ANNUAL
REPORT
2024
novonixgroup.com
Table of
Contents
01
Form 20-F
135
Shareholder
Information
137
Corporate
Directory
NOVONIX Limited and the Board are committed to achieving and demonstrating the
highest standards of corporate governance. The Company has reviewed its
corporate governance practices against the Corporate Governance Principles and
Recommendations (4th edition) published by the ASX Corporate Governance
Council.
The 2024 corporate governance statement is dated at 31 December 2024 and
reflects the corporate governance practices in place throughout the year ended 31
December 2024. The 2024 corporate governance statement was approved by the
Board on 28 February 2025. A description of the Group's current corporate
governance practices is set out in the Group's corporate governance statement
which can be viewed at ir.novonixgroup.com.
Corporate Governance
Statement
cF
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 20-F
(Mark One)
☐
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
or
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024
or
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
or
☐
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
Commission file number: 001-41208
NOVONIX LIMITED
(Exact name of Registrant as specified in its charter
NOVONIX LIMITED
(Translation of Registrant’s name into English)
Australia
(Jurisdiction of incorporation or organization)
NOVONIX LIMITED
Level 38
71 Eagle Street
Brisbane QLD 4000
Australia
(Address of principal executive offices)
NOVONIX Limited
Level 38
71 Eagle Street
Brisbane QLD 4000
Australia
(P) +61 439 310 818
Attn: Suzanne Yeates, Company Secretary
suzie@novonixgroup.com
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
Title of each class
Trading Symbol(s)
Name of each exchange and on which registered
American Depositary Shares, each representing four ordinary
shares, no par value
NVX
The Nasdaq Stock Market LLC
Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: 488,733,461 Ordinary Shares
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or (15)(d) of the Securities Exchange Act of 1934. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “accelerated filer,” “large accelerated filer” and “emerging
growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated Filer ☐
Accelerated Filer ☒
Non-Accelerated Filer ☐
Emerging Growth Company ☒
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley
Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial
statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive- based compensation received by any of the registrant’s executive officers during the relevant
recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP ☐
International Financial Reporting Standards as issued by the International Accounting Standards Board ☒
Other ☐
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☐
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes ☐ No ☐
1
TABLE OF CONTENTS
Page
INTRODUCTION AND USE OF CERTAIN TERMS
4
AUSTRALIAN DISCLOSURE REQUIREMENTS
4
EXPLANATORY NOTE
4
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
4
PART I
ITEM 1.
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
6
ITEM 2.
OFFER STATISTICS AND EXPECTED TIMETABLE
6
ITEM 3.
KEY INFORMATION
6
A.
[Reserved]
6
B.
Capitalization and Indebtedness
6
C.
Reasons for the Offer and Use of Proceeds
6
D.
Risk Factors
6
ITEM 4.
INFORMATION ON THE COMPANY
42
A.
History and Development of the Company
42
B.
Business Overview
43
C.
Organizational Structure
59
D.
Property, Plant, and Equipment
60
ITEM 4A.
UNRESOLVED STAFF COMMENTS
60
ITEM 5.
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
61
A.
Operating Results
61
B.
Liquidity and Capital Resources
69
C.
Research and Development, Patents and Licenses, Etc.
75
D.
Trend Information
75
E.
Critical Accounting Estimates
75
ITEM 6.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
76
A.
Directors and Senior Management
76
B.
Compensation
79
C.
Board Practices
104
D.
Employees
110
E.
Share Ownership
110
F.
Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation.
112
ITEM 7.
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
112
A.
Major Shareholders
112
B.
Related Party Transactions
113
C.
Interests of experts and counsel
114
ITEM 8.
FINANCIAL INFORMATION
115
A.
Consolidated Financial Statements and Other Financial Information
115
B.
Significant Changes
115
ITEM 9.
THE OFFER AND LISTING
115
A.
Offer and Listing Details
115
B.
Plan of Distribution
115
2
C.
Markets
115
D.
Selling Shareholders
115
E.
Dilution
115
F.
Expenses of the Issue
115
ITEM 10. ADDITIONAL INFORMATION
116
A.
Share Capital
116
B.
Memorandum and Articles of Association
116
C.
Material Contracts
116
D.
Exchange Controls
116
E.
Taxation
116
F.
Dividends and Paying Agents
125
G.
Statement by Experts
125
H.
Documents on Display
125
I.
Subsidiary Information
125
J.
Annual Report to Security Holders
125
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
125
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
125
A.
Debt Securities
125
B.
Warrants and Rights
125
C.
Other Securities.
125
D.
American Depositary Shares Fees and Expenses
126
PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
128
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
128
ITEM 15. CONTROLS AND PROCEDURES
128
ITEM 16. [RESERVED]
130
ITEM
16A.
AUDIT COMMITTEE FINANCIAL EXPERT
130
ITEM 16B.CODE OF ETHICS
130
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
130
ITEM
16D.
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
131
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
131
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
131
ITEM
16G.
CORPORATE GOVERNANCE
131
ITEM
16H.
MINE SAFETY DISCLOSURE
131
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
131
ITEM 16J. INSIDER TRADING POLICIES
131
ITEM 16K. CYBERSECURITY
131
PART III
3
ITEM 17. FINANCIAL STATEMENTS.
134
ITEM 18. FINANCIAL STATEMENTS
134
SHAREHOLDER INFORMATION
135
A
Distribution of equity securities
135
B
Equity security holders
135
C
Substantial holders
136
D
Voting rights
136
137
CORPORATE DIRECTORY
4
INTRODUCTION AND USE OF CERTAIN TERMS
We have prepared this annual report on Form 20-F using a number of conventions, which you should consider when
reading the information contained herein. In this annual report, “NOVONIX,” the “Company,” the “Group”, “our
company,” “we,” “us” and “our” refer to NOVONIX Limited and its consolidated subsidiaries, taken as a whole.
Additionally, this annual report uses the following conventions:
•
“US$,” “U.S. dollars,” “$” and “dollars” mean United States dollars;
•
“A$” mean Australian dollars;
•
“C$” mean Canadian dollars, unless otherwise noted;
•
“ADSs” mean American depositary shares, each of which represents four of our ordinary shares, no par value;
•
“ADRs” mean the American depositary receipts that may evidence the ADSs;
•
“ASX” refers to the Australian Securities Exchange; and
•
“Nasdaq” refers to the Nasdaq Stock Market LLC.
AUSTRALIAN DISCLOSURE REQUIREMENTS
Our ordinary shares are quoted on the ASX in addition to our listing of our ADRs on the Nasdaq. As part of our ASX listing,
we are required to comply with various disclosure requirements as set out under the Australian Corporations Act 2001
and the ASX Listing Rules. Information furnished under the sub-heading "Australian Disclosure Requirements" is intended
to comply with ASX Listing Rules and the Corporations Act 2001 disclosure requirements and is not intended to fulfill
information required by this Annual Report on Form 20-F.
EXPLANATORY NOTE
On December 20, 2022, the Board of Directors of NOVONIX Limited (the "Board of Directors" or the "Board") approved a
change of fiscal year end from June 30 to December 31 to better align the reporting of the Company’s results with its
industry peers. As a result, in February 2023, we filed a transition report on Form 20-F for the six-month transition period
of July 1, 2022, to December 31, 2022. Unless otherwise noted, all references to “fiscal year” in this annual report on Form
20-F refer to the fiscal year which, prior to the transition period, ended on June 30, and which, after the transition period,
ended December 31. Our consolidated financial statements for the fiscal years ended December 31, 2024, 2023 and six-
month period ended December 31, 2022, and year ended June 30, 2022, have been prepared in accordance with
International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board. A
comparison of our operating results for the years ended December 31, 2024, and 2023, has been included within Item 5.
Operating and Financial Review and Prospects.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This annual report contains forward-looking statements about us and our industry that involve substantial risks and
uncertainties. All statements other than statements of historical facts contained in this annual report, including
statements regarding our future results of operations, financial condition, business strategy, and plans and objectives of
management for future operations, are forward-looking statements. In some cases, you can identify forward-looking
statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,”
“expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would,” or the negative
of these words or other similar terms or expressions.
We have based these forward-looking statements largely on our current expectations and projections about future events
and trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.
These forward-looking statements are subject to a number of known and unknown risks, uncertainties, other factors and
assumptions, including the risks described in Item 3. Key Information—D. Risk Factors contained herein.
5
These risks are not exhaustive. Other sections of this annual report may include additional factors that could harm our
business and financial performance. New risk factors may emerge from time to time, and it is not possible for our
management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which
any factor, or combination of factors, may cause actual results to differ materially from those contained in, or implied by,
any forward-looking statements.
You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking
statements contained in this annual report primarily on our current expectations and projections about future events and
trends that we believe may affect our business, financial condition, and operating results. We undertake no obligation to
update any forward-looking statements made in this annual report to reflect events or circumstances after the date of
this annual report or to reflect new information or the occurrence of unanticipated events, except as required by law. We
may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should
not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential
impact of any future acquisitions, mergers, dispositions, joint ventures or investments.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject.
These statements are based on information available to us as of the date of this annual report. While we believe that
information provides a reasonable basis for these statements, that information may be limited or incomplete. Our
statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant
information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these
statements.
You should read this annual report and the documents that we reference in and have filed as exhibits to the annual report
with the understanding that our actual future results, levels of activity, performance and achievements may be different
from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
6
PART I
Item 1. Identity of Directors, Senior Management and Advisers
Not applicable.
Item 2. Offer Statistics and Expected Timetable
Not applicable.
Item 3. Key Information
A.
[Reserved]
B.
Capitalization and Indebtedness
Not applicable.
C.
Reasons for the Offer and Use of Proceeds
Not applicable.
D.
Risk Factors
Our business is subject to numerous risks and uncertainties that you should consider before investing in our securities.
These risks are described more fully below and include, but are not limited to, risks relating to the following:
•
We will need to obtain funding to finance our growth and operations, which may not be available on acceptable
terms, or at all. If we are unable to raise capital when needed, we may be forced to delay, reduce or eliminate
certain operations, and we may be unable to adequately control our costs.
•
We face significant challenges in our attempt to develop our anode and cathode materials to produce them at
volumes with acceptable performance, yields and costs. The pace of development in materials science is often
not predictable. We may encounter substantial delays or operational problems in the scale-up of our anode
materials production or the commercialization of our cathode materials technology.
•
The systems, equipment and processes we use in the production of our anode materials are complex, and we
are subject to many operational risks that could substantially increase our costs, limit the operational
performance of our anode materials operations, and adversely affect our business.
•
Our failure to achieve existing or target customers' product specifications for our anode materials or otherwise
engage target customers successfully and convert such contacts into meaningful orders in the future would
have a material adverse effect on our business.
•
If we are unable to attract and retain key employees and qualified personnel, our ability to compete could be
harmed.
•
Labor shortages, turnover, and labor cost increases and the delay or insufficiency of the training of our
employees could adversely impact our ability to scale up manufacturing of our anode materials and
commercialize our cathode technology.
•
If we do not satisfy the terms of our DOE grant, we may be unable to be reimbursed under or otherwise receive
any or all of the funds or other benefits under the grant, may be required to return unused funds, and may be
subject to claims or penalties, which would have a material adverse effect on our business.
•
We may not qualify for tax credits available to U.S. producers of graphite or otherwise realize any of the
benefits of such tax credits due to a change in current tax law, our inability to satisfy the requirements for
realizing such benefits or factors outside our control.
•
Our reliance on certain limited or sole source suppliers subjects us to a number of risks.
7
•
The battery technology market continues to evolve and is highly competitive, and we may not be successful in
competing in this industry or establishing and maintaining confidence in our long-term business prospects
among current and future partners and customers.
•
Our anode materials business is subject to fluctuating and potentially unfavorable market conditions for
graphite.
•
Our future growth and success will depend on our ability to sell effectively to large customers.
•
We depend, and expect to continue to depend, on a limited number of customers for a significant percentage
of our revenue.
•
Our commercial relationships are subject to various risks which could adversely affect our business and future
prospects.
•
Our business and future growth depend substantially on the growth in demand for electric vehicles and
batteries for grid energy storage.
•
Our projected operating and financial results rely in large part upon assumptions and analyses we have
developed. If these assumptions or analyses prove to be incorrect, our actual operating results may be
materially different from our projected results.
•
We may not be able to establish supply relationships for necessary components or may be required to pay
costs for components that are more expensive than anticipated, which could delay the introduction or
acquisition of additional equipment necessary to support our growth and negatively impact our business.
•
We may not be able to accurately estimate the future supply and demand for our materials and equipment,
which could result in a variety of inefficiencies in our business and hinder our ability to generate revenue. If we
fail to accurately predict our manufacturing requirements or prices of components increase, we could incur
additional costs or experience delays.
•
We have a history of financial losses and expect to incur significant expenses and continuing losses in the near
future.
•
We have a concentration of beneficial ownership among Phillips 66, LG Energy Solution, and our executive
officers, non-executive directors and their affiliates that may prevent new investors from influencing significant
corporate decisions.
•
Global political, economic and financial conditions (as well as the indirect effects flowing therefrom) could
negatively affect our business, results of operations, and financial condition.
•
Our systems and data may be subject to disruptions or other security incidents, and we may face alleged
violations of laws, regulations, or other obligations relating to our employees' personal data or confidential
data of our customers and other business partners that could result in liability and adversely impact our
reputation and future sales.
•
Our operations are subject to significant risks of safety incidents, which could result in harm to our workers,
damage to our property and delays in our production that would adversely affect our business.
•
From time to time, we may be involved in litigation, regulatory actions or government investigations and
inquiries, which could have an adverse impact on our profitability and consolidated financial position.
•
We may become subject to product liability claims, which could harm our financial condition and liquidity if we
are not able to successfully defend or insure against such claims.
•
From time to time we may enter into negotiations for acquisitions, dispositions, partnerships, joint ventures or
investments that are not ultimately consummated or, if consummated, may not be successful.
•
Our facilities or operations could be damaged or adversely affected as a result of natural disasters and other
catastrophic events.
•
Issues relating to the use of new and evolving technologies, such as Artificial Intelligence, in our business could
adversely affect our business and operating results.
•
Terrorist activity, acts of war and political instability around the world could adversely impact our business.
•
We are subject to substantial regulation and unfavorable changes to, or our failure to comply with, these
regulations could substantially harm our business and operating results.
•
We are subject to environmental, health and safety requirements which could adversely affect our business,
results of operation and reputation.
8
•
We are subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and
similar laws, and non-compliance with such laws can subject us to administrative, civil and criminal fines and
penalties, collateral consequences, remedial measures and legal expenses, all of which could adversely affect
our business, results of operations, financial condition and reputation.
•
Our success depends upon our ability to obtain and maintain intellectual property protection for our materials
and technologies.
•
Termination of our collaborative research agreement with Dalhousie University to support the development of
current and future technology would likely harm our business, and even if it continues, it may not help us
successfully develop any new intellectual property.
•
We may be subject to claims by third parties asserting misappropriation of intellectual property, or claiming
ownership of what we regard as our own intellectual property.
•
Our patent applications may not result in issued patents or our patent rights may be contested, circumvented,
invalidated or limited in scope, any of which could have a material adverse effect on our ability to prevent
others from interfering with our commercialization of our products.
•
Changes in patent law could diminish the value of patents in general, thereby impairing our ability to protect
our technologies and processes.
•
We may be unable to obtain intellectual property rights or technology necessary to develop and commercialize
our materials and equipment.
•
We may become involved in lawsuits or other proceedings to protect or enforce our intellectual property,
which could be expensive, time-consuming and unsuccessful and have a negative effect on the success of our
business.
•
An active U.S. trading market may not be sustained.
•
The trading price and volume of the ADSs may be volatile, and purchasers of the ADSs could incur substantial
losses.
•
Future sales of our ordinary shares or the ADSs or the anticipation of future sales could reduce the market price
of our ordinary shares or the ADSs.
•
If securities or industry analysts do not publish research or reports about our business, or publish inaccurate or
unfavorable reports about our business, the price of the ADSs and their trading volume could decline.
•
We do not currently intend to pay dividends on our securities and, consequently, your ability to achieve a return
on your investment will depend on appreciation in the price of the ADSs.
•
The dual listing of our ordinary shares and the ADSs may negatively impact the liquidity and value of the ADSs.
•
U.S. investors may have difficulty enforcing civil liabilities against our company, our directors or members of
senior management and the experts named in this annual report.
•
Australian takeover laws may discourage takeover offers being made for us or may discourage the acquisition
of a significant position in our ordinary shares or the ADSs.
•
Our Constitution and Australian laws and regulations applicable to us may differ from those which apply to a
U.S. corporation.
•
Holders of ADSs will not be directly holding our ordinary shares.
•
Your right as a holder of ADSs to participate in any future preferential subscription rights offering or to elect to
receive dividends in ordinary shares may be limited, which may cause dilution to your holdings.
•
You may not be able to exercise your right to vote the ordinary shares underlying your ADSs.
•
You may be subject to limitations on the transfer of your ADSs and the withdrawal of the underlying ordinary
shares.
•
ADS holders’ rights to pursue claims are limited by the terms of the deposit agreement.
•
We and the depositary are entitled to amend the deposit agreement and to change the rights of ADS holders
under the terms of such agreement and we may terminate the deposit agreement, without the prior consent
of the ADS holders.
•
ADS holders have limited recourse if we or the depositary fail to meet our respective obligations under the
deposit agreement.
9
•
As a foreign private issuer, we are exempt from a number of rules under the U.S. securities laws that apply to
public companies that are not foreign private issuers.
•
As a foreign private issuer we are permitted to adopt certain home country practices in relation to corporate
governance matters that differ significantly from Nasdaq corporate governance listing standards and these
practices may afford less protection to shareholders than they would enjoy if we complied fully with Nasdaq
corporate governance listing standards.
•
We may lose our foreign private issuer status in the future, which could result in significant additional cost and
expense.
•
We are an “emerging growth company” under the JOBS Act and will be able to avail ourselves of reduced
disclosure requirements applicable to emerging growth companies, which could make our ordinary shares and
ADSs less attractive to investors.
•
We have incurred and will continue to incur significant, increased costs as a result of operating as a company
with ADSs that are publicly traded in the United States and will incur increased costs as a result of becoming a
recipient of United States government funding and incentives, and our management will be required to devote
substantial time to new compliance initiatives.
•
If we fail to implement and maintain an effective system of internal controls or fail to identify and remediate
our material weaknesses thereof, we may be unable to accurately report our results of operations, meet our
reporting obligations or prevent fraud, and investor confidence in our Company and the market price of the
ADSs may be negatively impacted.
•
We currently report our financial results under IFRS, which differs in certain significant respects from U.S.
generally accepted accounting principles, or U.S. GAAP.
•
We are subject to risks associated with currency fluctuations, and changes in foreign currency exchange rates
could impact our results of operations.
•
Our ability to utilize our net operating losses to offset future taxable income may be prohibited or subject to
certain limitations.
•
If we are a passive foreign investment company, there could be adverse U.S. federal income tax consequences
to U.S. holders.
•
If a U.S. person is treated as owning at least 10% of our ordinary shares, such holder may be subject to adverse
U.S. federal income tax consequences.
•
Future changes to tax laws could materially adversely affect our company and reduce net returns to our
shareholders.
Risks Related to Our Business
We will need to obtain funding to finance our growth and operations, which may not be available on acceptable terms,
or at all. If we are unable to raise capital when needed, we may be forced to delay, reduce or eliminate certain
operations, and we may be unable to adequately control our costs.
We require significant capital to develop and grow our business and expect to incur significant expenses, including those
relating to acquisition of production equipment, facility expansion, research and development, property acquisition and
maintenance, regulatory compliance, and sales as we scale our commercial operations and build and market our materials,
equipment and service offerings. We also expect our general and administrative costs to increase as we scale our
operations. Our ability to generate operating cash flow and become profitable in the future will depend not only on our
ability to successfully market our materials, equipment and services, but also to control our costs, and will require us to
obtain additional funding.
We have applied for, received, and intend to continue to seek government support through grants, loans and tax or other
incentives from federal, state and provincial governments in the U.S. and Canada, and our ability to obtain and use funds
from such programs, depends, among other things, on our ability to raise matching funding in a timely manner. For
example, in the fourth quarter of 2023, we finalized our $100 million grant from the Office of Manufacturing & Energy
Supply Chains ("MESC Office") of the U.S. Department of Energy ("DOE") to expand domestic production of high-
10
performance, synthetic graphite anode materials at our Riverside facility in Chattanooga, Tennessee. To use this grant, we
must match the costs reimbursed under the grant. We also received a conditional commitment from the DOE through the
Loan Programs Office ("LPO") Advanced Technology Vehicles Manufacturing ("ATVM") program for a direct loan of up to
$754.8 million to be applied towards partially financing a proposed new facility in Chattanooga. We would need to raise
the remainder of eligible project costs (and fund non-eligible project costs) with equity. While this conditional
commitment demonstrates the DOE’s intent to finance the new facility, the DOE must complete an environmental review,
and the Company must satisfy certain technical, commercial, legal, environmental, and financial conditions before the
DOE can decide whether to enter into definitive financing documents and fund the loan. A binding loan agreement from
the DOE is also subject to the satisfactory completion of due diligence by the DOE, satisfaction of conditions precedent
specified in the term sheet, approval of the Company's Board, receipt of required governmental and third-party consents,
and the negotiation and execution of binding loan documents. There can be no assurance that all of the required
conditions and other actions will be satisfied or waived or that a final definitive loan agreement will be reached. For a
description of the DOE grant, the LPO loan and certain tax incentives we have received and applied for, see Item 4.
Information on the Company— B. Business Overview — NOVONIX Anode Materials.
The application process for financial, tax and other support from the government is highly competitive, and we cannot
predict whether we will ultimately be awarded or receive any additional grants, loans, including the LPO loan, or tax or
other incentives. Our ability to obtain grants, loans or tax or other incentives from government entities in the future is
subject to the availability of funds under applicable government programs, our ability to raise matching funds and equity,
approval of our applications to participate in such programs, achievement of milestones for funding, and ongoing
compliance with various laws and regulations as described below.
As of December 31, 2024, we had $42.6 million in cash, cash equivalents and short-term investments. We require
significant additional capital to achieve our plans to expand our production capacity for our anode materials to meet our
existing customer commitments and anticipated customer demand. Additional capital may not be available to us on
acceptable terms, or at all, and will depend among other things on our creditworthiness and the capital markets. If we
raise additional funds through collaboration and licensing arrangements with third parties, we may have to relinquish
some rights to our technologies or our product candidates on terms that may not be favorable to us. Any additional capital-
raising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to
develop and commercialize our current and future product and service offerings or delay, reduce or altogether cease
certain operations or future commercialization efforts. See also Item 3. Key Information — D. Risk Factors ("We have a
history of financial losses and expect to incur significant expenses and continuing losses in the near future”), Item 5
Operating and Financial Review and Prospects—B. Liquidity and Capital Resources, and Item 18. Financial Statements.
We face significant challenges in our attempt to develop our anode and cathode materials to produce them at volumes
with acceptable performance, yields and costs. The pace of development in materials science is often not predictable.
We may encounter substantial delays or operational problems in the scale-up of our anode materials production or the
commercialization of our cathode materials technology.
Developing anode and cathode materials that meet the requirements for wide adoption by our potential customers is a
difficult undertaking. We are still in the development stage for certain of our materials and face significant challenges in
producing our materials to required specifications and at commercial volumes. Some of the development challenges that
could prevent the successful scale up of production of our materials include changes in product performance from small
to large scale production, challenges in deployment of mass production equipment, and inability to produce materials
cost effectively at large volumes. If we are unable to cost efficiently design, manufacture, market, and sell our materials,
our margins, profitability and prospects would be materially and adversely affected. We have only recently produced
anode materials with our proprietary Generation 3 continuous induction graphitization furnace ("Generation 3 furnace
systems") and we have yet to produce cathode materials beyond lab and small pilot volumes. Any delay in the
manufacturing scale-up of our anode materials, our ability to achieve our customers' desired product specifications or the
progression of our cathode synthesis technology would negatively impact our business as it will delay revenue generation
and negatively impact our customer relationships.
