6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________

FORM 6-K

_______________________

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

OF THE SECURITIES EXCHANGE ACT OF 1934

For the month of May 2024

Commission File Number: 001-41726

ELECTROVAYA INC.

(Registrant)

6688 Kitimat Road

Mississauga, Ontario, Canada L5N 1P8

(Address of Principal Executive Offices)

_______________________

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

Form 20-F ☐     Form 40-F ☒

Indicate by check mark if the Registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the Registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

SIGNATURES

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

	ELECTROVAYA INC.
	(Registrant)
Date: May 14, 2024	By	/s/ Raj Das Gupta
		Raj Das Gupta
		Chief Executive Officer

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EXHIBIT INDEX

Exhibit	Description of Exhibit
99.1	Unaudited Condensed Interim Consolidated Financial Statements for the three months ended March 31, 2024
99.2	Management’s Discussion and Analysis For the quarter ended March 31, 2024
99.3	Certification of Interim Filings CEO dated May 14, 2024
99.4	Certification of Interim Filings CFO dated May 14, 2024

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EX-99.1

EXHIBIT 99.1

NOTICE OF NO AUDITOR REVIEW OF CONDENSED INTERIM FINANCIAL STATEMENTS Under National Instrument 51-102, Part 4, subsection 4.3(3) (a), if an auditor has not performed a review of the interim financial statements; they must be accompanied by a notice indicating that the interim financial statements have not been reviewed by an auditor. The accompanying unaudited condensed interim financial statements of the Company have been prepared by and are the responsibility of the Company’s management. The Company’s independent auditor has not performed a review of these condensed interim financial statements in accordance with standards established by the Canadian Institute of Chartered Professional Accountants for a review of interim financial statements by an entity’s auditor.

1

ELECTROVAYA INC.

Condensed Interim Consolidated Statements of Financial Position

(Expressed in thousands of U.S. dollars)

(Unaudited)

	March 31,			September 30,
	2024			2023
Assets
Current assets
Cash and cash equivalents	$	1,116		$	1,032
Trade and other receivables (note 4)		8,875			10,611
Inventories (note 5)		11,261			8,266
Prepaid expenses		5,916			5,997
Total current assets		27,168			25,906
Non-current assets
Property, plant and equipment (note 6)		9,707			10,149
Long-term deposit		705			459
Total non-current assets		10,412			10,608
Total assets	$	37,580		$	36,514
Liabilities and Equity
Current liabilities
Trade and other payables (note 7,19)	$	7,982		$	8,429
Working capital facilities (note 8(a))		14,740			11,821
Promissory notes (note 8(b))		519			1,026
Short term loans (note 9)		2,785			3,457
Derivative liability (note 11(c) & 16)		925			1,489
Relief and recovery fund payable (note 14)		10			-
Lease liability – current portion (note 10)		428			389
Total current liabilities		27,389			26,611
Non-current liabilities
Lease liability – non-current portion (note 10)		2,113			2,338
Relief and recovery fund payable (note 14)		90			96
Other payables (note 19)		232			323
Total non-current liabilities		2,435			2,757
Equity (Deficiency)
Share capital (note 11)		116,401			115,041
Contributed surplus		9,600			9,249
Warrants (note 11)		4,725			4,725
Accumulated other comprehensive income		8,527			8,581
Deficit		(131,497	)		(130,450	)
Total Equity		7,756			7,146
Total liabilities and equity	$	37,580		$	36,514
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 the Audit Committee	James K. Jacobs, Director

2

ELECTROVAYA INC.

Condensed Interim Consolidated Statements of Operations

(Expressed in thousands of U.S. dollars, except per share amounts)

Three and Six-month periods ended March 31, 2024 and 2023

(Unaudited)

	Three months ended March 31,						Six months ended March 31,
	2024			2023 Restated (note 20)			2024			2023 Restated (note 20)
Revenue (note 18)	$	10,695		$	8,470		$	22,786		$	17,032
Direct manufacturing costs		6,970			6,572			15,532			12,945
Gross margin		3,725			1,898			7,254			4,087
Expenses
Research and development		642			720			1,606			1,703
Government assistance (note 15)		(29	)		(137	)		(87	)		(217	)
Sales and marketing		708			503			1,438			1,228
General and administrative		921			1,070			2,309			1,954
Stock based compensation		480			214			849			536
Depreciation and amortization		300			210			536			370
		3,022			2,580			6,651			5,574
Income (Loss) from operations		703			(682	)		603			(1,487	)
Net finance charges (note 9)		1,535			480			1,554			1,597
Foreign exchange loss(gain)		7			(180	)		96			480
		1,542			300			1,650			2,077
Deferred tax recovery		-			679			-			679
Net (loss)income for the period	$	(839	)	$	(303	)	$	(1,047	)	$	(2,885	)
Basic and diluted income (loss) per share	$	(0.02	)	$	(0.01	)	$	(0.03	)	$	(0.09	)
Weighted average number of shares
Outstanding, basic and fully diluted		34,019,482			32,971,365			33,926,815			32,364,550

See accompanying notes to unaudited condensed interim consolidated financial statements.

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ELECTROVAYA INC.

Condensed Interim Consolidated Statements of Comprehensive income (Loss)

(Expressed in thousands of U.S. dollars)

Three and Six-month periods ended March 31, 2024 and 2023

(Unaudited)

	Three months ended March 31,						Six months ended March 31,
	2024			2023 Restated (note 20)			2024			2023 Restated (note 20)
Net income (loss) for the period	$	(839	)	$	(303	)	$	(1,047	)	$	(2,885	)
Items that will not be reclassified to profit or loss
Gain on revaluation of property (net of deferred tax)		-			1,921			-			1,921
Items that may be reclassified to profit or loss
Cumulative translation adjustment		(233	)		(249	)		(54	)		178
Other comprehensive income for the period		(233	)		1,672			(54	)		2,099
Total comprehensive (loss) for the period	$	(1,072	)	$	1,369		$	(1,101	)	$	(786	)

See accompanying notes to unaudited condensed interim consolidated financial statements.

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ELECTROVAYA INC.

Condensed Interim Consolidated Statements of Changes in Equity

(Expressed in thousands of U.S. dollars)

Six-month periods ended March 31, 2024 and 2023

(Unaudited)

	Share Capital		Contributed Surplus			Warrants		Accumulated other Comprehensive Income			Deficit			Total
Balance – October 01, 2022 (as restated, refer note 22)	$	103,305	$	8,099		$	4,725	$	6,135		$	(128,971	)	$	(6,707	)
Stock-based compensation		-		536			-		-			-			536
Issue of shares		7,268		-			-		-			-			7,268
Cumulative translation adjustment		-		-			-		178			-			178
Revaluation surplus		-		-			-		1,921			-			1,921
Exercise of options		37		(16	)		-		-			-			21
Net loss for the period		-		-			-		-			(2,885	)		(2,885	)
Balance – March 31, 2023 (as restated)	$	110,610	$	8,619		$	4,725	$	8,234		$	(131,856	)	$	332
Balance – October 01, 2023	$	115,041	$	9,249		$	4,725	$	8,581		$	(130,450	)	$	7,146
Stock-based compensation		-		849			-		-			-			849
Issue of shares		199		-			-		-			-			199
Exercise of options		1,161		(498	)		-		-			-			663
Cumulative translation adjustment		-		-			-		(54	)		-			(54	)
Net loss for the period		-		-			-		-			(1,047	)		(1,047	)
Balance – March 31, 2024	$	116,401	$	9,600		$	4,725	$	8,527		$	(131,497	)	$	7,756

See accompanying notes to unaudited condensed interim consolidated financial statements.

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ELECTROVAYA INC.

Condensed Interim Consolidated Statements of Cash Flows

(Expressed in thousands of U.S. dollars)

Six-month periods ended March 31, 2024 and 2023

(Unaudited)

	March 31,			Restated (note 20) March 31,
	2024			2023
Cash and cash equivalents provided by (used in)
Operating activities
Net income(loss) for the period	$	(1,047	)	$	(2,885	)
Items not involving cash:
Depreciation and amortization		590			370
Stock based compensation expense		849			536
Financing costs (note 9)		(41	)		293
Deferred tax recovery		-			(679	)
Cash and cash equivalents provided by (used in) operating activities		351			(2,325	)
Net changes in working capital (note 13)		(1,624	)		(2,723	)
Cash and cash equivalents from (used in) operating activities		(1,273	)		(5,088	)
Investing activities
Purchase of property, plant and equipment		(94	)		(519	)
Change in long-term deposits		(301	)		-
Cash and cash equivalents from (used in) investing activities		(395	)		(519	)
Financing activities
Issuance of shares		-			7,209
Issuance of warrants		-			3,265
Exercise of options (note 11)		180			21
Proceeds from working capital facilities		30,434			16,404
Repayment of working capital facilities		(27,510	)		(16,343	)
Repayment of short-term loans		(702	)		(300	)
Repayment of Regional Relief Recovery Fund		(28	)		(28	)
Repayment of Promissory Note (note 8b)		(507	)		(4,945	)
Lease payments		(186	)		(88	)
Cash and cash equivalents from (used in) financing activities		1,681			5,195
Decrease in cash and cash equivalents		13			(412	)
Effect of movements in exchange rates on cash held		71			339
Cash and cash equivalents, beginning of period		1,032			626
Cash and cash equivalents, end of period		1,116			553
Supplemental cash flow disclosures:
Interest paid		872			884
Options exercised using promissory note		1,161			-
See accompanying notes to unaudited condensed interim consolidated financial statements.

