | 4,725 | 0 | | Accumulated other comprehensive income | 5,356 | 5,792 | (436) | | Deficit | (127,929) | (129,244) | 1,315 | | Total Equity | 22,334 | 8,585 | 13,749 | - Issuance of shares contributed $11,582 thousand to equity during the nine-month period ended June 30, 2025[6] - The company recorded a net income of $1,315 thousand for the nine-month period ended June 30, 2025, reversing the prior year's net loss[6] Condensed Interim Consolidated Statement of Cash Flows Net cash and cash equivalents increased by $631 thousand for the nine months ended June 30, 2025, driven by financing activities | Metric (thousands USD) | Nine months ended June 30, 2025 | Nine months ended June 30, 2024 | Change (USD) | | :--------------------- | :------------------------------ | :------------------------------ | :----------- | | Cash from (used in) operating activities | (7,314) | 310 | (7,624) | | Cash (used in) investing activities | (2,588) | (538) | (2,050) | | Cash from (used in) financing activities | 10,533 | (129) | 10,662 | | Increase (decrease) in cash and cash equivalents | 631 | (357) | 988 | | Cash and cash equivalents at end of period | 1,290 | 534 | 756 | - Cash used in operating activities increased to $(7,314) thousand in 2025 from cash provided of $310 thousand in 2024, mainly due to net changes in working capital[9] - Financing activities provided $10,533 thousand in cash, a significant improvement from cash used of $(129) thousand in the prior year, largely due to the issuance of shares and net proceeds from working capital facilities[9] Notes to unaudited condensed interim consolidated financial statements 1. Reporting Entity Electrovaya Inc. is a Canadian-domiciled company listed on TSX and NASDAQ, specializing in Lithium-Ion batteries and related products - Electrovaya Inc. is domiciled in Ontario, Canada, and its common shares trade on the Toronto Stock Exchange (ELVA.TO) and NASDAQ (ELVA)[11] - The Company's primary business involves 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[12] 2. Basis of Presentation Interim financial statements are prepared under IAS 34 on a going concern basis, presented in USD, with Electrovaya Inc.'s functional currency being CAD - The financial statements are prepared based on IAS 34, 'Interim Financial Reporting,' and authorized for issuance on August 13, 2025[13][14] - The Company operates on a going concern basis, supported by working capital of $31,795 thousand and a net profit of $1,315 thousand for the nine months ended June 30, 2025[15][16] - The consolidated financial statements are presented in U.S. dollars, while the functional currency of Electrovaya Inc. is the Canadian dollar[18] a. Statement of Compliance These unaudited interim consolidated financial statements comply with IAS 34 and should be read with the prior year's audited annual statements - The unaudited condensed interim consolidated financial statements comply with International Accounting Standard 34, 'Interim Financial Reporting,' as issued by the IASB[13] - These statements do not include all information required for full annual financial statements and should be read with the September 30, 2024, audited annual consolidated financial statements[13] b. Basis of Accounting Financial statements are prepared on a going concern basis, supported by improved working capital and net profit for the period - The financial statements are prepared on a going concern basis, assuming assets will be realized and liabilities settled in the normal course of business[15] - As of June 30, 2025, the Company had working capital of $31,795 thousand and a net profit of $1,315 thousand for the nine-month period, compared to working capital of $887 thousand and a net loss of $(1,371) thousand in the prior year[16] c. Functional and Presentation Currency Consolidated financial statements are presented in USD, with Electrovaya Inc.'s functional currency being CAD and its subsidiaries using USD - Consolidated financial statements are presented in U.S. dollars, rounded to the nearest thousands[18] - The functional currency of Electrovaya Inc. is the Canadian dollar, while its subsidiaries (Electrovaya Corp., Electrovaya Company, Sustainable Energy Jamestown LLC, Electrovaya USA Inc.) use US Dollars as their functional currency[18] d. Use of Judgements and Estimates Financial statement preparation involves management judgments and estimates, especially for inventory, credit losses, asset impairment, and fair value of equity instruments - Preparation of financial statements requires management to make judgments, estimates, and assumptions affecting reported amounts, which are reviewed on an ongoing basis[19][20] - Significant areas of estimation uncertainty include net realizable values of inventories, allowance