11
Our Riverside facility in Chattanooga Tennessee, is targeted to produce anode materials of up to 20,000 tonnes per annum
(“tpa”). We utilize new proprietary furnace technology ("Generation 3 furnace systems") developed in collaboration with
Harper International Corporation ("Harper"). We have installed Generation 3 furnace systems at our Riverside facility and
are continuing the commissioning of those systems to meet our production targets. Our ability to produce at targeted
capacity is largely dependent upon Harper manufacturing and supplying Generation 3 furnace systems on a schedule that
meets our needs, our successful implementation of the same, and our ability to recruit and retain an increased number of
skilled staff focused on plant design, engineering and operations. Our production timelines have recently been adjusted
due to delays in receiving equipment from our vendors, ultimately affecting our installation and commissioning schedules.
The targeted production capacity of our Riverside facility is planned to help us meet our volume commitments under our
supply or offtake agreements with certain customers, including Panasonic Energy Co., Ltd. ("Panasonic Energy"), Stellantis
NV (“Stellantis”), and PowerCo SE (“PowerCo”). In addition, we plan to build a new facility, Enterprise South, to be located
in the Enterprise South Industrial Park in Chattanooga, Tennessee, to manufacture synthetic graphite primarily for use in
electric vehicle ("EV") batteries.
While we have a continued, phased expansion plan of 150,000 tpa to meet expected market demand growth, our plan is
contingent on the successful satisfaction of a number of factors, some of which are beyond our control. These factors
include, among others, our ability to obtain funding on attractive terms to enable further expansion of our current
production facilities and our ability to expand our production capacity through the construction of new production
facilities, acquisition, installation and commissioning of new equipment, and business acquisitions, joint ventures and
other inorganic means. Any or all of these expansion paths may involve many risks, any of which could materially harm
our business, including the diversion of management’s attention from core business concerns, failure to effectively exploit
acquired technologies, failure to successfully integrate acquired business or realize expected synergies or the loss of key
employees from either our business or acquired businesses. If we are unable to execute on those expansion efforts for
any reason, we may experience a delay in the manufacturing scale-up or the scale-up may not occur at all, which would
result in the loss of customers and materially damage our business, prospects, financial condition, and operating results.
The progression of our cathode materials technology from lab to commercial scale manufacturing is contingent upon the
success of our all-dry, zero-waste cathode synthesis process methodology. If production of cathode materials using this
methodology, either on a pilot or commercial scale, is not successful, our business, prospects, financial condition,
operating results and brand may be materially adversely affected.
The systems, equipment and processes we use in the production of our anode materials are complex, and we are subject
to many operational risks that could substantially increase our costs, limit the operational performance of our anode
materials operations, and adversely affect our business.
We rely heavily on complex systems, equipment and processes for our operations and the production of our synthetic
graphite anode materials. We are commissioning our Generation 3 furnace systems to become qualified to operate at
large-scale production. The work required to integrate our systems, equipment, and processes into the production of our
anode materials is time intensive and requires us to work closely with Harper and other third-party suppliers to ensure
they work properly for our proprietary battery materials technology. This work has involved and will continue to involve
a significant degree of uncertainty and risk and may result in a delay in the scaling up of anode materials production or
result in additional, unforeseen production costs. Any delay in the scale-up of our production would negatively impact our
business as it will delay time to revenue and negatively impact our customer relationships and agreements. Even if we
complete the commissioning of our systems and achieve volume production of our anode materials, if the cost,
performance characteristics or other specifications of the materials fall short of our targets or our customer requirements,
our sales, product pricing and margins could be adversely affected.
12
Our failure to achieve existing or target customers' product specifications for our anode materials or otherwise engage
target customers successfully and convert such contacts into meaningful orders in the future would have a material
adverse effect on our business.
Our ability to achieve our customers' desired specifications for our anode materials is critical to our meeting existing
customer obligations and gaining new customers. Volume commitments under our offtake agreements with Panasonic
Energy, Stellantis and PowerCo depend on our ability to produce our anode materials that meet their specific product
specifications. Other potential customers, including LGES, require the successful completion of certain development work
before they will enter into any binding offtake agreement. Our success, and our ability to increase revenue and operate
profitably, also depends in part on our ability to identify target customers and convert such contacts into meaningful
orders or expand on current customer relationships. In addition to new customers, our future success depends on whether
our current customers are willing to continue using our materials and equipment as well as whether their product lines
continue to incorporate our materials and equipment.
For example, although our anode materials business had signed a non-binding memorandum of understanding with
Samsung SDI, the MOU expired without the parties reaching an agreement. Additionally, we have a joint development
agreement with LGES which requires successful completion of certain development work before any offtake of our anode
materials. The satisfaction of quality standards and milestones of delivering mass production volume samples will be
required for final qualification with battery manufacturers. There is no assurance that these conditions will ultimately be
satisfied. However, if future production requirements, or similar production requirements with other potential customers,
are not met, or the materials produced are not of acceptable quality, we may lose these customers and lose credibility
with other domestic and international battery manufacturers and automotive OEMs, any of which could materially
adversely affect our financial condition and results of operations.
Our research and development efforts aim to create materials and equipment that are on the cutting edge of technology,
but competition in our industry is high. To secure acceptance of our materials and equipment, we must constantly develop
and introduce materials and equipment that are cost-effective and with enhanced functionality and performance to meet
evolving industry standards. If we are unable to meet our customers’ performance or volume requirements or industry
specifications, or retain or convert target customers, our business, prospects, financial condition and operating results
could be materially adversely affected.
If we are unable to attract and retain key employees and qualified personnel, our ability to compete could be harmed.
Our success depends on our ability to attract and retain our executive officers, key employees and other highly skilled
personnel, and our operations may be severely disrupted if we lost their services. As we build our operations and become
better known, there is an increased risk that competitors or other companies will seek to recruit and hire our key
personnel. The failure to attract, integrate, train, motivate and retain such key personnel could seriously harm our
business and prospects.
In addition, we are highly dependent on the services of our senior technical and management personnel, including our
executive officers, who would be difficult to replace. If any key personnel were to depart, we may not be able to
successfully attract and retain senior leadership necessary to grow our business. We do not currently maintain “key
person” life insurance on the lives of our executives or any of our employees. This lack of insurance means that we may
not receive adequate compensation for the loss of the services of these individuals.
On January 21, 2025, we announced the planned transition in our CEO role, with Dr. Chris Burns stepping down as Chief
Executive Officer effective January 24, 2025. Dr. Burns will continue to support the Company in an advisory capacity,
serving as Special Advisor to the Board, in order to provide continuity, support ongoing operations of the Company and
ensure a smooth transition. The Board has appointed Mr. Robert Long, our Chief Financial Officer, to serve as interim CEO,
effective January 24, 2025, until a permanent CEO is appointed. Mr Long will work closely with the Board to ensure a
smooth transition and maintain our momentum and focus on our key strategic goals. We cannot guarantee when we will
be able to appoint Dr. Burns’ permanent replacement. The change in executive management could disrupt our operations
and may have a material adverse effect on our business.
13
Labor shortages, turnover, and labor cost increases, and the delay or insufficiency of the training of our employees could
adversely impact our ability to scale up manufacturing of our anode materials and commercialize our cathode
technology.
We continue to face competition for talent, wage inflation and pressure to improve benefits and workplace conditions to
remain competitive. Challenging labor market conditions and the highly competitive wage pressure resulting from
qualified labor shortage have made it difficult to attract and retain the best talent. A sustained labor shortage or increased
turnover rates within our employee base could lead to increased costs, such as increased overtime or financial incentives
to meet demand and increased wage rates to attract and retain employees, and could negatively affect our ability to scale
up manufacturing for our anode and cathode materials and meet our production targets. Similarly, the complexity of our
operations requires that we train our workforce effectively, and our inability to do so on a timely basis may delay or
otherwise negatively affect our ability to scale up our anode materials operations, commercialize our cathode technology
or otherwise negatively affect our business.
If we do not satisfy the terms of our DOE grant, we may be unable to be reimbursed under or otherwise receive any or
all of the funds or other benefits under the grant, may be required to return unused funds, and may be subject to claims
or penalties, which would have a material adverse effect on our business.
As a result of the DOE grant, we are required to comply with a number of laws and regulations and terms and conditions
of the grant, including the preparation and furnishing of financial reports and other records. Relevant requirements
include certain accounting requirements and complying with the cost allowability principles; the U.S. National
Environmental Policy Act and other environmental, health and safety requirements; prevailing wage requirements;
compliance with export control laws and regulations; requirements to perform work in the U.S. unless DOE grants a
waiver; preferences for American-made equipment and products; requirements to substantially manufacture in the U.S.
products embodying or produced through the use of a new invention developed under the grant, unless such manufacture
is not commercially feasible and DOE agrees to foreign manufacture; requirements to grant liens in favor of the U.S.
government on property acquired or developed with grant funds and restrictions on the sale or disposition of such
property; data management requirements and restrictions on disclosing sensitive information; affirmative action and pay
transparency requirements; requirements for cyber- and technology security, including employment of security officers;
requirements to pre-approve participation by foreign nationals in the project; and requirements to pass-down certain of
such requirements to our subrecipients and subcontractors. If we are unable to meet these requirements, we may be
unable to be reimbursed under or otherwise receive any or all of the funds under the grant, may be required to return
unused funds, and may be subject to claims or penalties, including the loss of our eligibility for continued participation in
the grant program and other government programs. Other grants and loans for which we have applied would impose
similar and potentially additional requirements and, in each case, use of such government funding subjects us to increased
inspection and monitoring. We expect that the DOE’s MESC Office will, and the DOE’s Office of Inspector General may,
review our compliance, and the adequacy of our practices for maintaining compliance. In the event of improper or illegal
activities, or false or misleading statements in our applications or submissions to the government, we are subject to
possible civil and criminal penalties, sanctions, or suspension or debarment from multiple government programs. The
associated costs and risks may have a material adverse effect on our business.
We may not qualify for tax credits available to U.S. producers of graphite or otherwise realize any of the benefits of
such tax credits due to a change in current tax law, our inability to satisfy the requirements for realizing such benefits
or factors outside our control.
We were selected to receive a $103 million tax credit under the Qualifying Advanced Energy Project Allocation Program
(the “48C program”) to support production of critical battery materials from our Chattanooga, Tennessee production
facility. The 48C program incentivizes clean energy property manufacturing and recycling, industrial decarbonization, and
critical materials processing, refining, and recycling, and aims to foster the creation of high-quality jobs, curb industrial
emissions, and bolster U.S. domestic production of vital clean-energy products and critical materials. Realization of the
full amount of this tax credit is subject to satisfaction of the requirements set forth in Section 48C of the Internal Revenue
Code and operational and employment plans set out in the application to the Internal Revenue Service, including the
14
certification and placed-in-service requirements under the 48C program. In January 2025, we learned that we had not
been selected to receive 48C tax credits for the planned Enterprise South facility. We are working with the DOE and the
LPO to understand what, if any, impact this may have on the proposed LPO loan. See Item 4. Information on the Company—
B. Business Overview — NOVONIX Anode Materials.
Under current U.S. tax law, including regulations issued by the U.S. Department of Treasury and the Internal Revenue
Service, the production of graphite, including synthetic graphite, is eligible for the Advanced Manufacturing Production
Tax Credit under Section 45X ("45X tax credits") of the Internal Revenue Code of 1986, as amended (the “Code”).
Enterprise South remains eligible for a potential 45X tax credit, which offers 10% of eligible production costs of critical
minerals, including graphite, back to producers. Although current regulations are in final form, because they were issued
on October 24, 2024, they are subject to review under the Congressional Review Act, which gives the U.S. Congress the
authority to overturn certain actions of federal agencies, including the U.S. Department of Treasury and Internal Revenue
Service. In particular, there is a risk that the treatment of synthetic graphite may be subject to change. Further, U.S.-
produced graphite indirectly benefits from the Clean Vehicle Tax Credit under Section 30D of the Code, which requires
that the critical materials (and the associated constituent materials) contained in the battery cells of the clean vehicle
must, to a certain applicable percentage, be extracted or processed in the U.S. or a country with whom the U.S. has a free
trade agreement. The Clean Vehicle Tax Credit has been heavily criticized, and there are concerns that it may be repealed
or limited, which indirectly could affect the demand for critical minerals. In addition, the critical mineral (and the
associated constituent materials) cannot be extracted, processed or recycled by a foreign entity of concern (“FEOC”). That
aspect of the regulations has been criticized by some members of Congress who had hoped there would be more
restrictions relating to FEOCs. The regulations suggest that where a critical material is an insignificant cost and “non-
traceable,” it can be excluded from tracking for FEOC purposes. Although the regulations list graphite as a traceable critical
mineral, recent comments filed in response to the proposed regulations have requested that graphite be deemed a non-
traceable material. The risk that final regulations deem graphite a non-traceable material may be greater as a result of
Republican control of the House of Representatives and U.S. Senate.
Our ability to receive any additional tax credits, satisfy the requirements for realizing 48C and other potentially available
tax credits, and fully or partially utilize, monetize or otherwise benefit from these tax credits is subject to uncertainty and
factors that we may not be able to control.
Our reliance on certain limited or sole source suppliers subjects us to a number of risks.
Our anode materials business is dependent on our continued ability to source certain specialized systems, equipment,
components and raw materials from a limited number of suppliers. Our ability to scale up our commercial production of
synthetic graphite anode materials and meet our production targets depends on the successful and timely delivery,
commissioning, operation and availability of, for example, the Generation 3 furnace systems developed in collaboration
with and supplied by Harper. If the successful commissioning is delayed or the systems otherwise fail to perform as
expected, we may be delayed or prevented from meeting our production targets or our obligations to customers under
our offtake agreements, which would have a material adverse effect on our business, financial condition, liquidity, results
of operations and prospects.
We purchase certain of our systems, equipment, components and raw materials from limited sources of supply, and
disruption of these sources could negatively affect our ability to produce materials. For example, we may source specialty
petroleum needle coke, a key precursor to the synthetic graphite anode material we produce, from Phillips 66 or a select
few other suppliers. Even where alternative sources of equipment, materials and components are available, the quality
and cost of the alternative materials, regulatory and contractual requirements to qualify materials for use in our
production, the time required to establish new relationships with reliable suppliers, and the time potentially to re-qualify
products with customers could result in production delays and possible loss of sales. We have in the past and may continue
to experience delays in acquiring equipment due to global supply chain issues as well as our dependence on single
suppliers such as Harper. Our inability or delay in obtaining the systems, equipment components or raw materials needed
for our business may harm our customer relationships or require us to find alternative supply sources at increased costs,
15
which could have a material adverse effect on our business, financial condition, liquidity, results of operations and
prospects.
The battery technology market continues to evolve and is highly competitive, and we may not be successful in competing
in this industry or establishing and maintaining confidence in our long-term business prospects among current and
future partners and customers.
The battery technology market in which we compete continues to evolve and is highly competitive. Certain energy storage
technologies, such as lithium-ion battery technology, have been widely adopted, and current and future competitors may
have greater resources than we do and may also be able to devote greater resources to the development of their current
and future technologies. These competitors also may have greater access to customers and may be able to establish
cooperative or strategic relationships among themselves or with third parties that may further enhance their resources
and competitive positioning. In addition, lithium-ion battery manufacturers may continue to reduce cost and expand
supply of conventional batteries and therefore negatively impact the ability for us to sell our materials, equipment and
services at market-competitive prices and yet at sufficient margins.
Automotive original equipment manufacturers (“OEMs”) are researching and investing in energy storage development
and production. We expect competition in energy storage technology and EVs to intensify due to increased demand for
these vehicles and a regulatory push for EVs, continuing globalization, and consolidation in the worldwide automotive
industry. Developments in alternative technologies or improvements in energy storage technology made by competitors
may materially adversely affect the sales, pricing and gross margins of our business. If a competing technology is developed
that has superior operational or price performance, our business will be harmed. Similarly, if we fail to accurately predict
and ensure that our technology can address customers’ changing needs or emerging technological trends, or if our
customers fail to achieve the benefits expected from our materials, equipment and services, our business will be harmed.
We must continue to commit significant resources to develop our technologies in order to establish a competitive position,
and these commitments will be made without knowing whether such investments will result in materials, equipment and
services that potential customers will accept. There is no assurance we will successfully identify new customer
requirements, develop and bring our materials, equipment and services to market on a timely basis, or that products and
technologies developed by others will not render our materials, equipment and services obsolete or noncompetitive, any
of which would adversely affect our business and operating results.
Customers will be less likely to purchase our materials, equipment and services if they are not convinced that our business
will succeed in the long term. Similarly, suppliers and other third parties will be less likely to invest time and resources in
developing business relationships with us if they are not convinced that our business will succeed in the long term.
Accordingly, in order to build and maintain our business, we must maintain confidence among current and future partners,
customers, suppliers, analysts, ratings agencies and other parties in our long-term financial viability and business
prospects. Maintaining such confidence may be particularly complicated by certain factors including those that are largely
outside of our control, such as our limited operating history, size and financial resources relative to our competitors,
market unfamiliarity with our materials, equipment and services, any delays in scaling manufacturing, delivery and service
operations to meet demand, competition and uncertainty regarding the future of energy storage technologies and our
eventual production and sales performance compared with market expectations.
Our anode materials business is subject to fluctuating and potentially unfavorable market conditions for graphite.
Graphite is not a traded commodity like many base and precious metals, and its sales prices are generally not public. Sales
agreements are typically negotiated on an individual and private basis with each potential customer. In addition, there
are a limited number of producers of battery-grade graphite, most of whom are producers in China and may make it
difficult for new market entrants by increasing their production capacity and lowering sales prices. Factors such as foreign
currency fluctuation, supply and demand, industrial disruption and actual graphite market sale prices could have an
adverse impact on our ability to sell our synthetic graphite anode materials profitably. If battery manufacturers use less
16
graphite than expected, or if the demand for EV and energy storage grid batteries is less than anticipated, it could have a
material adverse effect on the sales price, profitability and development strategy of our business.
Our future growth and success will depend on our ability to sell effectively to large customers.
Our current and potential customers are primarily battery manufacturers and automotive OEMs that tend to be large
enterprises. Therefore, our future success will depend on our ability to effectively sell our materials, equipment and
services to such large customers. Sales to these customers involve risks that may not be present (or that are present to a
lesser extent) with sales to smaller customers. These risks include, but are not limited to, (i) increased pricing power and
leverage held by large customers in negotiating contractual arrangements with us, (ii) higher minimum volume
requirements that we may be unable to meet, (iii) longer sales cycles and the associated risk that substantial time and
resources may be spent on a potential customer that elects not to purchase our materials, equipment or services, and (iv)
requirements that we meet customer standards for their suppliers, including those relating to environmental, social and
governance protocols and ISO standards, that we may be unable to meet.
Purchases by large organizations are frequently subject to budget constraints, multiple approvals and unanticipated
administrative, processing and other delays. Finally, large organizations typically have longer implementation cycles,
require greater product functionality and scalability, require a broader range of services, demand that vendors take on a
larger share of risks, require acceptance provisions that can lead to a delay in revenue recognition and expect greater
payment flexibility. All of these factors can add further risk to business conducted with these potential customers.
We depend, and expect to continue to depend, on a limited number of customers for a significant percentage of our
revenue.
Our Battery Technology Solutions ("BTS") business is currently our only business that is generating revenue, and BTS has
generated most of its revenue from a limited number of customers. For the year ended December 31, 2024, the Company
had two customers, included in the consulting services revenue stream that accounted for approximately 13% and 12% of
total revenues, respectively, and one major customer, included in the hardware sales revenue stream, that accounted for
16% of total revenue. For the year ended December 31, 2023, the Company had two customers, included in consulting
services revenue stream, that accounted for approximately 17% and 15% of total revenues, respectively. For the six
months December 31, 2022, the Company had three major customers, included in the consulting services revenue stream,
that accounted for approximately 27%, 22%, and 11% of total revenue, respectively and two major customers, included
in the hardware sales revenue stream, that accounted for approximately 25% and 12% of total revenues, respectively. For
the year ended June 30, 2022, the Company had two customers, included in the consulting services revenue stream that
accounted for approximately 15%, and 12% of total revenues, respectively and one major customer, included in the
hardware sales and consulting services revenue streams, that accounted for 11% of total revenue.
Our anode materials business is not yet generating revenue, and our plans to scale the business are dependent upon our
collaborations with tier 1 customers such as Panasonic Energy, Stellantis, and PowerCo resulting in sales of our anode
materials to those parties. Similarly, our joint development agreement with LG Energy Solution, Ltd. ("LG Energy Solution"
or "LGES")) requires successful completion of certain development work before offtake of our anode materials. Because
we rely, and will continue to rely, on a limited number of customers for significant percentages of our revenue, a decrease
in demand or significant pricing pressure from any of our major customers for any reason could have a materially adverse
impact on our business, financial condition, and results of operations.
In addition, a number of factors outside our control could cause the loss of, or reduction in, business or revenues from
any customer, including, without limitation, pricing pressure from competitors, a change in a customer’s business strategy
or financial condition, or change in market conditions. Our customers may also choose to pursue alternative technologies
and develop alternative products in addition to, or in lieu of, our materials and equipment, either on their own or in
collaboration with others, including our competitors. The loss of any major customer or key project, or a significant
decrease in the volume of customer demand or the price at which we sell our materials and equipment to customers,
could materially adversely affect our financial condition and results of operations.
17
In addition, our ability to satisfy our commitments to such customers is dependent, among other things, on reaching the
targeted production capacities at our Riverside facility and our planned Enterprise South facility. See Item 3. Key
Information — D. Risk Factors ("We face significant challenges in our attempt to develop our anode and cathode
materials to produce them at volumes with acceptable performance, yields and costs. The pace of development in
materials science is often not predictable. We may encounter substantial delays or operational problems in the scale-
up of our anode materials production or the commercialization of our cathode materials technology.").
Our commercial relationships are subject to various risks which could adversely affect our business and future prospects.
Many of our commercial relationships are conditional, subject to supply performance, market conditions, quality
assurance processes and audits of supplier processes or other agreed upon conditions. There can be no assurance that we
will be able to satisfy these conditions. If we are unsuccessful in meeting the demand for high-quality materials and
equipment, our business and prospects will be materially adversely affected.
In addition, our business partners may have economic, business or legal interests or goals that are inconsistent with our
goals. Any disagreements with our business partners may impede our ability to maximize the benefits of any partnerships
and slow the commercialization of materials and equipment. Our arrangements may require us, among other things, to
pay certain costs or to make certain capital investments, for which we may not have the resources. In addition, if our
business partners are unable or unwilling to meet their economic or other obligations under any business arrangements,
our business and prospects will be materially adversely affected.
Our business and future growth depend substantially on the growth in demand for electric vehicles and batteries for
grid energy storage.
The demand for our materials is directly related to the market demand for EVs and batteries for grid energy storage.
However, the markets we have targeted may not achieve the level of growth we expect during the time frame projected.
For example, the new U.S. presidential administration has indicated its agenda will focus on deregulation, particularly with
respect to environmental and climate change-related regulations, which could be detrimental to companies like ours that
are focused on sustainable energy. If markets fail to achieve our expected level of growth, we may have excess production
capacity and may not be able to generate enough revenue to obtain profitability. If the market for EVs or batteries for grid
energy storage does not develop at the rate or in the manner or to the extent that we expect, or if critical assumptions
that we have made regarding the efficiency of our energy solutions are incorrect or incomplete, our business, prospects,
financial condition and operating results could be harmed.
Our projected operating and financial results rely in large part upon assumptions and analyses we have developed. If
these assumptions or analyses prove to be incorrect, our actual operating results may be materially different from our
projected results.
Management's projected operating and financial results reflect current estimates of our future performance. Whether
actual operating and financial results and business developments will be consistent with our expectations and
assumptions as reflected in our projections depends on a number of factors, many of which are outside our control,
including, but not limited to the factors described throughout this annual report. Unfavorable changes in any of these or
other factors, most of which are beyond our control, could materially and adversely affect our business, results of
operations and financial results.
We may not be able to establish supply relationships for necessary components or may be required to pay costs for
components that are more expensive than anticipated, which could delay the introduction or acquisition of additional
equipment necessary to support our growth and negatively impact our business.