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ELECTROVAYA INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except where otherwise indicated)

Six-month periods ended March 31, 2024 and 2023

(Unaudited)

1.	Reporting Entity
	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”). The Group is primarily involved in the design, development and manufacturing of Lithium-Ion batteries, battery systems and battery-related products for energy storage, clean electric transportation, and other specialized applications.
2.	Basis of Presentation

a)	Statement of Compliance
	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"). The unaudited condensed interim consolidated financial statements should be read in conjunction with the Company’s September 30, 2023 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 9, 2024.
b)	Basis of Accounting
	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 period ended March 31, 2024, the Company had cash provided by operations of $351 (March 31, 2023: $(2.3) million), a total of $(1.6) million (March 31, 2023: $(2.7) million) was the result of change in working capital items and a net loss of $(1.0) million (2023: $(2.9) million). The Company’s equity was in surplus of $7.7 million. As of March 31, 2024 the Company had cash and cash equivalents of $1.1 million. The Company is also anticipating the planned construction of its gigafactory in Jamestown, New York (the “Gigafactory”), which will need additional financing. The first phase of construction is expected to take place within the existing 135,000 square foot manufacturing facility for the production of cells and batteries. These material uncertainties raise significant doubt upon the Company's ability to continue as a going concern. In assessing whether the going concern assumption was appropriate, management took into account all relevant information available about the future, which was at least, but not limited to, the twelve-month period following March 31, 2024. The Company and its Board of Directors have implemented various operating and financing strategies, including the following:

7

	The Company is pursuing equipment financing for its planned Jamestown gigafactory and will only proceed in the event that it closes a government backed debt facility that includes advantageous terms with minimal impacts to operating cash flow and equity dilution. If the Company is unable to secure such financing, it will delay or cancel these expansion plans with limited financial impact as the main investment made thus far is the land and building.. The Company has made improvements to its manufacturing process, equipment, and facilities over the last several months. Furthermore, the Company also anticipates gross margins to improve in fiscal year 2024 due to decreasing costs of key materials including but not limited to cell materials, separators, and other high value items. These anticipated improved margins, when combined with expected overall sales growth should result in improved overall financial performance. Finally, the Company is confident in securing additional working capital from either debt or equity. Since the Company listed on Nasdaq in July 2023, it has further increased liquidity and overall financing capabilities.
c)	Functional and Presentation Currency
	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 Company is the Canadian dollar and the functional currencies of the Company’s subsidiaries include U.S. dollar.
d)	Use of Judgements and Estimates
	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 and liabilities, revenue 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 critical judgements in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements relate to the following (judgements made are disclosed in individual notes throughout the financial statements where relevant): Information about significant areas of estimation uncertainty that have the most significant effect on the amounts recognized in the consolidated financial statements relate to the following (assumptions made are disclosed in individual notes throughout the financial statements where relevant):

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ELECTROVAYA INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except where otherwise indicated)

Six-month periods ended March 31, 2024 and 2023

(Unaudited)

· 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 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, forfeiture and expected exercise rates.

· Property, plant and equipment are depreciated over their estimated useful life.

· In determining the carrying amount of right-of-use assets and lease liabilities, the Company is required to estimate the incremental borrowing rate specific to each leased asset or portfolio of leased assets if the interest rate implicit in the lease is not readily determined.

Allowance for expected credit losses

The allowance for expected credit losses is based on our assessment of the collectability of customer accounts and the aging of the related invoices and represents our best estimate of probable credit losses in our existing trade accounts receivable. We regularly review the allowance by considering factors such as historical experience, credit quality, the age of the account receivable balances, and current economic conditions that may affect a customer’s ability to pay.

Stock-Based Compensation

We account for stock-based compensation costs in accordance with the accounting standards for stock-based compensation, which require that all stock-based payments to employees be recognized in the unaudited condensed interim consolidated statements of earnings based on their fair values. The fair value of stock options on the grant date is estimated using the Black-Scholes option-pricing model using the single-option approach and the Monte Carlo valuation method depending on the type of option granted. The Black Scholes and Monte Carlo option pricing models require the use of highly subjective and complex assumptions, including the option's expected term and the price volatility of the underlying stock, to determine the fair value of the award.

Warrants

We account for warrants in accordance with the accounting standards for warrants, which requires all warrants to be recognized in the unaudited condensed interim consolidated statements of financial position based on their fair values. The fair value of warrants on the grant date is estimated using the Black-Scholes pricing model approach. The Black Scholes pricing model requires the use of highly subjective and complex assumptions, including the warrant’s expected term and the price volatility of the underlying stock, to determine the fair value of the award.

9

ELECTROVAYA INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except where otherwise indicated)

Six-month periods ended March 31, 2024 and 2023

(Unaudited)

3.	Significant Accounting Policies
	The accounting policies 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, 2023.
4.	Trade and Other Receivables

		March 31, 2024			September 30, 2023
Trade receivables, gross	$	7,511		$	9,404
Expected credit losses		(117	)		(257	)
Trade receivables		7,394			9,147
Other receivables		1,481			1,464
Trade and other receivables	$	8,875		$	10,611

As at March 31, 2024, 7.01% of the Company’s accounts receivable is over 90 days past due (September 30, 2023 – 7.18%)

Current	31_60 Days	61_90 Days	91_120 Days	Over 120 Days	Total
79.62%	13.1%	0.27%	4.98%	2.03%	100.00%
$5,979	$984	$21	$374	$153	$7,511

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

		March 31		September 30,
		2024		2023
Beginning balance	$	257		$	54
Write off		(178	)		-
Allowance provided/(reversed)		38			203
Ending balance	$	117		$	257

5.	Inventories
	Total inventories on hand as at March 31, 2024 and September 30, 2023 are as follows:

	March 31,		September 30,
	2024		2023
Raw materials	$	9,252	$	6,553
Semi-finished		781		165
Finished goods		1,228		1,548
	$	11,261	$	8,266

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ELECTROVAYA INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except where otherwise indicated)

Six-month periods ended March 31, 2024 and 2023

(Unaudited)

6. Property, plant and equipment

		Property, plant and equipment
	Land & Building	Right of Use Asset	Leasehold Improvement	Production Equipment	Office Furniture and Equipment	Total
Gross carrying amount
Balance October 1, 2023	7,700	3,197	76	1,712	73	$12,758
Additions	-	-	-	88	6	94
Exchange differences	-	-	-	-	-	-
Balance March 31, 2024	7,700	3,197	76	1,800	79	12,852
Depreciation and impairment
Balance October 1, 2023	(419)	(1,127)	(33)	(970)	(60)	(2,609)
Additions	(187)	(229)	(7)	(110)	(3)	(536)
Balance March 31, 2024	(606)	(1,356)	(40)	(1,080)	(63)	(3,145)
Net Book Value – March 31, 2024	$7,094	$1,841	$36	$720	$16	$9,707

		Property, plant and equipment
	Land & Building	Right of Use Asset	Leasehold Improvement	Production Equipment	Office Furniture and Equipment	Total
Gross carrying amount
Balance October 1, 2022	5,105	2,582	39	1,240	56	9,022
Additions	2,595	573	37	452	16	3,673
Exchange differences	-	42	-	20	1	63
Balance September 30, 2023	7,700	3,197	76	1,712	73	12,758
Depreciation and impairment
Balance October 1, 2022	(104)	(710)	(20)	(819)	(55)	(1,708)
Additions	(315)	(406)	(12)	(138)	(4)	(875)
Exchange differences	-	(11)	(1)	(13)	(1)	(26)
Balance September 30, 2023	(419)	(1,127)	(33)	(970)	(60)	(2,609)
Net Book Value – September 30, 2023	7,281	2,070	43	742	13	10,149

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ELECTROVAYA INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except where otherwise indicated)

Six-month periods ended March 31, 2024 and 2023

(Unaudited)

7.	Trade and Other Payables
	Trade and Other Payables as at March 31, 2024 and September 30, 2023 are as follows:

	March 31, 2024		September 30, 2023
Trade Payables	$	4,895	$	6,046
Accruals		2,315		1,197
Employee Payables		772		1,186
	$	7,982	$	8,429

8. Working Capital Facilities

a) Revolving Credit Facility

As at March 31, 2024 the balance owing under the facility is $14.74 million (Cdn $19.96 million). The maximum credit available under the facility is $16.24 million (Cdn $22 million).

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.

	March 31			September 30,
	2024			2023
Opening Balance	$	11,821		$	11,635
Exchange difference		(5	)		186
Payments made during the period		(27,510	)		(34,184	)
Cash drawn during the period		30,434			34,184
Closing balance	$	14,740		$	11,821

Total finance cost for the six-month period ended March 31, 2024 was $1,148 million (September 30, 2023 - $1.543 million).

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.

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ELECTROVAYA INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except where otherwise indicated)

Six-month periods ended March 31, 2024 and 2023

(Unaudited)

b) Promissory Note

	March 31,			September 30,
	2024			2023
Promissory Note opening balance	$	1,026		$	4,363
Finance cost		37			126
Repayment of Promissory Note (i)		-			(4,489	)
Repayment of Promissory Note(ii)		(507	)		-
Finance cost paid with options(i)		(37	)		-
Promissory Note(i) issued		-			1,050
Repayment of Promissory Note(i)					(24	)
	$	519		$	1,026

i)	The promissory note was secured by the personal guarantee of Dr. Sankar Das Gupta, CEO and the controlling shareholder of the Company, as well as a pledge of 25,700,000 Common Shares by Dr. Das Gupta in favour of the lender. The Promissory Note was for $4,363 (Cdn $6 million) and carried interest at the greater of a) 10% per annum or b) 7% per annum above the Prime Rate.
	On November 14, 2022, the Company repaid the promissory note in the amount of approximately $4.4 million (Cdn $6 million) via the proceeds of an equity raise. Upon repayment, the pledge of 27,500,000 Common Shares by Dr. Das Gupta on the share certificates was cancelled. 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 part 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 maturing on July 31, 2025.
ii)	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 $1.05 million to the members of SEJ, with a term of 365 days bearing interest at 7.5% annually payable at maturity. Interest, recorded for the quarter ended March 31, 2023, is $37.

13

ELECTROVAYA INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except where otherwise indicated)

Six-month periods ended March 31, 2024 and 2023

(Unaudited)

9.	Short Term Loans
	As of March 31, 2024 and September 30, 2023, short term loans consist of:

	March 31,			September 30,
	2024			2023
Vendor Take Back Opening Balance	$	3,457		$	4,130
Repaid in the period		(702	)		(750	)
Interest accretion		30			77
Vendor Take Back Closing Balance (short term)		2,785			3,457

          Finance Costs

During the six-month period ended March 31, 2024, the Company incurred both cash and non cash finance costs. The following table shows the split as included on the statement of earnings.

	Six months ended March 31, 2024								Six months ended March 31, 2023
	Cash		Non-Cash			Total			Cash		Non-Cash		Total
Working capital facility (note 8(a))	$	898		-			898			780		-		780
Shares issued to lender (note 11(a))		-		30			30			-		30		30
Working capital facility renewal (note 8(a))		250		-			250			-		-		-
Accretion on promissory note (note 8(b))		-		37			37			-		-		-
Interest on VTB		48		30			78			48		10		58
Equity and listing costs		219		-			219			151		-		151
Lease interest (note 10)		181		-			181			184		-		184
Change in fair value of derivative warrants		-		(564	)		(564	)		-		31		31
Shares issued to consultants (note 11(a))		-		169			169			-		-		-
Interest on promissory notes repaid		-		-			-			141		-		141
Accretion on government loans - RRRF		-		27			27			-		29		29
Accretion on government loans – TPC (note 19)		-		231			231			-		193		193
	$	1,595		(41	)		1,554		$	1,304		293		1,597

14

ELECTROVAYA INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except where otherwise indicated)

Six-month periods ended March 31, 2024 and 2023

(Unaudited)

10.	Lease liability
	As of March 31, 2024 lease liability consists of:

	March 31, 2024		September 30, 2023
Current	$	428	$	389
Non-current		2,113		2,338
Carrying amount – lease liability	$	2,541	$	2,727

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

	March 31, 2024			March 31, 2023
Interest on lease liabilities	$	181		$	184
Incremental borrowing rate at time of transition		14.00	%		14.00	%
Total cash outflow for the lease	$	367		$	301

The Company’s future minimum lease payments under operating leases for the years ended September 30 for the continued operations is as under:

Year	Amount
2024	$	467
2025	$	950
2026	$	789
2027	$	745
2028	$	762
2029 and beyond	$	975

The lease agreement for the Company’s laboratory facility was 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.