for expected credit losses, impairment testing of non-financial assets, and fair value of stock option grants and warrants[21] 3. Material Accounting Policies Accounting policies in these interim financial statements are consistent with those applied in the Company's prior year audited annual statements - The accounting policies adopted are consistent with those applied in the Company's consolidated financial statements as at and for the year ended September 30, 2024[22] 4. Trade and Other Receivables Trade and other receivables increased to $19,102 thousand, with a slight rise in over 90-day past due accounts and a corresponding loss provision adjustment | Metric (thousands USD) | June 30, 2025 | September 30, 2024 | | :--------------------- | :------------ | :----------------- | | Trade receivables, gross | 17,286 | 10,577 | | Expected credit losses | (58) | (64) | | Net trade receivables | 17,228 | 10,513 | | Other receivables | 1,874 | 779 | | Total | 19,102 | 11,292 | - As of June 30, 2025, 1.74% of accounts receivable were over 90 days past due, compared to 0.77% at September 30, 2024[23] | Allowance for Credit Losses (thousands USD) | June 30, 2025 | September 30, 2024 | | :---------------------------------------- | :------------ | :----------------- | | Beginning balance | 64 | 257 | | Allowance provided/(recovery) | (7) | 51 | | Ending balance | 57 | 64 | 5. Inventories Total inventories increased to $12,095 thousand, primarily due to raw materials, while the provision for slow-moving items remained stable | Inventory Category (thousands USD) | June 30, 2025 | September 30, 2024 | | :--------------------------------- | :------------ | :----------------- | | Raw materials | 10,461 | 8,433 | | Semi-finished | 55 | 324 | | Finished goods | 1,579 | 941 | | Total Inventories | 12,095 | 9,698 | - The provision for slow moving and obsolete inventories was $223 thousand for the period ended June 30, 2025, similar to $225 thousand in the prior year[30] - Materials expensed through direct manufacturing costs for the nine months ended June 30, 2025, were $29,192 thousand, up from $22,268 thousand in the prior year[30] 6. Prepaid expenses Prepaid expenses increased to $9,798 thousand, primarily driven by higher prepaid purchases for future inventory acquisitions | Prepaid Expense Category (thousands USD) | June 30, 2025 | September 30, 2024 | | :--------------------------------------- | :------------ | :----------------- | | Prepaid expenses | 1,671 | 612 | | Prepaid insurance | 5 | 54 | | Prepaid purchases | 8,122 | 6,981 | | Total Prepaid expenses | 9,798 | 7,647 | - Prepaid purchases, comprising vendor deposits on inventory orders, increased by $1,141 thousand[27] 7. Property, plant and equipment Net book value of property, plant, and equipment increased to $11,327 thousand, driven by additions in production equipment and battery technology | Category (thousands USD) | Net Book Value June 30, 2025 | Net Book Value September 30, 2024 | | :----------------------- | :--------------------------- | :-------------------------------- | | Land & Building | 6,626 | 6,907 | | Right of Use Asset | 1,268 | 1,619 | | Production Equipment | 1,276 | 615 | | Capital work in progress | 670 | - | | Battery technology | 1,188 | 777 | | Total | 11,327 | 9,979 | - Additions to property, plant, and equipment amounted to $2,414 thousand for the nine months ended June 30, 2025, including $670 thousand in capital work in progress and $593 thousand in battery technology[28] - Depreciation and amortization expense for the nine months ended June 30, 2025, was $1,033 thousand[4] 8. Trade and Other payables Trade and other payables increased slightly to $9,830 thousand, with a minor rise in warranty provision reflecting ongoing product support | Category (thousands USD) | June 30, 2025 | September 30, 2024 | | :----------------------- | :------------ | :----------------- | | Trade payables | 7,167 | 7,073 | | Accruals | 2,188 | 1,745 | | Employee payables | 475 | 655 | | Total | 9,830 | 9,473 | | Warranty Provision (thousands USD) | June 30, 2025 | September 30, 2024 | | :--------------------------------- | :------------ | :----------------- | | Opening provision | 1,072 | 250 | | Provided during the period | 534 | 1,494 | | Utilised during the period | (509) | (672) | | Closing balance | 1,097 | 1,072 | 9. Working Capital Facilities Working capital facilities saw significant changes, including repayment of the Cortland facility and a new $25 million credit agreement with Bank of Montreal - As of June 30, 2025, the revolving credit facility balance is $18.83 million (Cdn $25.65 million) with a maximum credit of $20 million[34] - On March 7, 2025, the Company entered a new three-year credit agreement with Bank of Montreal