As we expand our anode materials manufacturing capabilities, we will rely on third-party suppliers for components and
materials. Any disruption or delay in the supply of components or materials by our key third-party suppliers or pricing
volatility of such components or materials could temporarily disrupt research or production of our anode materials until
18
an alternative supplier is able to supply the required material. In such circumstances, we may experience prolonged delays,
which may materially and adversely affect our results of operations, financial condition and prospects.
We may not be able to control fluctuation in the prices for materials or negotiate agreements with suppliers on terms that
are beneficial to us. Our business depends on the continued supply of certain proprietary materials, components and
equipment. We are exposed to multiple risks relating to the availability and pricing of such materials and components.
Substantial increases in the prices for our raw materials or components would increase our operating costs and materially
impact our financial condition.
Currency fluctuations, trade barriers, extreme weather, pandemics, tariffs or shortages and other general economic or
political conditions may limit our ability to obtain key components for our battery cell testing equipment or significantly
increase freight charges, raw material costs and other expenses associated with our business, which could further
materially and adversely affect our results of operations, financial condition and prospects.
We may not be able to accurately estimate the future supply and demand for our materials and equipment, which could
result in a variety of inefficiencies in our business and hinder our ability to generate revenue. If we fail to accurately
predict our manufacturing requirements or prices of components increase, we could incur additional costs or experience
delays.
It is difficult to predict our future revenues and appropriately budget for our expenses, and our views as to industry trends
that may emerge may prove false, which could affect our business. Currently, there is limited historical basis for making
judgments on the demand for our materials or equipment, or our ability to develop, manufacture, and deliver our
materials or equipment, or our profitability in the future. If we overestimate our requirements, our suppliers may have
excess inventory, which indirectly would increase our costs. If we underestimate our requirements, our suppliers may
have inadequate inventory, which could interrupt manufacturing of our materials or equipment and result in delays in
shipments and revenues. In addition, lead times for materials that our suppliers order may vary significantly and depend
on factors such as the specific supplier, contract terms and demand for each material at a given time. If we fail to order
sufficient quantities of materials in a timely manner, the delivery of materials or equipment to our potential customers
could be delayed, which would harm our business, financial condition and operating results.
Additionally, agreements for the purchase of certain components used in the manufacture of our materials and equipment
may contain pricing provisions that are subject to adjustment based on changes in market prices of key components.
Substantial increases in the prices for such components would increase our operating costs and could reduce our margins
if we cannot recoup the increased costs. Any attempts to increase the announced or expected prices of our materials and
equipment in response to increased costs of components could be viewed negatively by our potential customers and could
adversely affect our business, prospects, financial condition or operating results.
We have a history of financial losses and expect to incur significant expenses and continuing losses in the near future.
We incurred net losses of $74.8 million, $46.2 million, $27.9 million, and $51.9 million for the years ended December 31,
2024 and 2023, six months ended December 31, 2022, and year ended June 30, 2022, respectively, and net operating cash
outflows of $40.4 million $36.2 million, $18.9 million, and $29.2 million for the years ended December 31, 2024 and 2023,
six months ended December 31, 2022, and year ended June 30, 2022, respectively. At December 31, 2024 and 2023, we
had a cash balance of $42.6 million and $78.7 million, respectively, and net current assets of $11.1 million and $51.9
million, respectively.
We expect our expenses to increase in connection with our ongoing activities, particularly as we continue to purchase
additional production equipment associated with the manufacture of synthetic graphite. For example, in July 2021, we
purchased commercial land and buildings in Chattanooga, USA for $42.6 million to expand our anode materials business
and concurrently entered into a loan facility with DBR Investments Co. Limited for $30.1 million with an interest rate of
4.09%. The loan was fully drawn down as at December 31, 2024. The total liability at December 31, 2024 is $27.7 million.
In addition, we expect to incur significant commercialization expenses related to sales and marketing to the extent that
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such sales and marketing are not the responsibility of any future customers. We may find that these efforts are more
expensive than we currently anticipate or that these efforts may not result in revenues, which would further increase our
losses, impact our ability to repay our debt (including our $30 million principal amount of unsecured convertible notes
issued to LGES) and require future capital raises to maintain the business. These conditions give rise to a material
uncertainty that may cast significant doubt (or raise substantial doubt as contemplated by PCAOB standards) as to our
ability to continue as a going concern. If we were not able to continue as a going concern, or if there were continued doubt
about our ability to do so, the value of your investment would be materially and adversely affected. See Item 3. Key
Information — D. Risk Factors ("We have incurred and will continue to incur significant, increased costs as a result of
operating as a company with ADSs that are publicly traded in the United States, and will incur increased costs as a result
of becoming a recipient of United States government funding and incentives, and our management will be required to
devote substantial time to new compliance initiatives.").
We have a concentration of beneficial ownership among Phillips 66, LG Energy Solution, and our executive officers, non-
executive directors and their affiliates that may prevent new investors from influencing significant corporate decisions.
In September 2021, we consummated a transaction with Phillips 66 pursuant to which Phillips 66 purchased 77,962,578
ordinary shares of NOVONIX for a total purchase price of $150 million (the “Phillips 66 Transaction”). As of December 31,
2024, Phillips 66 beneficially owned approximately 13.74% of our ordinary shares (based on the number of our ordinary
shares outstanding as of that date). In January 2025, Phillips 66 purchased an additional 12,771,392 ordinary shares as
part of a private placement, which, after giving pro forma effect to such transaction, would have resulted in its beneficial
ownership of 15.99% of our ordinary shares as of December 31, 2024. As of December 31, 2024, as the holder of our
unsecured convertible notes, LGES beneficially owned approximately 4.98% of our ordinary shares, and our executive
officers, non-executive directors and their affiliates beneficially owned approximately 2% as a group. Based on their
beneficial ownership, such security holders will be able to exercise a significant level of influence over all matters requiring
shareholder approval. This influence could have the effect of delaying or preventing a change of influence or changes in
our management and will make the approval of certain transactions difficult or impossible without the support of these
shareholders and their votes. In addition, pursuant to the terms of our 2021 subscription agreement, Phillips 66 has the
right to nominate one director to our Board of Directors and certain rights to be notified of, and participate in, issuances
of shares by the Company (other than distributions of shares to the Company’s shareholders on a pro rata basis). The
interests of Phillips 66 and these shareholders may differ from our interests or those of our other shareholders, and these
shareholders might not exercise their voting power in a manner favorable to our other shareholders.
Global political, economic and financial conditions (as well as the indirect effects flowing therefrom) could negatively
affect our business, results of operations, and financial condition.
In recent times, global political, economic and financial conditions negatively have affected businesses across a range of
industries, including the energy storage industry. In addition, there are currently political and trade tensions among a
number of the world’s major economies, which have resulted in the implementation of tariff and non-tariff trade barriers,
including the use of export control restrictions against certain countries and individual companies. Moreover, the new,
substantial tariffs on imports to the United States from Canada announced on February 1, 2025, if they are implemented
and sustained for an extended period of time, would have a significant adverse effect, including financial, on our business.
The U.S. is the largest export destination for our battery testing equipment. See Item 5. Operating and Financial Review
and Prospects. Implementation, prolongation or expansion of such trade barriers may result in a decrease in the growth
of the global economy and the battery industry, and could cause turmoil in global markets that may result in declines in
sales from which we generate our income through our materials, technologies and services. Also, any increase in the use
of export control restrictions to target certain countries and companies, any expansion of the extraterritorial jurisdiction
of export control laws in the jurisdiction in which we operate, or a complete or partial ban on products sales to certain
companies could impact not only our ability to supply our materials, technologies and services to such customers, but also
customers’ demand for our materials, technologies and services.
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Any future systemic political, economic or financial crisis or market volatility, including but not limited to, interest rate
fluctuation, inflation or deflation and changes in economic, fiscal and monetary policies and changes in government and
election results in major economies, could cause revenue or profits for the battery industry as a whole to decline
dramatically, and if the economic conditions or financial conditions of our current or target customers were to deteriorate,
the demand for our materials, technologies and services may decrease. Further, in times of market instability, sufficient
external financing may not be available to us on a timely basis, on commercially reasonable terms to us, or at all. If
sufficient external financing is not available when we need such financing to meet our capital requirements, we may be
forced to curtail our expansion, modify plans or delay the deployment of new or expanded materials, technologies and
services until we obtain such financing. Thus, further escalation of trade tensions, the use of export control restrictions as
a non-tariff trade barrier or any future global systemic crisis could materially and adversely affect our results of operations.
Our systems and data may be subject to disruptions or other security incidents, and we may face alleged violations of
laws, regulations, or other obligations relating to handling our employees' personal data or confidential data of our
customers and other business partners that could result in liability and adversely impact our reputation and future sales.
We may face challenges with respect to information security and maintaining the security and integrity of our systems
and other systems used in our business, as well as with respect to the data stored on or processed by these systems. Our
proprietary process technology is unique and may make us a target for cyber attackers. We are also at risk for
interruptions, outages and breaches of: (a) operational systems, including business, financial, accounting, product
development, data processing or production processes, owned by us or our third-party vendors or suppliers and (b) facility
security systems, owned by us or our third-party vendors or suppliers. A cyber incident could be caused by disasters,
insiders (through inadvertence or with malicious intent) or malicious third parties (including nation-states or nation-state
supported actors) using sophisticated, targeted methods to circumvent firewalls, encryption and other security defenses,
including hacking, fraud, trickery or other forms of deception. Advances in technology, an increased level of sophistication
or expertise of hackers, the ease of gathering intelligence from social media for social engineering, and new discoveries in
the field of cryptography or others can result in a compromise or breach of the systems used in our business or of security
measures used in our business to protect confidential information, personal information, and other data. The techniques
used by cyber attackers change frequently and cybersecurity incidents could be difficult to detect. Although we maintain
information technology measures designed to protect ourselves against intellectual property theft, data breaches and
other cybersecurity incidents, such measures will require updates and improvements, and we cannot guarantee that such
measures will be adequate to detect, prevent or mitigate cyber incidents. The implementation, maintenance, segregation
and improvement of these systems requires significant management time, support and cost, and these systems may be
insufficient to prevent significant data breaches.
Our ability to conduct our business and operations depends on the continued operation of information technology and
communications systems. Systems used in our business, including data centers and other information technology systems,
are vulnerable to damage or interruption. Such systems could also be subject to break-ins, cyber-attacks, sabotage and
intentional acts of vandalism, as well as disruptions and security incidents as a result of non-technical issues, including
intentional or inadvertent acts or omissions by employees, service providers, or others. Such cyber incidents could:
significantly disrupt operational systems; result in loss of trade secrets or other proprietary or competitively sensitive
information; compromise certain information of customers, employees, suppliers, or others; jeopardize the security of
our facilities; and expose us to remediation costs, monetary and reputational damages, legal liability and regulatory
actions under evolving laws and regulations related to data protection and privacy.
Moreover, there are inherent risks associated with developing, improving, expanding and updating current systems,
including the disruption of our data management, procurement, production execution, finance, supply chain and sales
and service processes. These risks may affect our ability to manage our data and inventory, procure parts or supplies or
produce, sell, deliver and service our materials and equipment, adequately protect our intellectual property or achieve
and maintain compliance with, or realize available benefits under, applicable laws, regulations and contracts. We cannot
be sure that these systems upon which we rely, including those of our third-party vendors or suppliers, will be effectively
implemented, maintained or expanded as planned. If we do not successfully implement, maintain or expand these systems
as planned, our operations may be disrupted, our ability to accurately and timely report our financial results could be
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impaired, and deficiencies may arise in our internal control over financial reporting, which may impact our ability to certify
our financial results. Moreover, our proprietary information or intellectual property could be compromised or
misappropriated and our reputation may be adversely affected. If these systems do not operate as we expect them to, we
may be required to expend significant resources to make corrections or find alternative sources for performing these
functions.
We use and expect to continue to use outsourced service providers to help provide certain services, and any such
outsourced service providers face similar security and system disruption risks as us. Some of the systems used in our
business will not be fully redundant, and our disaster recovery planning cannot account for all eventualities. Any data
security incidents or other disruptions to any data centers or other systems used in our business could result in lengthy
interruptions in our service.
Our operations are subject to significant risk of safety incidents, which could result in harm to our workers, damage to
our property and delays in our production that would adversely affect our business.
Our operations pose a number of safety risks, any of which could result in the personal injury or death of our workers, fire
or explosion, and damage to machinery, materials and equipment. For example, our manufacturing operations utilize
furnaces and equipment heated to extremely high temperatures, for which our existing safety measures, including policies
and procedures in place to protect against health and safety incidents or damage to our facility and equipment in the
event of a fire or other incident, might not prevent serious injury or death or significant property damage. Consequences
of safety incidents may include significant delays or fluctuations in production, increased maintenance and other operating
costs, environmental damage, litigation, regulatory action, increased insurance premiums, mandates to halt production,
workers’ compensation claims, and other liabilities, any of which could materially adversely impact our business, including
our results of operations, cash flows, financial condition and prospects, reputation, and ability to operate and finance our
business.
From time to time, we may be involved in litigation, regulatory actions or government investigations and inquiries,
which could have an adverse impact on our profitability and consolidated financial position.
We may be involved in a variety of litigation, other claims, suits, regulatory actions or government investigations and
inquiries and commercial or contractual disputes that, from time to time, are significant. In addition, from time to time,
we may also be involved in legal proceedings arising in the normal course of business including commercial or contractual
disputes, warranty claims and other disputes with potential customers and suppliers; intellectual property matters;
personal injury claims; environmental, health and safety issues; tax matters; and employment matters. From time to time,
such legal proceedings may be commenced by a significant customer, which may damage our relationship with such
customer. Our significant customers generally are larger enterprises and may be able to or choose to devote greater
resources to such legal proceedings. It is difficult to predict the outcome or ultimate financial exposure, if any, represented
by these matters, and there can be no assurance that any such exposure will not be material. Such claims may also
negatively affect our reputation. See also Item 3. Key Information — D. Risk Factors (“—We may become involved in
lawsuits or other proceedings to protect or enforce our intellectual property, which could be expensive, time-consuming
and unsuccessful and have a negative effect on the success of our business.”).
We may become subject to product liability claims, which could harm our financial condition and liquidity if we are not
able to successfully defend or insure against such claims.
We may become subject to product liability claims, even those without merit, which could harm our business, prospects,
operating results, and financial condition. We face inherent risk of exposure to claims in the event our materials and
equipment do not perform as expected or malfunction resulting in personal injury or death. A successful product liability
claim against us could require us to pay a substantial monetary award. Moreover, a product liability claim could generate
substantial negative publicity about our materials, equipment and business and inhibit or prevent commercialization of
other future materials or equipment, which would have a material adverse effect on our brand, business, prospects and
operating results. Any insurance coverage might not be sufficient to cover all potential product liability claims. Any claim
seeking significant monetary damages either in excess of our coverage, or outside of our coverage, may have a material
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adverse effect on our reputation, business and financial condition. We may not be able to secure additional product
liability insurance coverage on commercially acceptable terms or at reasonable costs when needed, particularly if we do
face liability for our materials and equipment and are forced to make a claim under our policy.
From time to time we may enter into negotiations for acquisitions, dispositions, partnerships, joint ventures or
investments that are not ultimately consummated or, if consummated, may not be successful.
From time to time we may consider acquisitions, dispositions, partnerships, joint ventures or investments that we believe
may allow us to implement our growth strategy. Our transactions with and investments in other companies are inherently
risky and could disrupt our ongoing businesses. For example, in January 2022, we entered into definitive supply and
investment agreements with KORE Power to become the exclusive supplier of graphite anode materials in support of KORE
Power's battery manufacturing operations in the U.S. and acquired an approximate 5% equity stake in KORE Power. During
the year ended December 31, 2024,we wrote off this investment in KORE Power and recorded a loss of $15.3 million based
in part KORE Power’s announcement that its planned facility in Arizona would not be constructed and the change in its
executive leadership. See Item 5 Operating and Financial Review and Prospects—A. Operating Results - Components of
the Results of Our Operations - Results of Operations for the Years Ended December 31, 2024, and 2023 - Loss on equity
investment securities at fair value through profit or loss. If the fair value of any of our investments decreases, our financial
results could be adversely affected. Moreover, general operational risks, such as inadequate or failing internal controls of
companies we invest in, may also expose our investments to risks of those companies.
We hold tenement rights in a high-grade natural flake graphite deposit located in Northern Queensland, Australia (the
"MDG Project"). As of the date of this annual report, we have not generated any revenue from the sale of natural graphite
and we have generally put any exploration or development of these assets on hold. In October 2023, we decided to pursue
potential opportunities to realize the value of these assets through a strategic transaction. While the Company may engage
in discussions with interested third parties regarding the MDG Project, there can be no assurances that any such
discussions will result in any transaction involving these assets or that any required tenement rights will be renewed on
satisfactory terms, within expected timeframes or at all. If we fail to complete a strategic transaction for the MDG Project
or renew our tenement rights on terms we find acceptable, we may not be able to realize the value of these assets.
We cannot forecast the number, timing or size of any future strategic transactions, or the effect that any such transactions
might have on our operating or financial results. We may not be able to successfully identify future opportunities or
complete any such transactions if we cannot reach agreement on commercially favorable terms, if we lack sufficient
resources to finance the transaction on our own and cannot obtain financing at a reasonable cost or if regulatory
authorities prevent such transactions from being completed. Management resources may also be diverted from operating
our existing businesses to focusing on such opportunities, and we may also incur substantial out-of-pocket costs.
Moreover, any such transaction may not be viewed favorably by investors or other stakeholders.
Our facilities or operations could be damaged or adversely affected as a result of natural disasters and other
catastrophic events.
Our facilities or operations could be adversely affected by events, conditions and circumstances outside of our control,
such as natural disasters, wars, health epidemics, and other calamities. We cannot assure you that our backup systems
will be adequate to protect us from the effects of fire, floods, typhoons, earthquakes, power loss, telecommunications
failures, war, riots, terrorist attacks or similar events. Any of the foregoing events may give rise to interruptions,
breakdowns, system failures, technology platform failures or internet failures, which could cause the loss or corruption of
data or malfunctions of software or hardware as well as adversely affect our ability to provide services or manufacture
materials or equipment. Any disruptions or other adverse events, whether within or beyond our control, at any of our
facilities or in their surrounding areas could have a particularly significant impact on our business performance and
financial results.
Moreover, our facilities located in Chattanooga, Tennessee, currently account for 100% of the production of our anode
materials, and our facility in Bedford, Nova Scotia, currently accounts for 100% of the production of our battery testing
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equipment. As a result, any disruptions or other adverse events, whether within or beyond our control, at those facilities
or in the surrounding area could have a particularly significant impact on our business performance and financial results.
In addition, while the long-term effects of climate change on the global economy are unclear, we recognize that there are
inherent climate-related risks wherever business is conducted. Any of our locations may be vulnerable to the adverse
effects of climate change. Our facilities have historically been, and may continue to be, subject to physical climate change
risks, including heavy rainfall and flooding in Chattanooga, Tennessee, and wildfires in Halifax, Nova Scotia. Climate-related
events, including the increasing frequency of extreme weather events and their impact on critical infrastructure in the
United States and elsewhere, have the potential to disrupt our business and/or our third-party service providers or
partners, and may cause us to experience higher attrition, losses and additional costs to maintain and resume operations.
Transitional climate change risks may subject us to increased regulations, reporting requirements, standards or
expectations regarding the environmental impacts of our business, and untimely or inaccurate disclosure could adversely
affect our reputation, business or financial performance.
Issues relating to the use of new and evolving technologies, such as Artificial Intelligence (“AI”), in our business could
adversely affect our business and operating results.
Issues relating to the use of new and rapidly evolving technologies such as AI in our business may result in reputational
harm, competitive harm, legal liability or litigation, or new or enhanced governmental or regulatory scrutiny, ethical
concerns, compliance issues, or security risks, and may cause us to incur additional costs to resolve such issues. We are
increasingly building AI into our business, particularly in our battery testing services and our technology collaborations
with business partners in our BTS division. As with many innovations, AI presents risks and challenges that could affect
its adoption and use, and therefore our business. For example, developing, testing and deploying third-party AI systems
and services may increase our costs, which could adversely affect our business and operating results. Our business may
be disrupted if any of the third-party AI systems and services we use become unavailable due to extended outages or
interruptions or because they are no longer available on commercially reasonable terms or prices. Further, market
demand and acceptance of AI technologies are uncertain. Potential litigation or government regulation related to AI may
also increase the burden and cost of research and development in this area, subjecting us to reputational harm,
competitive harm or legal liability. In addition, our employees use generative AI tools throughout the business. Among
other pitfalls, such tools may inadvertently generate or reveal confidential information, or may produce responses that
are erroneous, biased, inaccurate, illegal or unethical. Failure to address perceived or actual technical, legal, compliance,
privacy, security, ethical or other issues relating to the use of AI by us or others in our industry could adversely affect our
business and operating results.
Terrorist activity, acts of war and political instability around the world could adversely impact our business.
Terrorist attacks, acts of war and other hostilities, political instability, and the national and international responses to
the same, have created many economic and political uncertainties and could adversely affect our business and results of
operations in ways that we cannot presently predict. Such events could adversely affect global and regional economies
and financial markets in general, which could result in an economic downturn that could adversely affect our operations
and ability to finance our operations. Given the uncertainties relating to the Israel-Hamas war and the related Houthi
attacks on commercial shipping vessels in the Red Sea and Suez Canal, and Russia's invasion of Ukraine and the
international response to these conflicts, including the duration or expansion of the conflicts, we cannot predict the
impact that either of these conflicts may have on our future business. U.S. and foreign government-imposed sanctions
and export restrictions, as well as escalating hostilities that threaten transportation routes, could adversely affect our
business partners, suppliers or customers located in or doing business with Russia or in the Middle East, including as the
result of supply disruptions or inability to ship or collect payments for their products. These impacts on our business
partners, suppliers and customers, in turn, could negatively affect demand for our products and services and increase
our operating costs, which could have a material adverse effect on our business, results of operations, cash flows,
financial condition and prospects. In some cases, we are not insured for losses and interruptions caused by terrorist acts
and acts of war.
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Risks Related to Regulatory Matters
We are subject to substantial regulation, and unfavorable changes to, or our failure to comply with, these regulations
could substantially harm our business and operating results.
Our materials, and the purchasers of our materials, are regulated under international, federal, state and local laws,
including export control laws. We expect to incur significant costs in complying with these regulations. Regulations related
to our Company and the battery and EV industries and alternative energy are currently evolving and we face risks
associated with changes to these regulations, particularly in light of the recent government changes and election results
in the U.S.
To the extent the laws change, our materials and equipment may not comply with applicable international, federal, state
or local laws, which would have an adverse effect on our business. Compliance with changing regulations could be
burdensome, time consuming, and expensive. To the extent compliance with new regulations is cost prohibitive, our
business, prospects, financial condition and operating results would be adversely affected.
Internationally, there may be laws in jurisdictions we have not yet entered or laws we are unaware of in jurisdictions we
have entered that may restrict our sales or other business practices. The laws in this area can be complex and difficult to
interpret and may change over time. Continued regulatory limitations and other obstacles that may interfere with our
ability to commercialize our materials and equipment could have a negative and material impact on our business,
prospects, financial condition and results of operations.
We are subject to environmental, health and safety requirements which could adversely affect our business, results of
operation and reputation.
Our facilities and operations are subject to numerous environmental, health and safety (“EHS”) laws and regulations,
which require significant capital investment on an ongoing basis. These laws and regulations regulate, among other things,
the discharge of materials into the environment, air emissions, the handling and disposal of wastes, remediation of
contaminated sites and other matters relating to worker and consumer health and safety, and to the protection of the
environment. Non-compliance with applicable EHS laws could give rise to liability, including the potential for civil or
criminal fines or penalties, unforeseen capital expenditures or other legal liability. In addition, EHS laws or their
enforcement may change or become more stringent over time, which could increase our operating costs, subject us to
additional liabilities and cause delays in our processes. We may also face liability for the remediation of contaminated
sites, including at third-party contaminated sites where we or our predecessors in interest have sent waste for treatment
or disposal. Remediation liability may be imposed without regard to whether we knew of, or caused, the release of such
regulated substances. In addition, under environmental laws, we may be liable for the entire cost to remediate a
contaminated site, even where multiple parties contributed to the contamination.