11. Share Capital

a) Authorized and issued capital stock

	Common Shares
	Number		Amount
Balance, September 30, 2023		33,832,784	$	115,041
Issuance of shares (note (i))		10,024		30
Balance, December 31, 2023		33,842,808		115,071
Issuance of shares (note (ii))		42,157		169
Exercise of options for cash (note 11b)		38,007		180
Exercise of options (note 11b)		211,193		981
Balance, March 31, 2024		34,134,165		116,401

15

ELECTROVAYA INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except where otherwise indicated)

Six-month periods ended March 31, 2024 and 2023

(Unaudited)

(i)	Shares 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 compensation for Cdn $40K extension fee.
(ii)	Shares issued as for investor relations consulting; the Company issued 42,157 shares at Cdn $5.43 as compensation.

b) Stock Options

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.

	Number outstanding			Weighted average exercise price
Outstanding, September 30, and December 31, 2023		4,714,388		$	2.44
Exercised during the quarter		(249,200	)	$	2.65
Expired during the quarter		(16,200	)	$	2.87
Outstanding, March 31, 2024		4,448,988		$	2.42

Of the options exercised during the six months ended March 31, 2024, cash received amounted to $180, with the balance offset against the promissory note, see note 8(b)(i). The weighted average share price during the six months ended March 31, 2024 was $3.65.

											Options exercisable
Exercise price							Number Outstanding		Weighted average remaining life (years)		Number exercisable		Weighted average exercise price
$	3.77	(	Cdn	$	5.10	)		8,200		0.1424		8,200	$	3.77
$	2.40	(	Cdn	$	3.25	)		35,499		0.8871		35,499	$	2.40
$	3.36	(	Cdn	$	4.55	)		12,000		1.1362		12,000	$	3.36
$	2.55	(	Cdn	$	3.45	)		42,900		1.5003		42,900	$	2.55
$	2.92	(	Cdn	$	3.95	)		9,600		1.8645		9,600	$	2.92
$	7.87	(	Cdn	$	10.65	)		101,121		2.7488		101,121	$	7.87
$	4.51	(	Cdn	$	6.10	)		10,667		3.3347		10,667	$	4.51
$	1.03	(	Cdn	$	1.40	)		120,066		3.8960		120,066	$	1.03
$	1.11	(	Cdn	$	1.50	)		1,024,000		5.3333		1,024,000	$	1.11
$	2.44	(	Cdn	$	3.30	)		270,268		6.4476		270,268	$	2.44
$	3.69	(	Cdn	$	5.00	)		1,494,667		7.4524		671,337	$	3.69
$	4.25	(	Cdn	$	5.75	)		20,000		7.6632		20,000	$	4.25
$	2.10	(	Cdn	$	2.85	)		298,000		8.2218		171,337	$	2.10
$	3.95	(	Cdn	$	5.35	)		1,002,000		9.0267		41,000	$	3.95
								4,448,988		6.95		2,537,995	$	2.42

16

ELECTROVAYA INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except where otherwise indicated)

Six-month periods ended March 31, 2024 and 2023

(Unaudited)

c) Warrants

Details of Share Warrants
	Number Outstanding		Exercise Price
Outstanding, December 31, 2023 & March 31, 2024		1,711,924	$	2.38

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 3.8%, expected volatility of the market price of our shares (based on historical volatility of our share price) of 56.87%, and the expected warrant life (in years) of 3. 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.

Derivative warrant continuity schedule is as follows:

	Derivative warrants		Fair Value
Opening Valuation as at September 30, 2023		912,845	$	1,489
Fair value adjustment		-		(563	)
Currency difference		-		(1	)
Closing Valuation as at March 31, 2024		912,845	$	925

	Derivative warrants			Fair Value
Opening Valuation as at November 9, 2022		1,754,344		$	3,259
Warrants exercised in July 2023		(841,499	)		(1,409	)
Fair value adjustment					(361	)
Closing Valuation as at September 30, 2023		912,845		$	1,489

Details of Compensation options

	Number Outstanding		Exercise          Price
Outstanding, September 30, 2023		17,522	$	4.95
Outstanding, December 31, 2023 & March 31, 2024		17,522	$	4.95

17

ELECTROVAYA INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except where otherwise indicated)

Six-month periods ended March 31, 2024 and 2023

(Unaudited)

12. Related Party Transactions

Management compensation

Key management compensation for the six months period ended March 31, 2024 comprises the following:

	March 31, 2024		March 31, 2023
Salaries, bonus and other benefits		432		493
Share based compensation		486		705
		918		1,198

$120 is included in accrued expenses as at March 31, 2024.

Personal Guarantees

	March 31,			September 30,
	2024			2023
Promissory Note (note 8(b))	$	519	(i)	$	1,023

The promissory note payable to the members of Sustainable Energy Jamestown, was also secured by the personal guarantee by the Executive Chairman, Dr. Sankar Das Gupta, as well as a pledge of 5,140,000 Common Shares by Dr. Das Gupta in favor of the lender.

Electrovaya Labs – Facility Usage Agreement

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 associated with its Electrovaya Labs segment. The laboratory and pilot plant facilities have many equipment and does have 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, and which group 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 is now with 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 expense recorded in the quarter was $115 and the closing lease liability was $369.

18

ELECTROVAYA INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except where otherwise indicated)

Six-month periods ended March 31, 2024 and 2023

(Unaudited)

Special Option Grants

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 400,000 options which vest in two tranches of 200,000 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, Share-based payment. The expense for the quarter ended March 31, 2024 of $nil (March 2023 - $nil) is recorded within stock-based compensation on the face of the statement of earnings. The expense related to these options was fully recognised by December 31, 2023.

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. These 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 for the quarter ended March 31, 2024 of $nil (March 2023 - $81) is recorded within stock-based compensations in the face of the statement of earnings.

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 six hundred thousand options. These options will vest in two phases: three hundred thousand options and three hundred thousand options, contingent upon achieving certain target market capitalizations. The expense for the quarter ended March 31, 2024 of $243 (March 2023 - $nil) is recorded within stock-based compensation on the face of the statement of earnings.

Acquisition of Sustainable Energy Jamestown (“SEJ”)

During the year ended September 30, 2022, the Company acquired real estate (land and building) through its common control entity Sustainable Energy Jamestown (“SEJ”), a limited liability company controlled by the major shareholders of the company. SEJ purchased the land and buildings for $5.1 million financing the purchase with a deposit of $600 and a vendor take back loan of $4.4 million. Transaction costs incurred by the Company were $105. Both the asset and liability, including an amount payable to the majority shareholders of $531, and were included in the restated September 30, 2022 and December 31, 2022 financials.

During the year ended September 30, 2023, the land and buildings comprising the real estate were revalued by $2.7 million, which was recognised in other comprehensive income. The purchase price included a premium of $500 paid to the members of SEJ, who are also majority shareholders of the Company, which was recorded in General and Administrative costs in the statement of operations.

19

ELECTROVAYA INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except where otherwise indicated)

Six-month periods ended March 31, 2024 and 2023

(Unaudited)

13. Change in Non-Cash Operating Working Capital

		March 31
		2024			2023
Trade and other receivables	$	1,736		$	(730	)
Inventories		(3,004	)		(1,042	)
Prepaid expenses and other		79			(737	)
Trade and other payables		(435	)		(214	)
	$	(1,624	)	$	(2,723	)

14. Relief and Recovery Fund Payable

The Relief and recovery fund was created by the Ministry of Economic Development to support the Company to recover from economic disruption associated with the COVID-19 outbreak. An amount of $300 (Cdn 380) was received as at September 30, 2021. The funding bears no interest and the Company is required to repay in equal monthly payments for 5 years starting from April 1, 2023. The Company discounted the loan to the present value using the applicable discount rate

15. Government Assistance

The government assistance is related to specific Government supported research and development programs undertaken by Electrovaya. The National Research Council of Canada Industrial Research Assistance Program (IRAP) provided $29 (Cdn $39) during the quarter ended March 31, 2024. This total was recorded within Government Grants on the statement of earnings.

16. Financial Instruments

Derivative Liabilities

Warrants as derivative liability is fair valued using Black Scholes Model. Using this approach, the fair value of the warrants on 09 November 2022 was determined to be $3.3 million. Key valuation inputs and assumptions used in the BSM when valuing the warrants as at March 31, 2024 were, stock price $4.91, expected life of 1.6 years, annualized volatility of 56.9%, annual risk-free rate of 4.17%, and dividend yield of 0.0%.

The Company incurred total issuance costs of $459. The Company allocated proportionally to the derivative liability and expensed $134 as a finance cost in the statement of earnings, and balance portion of the issuance cost reduced from equity for the amount of $325 respectively during the fiscal year ended 30 September 2023.

Warrants are fair valued at each reporting date and the gain / (loss) is charged to the other comprehensive income. Warrants would fall under Level 2 Fair Value Measurement. The revaluation of the warrants as on March 31, 2024 resulted in the changes in fair value of $564, included in finance cost in the statement of earnings. A 10% change in any assumption would result in the change in derivative warrant liability between $(208) and $321.

20

ELECTROVAYA INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except where otherwise indicated)

Six-month periods ended March 31, 2024 and 2023

(Unaudited)

Fair Value

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.

There were no transfers between levels of the fair value hierarchy during the period presented.

	Fair Value		Level 1		Level 2		Level 3
Warrants	$	925		-	$	925		-

Risk Management

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.

Capital risk

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.

21

ELECTROVAYA INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except where otherwise indicated)

Six-month periods ended March 31, 2024 and 2023

(Unaudited)

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 on the basis of the carrying amount of equity plus its short-term debt comprised of the promissory notes, less cash and cash equivalents as presented on the face of the statement 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 the 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 and Concentration risk

Credit risk is the risk that the counter-party 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 no 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 quarter ended March 31, 2024, one customer accounted for $6.7 million or 55% of revenue (March 31, 2023 — $7.5 million or 83.5%). As of March 31, 2024, one customer accounted for 62.1% of accounts receivable (March 31, 2023 — 81.5%).