for up to $20 million, plus a $5 million accordion, and paid off the Cortland working capital facility[39] - The Company received a $51 million loan approval from Export–Import Bank of the United States for the Jamestown facility, with a term of 6.5 years, but has not drawn on it as of June 30, 2025[40] a. Revolving Credit Facility Revolving credit facility balance increased to $18,834 thousand, with a new three-year credit agreement established with Bank of Montreal - The revolving credit facility balance was $18,834 thousand as of June 30, 2025, up from $16,283 thousand at September 30, 2024[36] - The Company revised its revolving facility on February 12, 2024, expanding its maximum principal amount to $22 million and extending its term to July 29, 2025[38] - A new three-year credit agreement with Bank of Montreal was established on March 7, 2025, for up to $20 million, leading to the full repayment of the Cortland facility[39] b. Promissory Note The promissory note balance was fully repaid by June 30, 2025, after a portion was used for option purchases and the remainder paid off - The promissory note balance was fully repaid by June 30, 2025, from an opening balance of $519 thousand at September 30, 2024[41] - A portion of the promissory note ($507 thousand) was utilized to cover option purchase prices by the Executive Chairman and CEO on February 16, 2024[43] - The remaining balance of $519 thousand was substituted with a new promissory note on February 28, 2024, carrying a 14% interest rate, and was paid off in December 2024[43] 10. Short term loans All short-term loans, including the vendor take-back liability, were fully repaid by December 2024, resulting in a zero balance | Short Term Loans (thousands USD) | June 30, 2025 | September 30, 2024 | | :------------------------------- | :------------ | :----------------- | | Short term loans | - | - | | Vendor take back | - | 1,630 | | Total | - | 1,630 | - The VTB liability, along with interest, was fully repaid in December 2024[44] 11. Finance costs Net finance charges for the nine months ended June 30, 2025, were $1,925 thousand, with a notable increase in non-cash costs | Finance Cost Category (thousands USD) | Nine months ended June 30, 2025 (Cash) | Nine months ended June 30, 2025 (Non-Cash) | Nine months ended June 30, 2025 (Total) | Nine months ended June 30, 2024 (Cash) | Nine months ended June 30, 2024 (Non-Cash) | Nine months ended June 30, 2024 (Total) | | :------------------------------------ | :------------------------------------- | :----------------------------------------- | :-------------------------------------- | :------------------------------------- | :----------------------------------------- | :-------------------------------------- | | Working capital facility | 1,373 | 69 | 1,442 | 1,703 | - | 1,703 | | Promissory notes | - | 17 | 17 | - | 55 | 55 | | Lease interest | 214 | - | 214 | 266 | - | 266 | | Changes in FV of derivative warrants | - | 96 | 96 | - | (895) | (895) | | Total Net Finance Charges | 1,621 | 304 | 1,925 | 2,380 | (470) | 1,910 | - Cash finance costs for the nine months ended June 30, 2025, decreased to $1,621 thousand from $2,380 thousand in the prior year[47] - Non-cash finance costs for the nine months ended June 30, 2025, increased to $304 thousand, compared to a recovery of $(470) thousand in the prior year, largely due to changes in the fair value of derivative warrants[47] 12. Lease liability Total lease liability decreased to $1,981 thousand, with future undiscounted minimum lease payments extending through 2029 for key facilities | Lease Liability (thousands USD) | June 30, 2025 | September 30, 2024 | | :------------------------------ | :------------ | :----------------- | | Current | 409 | 471 | | Non-current | 1,572 | 1,871 | | Total | 1,981 | 2,342 | | Future Undiscounted Minimum Lease Payments (thousands USD) | | :------------------------------------------------------- | | Year | Amount | | :--- | :----- | | 2025 | 627 | | 2026 | 528 | | 2027 | 544 | | 2028 | 560 | | 2029 | 284 | - The Company's headquarters lease in Mississauga, Ontario, is for 10 years, expiring December 31, 2029. The lab facility lease was renewed for an additional three years starting January 2023[49][50] 13. Share capital Share capital increased significantly due to new share issuances, with details provided on stock options and warrants, including their fair value determination - Total share capital increased to $128,062 thousand as of June 30, 2025, from $116,408 thousand at September 30, 2024[52] - Outstanding stock options increased to 5,314,789 as of June 30, 2025, with a weighted average exercise price of $2.58[58] - The number of outstanding warrants remained at 1,420,000 as of June 30, 2025, with an exercise