In addition, our supply-chain and manufacturing processes rely on the use of fossil fuels for product materials and energy
consumption. Changes in rules and regulations (e.g., greenhouse gas regulations, air emission compliance requirements)
applicable to us or entities in our supply chain or stricter scrutiny of our sustainability performance by various stakeholders
could require us to make changes to our operations, which could increase our operating costs, cause delays or otherwise
have an adverse impact on our business.
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We are subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar
laws, and non-compliance with such laws can subject us to administrative, civil and criminal fines and penalties,
collateral consequences, remedial measures and legal expenses, all of which could adversely affect our business, results
of operations, financial condition and reputation.
We are subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws
and regulations in various jurisdictions in which we conduct or in the future may conduct activities, including the U.S.
Foreign Corrupt Practices Act (“FCPA”), the U.K. Bribery Act 2010, the Australian Criminal Code Act 1995 (“Criminal Code”),
the Australian Anti-Money Laundering and Counter Terrorism Financing Act 2006, and other anti-corruption laws and
regulations. The FCPA, the U.K. Bribery Act 2010, and the Criminal Code prohibit us and our officers, directors, employees
and business partners acting on our behalf, including agents, from corruptly offering, promising, authorizing or providing
anything of value, or providing benefit to a “foreign official”, or (under the Criminal Code) another person with the
intention this will benefit a “foreign public official”, for the purposes of influencing official decisions or obtaining or
retaining business or otherwise obtaining favorable treatment. The FCPA also requires companies to make and keep
books, records and accounts that accurately reflect transactions and dispositions of assets and to maintain a system of
adequate internal accounting controls. The U.K. Bribery Act also prohibits non-governmental “commercial” bribery and
soliciting or accepting bribes. Our policies and procedures that are designed to comply with these laws may not be
sufficient and our directors, officers, employees, representatives, consultants, agents, and business partners could engage
in improper conduct for which we may be held responsible.
Non-compliance with anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar
laws could subject us to whistleblower complaints, adverse media coverage, investigations, and severe administrative,
civil and criminal sanctions, collateral consequences, remedial measures and legal expenses, all of which could materially
and adversely affect our business, results of operations, financial condition and reputation. In addition, changes in these
laws in the future could adversely impact our business. See also Item 3. Key Information — D. Risk Factors ("Any global
political, economic and financial crisis (as well as the indirect effects flowing therefrom) could negatively affect our
business, results of operations, and financial condition.”).
Risks Relating to Intellectual Property
Our success depends upon our ability to obtain and maintain intellectual property protection for our materials and
technologies.
Our success will depend in significant part on our ability to establish and maintain adequate protection of our owned
intellectual property, and the ability to commercialize materials and equipment resulting therefrom, without infringing
the intellectual property rights of others. We rely upon a combination of the intellectual property protections afforded by
patent, trade secret and other intellectual property laws in the United States, Canada, and other jurisdictions, as well as
license agreements and other contractual protections, to establish, maintain and enforce rights in our proprietary
technologies, such as our cathode technology.
In addition to patent protection, we rely substantially on trade secrets, including unpatented know-how, technology and
other proprietary materials and information, to maintain our competitive position. We seek to protect our intellectual
property, in part, by requiring employees and consultants to waive or assign their intellectual property rights to us and by
protecting our trade secrets by entering into confidentiality or non-disclosure agreements with our employees,
consultants, business partners and other third parties. While it is our policy to enter into such agreements, these steps
may be inadequate as we may fail to enter into agreements with all necessary parties, the waivers or assignments of
intellectual property rights may not be self-executing or any of these parties may breach the agreements, and there may
be no adequate remedy available for such breach of an agreement. We may be forced to bring claims against third parties,
or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual
property. Such claims could harm our business, financial condition, results of operations and prospects.
Despite our efforts to protect our proprietary rights, third parties may nevertheless attempt to copy or otherwise obtain
and use our intellectual property. Monitoring unauthorized use of our intellectual property is difficult and costly, and the
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steps we have taken or will take to prevent infringement, misappropriation, or violation of our intellectual property rights
may not be sufficient. Enforcing a claim that a party infringed intellectual property or misappropriated a trade secret is
difficult, expensive and time consuming, and the outcome is unpredictable. In addition, some courts both within and
outside the United States may be less willing, or unwilling, to protect trade secrets or other intellectual property.
Moreover, if a competitor lawfully obtained, reverse engineered or independently developed any technology or
information that we protect as trade secret, we would have no right to prevent such competitor from using that
technology or information to compete with us, which could harm our competitive position. Our inability to prevent
unauthorized use of our intellectual property could harm our business and competitive position.
Furthermore, our owned and in-licensed intellectual property rights may be subject to a reservation of rights by one or
more third parties. In some instances, when new technologies are developed with government funding (and in particular,
the U.S. government), the government may obtain certain rights in any resulting patents, including a non-exclusive license
authorizing the government to use the invention or to have others use the invention on its behalf. These rights may permit
the government to disclose our confidential information to third parties and to exercise march-in rights to use or allow
third parties to use our licensed technology. For example, the United States federal government retains such rights in
inventions produced with its financial assistance under the Bayh-Dole Act. The government can exercise its march-in rights
if it determines that action is necessary because we fail to achieve practical application of the government-funded
technology, because action is necessary to alleviate health or safety needs, to meet requirements of federal regulations,
or to give preference to U.S. industry. Further, the Draft Interagency Guidance Framework for Considering the Exercise of
March-In Rights released by the U.S. Department of Commerce’s National Institute of Standards and Technology on
December 7, 2023 proposes to expand the U.S. government’s “march-in” authority under the Bayh-Dole Act. In November
2023, we reached agreement on the terms of a grant from the MESC Office of the DOE and we have begun to use those
funds to purchase equipment and facility infrastructure to expand Riverside’s production capacity to 20,000 tonnes per
annum. As a result of these laws and the U.S. Competitiveness Provisions that are part of the terms of our grant, our rights
in certain inventions may be subject to certain requirements to manufacture products embodying such inventions in the
United States. An exercise by the government of such rights or by any third party of its reserved rights could harm our
competitive position, business, financial condition, results of operations and prospects.
Termination of our collaborative research agreement with Dalhousie University to support the development of current
and future technology would likely harm our business, and even if it continues, it may not help us successfully develop
any new intellectual property.
In February 2021, we entered into a five-year collaborative research agreement with the Research Group of Dr. Mark
Obrovac at Dalhousie University (“Dalhousie”) to develop new battery technologies. The agreement may be terminated
at will by either party upon 90 days’ notice, subject to certain conditions. If Dalhousie elects to terminate this agreement,
our ability to continue to develop our technologies could be adversely impacted.
In addition, as of the date of this annual report, most of our patent portfolio has been developed, or includes technology
developed, through our collaboration with Dalhousie. Although this collaboration has been historically successful in new
intellectual property generation, there can be no assurance that it will be successful in future efforts to develop any new
intellectual property. Moreover, while we have the first right to file patent applications based on intellectual property
generated under our agreement with Dalhousie, and we would be the sole owner of any such patent and the intellectual
property incorporated therein, there can be no guarantee that we will successfully commercialize any such patents or
developed intellectual property. Disputes may arise between us and the other parties to this and related agreements
regarding intellectual property, including with respect to: the scope of rights granted under, and ownership of the
intellectual property resulting from, the agreements and other interpretation-related issues; the amount and timing of
payments; the rights and obligations of the parties under the agreements; and the use of intellectual property by each of
the parties.
Any disputes with Dalhousie may prevent or impair our ability to maintain our current collaboration arrangement. We
benefit from the intellectual property development assistance from Dalhousie to develop, manufacture, expand, and
accelerate our materials and technology. We cannot assure you that we will be able to continue to obtain the benefits
27
granted to us under these agreements. Termination of the collaboration with Dr. Obrovac’s Research Group at Dalhousie
could result in the loss of important rights and would likely harm our ability to further develop our technology.
We may be subject to claims by third parties asserting misappropriation of intellectual property, or claiming ownership
of what we regard as our own intellectual property.
We cannot guarantee that the technology and processes related to our materials and equipment, or our
commercialization thereof, do not and will not infringe or otherwise violate any third party’s intellectual property.
Companies, organizations or individuals, including our current and future competitors, may hold or obtain patents,
trademarks or other proprietary rights that would prevent, limit or interfere with our ability to make, use, develop or sell
our products or processes, which could make it more difficult for us to operate our business. From time to time, we may
receive inquiries from holders of such proprietary rights inquiring whether we are infringing or violating their proprietary
rights and/or seek court declarations that they do not infringe upon, misappropriate or otherwise violate our intellectual
property rights or challenging our ownership or the validity or enforceability of our intellectual property rights. Although
we seek to ensure that our employees do not use the proprietary information or know-how of others in their work for us,
we may also be subject to claims that we or these employees have used or disclosed confidential information or
intellectual property, including trade secrets or other proprietary information, of any such employee’s former employer,
or that third parties have an interest in our patents as an inventor or co-inventor. Companies holding patents or other
intellectual property rights relating to batteries, electric motors or electronic power management systems may bring suits
alleging misappropriation, infringement or violation of such rights or otherwise asserting their rights and seeking licenses.
In addition, if we or any of our commercialization partners are determined to have misappropriated, infringed upon or
violated a third party’s intellectual property rights and we were unable to successfully challenge the validity or
enforceability of such rights, we or our commercialization partners may be required to do one or more of the following:
•
cease selling, incorporating or using products or processes that incorporate or use the challenged intellectual
property;
•
pay substantial damages or other monetary compensation, including treble damages and attorneys’ fees in the
case of willful patent infringement;
•
obtain a license from the holder of the infringed or violated intellectual property right, which license may not
be available on reasonable terms or which license could be non-exclusive (thereby giving our competitors and
other third parties access to the same technologies licensed to us) or could require substantial licensing and
royalty payments; or
•
redesign our batteries or other products or processes material to our business in order to avoid infringement
or other violation.
Any of the foregoing would harm our business, prospects, financial condition and operating results. In addition, any
litigation or claims, whether or not valid, could result in substantial costs and diversion of resources and management’s
attention.
We also license patents and other intellectual property from third parties, and we may face claims that our use of this
intellectual property infringes the rights of others. In such cases, we may seek indemnification from our licensors under
our license contracts with them. However, our rights to indemnification may be unavailable or insufficient to cover our
costs and losses or otherwise provide us with the continued rights to use such licensed intellectual property.
Our patent applications may not result in issued patents or our patent rights may be contested, circumvented,
invalidated or limited in scope, any of which could have a material adverse effect on our ability to prevent others from
interfering with our commercialization of our products.
We have rights to five issued patents and 19 active families of patent applications. We intend to continue to apply for
patents with claims covering our technologies and processes, including our patent-pending all-dry, zero-waste cathode
synthesis technology and any innovations resulting from such process, when and where we deem it appropriate to do so.
We have filed patent applications in the United States, Canada and in certain non-U.S. jurisdictions to obtain patent rights
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to inventions we have developed, with claims directed to compositions of matter, methods of use and other technologies
relating to our programs, including battery applications. There can be no assurance that any of these applications will
result in patents being issued. Conversely, we may choose not to file a patent application in order to maintain certain
trade secrets or know-how, and a third party may subsequently file a patent covering such trade secrets or know-how. In
addition, there can be no assurance that any of our current and future patents will effectively protect our technologies
and processes or be sufficiently broad to effectively prevent others from commercializing competitive technologies,
processes and products. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and
patent applications in the United States and other jurisdictions are typically not published until 18 months after filing or
in some cases not at all. Therefore, we cannot be certain that we or our current or future collaborators were the first to
make the inventions claimed in our owned patent or pending patent applications, or that we or our current or future
collaborators were the first to file for patent protection of such inventions. For a description of our patent portfolio, see
Item 4. Information on the Company— B. Business Overview — Intellectual Property.
Any changes we make to our technologies or processes to cause them to have what we view as more advantageous
properties may not be covered by our existing patent and patent applications, and we may be required to file new
applications and/or seek other forms of protection for any such altered technologies or processes. The patent landscape
surrounding our underlying technology and processes is potentially crowded, and there can be no assurance that we
would be able to secure patent protection that would adequately cover an alternative to our current technologies or
processes.
The patent prosecution process is expensive and time-consuming, and we and our current or future collaborators may not
be able to prepare, file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely
manner. It is also possible that we or our current or future collaborators will fail to identify patentable aspects of inventions
made in the course of development and commercialization activities before it is too late to obtain patent protection for
them. Moreover, in some circumstances, we may not have the right to control the preparation, filing and prosecution of
patent applications, or to maintain or enforce the patents, covering technology that we license to third parties and may
be reliant on our current or future collaborators to perform these activities, which means that these patent applications
may not be prosecuted, and these patents enforced, in a manner consistent with the best interests of our business. If our
current or future collaborators fail to establish, maintain, protect or enforce such patents and other intellectual property
rights, such rights may be reduced or eliminated. If our current or future collaborators are not fully cooperative or disagree
with us as to the prosecution, maintenance or enforcement of any patent rights, such patent rights could be compromised.
Further, the issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our patents
may be invalidated, circumvented, narrowed or challenged in the courts or patent offices in the United States and abroad.
In recent years, these areas have been the subject of much litigation. As a result, the issuance, scope, validity,
enforceability and commercial value of our and our current or future collaborators’ patent rights are highly uncertain. The
legal protection afforded to inventors and owners of intellectual property in countries outside of the United States may
not be as protective or effective as that in the United States and we may, therefore, be unable to acquire and enforce
intellectual property rights outside the United States to the same extent as in the United States. In many non-U.S.
countries, patent applications and/or issued patents, or parts thereof, must be translated into the native language. If our
patent applications or issued patents are translated incorrectly, they may not adequately cover our technologies.
Furthermore, others may independently develop or commercialize similar or alternative technologies, or design around
our patents.
Filing, prosecuting, enforcing and defending patents in all countries throughout the world would be prohibitively
expensive, and our intellectual property rights in some countries outside the United States may be less extensive than
those in the United States. The requirements for patentability differ and certain countries have heightened requirements
for patentability, requiring more disclosure in the patent application. In addition, certain countries have compulsory
licensing laws under which a patent owner may be compelled to grant licenses to third parties. In those countries, we may
have limited remedies if patents are infringed or if we are compelled to grant a license to a third party, which could
materially diminish the value of those patents and limit our potential revenue opportunities. In addition, many countries
limit the enforceability of patents against government agencies or government contractors. In these countries, the patent
29
owner may have limited remedies, which could materially diminish the value of such patent. Competitors may use
technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further,
may export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong
as that in the United States. Accordingly, our efforts to enforce intellectual property rights around the world may be
inadequate to obtain a significant commercial advantage from the intellectual property that we own or license.
Changes in patent law could diminish the value of patents in general, thereby impairing our ability to protect our
technologies and processes.
Our success is dependent on intellectual property rights, including patents. Obtaining and enforcing patents involves
technological and legal complexity, and obtaining and enforcing patents is costly, time-consuming and inherently
uncertain. The U.S. Supreme Court in recent years has issued rulings either narrowing the scope of patent protection
available in certain circumstances or weakening the rights of patent owners in certain situations or ruling that certain
subject matter is not eligible for patent protection. In addition to increasing uncertainty with regard to our ability to obtain
patents in the future, this combination of events has created uncertainty with respect to the value of patents, once
obtained. Depending on decisions by Congress, the federal courts, the USPTO and equivalent bodies in non-U.S.
jurisdictions, the laws and regulations governing patents could change in unpredictable ways that would weaken our
ability to obtain new patents or to enforce our existing patent and patents we may obtain in the future.
Patent reform laws, such as the Leahy-Smith America Invents Act, as well as changes in how patent laws are interpreted,
could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement
or defense of our issued patents.
We may be unable to obtain intellectual property rights or technology necessary to develop and commercialize our
materials and equipment.
The patent landscape around our programs is complex, and there may be one or more third-party patents and patent
applications containing subject matter that might be relevant to our programs. Depending on what claims may ultimately
issue from these patent applications, and how courts construe the issued patent claims, as well as depending on the
ultimate method of use of our processes, we may need to obtain a license to practice the technology claimed in such
patents. There can be no assurance that such licenses will be available to us on commercially reasonable terms, or at all.
If a third party does not offer us a necessary license or offers a license only on terms that are unattractive or unacceptable
to us, we might be unable to develop and commercialize one or more of our programs, which would harm our business,
financial condition and results of operations. Moreover, even if we obtain licenses to such intellectual property, but
subsequently fail to meet our obligations under the relevant license agreements, or such license agreements are
terminated for any other reasons, we may lose our rights to the technologies licensed under those agreements.
The licensing or acquisition of third-party intellectual property rights is an area in which many companies operate that
have interests that are in conflict with ours, and several more established companies may pursue strategies to license or
acquire third-party intellectual property rights that we may consider attractive or necessary. These established companies
may have a competitive advantage over us due to their size, capital resources and greater commercialization capabilities.
In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. If we are
unable to successfully obtain rights to required third-party intellectual property rights or maintain the existing intellectual
property rights we have, we may have to abandon development of the relevant programs, which could harm our business,
financial condition, results of operations and prospects.
We may become involved in lawsuits or other proceedings to protect or enforce our intellectual property, which could
be expensive, time-consuming and unsuccessful and have a negative effect on the success of our business.
Third parties may infringe our patents or misappropriate or otherwise violate our intellectual property rights. In the future,
we may initiate legal proceedings to enforce or defend our intellectual property rights, to protect our trade secrets or to
determine the validity or scope of intellectual property rights we own or control. Also, third parties may initiate legal
proceedings or counterclaims against us to challenge the validity or scope of intellectual property rights we own, control
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or to which we have rights. These proceedings can be expensive and time-consuming and many of our adversaries in these
proceedings may have the ability to dedicate substantially greater resources to prosecuting these legal actions than we
can. Accordingly, despite our efforts, we may not be able to prevent third parties from infringing upon or misappropriating
intellectual property rights we own, control or have rights to, particularly in countries where the laws may not protect
those rights as fully as in the United States. Litigation could result in substantial costs and diversion of management
resources, which could harm our business and financial results. An adverse result in any litigation proceeding could put
one or more of our patents at risk of being invalidated, narrowed, held unenforceable or interpreted in such a manner
that would not preclude third parties from entering the market with competing products.
Third-party pre-issuance submission to the USPTO, or opposition, derivation, revocation, reexamination, inter partes
review or interference proceedings, or other pre-issuance or post-grant proceedings or other patent office proceedings
or litigation in the United States or other jurisdictions provoked by third parties or brought by us, may be necessary to
determine the inventorship, priority, patentability or validity of inventions with respect to our patents or patent
applications. An unfavorable outcome could leave our technology or processes without patent protection, allow third
parties to commercialize our technology and processes and compete directly with us, without payment to us, or could
require us to obtain license rights from the prevailing party in order to be able to manufacture or commercialize our
technologies or processes without infringing third-party patent rights. Our business could be harmed if the prevailing party
in such a case does not offer us a license on commercially reasonable terms, or at all. Even if we obtain a license, it may
be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. In addition, if the breadth
or strength of protection provided by our patents and patent applications is threatened, it could dissuade companies from
collaborating with us to license, develop or commercialize current or future technologies.
We may not be aware of all third-party intellectual property rights potentially relating to our technologies or processes,
or future technologies or processes, including patents or pending or future patent applications that, if issued, would block
us from commercializing our materials and equipment. As to pending third-party applications, we cannot predict with any
certainty which claims will issue, if any, or the scope of such issued claims. Even if we believe third-party intellectual
property claims are without merit, a court of competent jurisdiction could hold that these third-party patents are valid,
enforceable and infringed, which could materially and negatively affect our ability to commercialize any materials and
equipment and any other technologies covered by the asserted third-party patents.
Risks Related to the ADSs
An active U.S. trading market may not be sustained.
While our ordinary shares have been listed on the Australian Securities Exchange, or the ASX, since December 2015, and
trading on the OTCQX Best Market from September 2020 until December 2023, there was no public market on a U.S.
national securities exchange for our ordinary shares until we listed our ADSs on Nasdaq in January 2022. There can be no
assurance that an active trading market for the ADSs will be sustained. In the absence of an active trading market for the
ADSs, investors may not be able to sell their ADSs.
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The trading price and volume of the ADSs may be volatile, and purchasers of the ADSs could incur substantial losses.
The price and trading volumes of our ordinary shares and ADSs may be significantly affected by many factors, including:
•
actual or anticipated fluctuations in our or our competitors’ financial condition and operating results;
•
variations in our financial performance from the expectations of market analysts;
•
actual or anticipated changes in our growth rate relative to our competitors;
•
competition from existing products or new products that may emerge;
•
announcements by us or our competitors of significant business developments, acquisitions or expansion plans,
strategic partnerships, joint ventures, collaborations or capital commitments;
•
adverse results or delays in our or any of our competitors’ products development;
•
adverse regulatory decisions;
•
the termination of a strategic alliance or the inability to establish additional strategic alliances;
•
failure to meet or exceed financial estimates and projections of the investment community or that we provide
to the public;
•
ADS price and volume fluctuations attributable to inconsistent trading volume levels of the ADSs;
•
price and volume fluctuations in trading of our ordinary shares on the ASX;
•
short selling or other market manipulation activities;
•
additions or departures of key management, or scientific or technology personnel;
•
disruptions in our supply or manufacturing arrangements;
•
disputes or other developments related to proprietary rights, including patents, litigation matters and our
ability to obtain patent and other intellectual property protection for our technologies;
•
litigation involving our company;
•
announcement or expectation of additional debt or equity financing efforts;
•
natural disasters or other calamities or disease outbreaks;
•
sales of ordinary shares or the ADSs by us, our affiliates or our other shareholders; and
•
general economic and market conditions.
In addition, equity markets generally have experienced, and may in the future experience, extreme price and volume
fluctuations, and often these movements do not reflect the operational and financial performance of the listed companies
concerned. In particular, share prices of companies in the battery industry have been highly volatile in the past and may
continue to be highly volatile in the future. Our operations currently focus on battery materials, technology and services.
Therefore, we are especially vulnerable to these factors to the extent that they continue to affect the battery industry.
Fluctuations in the share markets in Australia and the United States, as well as macroeconomic conditions, could
significantly affect the price of the ADSs. As a result of this volatility, investors may not be able to sell their ADSs at or
above the price originally paid for the security.
These and other market and industry factors may cause the market price and demand for the ADSs to fluctuate, regardless
of our actual operating performance, which may limit or prevent investors from readily selling their ADSs and may
otherwise negatively affect the liquidity of the trading market for the ADSs.
Future sales of our ordinary shares or ADSs or the anticipation of future sales could reduce the market price of our
ordinary shares or ADSs.
Sales of a substantial number of shares or ADSs in the public market, or the perception that such sales could occur, could
adversely affect the market price of our ordinary shares and the ADSs and may make it more difficult for you to sell your
ADSs at a time and price that you deem appropriate. We have recently raised funds through the sales of our ordinary
shares. For instance, in addition to placements of our ordinary shares in March, May, and September 2021, in June 2023,
we issued unsecured convertible notes to LGES that are currently convertible into up to 28,263,492 ordinary shares, in
November 2024 we issued approximately 74.1 million ordinary shares in a fully underwritten institutional placement, and
in January 2025 we issued approximately 68.6 million ordinary shares to eligible shareholders pursuant to a share purchase
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plan and approximately 12.8 million ordinary shares to Phillips 66 in a conditional placement that was approved by
shareholders. See Item 7. Major Shareholders and Related Party Transactions, and Item 10.C – Material Contracts.
The ordinary shares subject to subscription under outstanding options and performance rights exercisable for ordinary
shares could become eligible for sale in the public market in the future, subject to certain legal and contractual limitations.
Sales of a large number of ordinary shares in the public market could depress the market price of the ADSs. If these
additional ordinary shares are sold, or if it is perceived that they will be sold, in the public market, the trading price of the
ordinary shares and ADSs could decline substantially, which could impair our ability to raise additional capital through the
issuance of ordinary shares, ADSs or other securities in the future, and may cause you to lose part or all of your investment.