Liquidity risk

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

22

ELECTROVAYA INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except where otherwise indicated)

Six-month periods ended March 31, 2024 and 2023

(Unaudited)

Market risk

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.

Interest rate risk

The Company has variable interest debt as described in Note 9 Changes in interest rates will affect future interest expense and cash flows. The Company does not enter into derivative instruments to reduce this exposure.

Foreign currency risk

The Company is exposed to foreign currency risk. The Company’s functional currency is the United States dollar 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, 2024 was $189 (March 31, 2023 $7). If the US dollar to Canadian foreign exchange rate changed by 2% this would change the recorded Net gain(loss) by $148 (March 31, 2023-$123).

17. Contingencies

The contingencies in these unaudited condensed interim consolidated financial statements are the same as those disclosed in the Company’s audited consolidated financial statements as at and for the year ended September 30, 2023.

18. Segment and Customer Reporting

The Company develops, manufactures and markets power technology products.

Given the size and nature of the products produced, the Company’s operations are segmented based on large format batteries, with the remaining smaller product line categorized as “Other”.

There has been no change in either the determination of our segments, or how segment performance is measured, from that described in the Company’s consolidated financial statements for the three and six month period ended March 31, 2024.

23

ELECTROVAYA INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except where otherwise indicated)

Six-month periods ended March 31, 2024 and 2023

(Unaudited)

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

	Three months ended March 31,				Six months ended March 31,
	2024		2023		2024		2023
Revenue with customers
Sale of batteries and battery systems	$	10,196	8150			21,408		16,353
Sale of services		266		5		933		23
Grant income
Research grant		-		183		-		350
Others		233		132		445		306
	$	10,695		8,470		22,786		17,032

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

	Three months ended March 31,				Six months ended March 31,
	2024		2023		2024		2023
Canada	$	186		308		1,120	$	515
United States		10,484		8,011		21,621		16,366
Others		25		151		45		151
	$	10,695		8,470		22,786	$	17,032

19. Other payables

Technology Partnerships Canada (“TPC”) projects were 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.

The following table represents changes in the provision for repayments to Industry Canada.

	March 31 2024			September 30 2023
Opening balance as at September 30, 2023		992			798
Interest accretion		231			294
Miscellaneous		(162	)		(108	)
Ending balance		1,061			984
Less: current portion of the provision		(829	)		(661	)
Ending balance of long-term portion	$	232		$	323

24

ELECTROVAYA INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except where otherwise indicated)

Six-month periods ended March 31, 2024 and 2023

(Unaudited)

Interest accretion amounted to $118 during the quarter ended March 31, 2024 was included in finance charges.

The latest repayment schedule starting July 1, 2018 for current and future fiscal years are as follows:

2024	624
2025	663
2026	117

20) Restatement of financial results for March 31, 2023

The Company previously restated its consolidated financial statements as at and for the year ended September 30, 2022. Some of the corrections identified had an impact on the previously reported quarterly financial statements within the or the fiscal year ended September 30, 2023. The purpose of this note is to identify the changes between what was originally reported for the quarter ended March 31, 2023 and the corrections made. There are no additional changes to the financial statements for the twelve months ended September 30, 2023.

(i)	The Company had previously not recognized its acquisition of control of SEJ during the year ended September 30, 2022, and instead recognized the purchase of 100% membership interest in SEJ during the three month period ended March 31, 2023. Accordingly, the Company included the associated real estate asset, promissory note and expenses (G&A) during the year ended September 30, 2022. During fiscal 2023, the real estate asset was revalued resulting in a revaluation surplus. Additionally, certain adjustments were also made to amounts due from/to related parties and a deferred tax asset was recognised as a result of the revaluation of the land and buildings. Further, certain expenses which were earlier considered as receivable have now been expensed upon change in the associated with real estate acquisition.
(ii)	The Company was previously recognising revenue upon shipment, instead of, upon delivery to customers. This resulted in adjustments in each reporting period for the financial year 2023 for revenue, direct manufacturing costs, trade receivables, and inventories.
(iii)	Certain promissory notes and short-term loans were not appropriately measured at fair value at initial recognition, resulting in adjustments to these balances along with interest accretion expense.
(iv)	The Company previously determined the functional currency of the subsidiary, Electrovaya Corp, as Canadian dollars, instead of US dollars. This resulted in adjustments to certain assets and liabilities and accumulated other comprehensive income.
(v)	The Company had previously not recognized certain performance-based stock options. This resulted in adjustments to stock-based compensation expense and contributed surplus.
(vi)	Warrants issued in a unit financing were incorrectly recognized as equity, resulting in recognition of a derivative warrant liability, and adjustments to share capital, warrant reserve and financing costs (representing changes in fair value).
(vii)	Warrants were incorrectly recognized as financing costs, resulting in adjustment to warrant reserve and financing costs.
(viii)	The above adjustments also resulted in changes in cash flows from operating, investing and financing activities in the comparative statement of cash flows.
(ix)	The provision for warranty cost was incorrectly estimated, resulting in adjustments to trade and other payables and sales and marketing expense.
(x)	Certain comparative figures were reclassified to confirm with the current period’s presentation:

· Expenses previously included within General and administrative and Research and development categories were reclassified to Finance costs category

· Finance cost was reclassified to non operating expense.

· Certain cash flow items was adjusted to give an accurate view of cash in and out.

(xi) Calculation of expense relating to Right of use asset and corresponding lease liability for the labs facility was not included.

25

ELECTROVAYA INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except where otherwise indicated)

Six-month periods ended March 31, 2024 and 2023

(Unaudited)

a) Statement of Financial Position

As at March 31, 2023
	As Restated			As Previously Reported			Restatement
Assets
Current assets
Cash and cash equivalents	$	553		$	553		$	-
Trade and other receivables (ii)		3,643			8,179			(4,536	)
Inventories (ii) & (iv)		8,520			5,092			3,428
Prepaid expenses and other		4,724			4,711			13
Total current assets		17,440			18,535			(1,095	)
Non current assets
Property, plant and equipment (i),(x) & (xi)		10,672			10,393			279
Long-term deposit (iv)		91			103			(12	)
Total non-current assets		10,763			10,496			267
Total assets	$	28,203		$	29,031			(828	)
Liabilities and Equity
Current liabilities
Trade and other payables (ix)	$	4,451		$	4,143			308
Working capital facilities		11,830			11,830			-
Promissory notes (iii)		1,031			1,022			9
Short term loans (i) & (iii)		1,085			3,950			(2,865	)
Derivative liability (vi)		3,239			-			3,239
Relief and recovery fund payable (iii)		6			42			(36	)
Lease liability – current portion (xi)		355			186			169
Total current liabilities		21,997			21,173			824
Non-current liabilities
Lease liability – non-current portion (xi)		2,543			2,174			369
Relief and recovery fund payable (iii)		100			239			(139	)
Other payables (iii)		-			106			(106	)
Promissory Note (i) & (iii)		3,231			-			3,231
Total non-current liabilities		5,874			2,519			3,355
Equity (Deficiency)
Share capital (vi)		110,610			111,756			(1,146	)
Contributed surplus (v)		8,619			6,483			2,136
Warrants (vi) & (vii)		4,725			6,872			(2,147	)
Accumulated other comprehensive income (iv)		8,234			15,323			(7,089	)
Deficit		(131,856	)		(135,095	)		3,239
Total Equity (Deficiency)		332			5,339			(5,007	)
Total liabilities and equity (deficiency)	$	28,203		$	29,031			(828	)

26

ELECTROVAYA INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except where otherwise indicated)

Six-month periods ended March 31, 2024 and 2023

(Unaudited)

b) Condensed Interim Consolidated Statements of Operations

For the six month period ended March 31, 2023
	As Restated			As Previously Reported			Restatement
Revenue (ii)	$	17,032		$	18,238		$	(1,206	)
Direct manufacturing costs (ii)		12,945			13,620			(675	)
Gross margin		4,087			4,618			(531	)
Expenses
Research and development (iii)		1,703			1,990			(287	)
Government assistance		(217	)		(217	)		-
Sales and marketing (ix)		1,228			978			250
General and administrative (i)		1,954			1,501			453
Stock based compensation (v)		536			265			271
Depreciation (i)		370			194			176
		5,574			4,711			863
Income(loss) from operations		(1,487	)		(93	)		(1,394	)
Finance costs (i), (iii) & (vii)		1,597			1,140			457
Foreign exchange loss and interest income (iv)		480			182			298
		2,077			1,322			755
Deferred tax recovery (i)		679			-			679
Net loss for the period		(2,885	)		(1,415	)		(1,470	)
Basic and diluted loss per share	$	(0.09	)	$	(0.04	)		(0.05	)
Weighted average number of shares
Outstanding, basic and fully diluted		32,971,365			32,971,365			-

27

ELECTROVAYA INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except where otherwise indicated)

Six-month periods ended March 31, 2024 and 2023

(Unaudited)

For the three month period ended March 31, 2023
	As Restated			As Previously Reported			Restatement
Revenue (ii)	$	8,470		$	10,459		$	(1,989	)
Direct manufacturing costs (ii)		6,572			7,787			(1,215	)
Gross margin		1,898			2,672			(774	)
Expenses
Research and development (iii)		720			887			(167	)
Government assistance		(137	)		(136	)		(1	)
Sales and marketing (ix)		503			501			2
General and administrative (i)		1,070			606			464
Stock based compensation (v)		214			132			82
Depreciation (i)		210			97			113
		2,580			2,087			493
Income(loss) from operations		(682	)		585			(1,267	)
Finance costs (i), (iii) & (vii)		480			477			3
Foreign exchange loss and interest income (iv)		(180	)		(62	)		(118	)
		300			415			(115	)
Deferred tax recovery (i)		679			-			679
Net loss for the period		(303	)		170			(473	)
Basic and diluted loss per share	$	(0.01	)	$	0.00			(0.01	)
Weighted average number of shares
Outstanding, basic and fully diluted		32,971,365			32,971,365			-

28

ELECTROVAYA INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except where otherwise indicated)

Six-month periods ended March 31, 2024 and 2023

(Unaudited)

c) Statement of Comprehensive Income (Loss)

