Electrovaya loses $7.53-million (U.S.) in fiscal 2021

2021-12-20 19:40 ET - News Release

Mr. Jason Roy reports

ELECTROVAYA REPORTS Q4 FY2021 AND FISCAL 2021 RESULTS

Electrovaya Inc. has released its financial results for the fourth quarter and fiscal year ended Sept. 30, 2021. All dollar amounts are in U.S. dollars unless otherwise noted.

Financial Highlights:

• Revenue for Q4 FY2021 was $4.2 million (C$5.4 million), compared to $6.9 million (C$8.8 million) in the fiscal fourth quarter ended September 30, 2020 ("Q4 FY2020"). Revenue for Q4 FY2021 decreased by 40% compared to Q4 FY2020 but increased significantly on a sequential basis compared to $1.9 million (C$3.2 million) in the fiscal third quarter ended June 30, 2021 ("Q3 FY2021"). Management believes that the year-over-year revenue decline in Q4 FY2021 was primarily due to a reduced-order volume resulting from a transition to the OEM Strategic Supply Agreement, which was signed in December 2020. This agreement brought a new corporate sales team focused on large corporations, and management believes the sales cycle is relatively long for these customers. Continued disruptions to the supply chain caused by the COVID-19-pandemic, as well as component shortages, also impacted the Company. Management is encouraged by the strong quarterly sequential revenue growth in Q4 FY2021 and believes the situation has improved, as the Company has received indications of significant new orders for delivery in the 2022 calendar year.
• Revenue for FY 2021 was $11.6 million (C$14.8 million), compared to revenue of $14.5 million (C$18.5 million) in the fiscal year ended September 30, 2020 ("FY 2020"). The gross margin was 34% in FY 2021, which was consistent with FY 2020.
• The balance sheet was strengthened during FY 2021. On September 30, 2021, current assets were $12.0 million, current liabilities were $13.5 million, and the equity deficiency was $1.7 million. This represents an increase of $4.0 million in current assets, a reduction of $3.0 million in current liabilities, and a reduction in the equity deficiency of $7.0 million compared to the balances as of September 30, 2020.
• On September 27, 2021, the Company completed a brokered private placement of Common Shares and warrants to purchase Common Shares with an institutional investor in the United States for gross proceeds of approximately C$3.8 million. The Company issued 2,919,230 Common Shares and warrants to purchase up to 1,459,615 Common Shares at a price of C$1.30 per Common Share and associated warrant. Each warrant entitles the holder thereof to purchase one Common Share at an exercise price of C$1.60 per Common Share at any time prior to September 29, 2024.
• On December 7, 2021, the Company filed a final base shelf prospectus with the securities regulatory authorities in each of the provinces of Canada. The base shelf prospectus is valid for a 25-month period, during which time the Company may offer and issue, from time to time, common shares, warrants, units, subscription receipts, and debt securities, or any combination thereof, having an aggregate offering price of up to $100 million. The ability to draw on the shelf prospectus was conditional upon extending the working capital and promissory note facilities. This condition is now fulfilled.
• On December 17, 2021, the Company amended its C$7 million working capital facility to extend the maturity from December 31, 2021 to December 31, 2022.
• On December 17, 2021, the promissory note which was due to mature on December 31, 2021 was amended to extend the maturity to July 1, 2022.

Business Highlights:

• On September 22, 2021, the Company launched EVISION, an internally developed and proprietary remote monitoring system. This new system is cloud-based and is able to track battery operational usage in Electrovaya-powered applications such as lift trucks or electric buses in real-time. The system monitors battery health, utilization, and charging to provide customers with optimized fleet and charging management. The EVISION system is now live and generating revenue.
• On September 23, 2021, the Company announced that its research division, Electrovaya Labs, produced promising initial test results using a proprietary approach for a solid-state (NMC cathode/lithium metal anode) battery. The initial results have demonstrated minimal capacity fade, and multiple tests have demonstrated the repeatability of the performance with coin cells at room temperature.
• On October 5, 2021, the Company announced that all of its battery models will be receiving a capacity increase of approximately 7%. This change has also been reflected in the UL files for Electrovaya batteries, in which new model numbers are used to reflect the capacity increases. Furthermore, additional models have been added to the UL file, expanding the number of Electrovaya UL-listed offerings.
• On October 13, 2021, the Company signed a Strategic Supply Agreement with Vicinity Motor Corp, a leading supplier of electric, compressed natural gas, and clean diesel vehicles. The Vicinity Strategic Supply Agreement is for the supply of battery systems for Vicinity's line of Vicinity Lightning EV buses and fully electric VMC 1200 Class 3 trucks.
• On December 1, 2021, the Company announced that Steven Berkenfeld has been engaged as a Special Advisor to the CEO and Board. Mr. Berkenfeld will provide capital markets, strategic, and commercial guidance to support the company's growth across multiple market segments.

Positive Financial Outlook:

The Company anticipates revenue of approximately $27 million for the fiscal year ending September 30, 2022 ("FY 2022"), more than double the revenue total of $11.6 million in FY 2021. The revenue is anticipated to be generated from two primary sources: direct sales and sales through the Company's OEM partner dealer network.

The revenue forecast takes into consideration the OEM Strategic Supply Agreement, which includes an exclusivity provision, pursuant to which the OEM must make annual purchases in the minimum amount of $15 million in order to maintain exclusivity. This annual period commences on January 1, 2022. While there is no assurance that the OEM will make more than $15 million of purchases in 2022, given the sales initiatives underway with the OEM, management anticipates achieving or even possibly exceeding this minimum purchase level and has accordingly included it in the revenue forecast of $27 million for FY 2022.

Impact of COVID-19 Pandemic:

Electrovaya is an essential business and has operated without major interruption during the COVID-19 pandemic to date. The Company's customers include large global firms in industries such as grocery, logistics, and e-commerce that are continuing to provide critical services during this difficult period. The crisis has highlighted Electrovaya's important role in helping its customers execute mission-critical applications under highly challenging conditions. COVID-19 did disturb the Company's supply chain from many of its global vendors, with resultant delays in delivery of the Company's products to its customers and associated cost increases.