If securities or industry analysts do not publish research or reports about our business, or publish inaccurate or
unfavorable reports about our business, the price of the ADSs and their trading volume could decline.
The trading market for the ADSs depends in part on the research and reports that securities or industry analysts publish
about us or our business. If additional securities or industry analysts do not cover our Company, the trading price for the
ADSs could be negatively impacted. If one or more of the analysts who covers us downgrades our equity securities or
publishes incorrect or unfavorable research about our business, the price of the ADSs would likely decline. If one or more
of these analysts ceases coverage of our company or fails to publish reports on us regularly, or downgrades our securities,
demand for the ADSs could decrease, which could cause the price of the ADSs or their trading volume to decline.
We do not currently intend to pay dividends on our securities and, consequently, your ability to achieve a return on your
investment will depend on appreciation in the price of the ADSs.
We have not declared or paid any cash dividends on our ordinary shares since our listing on the ASX and do not currently
intend to do so for the foreseeable future.
We currently intend to invest our future earnings, if any, to fund our operations and growth. Therefore, you are not likely
to receive any dividends on your ADSs for the foreseeable future and the success of an investment in the ADSs will depend
upon any future appreciation in its value. Consequently, investors may need to sell all or part of their holdings of the ADSs
after price appreciation, which may never occur, as the only way to realize any future gains on their investment. There is
no guarantee that the ADSs will appreciate in value or even maintain the price at which you have purchased them.
Investors seeking cash dividends should consider not purchasing the ADSs.
While we do not anticipate paying any cash dividends on our ordinary shares in the foreseeable future, if such a dividend
is declared, the depositary for the ADSs has agreed to pay to you the cash dividends or other distributions it or the
custodian receives on our ordinary shares or other deposited securities after deducting its fees and expenses. You will
receive these distributions in proportion to the number of our ordinary shares your ADSs represent. However, in
accordance with the limitations set forth in the deposit agreement, it may be unlawful or impractical to make a distribution
available to holders of ADSs. We have no obligation to take any other action to permit the distribution of the ADSs,
ordinary shares, rights or anything else to holders of the ADSs. This means that you may not receive the distributions we
make on our ordinary shares or any value from them if it is unlawful or impractical to make them available to you. These
restrictions may negatively impact the value of your ADSs. In addition, exchange rate fluctuations may affect the amount
of Australian dollars that we are able to distribute, and the amount in U.S. dollars that our shareholders receive upon the
payment of cash dividends or other distributions we declare and pay in Australian dollars, if any. These factors could harm
the value of the ADSs, and, in turn, the U.S. dollar proceeds that holders receive from the sale of the ADSs.
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The dual listing of our ordinary shares and the ADSs may negatively impact the liquidity and value of the ADSs.
Since the listing of the ADSs on Nasdaq, our ordinary shares have continued to be listed on the ASX. We cannot predict
the effect of this dual listing on the value of our ordinary shares and ADSs. However, the dual listing of our ordinary shares
and the ADSs may dilute the liquidity of these securities in one or both markets and may negatively impact the
development of an active trading market for the ADSs in the United States. The price of the ADSs could also be negatively
impacted by trading in our ordinary shares on the ASX.
U.S. investors may have difficulty enforcing civil liabilities against our company, our directors or members of senior
management and the experts named in this annual report.
Certain members of our senior management and Board of Directors named in this annual report are non-residents of the
United States, and a substantial portion of the assets of such persons are located outside the United States. As a result, it
may be impracticable to serve process on such persons in the United States or to enforce judgments obtained in U.S.
courts against them based on civil liability provisions of the securities laws of the United States. Even if you are successful
in bringing such an action, there is doubt as to whether Australian courts would enforce certain civil liabilities under U.S.
securities laws in original actions or judgments of U.S. courts based upon these civil liability provisions. In addition, awards
of punitive damages in actions brought in the United States or elsewhere may be unenforceable in Australia or elsewhere
outside the United States. An award for monetary damages under U.S. securities laws would be considered punitive if it
does not seek to compensate the claimant for loss or damage suffered and is intended to punish the defendant. The
enforceability of any judgment in Australia will depend on the particular facts of the case as well as the laws and treaties
in effect at the time. The United States and Australia do not currently have a treaty or statute providing for recognition
and enforcement of the judgments of the other country (other than arbitration awards) in civil and commercial matters.
As a result, our public shareholders may have more difficulty in protecting their interests through actions against us, our
management or our directors than would shareholders of a corporation incorporated in a jurisdiction in the United States.
In addition, as a company incorporated in Australia, the provisions of the Corporations Act 2001 (Cth), or the "Corporations
Act," regulate the circumstances in which shareholder derivative actions may be commenced, which may be different, and
in many ways less permissive, than for companies incorporated in the United States.
Australian takeover laws may discourage takeover offers being made for us or may discourage the acquisition of a
significant position in our ordinary shares or ADSs.
We are incorporated in Australia and are subject to the takeover laws of Australia. Subject to a range of exceptions, the
takeover provisions in the Corporations Act prohibit the acquisition of a direct or indirect interest in our issued voting
shares if the acquisition of that interest will lead to a person’s voting power in us increasing from 20% or below to more
than 20%, or increasing from a starting point that is above 20% and below 90%. Australian takeover laws may discourage
takeover offers being made for us or may discourage the acquisition of a significant position in our ordinary shares. This
may have the ancillary effect of entrenching our Board of Directors and may deprive or limit our shareholders’ opportunity
to sell their ordinary shares.
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Our Constitution and Australian laws and regulations applicable to us may differ from those which apply to a U.S.
corporation.
As an Australian company we are subject to different corporate requirements than a corporation organized under the
laws of the United States. Our Constitution, as well as the Corporations Act, sets forth various rights and obligations that
apply to us as an Australian company and which may not apply to a U.S. corporation. These requirements may operate
differently than those which apply to many U.S. companies. You should carefully review the summary of these matters
set forth under “Description of Securities Registered Under Section 12 of the Exchange Act," as well as our Constitution,
which are included as exhibits to this annual report, prior to investing in our securities.
Holders of ADSs will not be directly holding our ordinary shares.
A holder of ADSs will not be treated as one of our shareholders and will not have direct shareholder rights, unless they
surrender the ADSs to receive the ordinary shares underlying their ADSs in accordance with the deposit agreement and
applicable laws and regulations. Our Constitution and Australian law govern our shareholder rights. The depositary,
through the custodian or the custodian’s nominee, will be the holder of the ordinary shares underlying ADSs. The deposit
agreement among us, the depositary and holders of ADSs, and all other persons directly and indirectly holding ADSs, sets
out ADS holder rights, as well as the rights and obligations of us and the depositary. See Item 12. Description of Securities
Other Than Equity Securities – American Depositary Shares.
Your right as a holder of ADSs to participate in any future preferential subscription rights offering or to elect to receive
dividends in ordinary shares may be limited, which may cause dilution to your holdings.
The deposit agreement provides that the depositary will not make rights available to you unless the distribution to ADS
holders of both the rights and any related securities are either registered under the Securities Act of 1933, as amended
(the "Securities Act"), or exempted from registration under the Securities Act. If we offer holders of our ordinary shares
the option to receive dividends in either cash or shares, under the deposit agreement the depositary may require
satisfactory assurances from us that extending the offer to holders of ADSs does not require registration of any securities
under the Securities Act before making the option available to holders of ADSs. We are under no obligation to file a
registration statement with respect to any such rights or securities or to endeavor to cause such a registration statement
to be declared effective. Moreover, we may not be able to establish an exemption from registration under the Securities
Act. Accordingly, ADS holders may be unable to participate in our rights offerings or to elect to receive dividends in shares
and may experience dilution in their holdings. In addition, if the depositary is unable to sell rights that are not exercised
or not distributed or if the sale is not lawful or reasonably practicable, it will allow the rights to lapse, in which case you
will receive no value for these rights. Under the terms of our subscription agreement with Phillips 66, Phillips 66 also has
certain rights to be notified of, and participate in, issuance of shares by the Company, which opportunities may not be
available to you or other holders of ADSs.
You may not be able to exercise your right to vote the ordinary shares underlying your ADSs.
Holders of ADSs may exercise voting rights with respect to the ordinary shares represented by the ADSs only in accordance
with the provisions of the deposit agreement. The deposit agreement provides that, upon receipt of notice of any meeting
of holders of our ordinary shares, the depositary will fix a record date for the determination of ADS holders who shall be
entitled to give instructions for the exercise of voting rights. Upon timely receipt of notice from us, if we so request, the
depositary shall distribute to the holders as of the record date (i) the notice of the meeting or solicitation of consent or
proxy sent by us and (ii) a statement as to the manner in which instructions may be given by the holders.
You may instruct the depositary to vote the ordinary shares underlying your ADSs. Otherwise, you will not be able to
exercise your right to vote, unless you withdraw the ordinary shares underlying the ADSs you hold. However, you may not
know about the meeting far enough in advance to withdraw those ordinary shares in time to vote them yourself. If we ask
for your instructions, the depositary, upon timely notice from us, will notify you of the upcoming vote and arrange to
deliver our voting materials to you and will try to vote ordinary shares as you instruct. We cannot guarantee that you will
35
receive the voting materials in time to ensure that you can instruct the depositary to vote your ordinary shares or to
withdraw your ordinary shares so that you can vote them yourself.
Under our Constitution, any resolution to be considered at a meeting of the shareholders shall be decided on a show of
hands unless a poll is demanded in accordance with the terms of our Constitution. A poll may be demanded before a vote
is taken, or, in the case of a vote taken on a show of hands, immediately before or immediately after, the declaration of
the result of the show of hands. Under voting by a show of hands, the depositary will vote (or cause the custodian to vote)
all ordinary shares held on deposit at that time in accordance with the voting instructions received from a majority of
holders of ADSs who provide timely voting instructions.
You may be subject to limitations on the transfer of your ADSs and the withdrawal of the underlying ordinary shares.
Your ADSs are transferable on the books of the depositary. However, the depositary may close its books at any time or
from time to time when it deems expedient in connection with the performance of its duties. The depositary may refuse
to deliver, transfer or register transfers of your ADSs generally when our books or the books of the depositary are closed,
or at any time if we or the depositary think it is advisable to do so because of any requirement of law, government or
governmental body, or under any provision of the deposit agreement, or for any other reason subject to your right to
surrender your ADSs and receive the underlying ordinary shares. Temporary delays in the surrendering of your ADSs and
receipt of the underlying ordinary shares may arise because the depositary has closed its transfer books or we have closed
our transfer books, the transfer of ordinary shares is blocked to permit voting at a shareholders’ meeting or we are paying
a dividend on our ordinary shares. In addition, you may not be able to surrender your ADSs and receive the underlying
ordinary shares when you owe money for fees, taxes and similar charges and when it is necessary to prohibit withdrawals
in order to comply with any laws or governmental regulations that apply to ADSs or to the withdrawal of ordinary shares
or other deposited securities. See Item 12. Description of Securities Other Than Equity Securities – American Depositary
Shares.
ADS holders’ rights to pursue claims are limited by the terms of the deposit agreement.
The deposit agreement provides that holders and beneficial owners of ADSs, including those holders and owners who
acquired ADSs in secondary transactions, irrevocably waive the right to a trial by jury in any legal proceeding arising out
of or relating to the deposit agreement or the ADSs, including in respect of claims under U.S. federal securities laws, against
us or the depositary to the fullest extent permitted by applicable law. If this jury trial waiver provision is prohibited by
applicable law, an action could nevertheless proceed under the terms of the deposit agreement with a jury trial. To our
knowledge, the enforceability of a jury trial waiver under the U.S. federal securities laws has not been finally adjudicated
by a federal court. However, we believe that a jury trial waiver provision is generally enforceable under the laws of the
State of New York, which govern the deposit agreement, by a court of the State of New York or a federal court, which have
non-exclusive jurisdiction over matters arising under the deposit agreement, applying such law. In determining whether
to enforce a jury trial waiver provision, New York courts and federal courts will consider whether the visibility of the jury
trial waiver provision within the agreement is sufficiently prominent such that a party has knowingly waived any right to
trial by jury. We believe that this is the case with respect to the deposit agreement and the ADSs. In addition, New York
courts will not enforce a jury trial waiver provision in order to bar a viable setoff or counterclaim sounding in fraud or one
which is based upon a creditor’s negligence in failing to liquidate collateral upon a guarantor’s demand, or in the case of
an intentional tort claim (as opposed to a contract dispute), none of which we believe are applicable in the case of the
deposit agreement or the ADSs.
No condition, stipulation or provision of the deposit agreement or ADSs serves as a waiver by any holder or beneficial
owner of ADSs or by us or the depositary of compliance with any provision of the applicable U.S. federal securities laws.
If you or any other holder or beneficial owner of ADSs brings a claim against us or the depositary in connection with such
matters, you or such other holder or beneficial owner may not be entitled to a jury trial with respect to such claims, which
may have the effect of limiting and discouraging lawsuits against us and/or the depositary. If a lawsuit is brought against
us and/or the depositary under the deposit agreement, it may be heard only by a judge or justice of the applicable trial
court, which would be conducted according to different civil procedures and may result in different outcomes than a trial
36
by jury would have had, including results that could be less favorable to the plaintiff(s) in any such action, depending on,
among other things, the nature of the claims, the judge or justice hearing such claims, and the venue of the hearing.
As the jury trial waiver relates to claims arising out of or relating to the ADSs or the deposit agreement, we believe that
the waiver would likely continue to apply to ADS holders or beneficial owners who withdraw the ordinary shares from the
ADS facility with respect to claims arising before the cancellation of the ADSs and the withdrawal of the ordinary shares,
and the waiver would likely not apply to ADS holders or beneficial owners who subsequently withdraw the ordinary shares
represented by ADSs from the ADS facility with respect to claims arising after the withdrawal. However, to our knowledge,
there has been no case law on the applicability of the jury trial waiver to ADS holders or beneficial owners who withdraw
the ordinary shares represented by the ADSs from the ADS facility.
We and the depositary are entitled to amend the deposit agreement and to change the rights of ADS holders under the
terms of such agreement, and we may terminate the deposit agreement, without the prior consent of the ADS holders.
We and the depositary are entitled to amend the deposit agreement and to change the rights of the ADS holders under
the terms of such agreement, without the prior consent of the ADS holders. In the event that the terms of an amendment
are materially prejudicial to ADS holders’ substantial rights, ADS holders will only receive 30 days’ advance notice of the
amendment, and no prior consent of the ADS holders is required under the deposit agreement. Furthermore, we may
decide to terminate the ADS facility at any time for any reason, or the depositary agent may on its own initiative terminate
the deposit agreement. If the ADS facility will terminate, ADS holders will receive at least 30 days’ prior notice, but no
prior consent is required from them. Under the circumstances that we decide to make an amendment to the deposit
agreement that is materially prejudicial to the substantial rights of the ADS holders or terminate the deposit agreement,
the ADS holders may choose to sell their ADSs or surrender their ADSs and become direct holders of the underlying
ordinary shares, but will have no right to any compensation whatsoever.
ADS holders have limited recourse if we or the depositary fail to meet our respective obligations under the deposit
agreement.
The deposit agreement expressly limits our obligations and liability and those of the depositary. We and the depositary:
•
are only obligated to take the actions specifically set forth in the deposit agreement without negligence or bad
faith;
•
are not liable if we are or it is prevented or delayed by law or circumstances beyond our or its control from
performing our or its obligations under the deposit agreement;
•
are not liable if we exercise or it exercises discretion permitted under the deposit agreement;
•
are not liable for the inability of any holder of ADSs to benefit from any distribution on deposited securities
that is not made available to holders of ADSs under the terms of the deposit agreement, or for any
consequential or punitive damages for any breach of the terms of the deposit agreement; and
•
may rely upon any documents we believe or it believes in good faith to be genuine and to have been signed or
presented by the proper person.
These provisions of the deposit agreement limit the ability of holders of the ADSs to obtain recourse if we or the depositary
fail to meet our respective obligations under the deposit agreement.
As a foreign private issuer, we are exempt from a number of rules under the U.S. securities laws that apply to public
companies that are not foreign private issuers.
We are a foreign private issuer, as defined in the SEC’s rules and regulations and, consequently, we are not subject to all
of the disclosure requirements applicable to public companies organized within the United States. For example, we are
exempt from certain rules under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that regulate
disclosure obligations and procedural requirements related to the solicitation of proxies, consents or authorizations
applicable to a security registered under the Exchange Act, including the U.S. proxy rules under Section 14 of the Exchange
Act. In addition, our senior management and directors are exempt from the reporting and “short-swing” profit recovery
37
provisions of Section 16 of the Exchange Act and related rules with respect to their purchases and sales of our securities.
Moreover, while we currently make annual and semi-annual filings with respect to our listing on the ASX and expect to
file financial reports on an annual and semi-annual basis, we will not be required to file annual and current reports and
financial statements with the Securities and Exchange Commission ("SEC") as frequently or as promptly as U.S. domestic
companies whose securities are registered under the Exchange Act and will not be required to file quarterly reports on
Form 10-Q or current reports on Form 8-K under the Exchange Act. We will also be exempt from the provisions of
Regulation FD, which prohibits the selective disclosure of material nonpublic information to, among others, broker-dealers
and holders of a company’s securities under circumstances in which it is reasonably foreseeable that the holder will trade
in the company’s securities on the basis of the information. In addition, foreign private issuers are not required to file their
annual report on Form 20-F until four months after the end of each fiscal year.
These exemptions and leniencies will reduce the frequency and scope of information and protections to which you are
entitled as an investor and there may be less publicly available information concerning our company than there would be
if we were not a foreign private issuer.
As a foreign private issuer, we are permitted to adopt certain home country practices in relation to corporate
governance matters that differ significantly from Nasdaq corporate governance listing standards, and these practices
may afford less protection to shareholders than they would enjoy if we complied fully with Nasdaq corporate
governance listing standards.
As a foreign private issuer with ADSs listed on Nasdaq, we are subject to Nasdaq corporate governance listing standards.
However, the governance rules of Nasdaq permit foreign private issuers to follow the corporate governance practices of
their home country. Some corporate governance practices in Australia may differ from Nasdaq corporate governance
listing standards. For example, we could include non-independent directors as members of our Remuneration Committee
and our Nominating and Corporate Governance Committee, and our independent directors may not necessarily hold
regularly scheduled meetings at which only independent members of the Board of Directors are present. In addition, the
corporate governance practice in our home country, Australia, does not require a majority of our Board to consist of
independent directors (although it is recommended). Currently, we intend to follow home country practice to the
maximum extent possible. Therefore, our shareholders may be afforded less protection than they otherwise would have
under corporate governance listing standards applicable to U.S. domestic issuers. For an overview of our corporate
governance practices, see Item 6. Directors, Senior Management and Employees —C. Board Practices.
We may lose our foreign private issuer status in the future, which could result in significant additional cost and expense.
While we currently qualify as a foreign private issuer, the determination of foreign private issuer status is made annually
based on the last business day of an issuer’s most recently completed second fiscal quarter and, accordingly, our next
determination will be made based on information as of June 30, 2025. In the future, we would lose our foreign private
issuer status if we to fail to meet the requirements necessary to maintain our foreign private issuer status as of the relevant
determination date. For example, if 50% or more of our securities are held by U.S. residents and more than 50% of our
senior management or directors are residents or citizens of the United States, we could lose our foreign private issuer
status. As of December 31, 2024, approximately 13.9% of our outstanding ordinary shares were held by U.S. residents.
38
The regulatory and compliance costs to us under U.S. securities laws as a U.S. domestic issuer may be significantly higher.
If we cease to be a foreign private issuer, we will be required to file periodic reports and registration statements on U.S.
domestic issuer forms with the SEC, which are more detailed and extensive in certain respects than the forms available to
a foreign private issuer. We would be required under current SEC rules to prepare our financial statements in accordance
with U.S. GAAP rather than IFRS, and modify certain of our policies to comply with corporate governance practices
required of U.S. domestic issuers. Such conversion of our financial statements to U.S. GAAP would involve significant time
and cost. In addition, we may lose our ability to rely upon exemptions from certain corporate governance requirements
on U.S. stock exchanges that are available to foreign private issuers such as the ones described above and exemptions
from procedural requirements related to the solicitation of proxies.
We are an “emerging growth company” under the JOBS Act and will be able to avail ourselves of reduced disclosure
requirements applicable to emerging growth companies, which could make our ordinary shares and ADSs less attractive
to investors.
We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”), and we
intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public
companies that are not “emerging growth companies.” These include exemptions from the auditor attestation
requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"), reduced disclosure
obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the
requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden
parachute payments not previously approved.
We cannot predict if investors will find the ADSs less attractive because we may rely on these exemptions. If some
investors find the ADSs less attractive as a result, there may be a less active trading market for the ADSs and the price of
the ADSs may be more volatile. We may take advantage of these exemptions until such time that we are no longer an
emerging growth company. We would cease to be an emerging growth company upon the earliest to occur of (i) the last
day of the fiscal year in which we have more than $1.235 billion in annual revenue; (ii) the last day of the fiscal year in
which we qualify as a “large accelerated filer”; (iii) the date on which we have, during the previous three-year period,
issued more than $1.0 billion in non-convertible debt securities; and (iv) the last day of the fiscal year in which the fifth
anniversary of our first sale of common equity securities pursuant to an effective registration statement under the
Securities Act has occurred.
We have incurred and will continue to incur significant, increased costs as a result of operating as a company with ADSs
that are publicly traded in the United States, and will incur increased costs as a result of becoming a recipient of United
States government funding and incentives, and our management will be required to devote substantial time to new
compliance initiatives.
As a company with ADSs that are publicly traded in the United States, we have incurred and will incur significant legal,
accounting, insurance, administrative and other expenses. In addition, the Sarbanes-Oxley Act, Dodd-Frank Wall Street
Reform and Consumer Protection Act and related rules implemented by the SEC and Nasdaq have imposed various
requirements on public companies listed in the United States, including requiring the establishment and maintenance of
effective disclosure and procedures and internal control over financial reporting. In addition, our receipt of grants and
other funding and incentives from U.S. government agencies will heighten the importance of accurate reporting and
internal controls and will impose compliance obligations under a number of other laws and regulations. See also Item 3.
Key Information — D. Risk Factors (“Our DOE grant, and any future grants, loans or incentives we may obtain from
governmental agencies, will impose restrictions and compliance obligations on us, with associated costs and risks.”),
and Item 4 – Regulation – Department of Energy Grant Terms and Conditions.
The cost of complying with these requirements may place a strain on our systems and resources. To maintain and improve
the effectiveness of our disclosure controls and procedures, we must commit significant resources. Among other things,
this has required and will require us to commit additional management, operational and financial resources to identify
new professionals to join our company. These activities also may divert management’s attention from other business
39
concerns, which could have a material adverse effect on our business, results of operations, financial condition and cash
flows. Moreover, these requirements have increased and will continue to increase our legal and financial compliance costs
and make certain activities, such as procurement and tracking of compliance by sub-contractor and contractual
counterparties, more time-consuming and costly. These requirements could also make it more difficult and expensive for
us to attract and retain qualified persons to serve on our Board of Directors, our Board committees or as our senior
management. Furthermore, if we are unable to satisfy our obligations as a public company listed in the United States, or
are alleged to have made false or misleading statements in our applications for government support or other
documentation submitted to the government, we could be subject to delisting of the ADSs, fines, sanctions and other
regulatory action and potentially civil litigation, which may adversely affect our business, results of operation or financial
condition and could result in delays in achieving or maintaining an active and liquid trading market for the ADSs.
If we fail to implement and maintain an effective system of internal controls or fail to identify and remediate our
material weaknesses thereof, we may be unable to accurately report our results of operations, meet our reporting
obligations or prevent fraud, and investor confidence in our Company and the market price of the ADSs may be
negatively impacted.