	For the six month period ended March 31, 2023
	As Restated			As Previously Reported			Restatement
Net Loss for the period	$	(2,885	)	$	(1,415	)	$	(1,470	)
Items that will not be reclassified to profit or loss
Gain on revaluation of property (net of deferred tax)		1,921			1,882			39
Items that may be reclassified to profit or loss
Currency translation difference (iv)		178			(50	)		228
Total comprehensive loss for the period		(786	)		417			(1,203	)

	For the three month period ended March 31, 2023
	As Restated			As Previously Reported		Restatement
Net Loss for the period	$	(303	)	$	170	$	(473	)
Items that will not be reclassified to profit or loss
Gain on revaluation of property (net of deferred tax)		1,921			1,882		39
Items that may be reclassified to profit or loss
Currency translation difference (iv)		(249	)		119		(368	)
Total comprehensive loss for the period		1,369			2,171		(802	)

29

ELECTROVAYA INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except where otherwise indicated)

Six-month periods ended March 31, 2024 and 2023

(Unaudited)

d) Statement of Cash Flows

For the six month period ended March 31, 2023
	As Restated			As Previously Reported			Restatement
Net loss for the period (ii)	$	(2,885	)	$	(1,415	)		(1,470	)
Items not involving cash:
Depreciation (i)		370			194			176
Stock based compensation expense (v)		536			265			271
Financing costs (i), (iii) & (vii)		293			-			293
Deferred tax recovery (i)		(679	)		-			(679	)
Cash and cash equivalents used in operating activities		(2,365	)		(956	)		(1,409	)
Net changes in working capital (ii) & (iv)		(2,723	)		(3,621	)		898
Cash and cash equivalents used in operating activities		(5,088	)		(4,577	)		(511	)
Investing activities
Purchase of property, plant and equipment (i)		(519	)		-			(519	)
Change in long term deposits (iv)		-			(13	)		13
Cash and cash equivalents (used in) investing activities		(519	)		(13	)		(506	)
Financing activities
Issue of shares (vi)		7,209			10,554			(3,345	)
Issue of warrants (vi)		3,265			-			3,265
Exercise of options		21			-			21
Proceeds from loans (x)		16,404			(6,387	)		22,791
Repayment of loans (x)		(16,343	)		-			(16,343	)
Repayment of loans (i)		(300	)		-			(300	)
Repayment of promissory note		(4,973	)		-			(4,973	)
Lease payments		(88	)		(244	)		156
Change in other payables		-			345			(345	)
Cash and cash equivalents from (used in) financing activities		5,195			4,268			927
Increase (Decrease) in cash and cash equivalents		(412	)		(322	)		(90	)
Exchange difference		339			249			90
Cash and cash equivalents, beginning of period		626			626			-
Cash and cash equivalents, end of period		553			553			-

30

ELECTROVAYA INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except where otherwise indicated)

Six-month periods ended March 31, 2024 and 2023

(Unaudited)

e) Change in non-cash operating working capital

	Restated			As previousl  reported			Restatement
Trade and other receivables	$	(730	)	$	(1,870	)	$	1,140
Inventories		(1,042	)		(615	)		(427	)
Prepaid expenses and other		(737	)		(816	)		79
Trade and other payables		(214	)		(475	)		261
Deferred grant income		-			(65	)		65
Deferred revenue		-			61			(61	)
		-			159			(159	)
	$	(2,723	)	$	(3,621	)	$	898

f) Statement of changes in Equity

	Share Capital	Contributed Surplus (iv)	Warrants (vii)	Accumulated other Comprehensive Income (i), (iv)	Deficit (i), (iii), (v)	Total
Balance – October 01, 2022 (as restated)	$103,305	$8,099	$4,725	$6,135	$(128,971)	$(6,707)
Balance – March 31, 2023 (as restated)	$110,610	$8,619	$4,725	$8,234	$(131,856)	$332

Balance – October 01, 2022 (as previously reported)	$103,305	$6,235	$4,725	$13,491	$(133,675)	$(5,919)
Balance – March 31, 2023 (as previously reported)	$111,756	$6,483	$6,872	$15,323	$(135,095)	$5,339

Restatement
Balance – October 01, 2022	-	$1,864	-	$(7,356)	$4,704	$(788)
Balance – March 31, 2023	$(1,146)	$2,136	$(2,147)	$(7,089)	$3,239	$(5,007)

31

ELECTROVAYA INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in thousands of U.S. dollars, except where otherwise indicated)

Six-month periods ended March 31, 2024 and 2023

(Unaudited)

g) Opening Balance

Opening balance as at October 01, 2022
	As Restated			As Previously Reported			Restatement
Assets
Current assets
Cash and cash equivalents	$	626		$	626		$	-
Trade and other receivables (ii)		2,913			6,309			(3,396	)
Inventories (ii)		7,355			4,477			2,878
Prepaid expenses and other		3,894			3,895			(1	)
Due from related party (i)		-			374			(374	)
Total current assets		14,788			15,681			(893	)
Non current assets
Property, plant and equipment (i)		7,313			2,312			5,001
Long-term deposit		88			88			-
Total non-current assets		7,401			2,400			5,001
Total assets	$	22,189		$	18,081			4,108
Liabilities and Equity
Current liabilities
Trade and other payables (iv)	$	4,714		$	4,627			87
Working capital facilities		11,635			11,635			-
Promissory notes		4,363			4,363			-
Short term loans (iii)		1,255			582			673
Lease liability – current portion		164			164			-
Due to related party (i)		531			-			531
Total current liabilities		22,662			21,371			1,291
Non-current liabilities
Lease liability – non-current portion		2,235			2,235			-
Relief and recovery fund payable (iii)		102			249			(147	)
Other payables (iii)		440			145			295
Promissory Note (i)		3,457			-			3,457
Total non-current liabilities		6,234			2,629			3,605
Equity (Deficiency)
Share capital		103,305			103,305			-
Contributed surplus (v)		8,099			6,235			1,864
Warrants		4,725			4,725			-
Accumulated other comprehensive gain (iv)		6,135			13,491			(7,356	)
Deficit		(128,971	)		(133,675	)		4,704
Total Equity (Deficiency)		(6,707	)		(5,919	)		(788	)
Total liabilities and equity (deficiency)	$	22,189		$	18,081			4,108

32

EX-99.2

EXHIBIT 99.2

 www.electrovaya.com

ELECTROVAYA INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE QUARTER ENDED MARCH 31, 2024

May 13, 2024

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ELECTROVAYA INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

1.	OUR BUSINESS	4
2.	OUR STRATEGY	5
3.	RECENT DEVELOPMENTS	5
4.	SELECTED QUARTERLY FINANCIAL INFORMATION	7
5.	LIQUIDITY AND CAPITAL RESOURCES	14
6.	OUTSTANDING SHARE DATA	15
7.	OFF-BALANCE SHEET ARRANGEMENTS	16
8.	RELATED PARTY TRANSACTIONS	16
9.	CRITICAL ACCOUNTING ESTIMATES	16
10.	CHANGES IN ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS	16
11.	FINANCIAL AND OTHER INSTRUMENTS	16
12.	DISCLOSURE CONTROLS	17
13.	INTERNAL CONTROL OVER FINANCIAL REPORTING	17
14.	QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT RISKS AND UNCERTAINTIES	18
15.	OTHER RISKS	22

· Introduction

Management’s discussion and analysis (“MD&A”) provides our viewpoint on our Company, performance and strategy. “We,” “us,” “our,” “Company” and “Electrovaya” include Electrovaya Inc. and its wholly-owned or controlled subsidiaries, as the context requires.

Our Board of Directors, on the recommendation of its Audit Committee, approved the content of this MD&A on May 9, 2024 and it is, therefore, dated as at that date. This MD&A includes the operating and financial results for the quarters ending March 31, 2024 and 2023, and should be read in conjunction with our consolidated financial statements. It includes comments that we believe are relevant to an assessment of and understanding of the Company’s consolidated results of operations and financial condition. The financial information herein is presented in thousands of US dollars unless otherwise noted (except per share amounts, which are presented in US dollars unless otherwise noted), in accordance with International Financial Reporting Standards (“IFRS”). Additional information about the Company, including Electrovaya’s current annual information form, can be found on the SEDAR website for Canadian regulatory filings at www.sedar.com and the EDGAR website for SEC regulatory filings at sec.gov/EDGAR.

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· Forward-looking statements

This MD&A contains forward-looking statements including statements with respect factors impacting revenue, the competitive position of the Company’s products, global trends in technology supply chains, the Company’s current and prospective Original Equipment Manufacturer (OEM) relationships, the Company’s strategic objectives and financial plans, including the operations and strategic direction of Electrovaya Labs, expectations with respect to increasing predictability of customer sales cycles in the future, the Company’s products, including electric bus, high voltages and electric lift truck and robotic applications and the potential for revenue from new applications , market conditions being favourable for the use of the Company’s shelf prospectus; the ability to draw on the Company’s shelf prospectus and favourable market conditions therefor, cost implications, continually increasing the Company’s intellectual property portfolio, additional capital raising activities, the adequacy of financial resources to continue as a going concern, and also with respect to the Company’s markets, objectives, goals, strategies, intentions, beliefs, expectations and estimates generally. Forward-looking statements can generally be identified by the use of words such as “may”, “will”, “could”, “should”, “would”, “likely”, “possible”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “plan”, “objective” and “continue” (or the negatives thereof) and words and expressions of similar import. Readers and investors should note that any announced estimated and forecasted orders and volumes provided by customers and potential customers to Electrovaya also constitute forward-looking information and Electrovaya does not have (a) knowledge of the material factors or assumptions used by the customers or potential customers to develop the estimates or forecasts or as to their reliability and (b) the ability to monitor the performance of the business its customers and potential customers in order to confirm that the forecasts and estimates initially represented by them to Electrovaya remain valid. If such forecasts and estimates do not remain valid, or if firm irrevocable orders are not obtained, the potential estimated revenues of Electrovaya could be materially and adversely impacted.

Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, the outcome of such statements involve and are dependent on risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making forward-looking statements, and actual results may differ materially from those expressed or implied in such statements. Material assumptions used to develop forward-looking information in this MD&A include, among other things, that current customers will continue to make and increase orders for the Company’s products; that the Company’s alternate supply chain will be adequate to replace material supply and manufacturing; that the Company’s products will remain competitive with currently-available alternatives in the market; that the alternative energy market will continue to grow and the impact of that market on the Company; the purchase orders actually placed by customers of Electrovaya; customers not terminating or renewing agreements; general business and economic conditions (including but not limited to currency rates and creditworthiness of customers); the relative effect of the global pandemics, geopolitics and supply chains on the Company’s business, its customers, and the economy generally; the Company’s liquidity and capital resources, including the availability of additional capital resources to fund its activities; the Company’s ability to raise sufficient non-dilutive capital to start up its US cell manufacturing operations; industry competition; changes in laws and regulations; legal and regulatory proceedings; the ability to adapt products and services to changes in markets; the ability to retain existing customers and attract new ones; the ability to attract and retain key executives and key employees; the granting of additional intellectual property protection; and the ability to execute strategic plans. Information about risks that could cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements may be found herein under the heading “Qualitative and Quantitative Disclosures About Risks and Uncertainties”, in the Company’s Annual Information Form (“AIF”) for the year ended September 30, 2023 under the heading “Risk Factors”, and in other public disclosure documents filed with Canadian securities regulatory authorities. The Company does not undertake any obligation to update publicly or to revise any of the forward-looking statements contained or incorporated by reference in this document, whether as a result of new information, future events or otherwise, except as required by law.