price of $0.63[62] a. Authorized and issued capital stock Authorized and issued capital stock increased significantly, driven by a substantial equity raise in December 2024, including an over-allotment option | Metric (thousands USD) | Number of Common Shares | Amount | | :--------------------- | :---------------------- | :----- | | Balance, September 30, 2023 | 33,832,784 | 115,041 | | Issuance of shares | 10,024 | 30 | | Issuance of shares | 42,157 | 169 | | Exercise of options | 252,700 | 667 | | Balance, September 30, 2024 | 34,137,665 | 116,408 | | Issuance of shares | 5,951,250 | 11,582 | | Stock option exercised | 18,000 | 72 | | Balance, June 30, 2025 | 40,106,915 | 128,062 | - In December 2024, the company issued 5,175,000 common shares at $2.15, raising $11,789 thousand in equity[54] - An over-allotment option for 776,250 shares was exercised by underwriters in December 2024[54] b. Stock Options Outstanding stock options increased to 5,314,789 with a weighted average exercise price of $2.58, while stock-based compensation expense decreased | Stock Options Activity | Number Outstanding (June 30, 2025) | Weighted Average Exercise Price (June 30, 2025) | | :--------------------- | :--------------------------------- | :---------------------------------------------- | | Outstanding, September 30, 2023 | 4,714,388 | 2.44 | | Granted | 443,000 | 3.42 | | Outstanding, September 30, 2024 | 4,880,288 | 2.52 | | Granted | 484,000 | 2.50 | | Outstanding, June 30, 2025 | 5,314,789 | 2.58 | - The maximum number of common shares issuable upon exercise of stock options was increased to 6,000,000 in March 2022[57] - Stock-based compensation expense recognized for the nine months ended June 30, 2025, was $1,246 thousand, down from $1,669 thousand in the prior year[60] c. Warrants Outstanding warrants remained at 1,420,000 with an exercise price of $0.63, and their fair value is determined using the Black-Scholes model | Warrants Activity | 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, June 30, 2025 | 1,420,000 | $0.63 | - The fair value of derivative warrants as of June 30, 2025, was $251 thousand, determined using the Black-Scholes pricing model with a risk-free interest rate of 2.62% and expected volatility of 53.46%[63][64] - As a result of a reverse stock split, every five warrants were consolidated into one, reducing the number of outstanding warrants from approximately 13.1 million to 2.6 million[63] 14. Related Party Transactions The Company conducts related party transactions, including key management compensation, a research lab facility agreement, and special stock option grants Key Management Compensation Key management compensation for the nine months ended June 30, 2025, totaled $1,038 thousand, including salaries and share-based compensation | Compensation Category (thousands USD) | Nine months ended June 30, 2025 | Nine months ended June 30, 2024 | | :------------------------------------ | :------------------------------ | :------------------------------ | | Salaries, bonus and other benefits | 526 | 864 | | Share based compensation | 512 | 727 | | Total | 1,038 | 1,591 | Research Lab – Facility Usage Agreement The research lab facility, controlled by the CEO's family, involves a monthly payment of Cdn $25,265, recognized as a lease liability - In July 2021, the research lab facility was acquired by an investor group controlled by the family of Dr. Sankar Das Gupta (CEO), making the monthly payment of Cdn $25,265 a related party transaction[67] - The Facility Usage Agreement was retroactively extended for an additional three years from January 1, 2023, and recognized as a lease liability[68] Special Options Grants Special option grants were made to the Executive Chairman and CEO, contingent on market capitalization targets, with associated expenses recorded - Dr. Sankar Das Gupta was granted 700,000 options vesting in tranches based on specific target market capitalizations, with an expense of $175 thousand recorded for the nine months ended June 30, 2025[70] - Dr. Rajshekar Das Gupta was granted 900,000 options in September 2021 and an additional 600,000 options in April 2023, both contingent on market capitalization targets. An expense of $78 thousand was recorded for the 2023 grant for the nine months ended June 30, 2025[70][71][72] 15. Change in Non-Cash Operating Working Capital Non-cash operating working capital resulted in a cash outflow of $(12,688) thousand, primarily due to changes in trade receivables and inventories | Category (thousands USD) | June 30, 2025 | June 30, 2024 | | :----------------------- | :------------ | :------------ | | Trade and other receivables | (7,810) | 2,452 | | Inventories | (2,475) | (4,251) |\ | Prepaid expenses and other | (2,097) | (533) |\ | Trade and other payables | (306) | 49 |\ | Total | (12,688) | (2,283) | - The change in trade and other receivables shifted from a cash inflow of $2,452 thousand in 2024 to a cash outflow of $(7,810) thousand in 2025[73] 16. Financial Instruments The Company manages various financial risks, including capital, credit, liquidity, and market risks, with derivative liabilities fair valued using the Black-Scholes Model - Derivative liabilities (warrants) are fair valued using the Black-Scholes Model, with a fair value of $251 thousand as of June 30, 2025[74][77] - The Company's capital management objectives include ensuring its ability to continue as a going concern and providing an adequate return to shareholders[85] - The Company manages liquidity risk by maintaining liquid funds and access to a revolving credit facility, believing current resources are sufficient for anticipated financial obligations[87] Derivative Liabilities Warrants are fair valued as derivative liabilities using the Black-Scholes Model, incorporating specific risk-free interest rate and volatility assumptions - Warrants are fair valued as derivative liabilities using the Black-Scholes Model[74] - Key assumptions for fair value determination as of June 30, 2025, include a risk-free interest rate of 2.62%, expected volatility of 53.46%, and an expected warrant life of 0.36 years[74] Fair Value Fair value is the exchange price in an orderly transaction, categorized into a three-level hierarchy, with warrants valued at Level 2 - Fair value is defined as the exchange price to sell an asset or transfer a liability in an orderly transaction between market participants[75] - The fair value hierarchy categorizes inputs into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (unobservable inputs)[76] | Financial Instrument | Fair Value (June 30, 2025) | Level 1 | Level 2 | Level 3 | | :------------------- | :------------------------- | :------ | :------ | :------ | | Warrants | 251 | - | 251 | - | Risk Management Risk management processes identify risks and ensure adequate capital, with no significant changes in risk exposure since the prior year - The Company's risk management processes aim to identify risks and ensure adequate capital in relation to those risks[78] - No significant changes in risk exposure have occurred since the prior year[78] Capital risk Capital is managed to ensure adequate resources for product development, with shareholders' equity forming the capital structure, aiming for going concern status - The Company manages its capital to ensure adequate resources for product maintenance and development, with its capital structure consisting of shareholders' equity[79] - Capital management objectives include ensuring going concern status and providing adequate shareholder returns[85] Credit risk and Concentration risk Credit risk from cash and receivables is managed through policies, with one customer representing a significant concentration of revenue and receivables - Credit risk arises from cash and cash equivalents, trade and other receivables, managed through credit limits and approval policies[83][84] - For the nine months ended June 30, 2025, one customer accounted for 52% of revenue and 31% of accounts receivable[86] Liquidity risk Liquidity risk is managed by maintaining liquid funds and access to a revolving credit facility, with most financial liabilities due within 90 days - Liquidity risk is managed by maintaining liquid funds and access to a revolving credit facility, with most financial liabilities due within 90 days[87] | Contractual Maturities (thousands USD) | 2025 | 2026 | 2027 | 2028 | 2029 & beyond | Total | | :------------------------------------- | :--- | :--- | :--- | :--- | :------------ | :---- | | Trade and other payables | 9,830 | - | - | - | - | 9,830 | | Lease liability | 184 | 574 | 532 | 548 | 706 | 2,544 | | Working capital facility | - | - | - | 18,834 | - | 18,834 | | Other payable | 167 | 187 | 220 | 258 | 758 | 1,590 | | Total | 10,181 | 761 | 752 | 19,640 | 1,464 | 32,798 | Market risk Market risk includes market price and currency risk, impacting financial asset and liability fair values, with profitability linked to competitor pricing - Market risk includes market price risk and currency risk, affecting the fair value of financial assets and liabilities[89] - The Company's profitability is linked to the market price of its primary competitors' products[89] Interest rate risk Variable interest debt exposes the Company to interest rate risk, impacting future expenses and cash flows, without derivative mitigation - The Company has variable interest debt, meaning changes in interest rates will affect future interest expense and cash flows[90] - The Company does not use derivative