As a public company, we are required to comply with the SEC’s rules implementing Sections 302 and 404 of the Sarbanes-
Oxley Act, which requires management to certify financial and other information in our SEC reports and provide an annual
management report on the effectiveness of internal control over financial reporting. Our management conducted an
evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2024. Based on this
evaluation, management has concluded that as of December 31, 2024, we had not maintained effective internal control
over financial reporting as a result of the existence of material weaknesses, as further noted below. Consequently,
management, with the participation of our interim Chief Executive Officer and Chief Financial Officer, also concluded that
our disclosure controls and procedures were not effective as of December 31, 2024.
In connection with the preparation of our financial statements as of and for the year ended June 30, 2022, we identified
certain control deficiencies in the design and implementation of our internal control over financial reporting that
constituted material weaknesses. These material weaknesses have not yet been fully remediated as of December 31,
2024. As described in Item 15. Controls and Procedures of this Form 20-F, we are continuing to implement our remediation
plans to address the identified material weaknesses, and our management continues to be actively engaged in the
remediation efforts. The material weaknesses will not be considered remediated until the applicable controls operate for
a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.
The presence of material weaknesses could result in financial statement errors which, in turn, could lead to errors in our
financial reports or delays in our financial reporting, which could require us to restate our financial statements.
Remediating material weaknesses will absorb management's time and will require us to incur additional expenses, which
could have a negative effect on the trading price of our ordinary shares and the ADSs. In order to establish and maintain
effective disclosure controls and procedures and internal controls over financial reporting, we will need to expend
significant internal and external resources and provide significant management oversight. Developing, implementing and
testing changes to our internal controls may require specific compliance training of our directors and employees, entail
substantial costs in order to modify our existing accounting systems, take a significant period of time to complete and
divert management’s attention from other business concerns. These changes may not, however, be effective in
establishing and maintaining adequate internal controls.
If we are unable to conclude that we have effective internal controls over financial reporting, investors may lose
confidence in our operating results, the price of our ordinary shares and the ADSs could decline and we may be subject to
litigation or regulatory enforcement actions. In addition, if we are unable to meet the requirements of Section 404 of the
Sarbanes-Oxley Act, we may not be able to remain listed on Nasdaq.
40
We currently report our financial results under IFRS, which differs in certain significant respects from U.S. generally
accepted accounting principles, or U.S. GAAP.
Currently we report our financial statements under International Financial Reporting Standards ("IFRS") as issued by the
International Accounting Standards Board. There have been and there may in the future be certain significant differences
between IFRS and U.S. GAAP, and those difference may be material. As a result, our financial information and reported
earnings for historical or future periods could be significantly different if they were prepared in accordance with U.S.
GAAP. In addition, we do not intend to provide a reconciliation between IFRS and U.S. GAAP unless it is required under
applicable law. As a result, you may not be able to meaningfully compare our financial statements under IFRS with those
companies that prepare financial statements under U.S. GAAP.
We are subject to risks associated with currency fluctuations, and changes in foreign currency exchange rates could
impact our results of operations.
Our ordinary shares are quoted in Australian dollars on the ASX and the ADSs are quoted in U.S. dollars. Any significant
change in the value of the Australian dollar may have a negative effect on the value of the ADSs in U.S. dollars. In particular,
if the Australian dollar weakens against the U.S. dollar, then, if we decide to convert our Australian dollars into U.S. dollars
for any business purpose, appreciation of the U.S. dollar against the Australian dollar would have a negative effect on the
U.S. dollar amount available to us. Consequently, appreciation or depreciation in the value of the Australian dollar relative
to the U.S. dollar would affect our financial results reported in U.S. dollar terms without giving effect to any underlying
change in our business or results of operations. As a result of such foreign currency fluctuations, it could be more difficult
to detect underlying trends in our business and results of operations.
Risks Related to Tax Matters
Our ability to utilize our net operating losses to offset future taxable income may be prohibited or subject to certain
limitations.
Prior or future changes in our ownership could limit our ability to use our net operating losses (“NOLs”) to offset future
taxable income. In general, in the United States, Section 382 of the Internal Revenue Code of 1986, as amended, provides
an annual limitation with respect to the ability of a corporation to utilize its tax attributes, including its NOLs, against
future taxable income in the event of a change in ownership. The use of tax losses incurred prior to a change in ownership
may also be limited in Australia. We have not determined whether we have undergone a change in ownership for United
States or Australian tax purposes, and it is possible that we may have undergone such a change previously or may undergo
such a change as a result of future transactions in our stock (many of which are outside our control). If it is determined
that we have previously experienced such an ownership change, or if we undergo one or more ownership changes as a
result of future transactions, we may be unable to use all or a portion of our NOLs to offset our future taxable income in
the United States or Australia. Any limitations on our ability to use our NOLs may cause income taxes to be paid earlier
than otherwise would be paid if such limitations were not in effect and could cause such NOLs to expire unused, in each
case, reducing or eliminating the benefit of such NOLs. This could adversely affect our financial condition and operating
results.
If we are a passive foreign investment company, there could be adverse U.S. federal income tax consequences to U.S.
holders.
Generally, we will be a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes for any taxable
year in which, after applying certain look-through rules with respect to the income and assets of our subsidiaries, either:
(1) at least 75% of our gross income is “passive income” or (2) at least 50% of the average quarterly value of our total gross
assets (which would generally be measured by fair market value of our assets) is attributable to assets that produce
“passive income” or are held for the production of “passive income.” Passive income for this purpose generally includes
dividends, interest, royalties, rents, gains from commodities and securities transactions and the excess of gains over losses
from the disposition of assets which produce passive income.
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We believe that we were not a PFIC for U.S. federal income tax purposes for the taxable year ended December 31, 2023.
However, there can be no assurance that we will not be a PFIC for the current taxable year or for any subsequent year.
The determination of PFIC status is a factual determination that must be made annually and cannot be made until the
close of a taxable year. The determination depends on, among other things, the composition of our income and assets. In
this regard, cash generally is treated as a passive asset for PFIC purposes, and the composition of our income and assets
will be affected by the amount and timing of any cash we receive, including from any grant funding, government loans or
other sources, and the spending of such funds. The fair market value of our assets (including goodwill) may be determined
in large part based on the market price of the ADSs and our ordinary shares, which may fluctuate. Moreover, the
determination of PFIC status depends, in part, on the application of complex U.S. federal income tax rules which are
subject to differing interpretations. Accordingly, there can be no assurance that we would not be a PFIC for the current
taxable year or any future taxable year.
If we were to be a PFIC, a U.S. holder would be subject to increased tax liability (generally including an interest charge on
certain taxes treated as having been deferred under the PFIC rules) on any gain realized on a sale or other disposition of
the ADSs or ordinary shares and on the receipt of certain “excess distributions” received with respect to the ADSs or
ordinary shares, unless such U.S. holder makes certain elections. One such election, the “QEF Election,” will be unavailable
to a U.S. holder because we do not intend to provide information that a U.S. holder would need to make a valid QEF
Election.
U.S. holders should consult their tax advisors regarding the potential application of the PFIC rules to their ADSs or ordinary
shares.
If a U.S. person is treated as owning at least 10% of our ordinary shares, such holder may be subject to adverse U.S.
federal income tax consequences.
If a U.S. person is treated as owning, directly or indirectly, at least 10% of the value or voting power of our equity, such
U.S. person would be treated as a “United States shareholder” with respect to each “controlled foreign corporation” in
our Company, if any. Because our Company currently includes one entity that is treated as a U.S. corporation for U.S.
federal income tax purposes, all of our current non-U.S. subsidiaries and any future newly formed or acquired non-U.S.
subsidiaries that are treated as corporations for U.S. federal income tax purposes will be treated as controlled foreign
corporations, regardless of whether we are treated as a controlled foreign corporation. A United States shareholder of a
controlled foreign corporation may be required to annually report and include in its U.S. taxable income its pro rata share
of “Subpart F income,” “global intangible low-taxed income” and investments in U.S. property by controlled foreign
corporations, regardless of whether we make any distributions on the ADSs or ordinary shares. An individual who is a
United States shareholder with respect to a controlled foreign corporation generally would not be allowed certain tax
deductions or foreign tax credits that would be allowed to a United States shareholder that is a U.S. corporation. Failure
to comply with controlled foreign corporation reporting obligations may subject a United States shareholder to significant
monetary penalties. We cannot provide any assurances that we will furnish to any United States shareholder information
that may be necessary to comply with the reporting and tax paying obligations applicable under the controlled foreign
corporation rules of the Internal Revenue Code. U.S. persons should consult their tax advisors regarding the potential
application of these rules to their investment in the ADSs.
42
Future changes to tax laws could materially adversely affect our company and reduce net returns to our shareholders.
Our tax treatment is subject to the enactment of, or changes in, tax laws, regulations and treaties, or the interpretation
thereof, tax policy initiatives and reforms under consideration and the practices of tax authorities in jurisdictions in which
we operate, including those related to the Organization for Economic Co-Operation and Development’s Base Erosion and
Profit Shifting Project and other initiatives. Such changes may include (but are not limited to) the taxation of operating
income, investment income, dividends received or (in specific context of withholding tax) dividends paid. We are unable
to predict what tax reform may be proposed or enacted in the future or what effect such changes would have on our
business, but such changes, to the extent they are brought into tax legislation, regulations, policies or practices, could
affect our financial position and overall or effective tax rates in the future in countries where we have operations, reduce
post-tax returns to our shareholders, and increase the complexity, burden and cost of tax compliance.
Item 4. Information on the Company
A.
History and Development of the Company
We were incorporated under the laws of Australia in 2012 under the name Graphitecorp Pty Limited. In 2015, we
completed an initial public offering of our ordinary shares and the listing of our ordinary shares on the Australian Securities
Exchange, or the ASX, and changed our name to GRAPHITECORP Limited. In 2017, we changed our name to NOVONIX
Limited.
The principal place of business of NOVONIX Limited and our registered office are located at Level 38, 71 Eagle Street,
Brisbane, Queensland 4000, Australia. Our telephone number is +1 423-298-1007. Our agent for service of process in the
United States is National Registered Agents, Inc., located at 1209 Orange Street, Wilmington, DE 19801.
NOVONIX Anode Materials LLC (formerly PUREgraphite, LLC) ("NAM") was established in March 2017 as a joint venture to
develop and commercialize ultra-high purity high performance graphite anode material for the lithium-ion battery market
focused on electric vehicles ("EVs"), energy storage systems ("ESSs") and specialty applications. In fiscal year 2019, we
exercised our call option, pursuant to which we acquired all our joint venture partner’s interest in NOVONIX Anode
Materials and increased our ownership to 100%.
In June 2017, we acquired Battery Testing Services, Inc., now known as NOVONIX Battery Technology Solutions, Inc.
(“BTS”). BTS was founded by Dr. Chris Burns, our former CEO and current special advisor to the Board, and researchers
from the research group at Dalhousie University, headed by Dr. Jeff Dahn. BTS aims to provide innovative battery R&D
capabilities and technological advantage.
On July 28, 2021, we completed the purchase of an approximately 404,000 square-foot facility in Chattanooga, Tennessee,
which we refer to as “Riverside”, our first mass production site for production of anode materials. Additionally, NOVONIX
Anode Materials has also initiated work on further expansion plans beyond Riverside. We recently announced our
intention to enter into a purchase and sale agreement with the City of Chattanooga, Tennessee, and Hamilton County,
Tennessee, for land where we intend to develop our second mass production plant, referred to as "Enterprise South." The
execution of the purchase and sale agreement is subject to approvals of the City of Chattanooga and Hamilton County,
and the closing of the transaction will be subject to the satisfaction of certain conditions to be specified in the purchase
and sale agreement. For more information on our anode materials production, see "Item 4.B. Business Overview -
NOVONIX Anode Materials."
Since the beginning of fiscal year 2020 and through the date of this report, we have incurred capital expenditures of
approximately $164.4 million, primarily consisting of purchases of property, plant and equipment and capital leases in
connection with the expansion of our business and development of our technologies. Capital expenditure commitments
as of the end of fiscal 2024 but not recognized as liabilities were approximately $53.0 million. For more information on
our capital expenditures, see Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources,
and Item 8. Financial Information.
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The SEC maintains an Internet site at http://www.sec.gov that contains reports, proxy and information statements, and
other information regarding issuers that file electronically with the SEC. Our website address is www.novonixgroup.com.
Information that we furnish to or file with the SEC, including our Annual Reports on Form 20-F and reports of foreign
private issuer on Form 6-K, and any amendments to, or exhibits included in, these reports are made available for
download, free of charge, through our website as soon as reasonably practicable. We may use our website as a distribution
channel of material company information. Financial and other important information regarding the Company is routinely
posted on and accessible through our website at www.novonixgroup.com. Accordingly, investors should monitor this
channel, in addition to following our press releases, SEC filings and public conference calls and webcasts. The reference to
our website is an inactive textual reference only and information contained in, or that can be accessed through, our
website is not part of this annual report.
B.
Business Overview
NOVONIX is a leading battery materials and technology company committed to onshoring the graphite supply chain and
providing revolutionary solutions for the global lithium-ion battery industry. with innovative, sustainable technologies,
high-performance materials, and more efficient production methods. The Company offers innovative, sustainable
technologies, high-performance materials, as well as more efficient production methods. NOVONIX is growing its high-
performance synthetic graphite anode material manufacturing operations, has developed a patented all-dry, zero-waste,
cathode synthesis process, and manufactures industry-leading battery cell testing equipment. Through advanced R&D
capabilities, proprietary technology, and strategic partnerships, NOVONIX has gained a prominent position in the electric
vehicle and energy storage industries and is working to power a cleaner energy future.
Our mission is underpinned by an increasing emphasis on environmentally conscious battery technologies, which we
believe are key to creating a sustainable future. We are focused on the development of innovative, sustainable
technologies and processes as well as high-performance materials that support longer life batteries, higher-energy
efficiency, reduced chemical usage, reduced waste generation, and the use of cleaner power inputs.
Our vision is to provide revolutionary clean energy solutions to the battery industry. Our core values, curiosity,
collaboration, and commitment, promote a corporate culture where we put people first, foster resilient problem solving,
and take pride in what we are accomplishing to create a more sustainable future.
NOVONIX is well-positioned to be an industry leader at the forefront of product innovation and intellectual property
development in the battery materials and technology industry with a focus on supporting the onshoring of the battery
supply chain. The Company has built a team of top talent with experience to drive innovation company wide and believes
it has the next-generation technology needed to support the rapidly growing EV and ESS markets in North America.
The Company continues to receive and install equipment at its Riverside facility in Chattanooga, Tennessee to meet
growing customer demand for high-performance synthetic graphite materials. This year, NOVONIX signed offtake
agreements with Stellantis, PowerCo, and Panasonic Energy and is currently working to meet customer milestones for
mass production qualification as well as compliance criteria. Current customer agreements are forecasted to exceed our
planned volumes at our Riverside facility, driving demand into our next planned site at, Enterprise South.
Additionally, NOVONIX continues to focus on developing improved and sustainable technologies, pursuing strategic
partnerships with leading international battery companies and growing an intellectual property pipeline that we believe
will position the Company at the forefront of next generation battery technology.
Throughout fiscal year 2024, NOVONIX continued to focus on the execution of its business strategy and growth initiatives.
NOVONIX had net assets of $137.6 million including $42.6 million in cash and cash equivalents at December 31, 2024. The
Company reported a statutory after-tax loss for the year ended December 31, 2024, of $74.8 million. These financial results
are in line with management expectations.
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Highlights of the Year Ended December 31, 2024
The year ended December 31, 2024, saw significant progress for NOVONIX along our four main growth strategies. The
Company continued to make progress towards its business goals, by 1) securing financing to scale operations to create
value for shareholders, (2) scaling our operations to deliver commercial production, (3) securing tier-one customers, (4)
maintaining industry leading research and development efforts for battery materials.
Key highlights and developments during 2024 include:
Scale Operations to Deliver Commercial Production
•
Completed independent engineering assessment of Riverside facility in Chattanooga, Tennessee with plans to
reach 20,000 tpa in 2028
•
Continued to receive, install, and commission equipment at Riverside aimed at reaching commercial production
capacity of 3,000 tpa at Riverside to support final qualification and anticipated start of production for Panasonic
Energy in early 2026
•
Announced intended location for new synthetic graphite manufacturing plan in the Enterprise South Industrial
Park in Chattanooga, Tennessee, targeting to bring online an initial 31,500 tpa of production capacity in 2028
Secure Tier 1 Customers
•
Signed a binding offtake agreement with Panasonic Energy for 10,000 tonnes of high-performance synthetic
graphite materials from 2025 through 2028 (as noted above, we plan to deliver product in early 2026)
•
Signed binding offtake agreement with Stellantis for up to a target volume of 115,000 tonnes of high-
performance synthetic graphite materials from 2026 through 2031
•
Signed binding offtake agreement with PowerCo SE for a minimum of 32,000 tonnes of high-performance
synthetic graphite materials to be supplied to PowerCo from 2027 through 2031
Maintain Industry-Leading R&D Efforts for Battery Materials
•
Released inaugural Sustainability Report
•
Entered into a testing and development agreement with PowerCo, Volkswagen Group’s wholly owned battery
cell manufacturing company
•
Granted patents for graphite/silicon alloy composite material in Europe, Japan, and the United States
•
Won Reuters Global Energy Transition Awards in the category of R&D Achievement for all-dry, zero-waste
cathode synthesis technology
•
Granted patent for all-dry, zero-waste cathode synthesis technology in Japan
•
Entered Joint Development Agreement with CBMM, focused on niobium materials for improved Cathode
Active Materials (“CAM”) performance
•
Entered Collaboration Agreement with ICoNiChem Widnes Limited (“ICoNiChem”), focused on sustainable CAM
feedstock materials
•
Published white paper focused on our cathode technology
•
Entered into strategic partnership with Voltaiq to drive efficiency and quality in the battery industry
•
Entered license agreement with Harper International
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Secure Financing to Scale Operations
•
Selected for $103 million Qualifying Advanced Energy Project tax credit for Riverside facility
•
Received $12.9 million in reimbursements from the DOE’s MESC Office grant to expand production at Riverside
facility
•
Completed equity raise to continue to investment in machinery and equipment at our Riverside facility to
achieve the 2025 targeted production capacity and certain qualification requirements for Panasonic, Stellantis
and PowerCO
•
Offered conditional commitment for a direct loan of up to $754 million from the DOE for a new synthetic
graphite manufacturing plant in Tennessee, Enterprise South
Our Growth Strategies
NOVONIX’s leadership is focused on continuing the successful execution of its operational strategic roadmap with the
objective of maximizing long-term shareholder value through the generation of strong cash flow and the pursuit of
profitable, high-growth opportunities through innovative, sustainable technologies, high-performance materials, and
more efficient production methods for the global lithium-ion battery industry. The Company’s key strategies for 2025
include:
Scale Operations to Deliver Commercial Production
•
Install, qualify, commission, and start-up of equipment for commercial production capacity of 3,000 tpa at
Riverside to support final qualification and anticipated start of production for Panasonic Energy in early 2026,
Stellantis in 2026, and PowerCo in 2027
•
Leverage Riverside engineering to progress Enterprise South plans
•
Invest in its team through recruitment, training, and development to ensure recruitment and retention of the
best talent in the industry
Secure Tier 1 Customers
•
Aim to complete product qualification for offtake agreement with Panasonic Energy for the planned start of
production in early 2026
•
Continue to pursue additional supply agreements to allocate capacity from the planned Enterprise South
facility, toward its initial production target of 31,500 tpa
Maintain Industry-Leading R&D Efforts for Battery Materials
•
Engage in phased commercialization strategy that leverages our existing expertise, strategic partnership and
ongoing research and development to position our patented all-dry, zero-waste, cathode synthesis processing
technology
•
Operates its pilot line to demonstrate the scalability of its cathode synthesis technology. These capabilities
support sampling to potential customers and will be leveraged for new strategic partnerships with ICoNiChem
and CBMM through which we will synthesize, test, and analyze cathode active materials
•
Continue advancing intellectual property, aimed at driving innovation across our technologies and reinforcing
our position as a leader in next-generation battery materials. Patents acquired this year reflect our progress
and ongoing efforts to build a robust IP portfolio that supports our current and future products that will power
sustainable energy solutions
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Secure Financing to Scale Operations
•
Offered conditional commitment for a $754 million loan from the DOE. The Company will work with the DOE
LPO to satisfy certain technical, commercial, legal, environmental, financial conditions and certain government
approvals to enter into definitive financing documents and fund the loan for Enterprise South
•
Invest alongside remaining MESC grant funds to scale Riverside production
•
Attract additional strategic investment to continue production build out of Riverside and for growth plans at
Enterprise South
Operational Structure at a Glance
NOVONIX is a leading battery technology and materials company. Our synergistic operating structure, as depicted below,
is integral to the company’s current business development and growth strategy.
NOVONIX Anode Materials
NOVONIX Anode Materials, located in Chattanooga, Tennessee, is a leading domestic supplier of high-performance
battery-grade synthetic graphite.
NAM's Riverside facility is poised to become the first large-scale production site dedicated to high-performance synthetic
graphite for the battery sector in North America. This year, the Company signed binding offtake agreements with Tier 1
customers including Stellantis, PowerCo, and Panasonic. These contracts allocate the remainder of our available volumes
at our Riverside facility and a portion of the volumes to be produced at our next planned mass production facility,
Enterprise South. The Company also entered into a licensing agreement with its long-time technology partner, Harper, for
the rights and use of its continuous, induction-based graphitization furnace technology. Upon making an initial payment
within 12 months of the effective date of the agreement, which is solely at the Company’s option, NOVONIX will have the
exclusive license to use the technology to further develop the furnaces used for the thermal production of graphite
material for use in the battery anode market.
Riverside is slated to begin commercial production in early 2026, with plans to grow output to 20,000 tpa to meet current
customer commitments. In November 2023, we reached agreement on the terms of a grant from the MESC Office of the
DOE and we have begun to use those funds to purchase equipment and facility infrastructure to expand Riverside’s
production capacity to 20,000 tpa. In April 2024, we were selected to receive a US$103 million tax credit (the “48C tax
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credit”) under the Qualifying Advanced Energy Project Allocation Program (the “48C program”), to support production of
critical battery materials from the Riverside facility.
Our team continues to receive, install, and commission equipment at Riverside towards our initial 3,000 tpa of production
capacity to support our planned start of production for Panasonic Energy in early 2026.
NAM’s Lookout Valley (“Lookout Valley”) facility, also located in Chattanooga, Tennessee, is the center of the Company’s
product and process development for the anode materials business scale up and optimization. Lookout Valley operates
full pilot production to produce materials to customer specification. Our team applies learnings and principles to Riverside,
the first mass production site.
Conditional Commitment for a US$754 Million Loan from U.S. Department of Energy
To meet anticipated customer demand, the Company plans to build a new facility to be located in the Enterprise South
Industrial Park in Chattanooga, Tennessee, to manufacture synthetic graphite primarily for use in EV batteries. The
planned Enterprise South facility is targeted to have an initial production capacity of 31,500 tpa, with plans to expand to
up to 75,000 tpa of production capacity. In December, the Company announced a conditional commitment from the DOE
through the Loan Programs Office for a direct loan of up to $754.8 million, which includes $692 million in principal and
$62.8 million in capitalized interest, to be applied towards partially financing the new facility. The proposed financing is
being offered under the DOE LPO’s Advanced Technology Vehicles Manufacturing Loan Program.
Key terms of the DOE’s conditional commitment, including those set forth in a non-binding term sheet attached to the
conditional commitment letter signed by the DOE, the Company and NOVONIX Enterprise South LLC, an indirect wholly
owned subsidiary of the Company ("NES"), include:
•
the loan will be structured in two tranches based on a phased completion of infrastructure and production lines
from a total eligible investment of $943.6 million;
•
the loan will be comprised of two primary tranches that will have terms of 15 years and 10 years, respectively,
from the date of first payment of each. The first tranche will be to support the site and infrastructure for the
Enterprise South facility and 21,000 tpa of production capacity, while the second tranche will support an
additional 10,500 tpa of production capacity;
•
an additional tranche to fund eligible project costs will be subject to repayment upon receipt of any proceeds
derived from the monetization of any tax credit received by the Company or NES related to the Enterprise
South facility under the Qualifying Advanced Energy Project Allocation Program (see below for the update
related to the Company's receipt of this tax credit);
•
the loan will be guaranteed by the Company and secured by a first priority security interest in all assets of NES,
equity interests in and, with certain exceptions, assets of certain of the Company’s existing subsidiaries; and
•
each advance of loan proceeds will have a separate interest rate set by the Federal Financing Bank under the
general supervision of the Secretary of Treasury at the time that the respective advance is made.