Revenue forecasts herein constitute future‐oriented financial information and financial outlooks (collectively, “FOFI”), and generally, are, without limitation, based on the assumptions and subject to the risks set out above under “Forward‐Looking Statements”. Although management believes such assumptions to be reasonable, a number of such assumptions are beyond the Company’s control and there can be no assurance that the assumptions made in preparing the FOFI will prove accurate. FOFI is provided for the purpose of providing information about management’s current expectations and plans relating to the Company’s future performance, and may not be appropriate for other purposes.

The FOFI does not purport to present the Company’s financial condition in accordance with IFRS, and it is expected that there may be differences between actual and forecasted results, and the differences may be material. The inclusion of the FOFI in this MD&A should not be regarded as an indication that the Company considers the FOFI to be a reliable prediction of future events, and the FOFI should not be relied upon as such.

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ELECTROVAYA INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

1. OUR BUSINESS

Electrovaya Inc. designs, develops and manufactures directly or through out-sourced  manufacturing lithium ion batteries for Material Handling Electric Vehicles (“MHEV”) and other electric transportation applications, as well for electric stationary storage and other battery markets. Our main businesses include:

(a)	lithium ion battery systems to power MHEV including fork-lifts as well as accessories such as battery chargers to charge the batteries;
(b)	lithium ion batteries for robotic applications;
(c)	high voltage battery systems for electric bus, truck and defense applications; and,
(d)	industrial products for energy storage.

The Company has a battery and battery systems research and manufacturing facility in Mississauga, Ontario. In December 2019, Electrovaya moved its corporate head office to 6688 Kitimat Road in Mississauga, Ontario. The location, which comprises approximately 62,000 square feet, is designed to enhance the Company’s productivity and efficiency. The Company also owns a 52 acre site including a 137,000 square foot manufacturing site at 1 Precision Way in Jamestown New York. This site is intended to be Electrovaya’s US headquarters and a key manufacturing hub. For further information, see “Liquidity and Capital Resources”. The Company has operating personnel in both Canada and the USA.

Electrovaya has a team of mechanical, electrical, electronic, battery, electrochemical, materials and system engineers able to give clients a “complete solution” for their energy and power requirements. Electrovaya also has substantial intellectual property in the lithium ion battery sector.

Management believes that our battery and battery systems contain a unique combination of characteristics that enable us to offer battery solutions that are competitive with currently available advanced lithium ion and non-lithium ion battery technologies. These characteristics include:

· Scalability and pouch cell geometry: We believe that large-format pouched prismatic (flat) cells represent the best long-term battery technology for use in large electro-motive and energy storage systems.

· Safety: We believe our batteries provide a high level of safety in a lithium ion battery. Safety in lithium ion batteries is becoming an important performance factor and Original Equipment Manufacturers (“OEMs”) and users of lithium ion batteries prefer to have the highest level of safety possible in lithium ion batteries.

· Cycle-life: Our cells are in the forefront of battery manufacturers with respect to cycle-life, with excellent rate capabilities. Cycle-life is generally controlled by the parasitic reactions inside the cell and these reactions have to be reduced in order to deliver industry leading cycle-life. Higher cycle-life is of importance in many intensive applications of lithium ion batteries.

· Energy and Power: Our batteries give industry leading combination of energy and power and can be application specific.

· Battery Management System: Our Battery Management System (“BMS”) has developed over the years, and provides excellent control and monitoring of the battery with advanced features as well as communication to many chargers, electric vehicles and other devices.

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2. OUR STRATEGY

We have developed a highly proprietary and specialized lithium ion technology that provides superior cycle life and safety. Given these advantages, the Company is focused on applications where those two performance differentiators provide the greatest benefits which has led to a focus on heavy duty and mission critical applications. These often require battery systems to provide around the clock operational capability, longer life and better safety and include material handling, robotics, transit, aerospace and other intensive electrified applications. We developed cells, modules, battery management systems, software and firmware necessary to deliver systems for these intensive applications. We also developed supply chains which can produce needed components including separators, electrolytes with appropriate additives, cells and cell assembly, modules, electronic boards, electrical and mechanical components as needed for our battery systems. Our goal is to utilize our battery and systems technology to develop and commercialize mass-production levels of battery systems for our targeted end markets.

To achieve these strategic objectives, we intend to:

· Establish global strategic relationships in order to broaden the market potential of our products and services;

· Develop and commercialize leading-edge technology for heavy duty and mission critical electrified applications, as well as partnering with key large organizations to bring them to market;

· Invest in research and development initiatives related to new technologies that reduce the costs of our products, but enhance the operating performance, of our current and future products; and,

· Focus on intensive use and mission critical applications such as the logistics and e-commerce industry, automated guided vehicles, electric buses, energy storage and similar other applications.

3. RECENT DEVELOPMENTS

3.1Business Highlights and 2024 Outlook

Business Highlights – Q1 and Q2 FY2024:

In October 2023, the Company established a relationship with one of the four largest Japanese trading houses or “sogo shosha”. Through this partnership, Electrovaya products are being marketed to a host of Japanese and international OEMs representing a significant boost to the Company’s sales reach. The trading house was identified as Sumitomo Corporation in a press release on April 29th, 2024.

On October 21, 2023, the Company announced the appointment of Steven Berkenfeld to the Company’s board of directors.

On November 2, 2023, the Company announced that it had executed a strategic supply agreement with two leading affiliated OEM partners for material handling vehicles and other affiliates for the supply of battery systems. The new agreement supersedes a preceding agreement from December 2020 with just one of the OEM partners and includes a longer term with larger minimum purchases to maintain exclusivity.

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On November 7, 2023, the Company announced the receipt of a battery purchase order through one of its OEM sales channels valued at over US$8 million. The batteries will be used by a leading Fortune 100 company in the United States for material handling electric vehicles.

On December 20, 2023 the Company renewed its revolving facility and extended the term of the facility by three months to March 29, 2024, with the aim to refinance the facility by the end of Q2 FY2024. The Company retains the option to extend the existing facility by a further three months to June 29, 2024.

On December 26, 2023, the Company announced that it had made its first shipment of its Infinity-HV battery system.

On February 14, 2024, the Company announced that it had agreed an increase to its credit facility from C$16 million to C$22 million with uncommitted accordions up to C$4 million to increase the facility to C$26 million in the future.

On February 27, 2024, the Company announced that its latest generation of battery management system had been approved by UL.

On March 11, 2024, the Company announced that its latest generation of battery systems had been integrated and tested with two leading providers of wireless charges and had successfully demonstrated wireless charging capabilities that achieve performance metrics similar to that of wired chargers.

On April 19, 2024, the Company announced that it is hosting a battery technology and investor day on Wednesday June 12, 2024.

On April 29, 2024, the Company announced that it had established a supply agreement with Sumitomo Corporation Power & Mobility, a 100% owned subsidiary of Sumitomo Corporation. The supply agreement will initially cover the supply of battery modules to leading Japanese construction equipment manufacturers.

Notice to Reader:

The Company included with its financial results a notice to reader disclaimer due to the review engagement not being completed in time to meet the filing deadline. The reviewer identified an opening balance currency translation adjustment from fiscal year 2022 pertaining to the change in functional currency that requires further analysis. The Company expects to complete the review over the next few days.

Positive Financial Outlook:

The Company continues to anticipate revenue of approximately $65-75 million for the fiscal year ending September 30, 2024 (“FY 2024”). Approximately $20 million of this anticipated revenue is dependent on new distribution center sites. Any delays in the startup of these sites may lead to a proportion of revenue moving into the subsequent fiscal year. The Company expects to have further clarity on firm delivery dates for these sites over the next several months.

The revenue forecast takes into consideration the Company’s existing purchase order backlog, anticipated pipeline, additional demand from its key OEM partner and new products designed for new sectors. This guidance is subject to change and is made barry any unforeseen circumstances. See “Forward-Looking Statements”.

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4. SELECTED QUARTERLY FINANCIAL INFORMATION

4.1 OPERATING SEGMENTS

The Company has reviewed its operations and determined that it operates in one business segment and has only one reporting unit. The Company develops, manufactures and markets power technology products.

4.2 Quarterly Financial Results

Our Q2 2024 Interim Financial Statements have been prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting, as issued by the IASB and accounting policies we adopted in accordance with IFRS. The Q2 2024 Interim Financial Statements reflect all adjustments that are, in the opinion of management, necessary to present fairly our financial position as at March 31, 2024 and the financial performance, comprehensive income and cash flows for the three months ended March 31, 2024.

Results of Operations

(Expressed in thousands of U.S. dollars)

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Revenue

Revenue increased to $10.7 million, compared to $8.5 million for the quarters ended March 31, 2024 and 2023 respectively, an increase of $2.2 million or 26%. The increase in year-over-year revenue was due to increased order and production volume. The Company had over $1.2 million within finished goods at the end of the quarter. This would represent completed units that were completed during the period and are either in transit to customers but have not yet been delivered or are awaiting transport.

Revenue was predominantly from the sale of batteries and battery systems for MHEVs. Batteries and battery systems accounted for $10.2 million or 95% of revenue for Q2 2024 and $8.2 million or 96% for Q2 2023. Sale of engineering services and other sources of revenue  accounted for the remaining $0.5 million or 5% in Q2 2024 and $0.3 million or 4% in Q2 2023.

For the quarter ended March 31, 2024 revenue attributable to the United States accounted for $10.5 million 98% of total revenue while revenue attributed to Canada and other countries accounted for the remaining $0.2 million or 2%. For the quarter ended March 31, 2023 revenue attributable to the United States accounted for $8.0 million or 95%. This reflects the growing level of interest in our material handling batteries and an increased direct and indirect sales presence in the United States.

Direct Manufacturing Costs (variable costs) and Gross Margin

Direct manufacturing costs are comprised of materials, labour and manufacturing overhead, excluding amortization, associated with the production of batteries and battery packs for Electric Vehicles, stationary grid applications and research and engineering service revenues.