instruments to mitigate interest rate exposure[90] Foreign currency risk Foreign currency risk arises from multiple functional currencies and transactions, with a 2% USD/CAD rate change impacting net gain/loss by $310 thousand - The Company is exposed to foreign currency risk due to its functional currency (CAD for Electrovaya Inc., USD for subsidiaries) and transactions in CAD, USD, and Euro[91][92] - A 2% change in the US dollar to Canadian foreign exchange rate would change the recorded net gain (loss) by $310 thousand as of June 30, 2025[93] 17. Contingencies The Company faces contingencies, including tax credit disputes and a Ministry of Energy claim, which management believes will not materially affect financial condition - The Company received a Notice of Confirmation from the CRA regarding 2014 and 2015 SRED reassessment for $299 thousand and $302 thousand, which is being appealed[94] - The Province of Ontario filed a claim for $655 thousand against Electrovaya Corp. related to a Smart Grid Fund program dispute, which the Company is disputing[95] - Management believes the resolution of existing business-related claims will not have a material adverse effect on the Company's financial condition[96] a. Refundable Ontario Investment Tax Credits The Company is appealing a CRA Notice of Confirmation for 2014 and 2015 SRED reassessments totaling $601 thousand, which is fully provided for - The Company received a Notice of Confirmation from the CRA on July 22, 2022, for 2014 and 2015 SRED reassessments totaling $601 thousand (Cdn$775 thousand) including interest[94] - The balance owing has been fully provided for in other payables, and the Company is appealing the decision[94] b. Ministry of Energy The Province of Ontario claimed $655 thousand against Electrovaya Corp. for a Smart Grid Fund dispute, which the Company is actively disputing - On May 28, 2018, the Province of Ontario claimed $655 thousand (Cdn $830 thousand) against Electrovaya Corp. related to a Smart Grid Fund program dispute[95] - A Statement of Defense disputing the claim was filed on March 21, 2019, and no further steps have been taken by the province[95] c. Other Contingencies The Company is involved in various business-related claims, with management believing their resolution will not materially affect financial condition - The Company is party to business-related claims in the normal course of business, with potential outcomes not yet determinable[96] - Management intends to defend these actions and believes their resolution will not materially adversely affect the Company's financial condition[96] 18. Segment and Customer Reporting Electrovaya Inc. operates as a single segment in power technology, with significant revenue growth driven by large format batteries, primarily in the United States - The Company operates in a single segment: the development, manufacturing, and marketing of power technology products[97] | Revenue Category (thousands USD) | Nine months ended June 30, 2025 | Nine months ended June 30, 2024 | | :------------------------------- | :------------------------------ | :------------------------------ | | Large format batteries | 42,514 | 32,452 | | Other | 806 | 608 | | Total Revenue | 43,320 | 33,060 | | Geographical Revenue (thousands USD) | Nine months ended June 30, 2025 | Nine months ended June 30, 2024 | | :----------------------------------- | :------------------------------ | :------------------------------ | | Canada | 2,172 | 1,505 | | United States | 41,042 | 31,398 | | Others | 106 | 157 | | Total Revenue | 43,320 | 33,060 | 19. Other payables Other payables relate to TPC projects, with an amended agreement in September 2024 leading to new debt and a repayment schedule through 2031 - The TPC contribution agreement was amended in September 2024, resulting in the de-recognition of old debt and recognition of new debt with a revised payment schedule[101] | TPC Debt Changes (thousands USD) | June 30, 2025 | September 30, 2024 | | :------------------------------- | :------------ | :----------------- | | Opening balance | 379 | 984 | | Debt extinguishment | - | (1,474) | | Recognition of new debt | - | 370 | | Interest accretion on new debt | 99 | 9 | | Ending balance | 469 | 379 | | Long-term portion | 425 | 343 | | TPC Payment Schedule (thousands USD) | | :----------------------------------- | | Year | Amount | | :--- | :----- | | 2025 | 155 | | 2026 | 132 | | 2027 | 132 | | 2028 | 132 | | 2029 | 132 | | 2030 | 132 | | 2031 | 132 | 20. Subsequent event A significant portion of the Company's outstanding warrants were exercised in August 2025, subsequent to the reporting period - Out of 912,841 warrants outstanding as of June 30, 2025, 845,000 warrants were exercised at CDN $5.30 in August 2025[104]