While this conditional commitment demonstrates the DOE’s intent to finance the Enterprise South facility, the DOE must
complete an environmental review, and the Company must satisfy certain technical, commercial, legal, environmental,
and financial conditions before the DOE can decide whether to enter into definitive financing documents and fund the
loan. A binding loan agreement from the DOE is also subject to the satisfactory completion of due diligence by the DOE,
satisfaction of conditions precedent specified in the term sheet, approval of the Company's Board, receipt of required
governmental and third-party consents, and the negotiation and execution of binding loan documents. Once binding loan
documents have been signed, the Company and NES will need to satisfy certain conditions precedent prior to loan closing,
and/or prior to first and subsequent advances of loan proceeds.
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The Enterprise South facility (site rendering below) is expected to reach initial production capacity by the end of 2028 and
is anticipated to create 450 full-time operational jobs and 500 construction jobs. Enterprise South, together with Riverside,
is planned to bring the Company’s total production capacity to over 50,000 tpa by 2028.
In January 2025, the Company learned that it had not been selected to receive tax credits under the 48C Program for
Enterprise South and is working to understand what, if any, impact this may have on the proposed loan. The conditional
commitment from the LPO remains unchanged at up to $754.8 million. Enterprise South remains eligible for potential tax
credits under the Advanced Manufacturing Production Tax Credit (Section 45X) which offers 10% of eligible production
costs of critical minerals, including graphite, back to producers.
Tier 1 Customer Offtake Agreements: Panasonic Energy, Stellantis, and PowerCo
This year, NOVONIX has signed binding offtake agreements to supply synthetic graphite to Panasonic Energy, Stellantis,
and PowerCo, allocating all the volume to be produced at our Riverside facility.
In February 2024, the Company announced the signing of a binding offtake agreement with Panasonic Energy for at least
10,000 tonnes of high-performance synthetic graphite material to be supplied to Panasonic Energy’s North American
operations from 2025 through 2028. As a leading battery cell provider, Panasonic Energy is working to expand its
production of EV batteries in North America to meet increased demand while also increasing the percentage of materials
procured locally. Panasonic Energy is establishing a sustainable supply and working to meet the objective to reduce the
carbon footprint of their entire lithium-ion battery supply chain for EVs by 50% in 2031 compared to 2022 levels.
In November 2024, NOVONIX signed a binding offtake agreement with Stellantis, a leading automotive company, for a
minimum of 86,250 tonnes, up to a target volume of 115,000 tonnes of high-performance synthetic graphite material. The
material will be supplied to Stellantis’ cell manufacturing partners in North America over a six-year term starting in 2026.
Stellantis is one of the world’s leading automakers – with brands including Dodge, Fiat, Jeep, Ram, Maserati, Peugeot,
Opel, and Alfa Romeo – and has announced plans to invest more than €50 billion over the decade in electrification to
deliver on its targets of reaching 100% passenger car battery-electric vehicles.
Also in November, the Company signed a binding offtake agreement with PowerCo for a minimum of 32,000 tonnes of
high-performance synthetic graphite material. The material will be supplied to PowerCo over a five-year term starting in
2027. Established by Volkswagen in 2022, PowerCo is committed to ramp-up global battery cell production. PowerCo
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oversees international factory operations, advances in cell technology, and vertical integration of the battery value chain.
PowerCo has identified three gigafactory locations – Salzgitter in Germany, Valencia in Spain, and St. Thomas in Canada –
with a combined capacity of up to 200 GWh/year.
*Agreements require final product qualification. The Company also has a supply agreement with KORE Power to support
its proposed KOREPlex facility. KORE Power has made the decision not to construct the KOREPlex facility. As such, the
Company has not factored any potential purchase by KORE Power into its currently planned allocation of capacity.
Technology License Agreement with Harper
In January 2025, the Company entered into a license agreement with its long-time technology partner, Harper
International Corporation, for the rights and use of its continuous, induction-based graphitization furnace technology.
In December 2020, NOVONIX and Harper announced a strategic partnership to develop innovative graphitization furnace
technology to be used to produce synthetic graphite anode material for the lithium-ion battery sector. This partnership
provided for commitments from NOVONIX to purchase from Harper, and from Harper to develop and exclusively supply
NOVONIX with proprietary systems for thermal processing material for the battery anode market.
Alongside this exclusive use agreement, the license agreement provides NOVONIX the right to an exclusive license to
Harper’s technology on which its continuous graphitization furnaces operate. Upon making an initial payment within 12
months of the effective date of the agreement, NOVONIX will have the exclusive license to use the technology to further
develop the furnaces used for the thermal production of graphite material for use in the battery anode market. Upon
equipment meeting certain performance objectives, and NOVONIX’s payment of additional licensing fees, the license will
expand to include NOVONIX’s right to build equipment using the licensed technology, either internally or through other
permitted sublicensees.
Intellectual Property
NAM exclusively owns all graphite-related intellectual property of its former joint venture partner and has the ongoing
exclusivity for the development of graphite products and battery anode materials using that technology. Our intellectual
property includes innovative, high-performance graphite anode materials, which have been demonstrated in internal
testing to outperform leading materials currently in the market, and production methods that we expect to deliver
production costs significantly lower than existing producers.
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Through operational growth and strategic partnerships, NOVONIX has developed proprietary technology that delivers
increased energy efficiency, negligible facility emissions, and anode materials that outperform industry standards. In June
2022, NOVONIX released the results of a Life Cycle Assessment, which showed an approximate 60% decrease in global
warming potential compared to commercially manufactured anode grade synthetic graphite produced in China, and an
approximate 30% decrease in global warming potential compared to anode grade natural graphite also produced in China.
NAM strives for the highest performance while powering the battery materials industry with lower carbon emissions.
In the fourth quarter of 2024, the U.S. Patent and Trademark Office granted NOVONIX a patent for the graphite/silicon
alloy composite material previously granted in Europe in the third quarter and Japan in the second quarter. This patent
covers a new type of anode active material for lithium-ion battery applications combining a silicon alloy material within a
graphite matrix and the method of making the same. Examination of additional patent members for this anode active
material will take place over the coming months. Continued advancement of intellectual property is an important part of
NOVONIX’s long-term strategy, driving innovation across our technologies and reinforcing our position as a leader in next-
generation battery materials. This latest milestone reflects our ongoing efforts to build a robust IP portfolio that supports
our current and future products that will power sustainable energy solutions.
NOVONIX Battery Technology Solutions
NOVONIX Battery Technology Solutions, located in Nova Scotia, Canada, was founded by Dr. Chris Burns and researchers
from the research group at Dalhousie University, formerly headed by Dr. Jeff Dahn, in 2013. NOVONIX acquired BTS in
June 2017, and we have continued our collaboration with Dalhousie University through our partnership with Dr. Mark
Obrovac, a leading battery materials innovator, and his team. NOVONIX exclusively owns all intellectual property
developed within Dr. Obrovac’s group under the collaborative research agreement without any ongoing obligations to
Dalhousie University.
Our capabilities and expertise to develop new materials and accelerate research and development activities has led to the
development of our patented processing technology for cathode materials, which we are continuing to leverage to
support customer needs.
BTS meets our customer’s needs in two critical ways: battery testing equipment and research and development services.
Our team is proud to provide manufacturers with what we believe to be the most accurate lithium-ion battery cell test
equipment in the world. In October 2024, Voltaiq, an industry leader in battery quality analytics software, and NOVONIX
announced a strategic partnership aimed at revolutionizing the battery industry's approach to quality control and
efficiency. NOVONIX had previously been developing its own data and analytics offering to support its needs and look at
leveraging potential artificial intelligence and machine learning integration. Through this partnership, NOVONIX will work
with Voltaiq to integrate these features into Voltaiq’s platform. The partnership represents a significant step forward in
addressing industry challenges, combining Voltaiq's best-in-class battery quality analytics software with NOVONIX’s Ultra-
High Precision Coulometry Systems ("UHPC"), as well as its expertise in battery R&D and materials development.
Key highlights of the partnership include:
•
Integration of Voltaiq's advanced analytics platform into NOVONIX's battery materials development programs
•
Enhanced quality control and defect detection capabilities in gigafactories and battery research labs using best-
in-class software and UHPC equipment
•
Improved efficiency in battery development cycles, leading to faster time-to-market for new battery
technologies.
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Ultra-High Precision Coulometry Systems (Hardware)
NOVONIX provides the only UHPC systems available today for those seeking state-of-the-art battery testing equipment
for their laboratory research, product development, and manufacturing environments. Our world-class UHPC systems are
fully capable battery cyclers that allow our customers to rapidly test electrochemical processes within cells of various form
factors, with industry leading precision and accuracy.
Our UHPC equipment is used by leading battery makers, researchers, and equipment manufacturers including 80% of the
top cell makers in China, and 50% of major automotive OEMs worldwide.
In December 2024, BTS announced a strategic collaboration with Gamry Instruments Inc. (“Gamry”), a leader in
Electrochemical Impedance Spectroscopy (“EIS”) technology, that will allow for a seamless integration of a Gamry EIS box
with a NOVONOIX UHPC system. The Gamry EIS box can either be rack-mounted or placed near a UHPC system. A new
interconnect cable will connect both the UHPC Channel Module and Gamry EIS box to a NOVONIX Thermal Chamber. This
integration allows for an automated experience for running EIS measurements during an experiment.
NOVONIX is always looking for new ways to deliver value to our customers and the Company is now able to distribute
Gamry products as part of integrated UHPC systems to its customers worldwide.
Research & Development Services (Consulting Services)
In 2017, our team started working to establish a battery pilot line, along with cell testing capabilities, to support the
Company’s work in battery materials development. These resources and services continue to be leveraged by our anode
and cathode materials teams and well as external customers and partners.
NOVONIX has significantly expanded its research and development capabilities through direct investments and our long-
term collaborative research agreement with Dalhousie University. BTS now has an established team of leading scientists
with an internal battery pilot line to prototype and evaluate new materials and cell designs, and leverage extensive battery
testing capabilities, including our proprietary UHPC.
With the battery industry growing, there is a shortage of facilities, infrastructure, time, capital, personnel, and knowledge.
We provide a range of services and co-development models to help our customers gain the insights they need to make
the right decisions at the critical R&D stage. The BTS team holds a wide array of expertise in engineering, metrology, and
electrochemistry that establishes them as industry experts. They engage with customers in a variety of ways including
project scoping, cell design, testing, evaluation protocols, as well as analyzing process and performance data.
Cathode Materials
In 2021, NOVONIX began development of its patented all-dry, zero-waste cathode synthesis technology. This process
technology minimizes environmental impact while producing high performance materials. In 2023, the Company
commissioned a pilot line with a nameplate capacity of 10 tpa to demonstrate the scalability of its technology.
The Company is committed to a phased commercialization strategy that leverages our existing expertise, strategic
partnerships, and ongoing R&D to position our CAM processing technology to have a transformative impact on the lithium-
ion battery sector.
NOVONIX plans to build on success to accelerate commercialization through:
•
Aligning technology to global market trends
•
Strategic development partnerships
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•
Technology licensing and joint ventures
•
Leverage government support and potential strategic investment
In June 2024, NOVONIX’s all-dry, zero-waste cathode synthesis technology was recognized by Reuters Global Energy
Transition Awards, winning the R&D Achievement category.
In the third quarter of 2024, NOVONIX and CBMM, the world leader in the production and commercialization of niobium
products, announced the signing of a joint development agreement focused on nickel-based cathode materials. Under the
agreement, NOVONIX will use its patented all-dry, zero-waste synthesis process to synthesize, test, and analyze CAM that
will incorporate CBMM’s suite of niobium products with the goal of developing a CAM with improved performance at a
lower cost.
NOVONIX will utilize its cathode pilot line and BTS capabilities to characterize the materials under the project through
their physical and electrochemical performance, including building full scale pouch cells for benchmark evaluation. CBMM
will provide various materials throughout the project to compare and demonstrate optimal performance in NOVONIX’s
cathode powders. Upon successful completion of milestones during this one-year project, NOVONIX and CBMM may enter
into an agreement for CBMM products to be integrated into NOVONIX’s production processes.
In October 2024, NOVONIX also announced the signing of a Joint Collaboration Agreement with ICoNiChem focused on
the development of nickel-based CAM. ICoNiChem is an expert in transition metal chemistry specializing in cobalt and
nickel compounds made from 100% ethically source feedstocks to modern industries across the globe.
NOVONIX and ICoNiChem have been selected for funding under the 2024 Canada-UK critical minerals call for proposals,
which is focused on advancing projects related to critical minerals essential for industries like renewable energy, electric
vehicles, and electronics. To support their participation in the project, BTS is receiving advisory services and up to CAD
$127,928 in funding from the National Research Council of Canada Industrial Research Assistance Program (“NRC IRAP”),
while ICoNiChem is receiving support through Innovate UK. The 2-year project, with a total budget of CAD $515,686
between NOVONIX and ICoNiChem, aims to further improve the sustainability of the NOVONIX all-dry, zero-waste
technology by incorporating recycled metal feedstock, such as cobalt and nickel carbonates and oxides, into the process.
Upon successful completion of milestones, NOVONIX may enter into commercial agreements for ICoNiChem products
with the goal of integrating recycled feed into its CAM production processes moving forward.
Mount Dromedary Graphite Project
We hold tenement rights in the Mount Dromedary Graphite Project (the "MDG Project"), a high-grade natural flake
graphite deposit located in Northern Queensland, Australia. As of the date of this annual report, the Company has not
generated any revenue from the sale of natural graphite.
In April 2024, NOVONIX signed a Share Sale and Purchase Agreement under which its wholly owned subsidiary, MD
South Tenements Pty Ltd, which holds the Mount Dromedary natural graphite exploration interests, will be divested to
Axon Graphite Limited (“Axon Graphite”), a wholly owned subsidiary of Lithium Energy Limited (“Lithium Energy”). As a
consideration for the transaction, NOVONIX will receive shares in Axon Graphite, subject to the completion of the
parties’ due diligence enquiries, completion of the initial public offering (“IPO”) of Axon Graphite, and receipt of
approval and admission of Axon Graphite to the Australian Securities Exchange (“ASX”).
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Axon Graphite will seek to capitalize on expected growth in EV sales and battery-based grid scale energy storage systems
over the coming decades, through the production and sale of graphite-based battery anode material, one of the key
components of electric vehicle and grid storage batteries. See Item 3. Key Information — D. Risk Factors ("From time to
time we may enter into negotiations for acquisitions, dispositions, partnerships, joint ventures or investments that are
not ultimately consummated or, if consummated, may not be successful.").
Tenement List
Principal Markets
The principal markets in which our BTS division competes are North America, Asia, and Europe through the sale of battery
testing equipment and related consulting services. BTS customers are primarily battery manufacturers and developers,
including specialty materials manufacturers, consumer electronics OEMs and automotive OEMs, primarily across the
lithium-ion battery value chain. Revenues during the years ended December 31, 2024 and 2023, six months ended
December 31, 2022, and year ended June 30, 2022 were $5.9 million, $8.1 million, $2.7 million, and $6.1 million,
respectively.
In fiscal year 2024, North America, Asia, Australia, and Europe accounted for 71%, 22%, 3%, and 4% of revenues,
respectively. In fiscal year 2023, North America, Asia, Australia, and Europe accounted for 82%, 8%, 6%, and 4% of
revenues, respectively. In fiscal year 2022, North America, Asia and Europe accounted for 79%, 17% and 4% of revenues,
respectively.
As of the date of this annual report on Form 20-F, we have not generated any revenue from sale of synthetic graphite. If
our commercialization efforts for our synthetic graphite product are successful, we may generate revenue from the sale
of our synthetic graphite materials primarily in North America primarily to customers in the EV and grid storage industries.
Sales and Marketing
We market and sell our BTS battery testing equipment and related consulting services through a combination of direct
contact with customers' research and development experts and third-party distributors who specialize in battery testing
technologies and sell to automotive and electronics OEMs, battery developers and manufacturers, and research
institutions. As we develop and commercialize our synthetic graphite anode materials business, we market our battery
materials through the direct engagement of a combination of our corporate, R&D and operations leadership teams.
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Raw Materials
Raw materials for our BTS business are comprised of various equipment and other components from a wide range of third-
party suppliers. As we expand our anode materials manufacturing capabilities, we will begin to rely on third-party suppliers
for components and materials. See “Risk Factors—We may not be able to establish supply relationships for necessary
components or may be required to pay costs for components that are more expensive than anticipated, which could
delay the introduction or acquisition of additional equipment necessary to support our grow and negatively impact our
business.”
Seasonality
We have not been subject to any seasonality in our continuing operations in any material respect.
Our Competitive Strengths
We develop and supply what we believe is the most accurate battery testing technology in the world. Our UHPC
technology for short term reliable evaluation of the cycle life of lithium-ion cells was developed in the laboratory at
Dalhousie University by Dr. Jeff Dahn, who joined our team as Chief Scientific Advisor on July 1, 2021. Our former CEO, Dr.
Chris Burns, was a team lead of that laboratory. This testing technology delivers high accuracy, high precision
measurements that are dependable and repeatable, with the potential to allow cycle life evaluation to be made in weeks
instead of years. We believe our Ultra-High Precision Coulometry technology provides significantly higher grading
measurements than our competitors, enabling us to support the most urgent and innovative performance cell testing
projects and is used by industry leaders across the battery sector.
Our proprietary process technology and capabilities across the battery and energy storage value chain drive innovation
and commercial opportunities. By playing a critical role across the full value chain, our proprietary testing and
development technologies provide us with in-depth visibility into industry and technological trends ranging from materials
to end use cases and requirements. We believe that this access should allow us to remain at the forefront of lithium-
battery technology. As the broader battery and energy storage industry continues to evolve, we are committed to
continuing to expand into new and emerging technologies.
A leading U.S.-based supplier of battery-grade synthetic graphite anode material, with capacity scaling as market
demand grows. Our NOVONIX Anode Materials business is well-positioned to help localize synthetic graphite as U.S. and
non-U.S. companies seek to diversify their suppliers of battery materials with the goal of sourcing material within the U.S.
We are a leading US-based supplier with plans to scale significant domestic volumes of battery-grade synthetic graphite
anode material. To our knowledge, we are the only qualified U.S.-based supplier of battery-grade synthetic graphite anode
material.
Our high-performance anode materials have longer cycle life with competitive costs. NOVONIX Anode Materials’
premium graphite showcases higher coulombic efficiency as well as capacity retention compared to industry leading
materials in head-to-head comparisons (including a Tier 1 automotive OEM cell used as a reference benchmark). We
believe NOVONIX’s materials have the highest purity in the market as they contain essentially no contaminants, enhancing
safety as well as performance. We believe NOVONIX Anode Materials’ process is also a “greener” alternative as it utilizes
higher energy efficiency production technology, several lower emission energy sources and no chemical purification,
avoiding the environmental and safety risks of such processes. The strength of NOVONIX Anode Materials’ products are
evidenced by our supply agreements with Stellantis, PowerCo and Panasonic Energy, and a joint development agreement
with LGES. Our mission is to be a leader with high performance, longer life, lower costs, and “greener” materials.
Our offerings are directly compatible with today’s installed and planned battery manufacturing technology. NOVONIX
Anode Materials provides proven technology that can be integrated into current cell designs with no material additional
costs to cell manufacturers. An extremely limited number of suppliers are established outside of Asia, which could lead to
a lack of localized supply options. The plug and play characteristic along with superior material performance and
competitive pricing is expected to drive continued industry adoption of our offerings.
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Our research and development team consists of renowned battery technology researchers including Dr. Jeff Dahn and
Dr. Mark Obrovac. Dr. Jeff Dahn, who joined our team as Chief Scientific Advisor on July 1, 2021, is a leading researcher
in the field of lithium-ion batteries and materials. Dr. Dahn is a named inventor on over seventy patents and patent
applications. Dr. Mark Obrovac is another renowned researcher in battery materials and process technology, a NOVONIX
sponsored researcher, and the head of the Obrovac Research Group at Dalhousie University. With the support of leading
innovative battery technology researchers, we believe NOVONIX is well-positioned to remain at the forefront of battery
technology.
We are partnering with industry-leading companies. To further the development and production of advanced anode
materials, we are partnering with Harper International, a global leader in complete thermal processing solutions and
technical services to produce advanced materials, to develop proprietary next-generation furnace technology. This
arrangement demonstrates that industry leaders have identified NOVONIX as a strategic partner for continued innovation.
We were selected to receive support from the U.S. Government. Since November 2023, we have finalized a $100 million
grant from the DOE MESC Office, were selected to receive a $103 million 48C tax credit and received a conditional
commitment from the Loan Programs Office of the DOE for a direct loan of up to $754.8 million, to help finance the growth
of our anode materials business. We believe that the grant, tax credit and conditional loan commitment demonstrate the
commitment by the U.S. Government to support the establishment of domestic supply of high-performance battery
materials, while highlighting the expertise, progress, strategic partnerships, and technology NOVONIX has developed.
Competition
The battery materials market consists of many small suppliers (of which we form part of that market), a smaller number
of large volume suppliers and a small number of large dominating buyers. As the market continues to grow, we face the
risk that one or more competitors, or a new entrant to the market, will increase their competitive position through
aggressive marketing campaigns, product innovation, price discounting, acquisitions, or advances in technology. We strive
to remain competitive by continuing to develop our products, technologies and associated intellectual property licenses
and maintaining competitive pricing. However, in the event we are unable to adapt to changing market pressures or
customer demands and keep pace with technological change relative to our competitors, or we are forced to reduce
pricing in response to competition, our revenue and profit margins could be affected, which could have a material adverse
effect on our business and cash flows, financial condition and results of our operations.
Although, to our knowledge, we are the only qualified U.S.-based supplier of battery-grade synthetic graphite anode
material, there are four categories of companies that could be considered potential competition. The first are established
synthetic graphite manufacturing companies outside the United States, predominantly in Asia. While these companies do
have established manufacturing capacity, they suffer from a geopolitical disadvantage not being located in the United
States and suffer from higher energy costs and have less stringent environmental regulations. The second category of
potential competition is natural graphite mining companies. Natural graphite provides historically cheaper pricing than
synthetic graphite; however natural graphite significantly underperforms relative to synthetic graphite in battery testing
and has potential environmental concerns regarding mining practices. The third potential category of competition are
existing graphitization companies and new entrants to the production of battery grade synthetic graphite in the United
States. While these companies may have significant furnace operations, we believe there are no other graphitization
companies or new entrant that have developed an economic process to manufacture battery grade synthetic graphite to
the specifications of tier-1 battery manufacturers building in the United States. The fourth and final category of
competition are companies developing disruptive technologies such as silicon anodes and liquid metal/solid-state
batteries. There are significant marketing materials available to demonstrate the promise of these potential disruptive
technologies. However, we are unaware of any technology that has a path to develop, a cost competitive product in the
foreseeable future that will meet the increasing lifetime requirements for EVs and energy storage solutions markets and
thus be able to capture more than a niche portion of the battery market. As a result, we do not foresee these new
technologies having a material impact on the addressable market for our graphite anode material products in the
foreseeable future.
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Intellectual Property
As of December 31, 2024, we have rights to five issued patents and nineteen active families of patent applications. Our
oldest patent application was filed with a priority date in 2015. This patent information is based on our current assessment
of patents that we own or control or have exclusively licensed. The information is subject to revision, for example, in the
event of changes in the law or legal rulings affecting our patents or if we become aware of new information.
The actual protection afforded by a patent varies in each country and is dependent on the type of patent, the scope of its
coverage as determined by the patent office or courts in that country, and the availability of legal remedies in the country.