The gross margin increased to $3.7 million, compared to $1.9 million for the quarter ended March 31, 2024 and 2023 respectively, an increase of $1.8 million or 96%. The gross margin percentage was 34.8% for the quarter ended March 31, 2024, compared to 22.4% in the prior year. Prior year gross margin was affected by some orders being delivered at historical pricing with low margins. When reviewing gross margin by revenue stream, the main driver of revenue, Battery Systems, shows a gross margin of 35.4% for the quarter.

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Our margin varies from period to period due to a number of factors including the product mix, special customer pricing, material cost, shipping costs and foreign exchange movement. In the current fiscal year we have seen some significant increases in costs due to inflationary pressures. The company has offset this by increasing sales prices and continues to work to improve gross margins going forward.

Operating Expenses

Operating expenses include:

· Research and Development (“R&D”) Research and development expenses consist primarily of compensation and premises costs for research and development personnel and activities, including independent contractors and consultants, and direct materials;

· Government Assistance The company applied for and received funding from the Industrial Research Assistance Program during the year;

· Sales and Marketing Sales and marketing expenses are comprised of the salaries and benefits of sales and marketing personnel, marketing activities, advertising and other costs associated with the sales of Electrovaya’s product lines;

· General and Administrative General and administrative expenses include salaries and benefits for corporate personnel, insurance, professional fees, reserves for bad debts and facilities expenses. The Company’s corporate administrative staff includes its executive officers and employees engaged in business development, financial planning and control, legal affairs, human resources and information technology;

· Stock based compensation Recognizes the value based on Black-Scholes option pricing model of stock based compensation expensed over the relevant vesting period;

· Financing costs Financing costs includes the cost of debt, equity or other financing. This includes cash and non-cash interest, legal costs of financing, commissions and fees; and,

· Patent and trademark costs Patent and trademark expense recognizes the cost of maintaining the Company’s patent and trademark portfolio.

Total operating expenses increased to $3.0 million compared to $2.5 million for the quarters ended March 31, 2024 and 2023 respectively, an increase of $0.5 million or 17%. Within the quarter, Sales & Marketing increased by $0.2 million and Stock Based Compensation increased by $0.3 million due to the recognition of options with market conditions for vesting. Government assistance reduced by $0.1 million due to Government projects coming to an end and depreciation increased due to the additions to PPE. Other costs have not changed significantly from the prior year.

Operating Profit/(Loss) and Net Profit/(Loss)

The operating profit increased to $0.7 million from an operating loss of $0.7 million for the quarters ended March 31, 2024 and 2023 respectively, an increase of $1.4 million.

The net loss decreased to $0.8 million from a net loss of $0.3 million for the quarters ended March 31, 2024 and 2023 respectively, a decrease of $0.5 million. A significant driver of the net loss was the finance costs of $1.5 million in the quarter, which increased by $1.0 million compared to the same period in 2023. This is a result of increasing interest rates and the loan renewal costs of $0.2 million. Foreign exchange gain decreased by $0.2 million to a $0.0 million loss for the quarter ended March 31, 2024. The prior year also received the benefit of the deferred tax recovery from the revaluation of the land and buildings.

Key Performance Indicators

In addition to operating results and financial information described above, management reviews the following measures (which are not measures defined under IFRS):

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Adjusted EBITDA¹

(Expressed in thousands of U.S. dollars)

¹ Non-IFRS Measure: Adjusted EBITDA is defined as profit/loss from operations, plus stock-based compensation costs and depreciation. Adjusted EBITDA does not have a standardized meaning under IFRS. We believe that certain investors and analysts use Adjusted EBITDA to measure the performance of the business and is an accepted measure of financial performance in our industry. It is not a measure of financial performance under IFRS, and may not be defined and calculated in the same manner by other companies and should not be considered in isolation or as an alternative to Income (loss) from operations.

Adjusted EBITDA¹ increased by $1.7 million primarily due to the increase in revenue and improvement in gross margin. Adjusted EBITDA¹ percentage for the quarter improved to 14% compared to -3% for the quarter ended March 31, 2023. Management is focused on continuing the trend of positive Adjusted EBITDA¹ in 2024 through an increase in sales, improving the gross margin and controlling cost of operations.

Adjusted EBITDA¹ will improve primarily through increased sales, maintaining gross margin percentage and controlling operating expenses. We continue our efforts for sales growth, control of manufacturing costs and reduction operating expenses.

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4.3 Summary Operating Results - Six Months Ended March 31, 2024 & 2023

Revenue was $22.8 million and $17.0 million for the six months ended March 31, 2024 and 2023. It is anticipated that sales will be higher for the second half of 2024 as customer site launches are skewed to our fiscal Q3 and Q4 periods. While the first half of fiscal year 2024 has been a record for the Company, we have experienced movement in orders due to customer delays. For example, approximately $3.5 million of orders were moved from Q2 to Q3 due to a customer site launch date delay. 

The gross margin increased to 31.8% from 24% in the prior year. Management is working to increase the gross margin through increasing efficiency within the production facility and taking advantage of increased purchasing power.

Operating expenses increased by $1.1 million or 19% from Q2 FY2023 to Q2 FY 2024, due to increases in Sales & Marketing, General & Administrative costs by $0.2 million and $0.3 million respectively. Stock based compensation increased by $0.3 million and depreciation increased by $0.2 million. Finance costs are flat from year to year, while Foreign Exchange loss decreased by $0.4 million.

Operating profit increased by $2.1 million from a loss of $1.5 million to a profit of $0.6 million for the six month period ended March 31, 2024. Net loss decreased to $1.0 million from $2.9 million for the six month period ended March 31, 2024, an improvement of $1.8 million.

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Quarterly Summary Financial Position and Cash Flow

Summary Financial Position

(Expressed in thousands of U.S. dollars)

Management is focused on continuing to improve the company’s financial position through the prudent use of debt and equity but most importantly achieving a profitable position and strong working capital management. The Company is also actively pursuing lower cost of capital lenders to refinance existing working capital facilities and reduce costs.

Summary Cash Flow

(Expressed in thousands of U.S. dollars)

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The Company ended March 31, 2024 with $1.1 million of cash as compared to $0.6 million at March 31, 2023. The company is optimizing its cash position in order to reduce interest charges relating to the revolver.

For the six months ended March 31, 2024 the Company had cash provided by operating activities of $0.4 million, as compared to cash used in operating activities of $2.4 million for March 31, 2023, an improvement of $2.7 million year on year. Net change in working capital was $(1.6) million compared to $(2.7) million for the period ended March 31, 2023. Cash used in operating activities reduced to $1.3 million from $5.1 million in the prior year, an improvement of $3.8 million.

Quarterly Comparative Summaries

Quarterly revenue from continued operations are as follows:

(USD $ thousands)	Q1		Q2		Q3		Q4
2024	$	12,091	$	10,695
2023	$	8,562	$	8,470	$	12,557	$	14,470
2022	$	1,250	$	4,290	$	4,305	$	9,978

Quarterly net profits/(losses) from continued operations are as follows:

(USD $ thousands)	Q1			Q2			Q3			Q4
2024	$	(208	)	$	(839	)
2023	$	(2,581	)	$	(303	)	$	(166	)	$	1,610
2022	$	(2,155	)	$	(2,251	)	$	(1,461	)	$	(680	)

Quarterly net gains (losses) per common share from continued operations are as follows:

	Q1			Q2			Q3			Q4
2024	$	(0.00	)		(0.03	)
2023	$	(0.08	)	$	(0.01	)	$	(0.01	)	$	0.05
2022	$	(0.01	)	$	(0.02	)	$	(0.01	)	$	(0.00	)

Quarterly Revenue and Seasonality

In recent periods, revenue has been weighted towards the second half of the fiscal year and management expects this trend to continue for the current fiscal year.

The lithium ion forklift battery has a long sales cycle as many customers are large companies, the technology is relatively new to the forklift market, and customers need time to familiarize themselves with and validate the benefits as compared to the incumbent technology of lead acid batteries. In some cases, the process involves receiving a demonstrator battery for testing and trial. This causes a somewhat long and “lumpy”, or uneven, sales cycle. As customers become more comfortable with the product and place repeat orders it is management's view that the sales will grow in a more predictable and consistent fashion.

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5. LIQUIDITY AND CAPITAL RESOURCES

During the six months ended March 31, 2024, the Company had cash provided by operations of $351 (March 31, 2023: $(2.3) million). As of March 31, 2024 the company had negative working capital of $1.6 million (March 31, 2023: $(2.7) million) and a net loss of $(1.0) million (2023: $(2.8) million). The Company’s equity was in surplus of $7.7 million. As of March 31, 2024 the Company had cash and cash equivalents of $1.1 million. The Company is also anticipating the planned construction of its gigafactory in Jamestown, New York (the “Gigafactory”), which will need additional financing.

The first phase of construction is expected to take place within the existing 135,000 square foot manufacturing facility for the production of cells and batteries, with an estimated capital expenditure of approximately US$38 million. These material uncertainties raise significant doubt upon the Company's ability to continue as a going concern.

In assessing whether the going concern assumption was appropriate, management took into account all relevant information available about the future, which was at least, but not limited to, the twelve-month period following March 31, 2024. The Company and its Board of Directors have implemented various operating and financing strategies, including the following:

The Company plans on pursuing large scale investments in its planned Jamestown gigafactory only in the event that it closes a government backed debt facility that includes advantageous terms with minimal impacts to operating cash flow and equity dilution. If the Company is unable to secure such financing, it will delay or cancel these expansion plans with limited financial impact as the main investment made thus far is the land and building. which can be sold at a profit.

The Company has made improvements to its manufacturing process, equipment and facilities over the last several months. Furthermore, the Company also anticipates gross margins to improve in fiscal year 2024 due to decreasing costs of key materials including but not limited to cell materials, separators, and other high value items. These anticipated improved margins, when combined with expected overall sales growth should result in improved overall financial performance.

Finally, the Company is confident in securing additional working capital from either debt or equity. Since the Company listed on Nasdaq in July 2023, it has further increased liquidity and overall financing capabilities.

The Company believes that the cash on hand of $1.1 million, plus additional space on its revolving facility, $8.9 million of accounts receivable and $11.0 million of inventory, improved revenue levels, our strong relationship with our OEM partner, strong backlog and sales pipeline will provide adequate working capital to support its operating activities at the anticipated sales level for the 12 months ended March 31, 2025.

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At March 31, 2024, we had the following contractual obligations:

Year of Payment Obligation	Debt Repayment
2024		2,813
2025		14,837
2026		57
2027 and thereafter		86
Total	$	17,793

6. OUTSTANDING SHARE DATA

The authorized and issued capital stock of the Company consists of an unlimited authorized number of common shares as follows:

	Common Shares
	Number		Amount
Balance, September 30, 2023		33,832,784	$	115,041
Issued		10,024		30
Issued		42,157		169
Exercise of options		249,200		1,161
Balance, March 31, 2024		34,134,165	$	116,401

The following table reflects the quarterly stock option activities for the period from October 1, 2023 to March 31, 2024:

	Number  outstanding			Weighted average exercise price
Outstanding, September 30, 2023		4,714,388		$	2.44
Exercised/Granted during the quarter		(249,200	)	$	2.65
Expired during the quarter		(16,200	)	$	2.87
Outstanding, Mar 31, 2024		4,448,988		$	2.42

The following table reflects the outstanding warrant and Broker Compensation Option activities for the period from October 1, 2023 to March 31, 2024:

Details of Share Warrants
	Number Outstanding		Exercise Price
Outstanding, March 31, 2024		1,711,924	$	2.38

Details of Compensation Options to Brokers
	Number Outstanding		Exercise Price
Outstanding, March 31, 2024		17,522	$	4.95

As of March 31, 2024, the Company had 34,134,165 common shares outstanding, 4,714,388 options to purchase common shares outstanding, 17,522 compensation options outstanding and 1,711,924 warrants to purchase common shares outstanding.

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7. OFF-BALANCE SHEET ARRANGEMENTS

The Company does not have any off-balance sheet arrangements for the quarter ended March 31, 2024.

8. RELATED PARTY TRANSACTIONS

Please refer to note 12 to the March 31, 2024 Financial Statements for details on related party transactions.

9. CRITICAL ACCOUNTING ESTIMATES

The Company’s management makes judgments in the process of applying the Company’s accounting policies in the preparation of its consolidated financial statements. In addition, the preparation of financial information requires that the Company’s management make assumptions and estimates of effects of uncertain future events on the carrying amounts of the Company’s assets and liabilities at the end of the reporting period and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from those estimates as the estimation process is inherently uncertain. Estimates are reviewed on an ongoing basis based on historical experience and other factors that are considered to be relevant under the circumstances. Revisions to estimates and the resulting effects on the carrying amounts of the Company’s assets and liabilities are accounted for prospectively.

The critical judgments, estimates and assumptions applied in the preparation of Company’s financial information are reflected in Note 3 of the Company’s September 30, 2023 consolidated financial statements.

10. CHANGES IN ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS

Our accounting policies and information on the adoption and impact of new and revised accounting standards the Company was required to adopt effective January 1, 2015 are disclosed in Note 3 of our consolidated financial statements and their related notes for the year ended September 30, 2023.

11. FINANCIAL AND OTHER INSTRUMENTS

Please refer to note 16 of the March 31, 2024 Financial Statements for details of Financial and Other Instruments.

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12. DISCLOSURE CONTROLS

We have established disclosure controls and procedures that are designed to ensure that the information required to be disclosed by the Company in the reports that it files or submits under securities legislation is recorded, processed, summarized, and reported within the time periods specified in such rules and forms and that such information is accumulated and communicated to management, including our principal executive officer and principal financial officer (who are our Chief Executive Officer and Chief Financial Officer, respectively) as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognized that disclosure controls and procedures can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met.

Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures. Based on this evaluation and as described below under “Internal Control over Financial Reporting”, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2024.

13. INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed by, or under the supervision of, the CEO and the CFO and effected by the Board of Directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with IFRS.

Our management, including our CEO and CFO, believes that any disclosure controls and procedures or internal control over financial reporting, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, they cannot provide absolute assurance that all control issues and instances of fraud, if any, have been prevented or detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by unauthorized override of the control. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Accordingly, because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud might occur and not be detected.

Management assessed the effectiveness of the Company’s internal control over financial reporting on September 30, 2023, based on the criteria set forth in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission as published in 2013, and determined that the Company’s internal control over financial reporting was not effective in respect of the analysis and evaluation of certain technical accounting matters. In light of the material weakness, during the quarter ended December 31, 2023, management commenced a plan to add additional technical accounting resources to the financial reporting process. Management is committed to the implementation of remediation efforts to address the material weakness. Remediation is continuing and intended to address the material weakness and enhance the overall financial control environment, including steps to address the evaluation, applicability, and documentation of the impact of technical accounting matters on an ongoing basis. The material weakness will only be considered as remediated when the applicable control operates for a sufficient period of time and management has concluded through testing, that the control is operating effectively.

No assurance can be provided at this time that the actions and remediation efforts of the Company will effectively remediate the material weakness or prevent the occurrence of other significant deficiencies or material weaknesses in the Company’s internal controls over financial reporting in the future.

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14. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT RISKS AND UNCERTAINTIES

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.

Capital risk

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 on the basis of the carrying amount of equity plus its short-term debt comprised of the Promissory note, less cash and cash equivalents as presented on the face of the statement of financial position.

The Company sets the amount of capital in proportion to its overall financing structure, comprising equity and long-term debt. The Company manages the capital structure and makes adjustments to it in the 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.

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Capital for the reporting periods under review is summarized as follows:

Credit risk

Credit risk is the risk that the counterparty fails to discharge an obligation to the Company. The Company is exposed to this risk for various financial instruments, for example, by granting loans and receivables to customers, placing deposits, etc. The Company’s maximum exposure to credit risk is limited to the carrying amount of financial assets recognized at the reporting date, as summarized below:

	March 31,		September 30,
	2024		2023
Cash and cash equivalents	$	1,116	$	1,032
Trade and other receivables		8,875		10,611
Carrying amount	$	9,991	$	11,643

Cash and cash equivalents are comprised of the following:

	March 31,		September 30,
	2024		2023
Cash	$	1,116	$	1,032
Cash equivalents		-		-
	$	1,116	$	1,032

The Company's current portfolio consists of certain banker’s acceptance and high interest yielding savings accounts deposits.  The majority of cash and cash equivalents are held with financial institutions, each of which had at March 31, 2024 a rating of R-1 mid or above.

The Company manages its credit risk 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 as some receivables are falling into arrears. Management is taking appropriate action to mitigate this risk by adjusting credit terms.

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Liquidity risk

Liquidity risk is the risk that we may not have cash available to satisfy our financial obligations as they come due. The majority of our financial liabilities recorded in accounts payable, accrued and other current liabilities and provisions are due within 90 days. We manage liquidity risk by maintaining a portfolio of liquid funds and having access to a revolving credit facility. We believe that cash flow from operating activities, together with cash on hand, cash from our A/R, and borrowings available under the Revolver are sufficient to fund our currently anticipated financial obligations, and will remain available in the current environment.

Market risk

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.

Interest rate risk

The Company has floating and fixed interest-bearing debt ranging from prime plus 7% to 24%. The Company’s current policy is to invest excess cash in investment-grade short-term deposit certificates issued by its banking institutions.

Foreign currency risk

The Company is exposed to foreign currency risk. The Company’s functional currency is the US dollar and a majority of its revenue is derived in US dollars. 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 non-functional currencies.  Cash held by the Company in US dollars at March 31, 2024 was $189 (September 30, 2023 - $175).

If the US dollar to Canadian foreign exchange rate changed by 2% this would change the recorded Net gain by $119 (September 30, 2023 - $173).

Price risk

The Company is exposed to price risk. Price risk is the risk that the commodity prices that the Company charges are significantly influenced by its competitors and the commodity prices that the Company must charge to meet its competitors may not be sufficient to meet its expenses. The Company reduces the price risk by ensuring that it obtains information regarding the prices set by its competitors to ensure that its prices are appropriate to the unique attributes of our product. In the opinion of management, the price risk is low and is not material.

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Disclosure control risks

The Company’s management, with the participation of the Chief Executive Officer and Chief Financial Officer of the Company, have designed disclosure controls and procedures (“DC&P”), or caused them to be designed under their supervision, to provide reasonable assurance that material information relating to the issuer, including its consolidated subsidiaries, is made known, particularly during the period in which interim or annual filings are being prepared, and information required to be disclosed by the Company in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation. Although certain weaknesses have been identified, these items do not constitute a material weakness or a weakness in DC&P that are significant. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. DC&P are reviewed on an ongoing basis.

Internal control risks

The Company’s management, with the participation of the Chief Executive Officer and Chief Financial Officer of the Company, have designed such internal control over financial reporting (“ICFR”), or caused it to be designed under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Such design also uses the framework and criteria established in Internal Control over Financial Reporting - Guidance for Smaller Public Companies, issued by The Committee of Sponsoring Organizations of the Treadway Commission. The Company relies on entity-wide controls and programs including written codes of conduct and controls over initiating, recording, processing and reporting significant account balances and classes of transactions. Other controls include centralized processing controls, including a shared services environment and monitoring of operating results. Based on the evaluation of the design and operating effectiveness of the Company’s ICFR, the CEO and CFO concluded that the company’s ICFR was not effective as at March 31, 2024.

The Company does not believe that it has any material weakness or a weakness in ICFR that are significant, other than those reported in the September 30, 2023 audited financial statements. Control deficiencies have been identified within the Company’s accounting and finance departments and its financial information systems over segregation of duties and user access respectively. Specifically, certain duties within the accounting and finance departments were not properly segregated due to the small number of individuals employed in these areas. To our knowledge, none of the control deficiencies has resulted in a misstatement to the financial statements. However, these deficiencies may be considered a material weakness resulting in a more-than remote likelihood that a material misstatement of the Company’s annual or interim financial statements would not be prevented or detected.

As the Company incurs future growth, we plan to expand the number of individuals involved in the accounting function. At the present time, the CEO and CFO oversee all material transactions and related accounting records. In addition, the Audit Committee reviews on a quarterly basis the financial statements and key risks of the Company and queries management about significant transactions, there is a quarterly review of the company’s condensed interim unaudited financial statements by the Company’s auditors and daily oversight by the senior management of the Company.

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15. OTHER RISKS

Other Risk Factors.

The risks described above are not the only risks and uncertainties that we face. Additional risks the Company faces are described under the heading “Risk Factors” in the Company’s AIF for the year ended September 30, 2023.

Other additional risks and uncertainties not presently known to us or that we currently consider immaterial may also impair our business operations. These risk factors could materially affect our future operating results and could cause actual events to differ materially from those described in our forward-looking statements.

Additional information relating to the Company, including our AIF for the year ended September 30, 2023, is available on SEDAR and EDGAR.

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EX-99.3

EXHIBIT 99.3

 

1

 

2

EX-99.4

EXHIBIT 99.4

 

1

 

2