Patents expire, on a country-by-country basis, at various times depending on several factors, including the filing date of
the corresponding patent application(s), the availability of patent term adjustment, patent term extension and
supplemental protection certificates and requirements for terminal disclaimers. In most countries, including Australia and
the United States, the patent term is 20 years from the earliest claimed filing date of a non-provisional patent application
or its foreign equivalent in the applicable country. In the United States, a patent’s term can be lengthened in certain cases
by a patent term adjustment, which compensates a patentee for administrative delays by the USPTO in examining and
granting a patent, or may be shortened if a patent is terminally disclaimed over a commonly owned patent or a patent
naming a common inventor and having an earlier expiration date.
We may not be able to develop patentable products or processes or obtain patents from pending patent applications. In
the event of patent issuance, the patents may not be entirely sufficient to protect the proprietary technology owned by
or licensed to us or our partners. Our current patents, or patents that issue on pending applications, may be challenged,
invalidated, infringed, or circumvented. In addition, changes to patent laws in the United States or in other countries may
limit our ability to defend or enforce our patents or may apply retroactively to affect the term and/or scope of our patents.
Our patents may be challenged by third parties in post-issuance administrative proceedings or in litigation as invalid, not
infringed, or unenforceable under U.S., Canadian, U.K, Australian or other foreign laws, or they may be infringed by third
parties. As a result, we are or may be from time to time involved in the defense and enforcement of our patent or other
intellectual property rights in a court of law and administrative tribunals, such as in USPTO inter partes review or
reexamination proceedings, foreign opposition proceedings or related legal and administrative proceedings in the United
States and elsewhere. The costs of defending our patents or enforcing our proprietary rights in post-issuance
administrative proceedings or litigation may be substantial and the outcome can be uncertain. An adverse outcome may
allow third parties to use our proprietary technologies without a license from us.
Furthermore, we rely upon trade secrets and know-how and continuing technological innovation to develop and maintain
our competitive position. We seek to protect our proprietary information, in part, by using confidentiality and invention
assignment agreements with commercial partners, collaborators, employees and consultants. These agreements are
designed to protect our proprietary information and, in the case of the invention assignment agreements, to grant it
ownership of technologies that are developed through a relationship with a third party. These agreements may be
breached, and we may not have adequate remedies for any breach. In addition, our trade secrets may otherwise become
known or be independently discovered by competitors. To the extent that our commercial partners, collaborators,
employees, and consultants use intellectual property owned by others in their work for us, disputes may arise as to the
rights in related or resulting knowledge and inventions.
Our commercial success will also depend in part on not infringing upon the proprietary rights of third parties. It is uncertain
whether the issuance of any third-party patent would require us to alter our development or commercial strategies for
our product candidates or processes, or to obtain licenses or cease certain activities. Our breach of any license agreements
or failure to obtain a license to proprietary rights that we may require to develop or commercialize our future products
may have an adverse impact on us. If third parties prepare and file patent applications in the United States that also claim
technology to which we have rights, we may have to participate in interference or derivation proceedings in the USPTO
to determine priority of invention.
We currently rely on our registered and unregistered trademarks, trade names and service marks, as well as our domain
names and logos, as appropriate, to market our brands and to build and maintain brand recognition.
57
Regulation
Our business is subject to regulation in several areas. Changes in government, monetary policies and laws and regulations,
among other things, can have a significant impact on our assets, operations, financial performance and, ultimately, the
value of our company and our ordinary shares. Changes may occur in the U.S., Canada, Australia, or any other country in
which we operate, or subsequently start to operate. Such changes are likely to be beyond our control and may affect the
industries in which we operate, our company, or both. Non-compliance with changing laws and regulations may expose
the company to legal risk via investigations or litigious proceedings from regulators, counterparties, or consumers. This
section sets forth a summary of the principal laws and regulations relevant to our business.
Department of Energy Grant Terms and Conditions
Under the award agreement that the Company finalized in November 2023 with DOE’s MESC Office, and the underlying
regulations applicable to the $100 million grant awarded to the Company, which is payable upon achieving certain
milestones and must be matched by the recipient, the Company is required to comply with a number of U.S. laws and
regulations. Relevant requirements include the U.S. National Environmental Policy Act and other environmental, health
and safety requirements; minimum wage and apprenticeship requirements; export control laws; requirements to perform
work in the U.S.; preferences for U.S. supplies of goods and services; requirements to carry out manufacturing using new
inventions (if developed through the grant) in the U.S. to the extent commercially feasible; requirements to grant liens in
favor of the U.S. government on property acquired or developed with grant funds and restrictions on sales or dispositions
of such property; data management and intellectual property sharing requirements; and requirements to pass-down
certain of such requirements to our sub-contractors and contractual counterparties. We expect that the DOE’s MESC
Office will, and the DOE’s Office of Inspector General may, review our compliance, and the adequacy of our practices for
maintaining compliance. In the event of improper or illegal activities, or misleading statements in our applications, we are
subject to possible civil and criminal penalties, sanctions, or suspension or debarment.
In addition to the matching funding requirements and the cost of complying with law and regulations, the Company may
be required to pay the costs of a third party monitoring firm and is required to indemnify the U.S. government and its
officers, agents, or employees in the event of liability arising from claims for death, bodily injury, or loss of or damage to
property or to the environment, resulting from the project, except to the extent that such liability results from the direct
fault or negligence of U.S. government officers, agents or employees. See See Item 3. Key Information—D. Risk Factors
("We will need to obtain funding from time to time to finance our growth and operations, which may not be available
on acceptable terms, or at all. If we are unable to raise capital when needed, we may be forced to delay, reduce or
eliminate certain operations, and we may be unable to adequately control our costs.” and “Our DOE grant, and any
future grants, loans or incentives we may obtain from governmental agencies, will impose restrictions and compliance
obligations on us, with associated costs and risks.”).
Corporations Act and ASX Listing Rules
As a company incorporated in Australia, we remain subject to the Corporations Act 2001 (Cath), or Corporations Act, and
we are regulated by both the Australian Securities and Investments Commission, or ASIC, the country’s corporate
regulator, and the Australian Securities Exchange, or ASX, as an entity listed on that exchange. Accordingly, we must
comply with all Corporations Act requirements and the Listing Rules maintained by ASX. Changes to these rules and
requirements may have an impact on our assets, operations, financial performance, value, or other matters. Breaches of
these rules and regulations may give rise to regulatory action from ASIC or ASX or litigious proceedings initiated by other
stakeholders.
58
The Foreign Corrupt Practices Act
The FCPA prohibits any U.S. individual or business from paying, offering, or authorizing payment or offering of anything of
value, directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing any act or
decision of the foreign entity in order to assist the individual or business in obtaining or retaining business. The FCPA also
obligates companies whose securities are listed in the United States to comply with accounting provisions requiring us to
maintain books and records that accurately and fairly reflect all transactions of the corporation, including international
subsidiaries, and to devise and maintain an adequate system of internal accounting controls for international operations.
Environmental, Health and Safety
Our facilities and operations are subject to numerous environmental, health and safety (“EHS”) laws and regulations which
require significant capital investment on an ongoing basis and could give rise to unforeseen liability, including as a result
of a governmental enforcement action or obligations to remediate contaminated sites, including third-party contaminated
sites where we have sent waste for treatment or disposal. EHS laws or their enforcement may become more stringent
over time, which could increase our operating costs and subject us to additional liabilities.
See Item 3. Key Information—D. Risk Factors—Risks Related to Regulatory Matters contained herein.
Sustainability and ESG Strategy and Initiatives
We believe that an increasing emphasis on environmentally conscious battery technologies is key to a sustainable future
with widespread adoption of EVs and grid ESS. Many current manufacturing methods for key battery materials are energy
intensive, wasteful or hazardous to the environment. End users and OEMs are focused on sourcing materials from cleaner
technologies. We are committed to the development of technologies that support key sustainability criteria in the field of
battery materials and technologies, including:
•
Longer Life Batteries. We believe that the use of NOVONIX’s synthetic graphite leads to longer life batteries
which therefore generate less overall waste in recycling or disposal.
•
Higher Energy Efficiency. Improvements in process technology demonstrated by NOVONIX Anode Materials as
well as through NOVONIX’s all-dry, zero-waste cathode synthesis process technology could reduce the amount
of energy required to produce key battery materials. NOVONIX’s proprietary graphitization furnace technology
was developed with the objective of being the highest efficiency graphitization technology.
•
Reduced Chemical Usage. NOVONIX Anode Materials uses no chemical purification, which reduces risks of
harmful chemical leaks, spills, or exposure, while eliminating costs of compliance with chemical disposal
requirements. Additionally, NOVONIX’s all-dry, zero-waste cathode synthesis technology does not use
chemicals or reagents that would typically be used and require reclamation and treatment after processing.
•
Reduced Waste Generation. NOVONIX is focused on high yield technologies to produce key battery materials.
NOVONIX Anode Materials process development has maintained what we believe to be industry-leading yields
through our graphitization furnaces. NOVONIX’s all-dry, zero-waste cathode synthesis technology can allow for
the manufacturing of cathode materials requiring essentially no reagents, reduced water consumption, no
sodium sulphate byproduct generation and other reductions in waste streams.
•
Cleaner Power Inputs. NOVONIX is focused on sourcing power for its manufacturing from clean sources of
energy generation. As such, our current location in the Tennessee Valley Authority has an electrical grid make-
up which is over 50% non-carbon producing sources of energy including nuclear, hydro, wind and solar.
In 2023, we commenced our environmental, social and governance (“ESG”) program by establishing a committee
comprised of internal personnel across the Company (the "ESG Committee"). To guide discussions around relevant
sustainability themes, we engaged a third-party ESG advisor, with whose support we performed a focused materiality
assessment to identify key ESG topics relevant to our current and future business. That assessment and the efforts that
followed, including the preparation of our inaugural Sustainability Report, considered a range of ESG reporting protocols
and frameworks considered relevant to our business, such as the Sustainability Accounting and Standards Board, Global
59
Reporting Initiative, and the UN Development Goals. The ESG Committee looked to a range of protocols and frameworks
for the following reasons:
•
our primary focus was to lay the foundation for an ESG program that would begin with a focus on key ESG
topics and then develop and expand in 2023 and beyond;
•
we believed it would be premature to evaluate and decide on a single or limited number of reporting standards
that could be applied across businesses;
•
our two operating subsidiaries – NAM and BTS – while both broadly engaged in the battery industry, have key
differentiators between their businesses that required consideration of a broader range of reporting standards
that properly accounted for those differences; and
•
our NAM business has not yet achieved its full scale operations, with plans to begin production in early 2026,
which meant many of its business activities that relate to key ESG topics were still under development or not
yet generating significant or reportable data.
Our inaugural Sustainability Report is available at https://www.novonixgroup.com/about-us/sustainability/. The
reference to our website address does not constitute incorporation by reference of the information contained at or
available through our website, and you should not consider the website or any of its contents, including the Sustainability
Report, to be a part of, this annual report.
AUSTRALIAN DISCLOSURE REQUIREMENTS
Dividends
The Directors do not recommend the payment of a dividend. No dividend was paid during the financial year.
C.
Organizational Structure
The chart below sets forth our corporate organizational structure, including our directly and indirectly owned subsidiaries,
as of December 31, 2024.
60
D.
Property, Plants, and Equipment
We maintain facilities in Chattanooga, Tennessee, and Bedford and Dartmouth, Nova Scotia, and hold interests in the
MDG Project in Queensland, Australia.
Chattanooga, Tennessee
We lease property with an area of approximately 120,000 square feet. We acquired an additional property with an area
of approximately 404,000 square feet in late July 2021. These properties are used in connection with our NAM business.
Nova Scotia
We own two properties totaling 57,000 square feet. These properties are used in connection with our BTS business.
Australia
We hold tenement rights in the Mount Dromedary Graphite Project (the "MDG Project"), a high-grade natural flake
graphite deposit located in Northern Queensland, Australia. As of the date of this annual report, we have not generated
any revenue from the sale of natural graphite.
In April 2024, NOVONIX signed a Share Sale and Purchase Agreement under which its wholly owned subsidiary, MD South
Tenements Pty Ltd, which holds the Mount Dromedary natural graphite exploration interests, will be divested to Axon
Graphite Limited (“Axon Graphite”), a wholly owned subsidiary of Lithium Energy Limited (“Lithium Energy”). As a
consideration for the transaction, NOVONIX will receive shares in Axon Graphite, subject to the completion of the parties’
due diligence enquiries, completion of the initial public offering (“IPO”) of Axon Graphite, and receipt of approval and
admission of Axon Graphite to the Australian Securities Exchange (“ASX”). This decision was based on what the Company
considered more favorable investment opportunities through the manufacturing of advanced battery anode materials
and the development of new battery technologies. See Item 5. Operating and Financial Review and Prospects—A.
Operating Results.
We believe our facilities in Chattanooga, Tennessee, and Nova Scotia, are adequate and suitable for our current and
anticipated needs and that, should it be needed, suitable additional or alternative space will be available to accommodate
our operations.
As of December 31, 2024, the net book values of tangible fixed assets were as follows:
At
December 31,
2024
At
December 31,
2023
Asset category
Net book
value US$
Net book
value US$
Land
$
2,272,297
$
2,330,826
Building
42,014,149
43,786,229
Leasehold Improvements
227,954
424,769
Machinery and Equipment
18,833,358
21,204,001
Construction in Progress
85,962,585
72,047,622
Total tangible fixed assets
$
149,310,343
$
139,793,447
Item 4A. Unresolved Staff Comments
Not applicable.
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Item 5. Operating and Financial Review and Prospects
The following discussion of our financial condition and results of operations is based upon and should be read in conjunction
with our consolidated financial statements and their related notes included in this annual report on Form 20-F.
Certain information included in this discussion and analysis includes forward-looking statements that are subject to risks
and uncertainties, which may cause actual results to differ materially from those expressed or implied by such forward-
looking statements. For further information on important factors that could cause our actual results to differ materially
from the results described in the forward-looking statements contained in this discussion and analysis, see “Cautionary
Note Regarding Forward-Looking Statements,” above, and the risks described in Item 3. Key Information—D. Risk Factors
contained herein.
A.
Operating Results.
Overview
NOVONIX is a leading critical mineral, battery materials and technology company aiming to revolutionize the global
lithium-ion battery industry with innovative, sustainable technologies, high-performance materials, and more efficient
production methods. The Company is growing its high-performance synthetic graphite anode material manufacturing
operations, manufactures industry-leading battery cell testing equipment, and has developed an all-dry, zero-waste
cathode synthesis process. Through advanced R&D capabilities, proprietary technology, strategic partnerships, and as a
leading North American supplier of battery-grade synthetic graphite, NOVONIX has gained a prominent position in the
critical mineral, electric vehicle and energy storage systems battery industry and is working to power a cleaner energy
future.
We currently operate two core businesses: NOVONIX Anode Materials and NOVONIX Battery Technology Solutions. We
also have a third reporting segment related to our Mount Dromedary graphite project, which is currently held as available
for sale and is not presently considered by management as a core operating business.
NAM is the leading domestic supplier of battery-grade synthetic graphite, a critical mineral, and was established with the
objective of commercializing what we believe is the most advanced anode material in the market for EVs and energy
storage applications. These end-markets continue to demand high-performance batteries with longer life cycles, while at
the same time pursuing cost efficiencies to continue to drive mass adoption. Anode materials are one of the most
significant components that define the overall performance, reliability, and cycle life of the battery cell. To our knowledge,
we are the only qualified U.S.-based producer of EV battery-grade synthetic graphite anode material and believe NAM is
well positioned to onshore the supply chain and support the rapid growth in demand for these advanced anode materials
in North America and globally.
BTS provides industry leading battery testing technology and research and development (“R&D”) services to create next
generation batteries. BTS also serves as the pillar of innovation across the NOVONIX ecosystem by creating a positive
feedback loop with our anode and cathode materials businesses through the development of applications and strategic
partnerships. This collaboration drives our continuous technological innovation and enables us to deliver best-in-class
products and services for customers.
NOVONIX holds tenement rights in the Mount Dromedary Graphite Project (the "MDG Project"), a high-grade natural flake
graphite deposit located in Northern Queensland, Australia. In April 2024, NOVONIX signed a Share Sale and Purchase
Agreement under which its wholly owned subsidiary, MD South Tenements Pty Ltd, which holds the Mount Dromedary
natural graphite exploration interests, will be divested to Axon Graphite Limited (“Axon Graphite”), a wholly owned
subsidiary of Lithium Energy Limited (“Lithium Energy”). As a consideration for the transaction, NOVONIX will receive
shares in Axon Graphite, subject to the completion of the parties’ due diligence enquiries, completion of the initial public
offering (“IPO”) of Axon Graphite, and receipt of approval and admission of Axon Graphite to the Australian Securities
Exchange (“ASX”). On September 9, 2024, NOVONIX and Lithium Energy provided an update on the spin-out and IPO and
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ASX listing of Axon Graphite, which encompasses the merger of the high-grade natural graphite assets of Lithium Energy
(known as the Burke and Corella Deposits) and NOVONIX (known as the Mt Dromedary Deposit) to form a distinct vertically
integrated Battery Anode Material business in Queensland, Australia. As of the date of this annual report, we have not
generated any revenue from the sale of natural graphite. See Item 3. Key Information—D. Risk Factors ("From time to time
we may enter into negotiations for acquisitions, dispositions, partnerships, joint ventures or investments that are not
ultimately consummated or, if consummated, may not be successful.").
Overview of Financials
We have incurred operating losses since our inception in 2012. Our ability to generate product revenue sufficient to
achieve profitability will be dependent on our ability to begin significant production and commercialization of NOVONIX
Anode Materials business’ synthetic graphite product. Accordingly, we expect to continue to incur significant expenses as
we continue to scale production of our synthetic graphite product, the majority of which will be associated with planned
production equipment spend. We also expect to incur significant costs associated with operating as a public company in
Australia and the United States, including additional legal, accounting, investor relations, compliance, and other expenses.
As a result, we will need substantial additional funding to support our continuing operations and pursue our growth
strategy. Until such time, if ever, as we can generate sufficient revenue from synthetic graphite sales, we expect to finance
our operations through the issue of equity, debt financings, or other capital sources, which may include collaborations
with other companies or other strategic transactions as well as U.S. government financing support and tax incentives. We
may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable
terms. If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay,
scale back or discontinue the development and commercialization of our synthetic graphite product. See Item 3. Key
Information—D. Risk Factors ("We may need to obtain funding from time to time to finance our growth and operations,
which may not be available on acceptable terms, or at all. If we are unable to raise capital when needed, we may be
forced to delay, reduce or eliminate certain operations, and we may be unable to adequately control their costs.”)
contained herein.
Because of the numerous risks and uncertainties associated with the commercialization of battery-grade synthetic
graphite, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or
maintain profitability. Even if we are able to generate product sales, we may never become profitable. If we fail to become
profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations
at planned levels and be forced to scale back or discontinue our operations. See Item 3. Key Information—D. Risk Factors
("We have a history of financial losses and expect to incur significant expenses and continuing losses in the near future.”)
contained herein.
As of December 31, 2024, we had cash and cash equivalents of $42.6 million. During the year ended December 31, 2024,
the Company claimed $19.2 million from the $100 million DOE MESC grant. We continue to receive, install, and
commission equipment at Riverside towards our initial 3,000 tpa of production capacity to support our planned start of
production for Panasonic Energy in early 2026. We believe that our existing cash and cash equivalents will help support
capacity expansion towards 3,000 tpa, which is expected to be completed in early 2026. We have based these estimates
on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.
See “—Liquidity and Capital Resources,” below.
Components of Our Results of Operations
Segment Information
Our segments consist of Battery Materials (NAM), Battery Technology (BTS), and Graphite Exploration (MDG Project). In
order to comply with the requirement to discuss significant components of revenue and expenses, and to enable investors
to understand the consolidated amounts, where applicable we have provided a discussion along segmental lines. As a
result, the discussion and analysis of segments is integrated with the discussion of the consolidated amounts to avoid
confusion and duplication of disclosure.
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Revenue
NOVONIX Anode Materials
As of the date of this annual report on Form 20-F, we have not generated any revenue from sale of synthetic graphite. If
our commercialization efforts for our synthetic graphite product are successful, we may generate revenue from the sale
of our synthetic graphite materials. In addition, if we enter into additional collaboration, partnership or license
agreements with third parties, we may generate revenue in the future from payments from such collaboration or license
agreements or a combination of product sales and those payments.
NOVONIX Battery Technology Solutions
Revenue is contributed through two primary BTS business lines: hardware sales and consulting services. Our customers
include leading battery makers and researchers and equipment manufacturers, and numerous specialty materials,
consumer electronics OEMs and automotive OEMs.
When we sell battery testing equipment, we enter into a contract with our customers covering the price, specifications,
delivery dates and warranty for the products being purchased among other things. Our contractual delivery periods vary,
but are typically about three months. Contracts for battery testing equipment can range in value based on the amount of
equipment provided and the duration of the contract. Revenue from the sales of BTS hardware is recognized at the point
in time when the hardware is delivered and the legal title has passed.
The consulting services business provides battery cell design, implementation and support services under fixed-price and
variable price contracts. Revenue from providing services is recognized in the accounting period in which the services are
rendered. For fixed-price contracts, revenue is recognized based on the actual service provided to the end of the reporting
period relative to the remaining services under the contract because the customer receives and uses the benefits
simultaneously. This is determined based on the actual labor hours spent relative to the total expected labor hours.
Where the contracts include multiple performance obligations, the transaction price will be allocated to each performance
obligation based on the stand-alone selling prices. Where these are not directly observable, they are estimated based on
expected cost-plus margin.
Our BTS revenue is affected by changes in the price, volume and mix of products and services purchased by BTS’ customers.
The price and volume of our products is driven by the demand for our products, changes in product mix between
equipment and services, geographic mix of our customers, and strength of competitors’ product offerings.
Graphite Exploration
As of the date of this annual report on Form 20-F, we have not generated any revenue from the sale of natural graphite.
We do not expect any revenue from our interests in the MDG Project in the near future. In October 2023, the Company
decided to pursue potential opportunities to realize the value of these assets through a strategic transaction. All tenement
rights remain current, exploration activity is continuing to the extent required under the tenement rights, a resource,
principally high-grade graphite, has been identified, and, as a result of the Company’s decision, the assets are classified as
being available for sale as of the years ended December 31, 2023 and 2024.
Other Income
Other income is primarily comprised of interest income and grant income. Interest income is recognized as interest accrues
using the effective interest method. This is a method of calculating the amortized cost of a financial asset and allocating
the interest income over the relevant period using the effective interest rate, which is the rate that discounts estimated
future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.
Government grants are recognized where there is reasonable assurance that the grant will be received and all attached
conditions will be complied with. When the grant relates to an expense item, it is recognized as income on a systematic
64
basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates
to an asset, it is recognized as an offset to the cost of the related asset. Other income also includes gains on revaluation
of previously held equity method investments, which can be recognized when we obtain control over the equity method
investee.
Product Manufacturing and Operating Costs
Product manufacturing and operating costs consists of product costs, including purchased materials and components, as
well as costs related to shipping, which, as at the date of this annual report on Form 20-F, have been in connection with
our BTS business only. Our product costs are affected by the underlying cost of raw materials and component costs.
Administrative and Other Expenses
Administrative and other expenses consist primarily of travel expenses, facilities costs, audit, legal, tax, insurance,
information technology and other costs.
We expect to incur additional audit, tax, accounting, legal and other costs related to compliance with applicable securities
and other regulations, as well as additional insurance, investor relations and other costs associated with being a public
company in Australia and the United States. In addition, if we cease to qualify as a foreign private issuer in the future, we
would expect that we would incur additional expenses as a domestic reporting company in the United States. See Item 3.
Key Information—D. Risk Factors ("We may lose our foreign private issuer status in the future, which could result in
significant additional cost and expense.").
Borrowing Costs
The borrowing costs are recognized in the profit or loss statement in the reporting period in which they are incurred.
Borrowing costs consist primarily of interest accrued on loan notes and borrowings, loss on redemption of loan notes and
unwinding of fair value gains.
Impairment Losses
At the end of each reporting period, the Company assesses whether there is any indication that an asset may be impaired.
The assessment includes the consideration of external and internal sources of information, including dividends received
from subsidiaries, associates or joint ventures deemed to be out of pre-acquisition profits. If such an indication exists, an
impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the
asset’s fair value less costs of disposal and value in use, to the asset’s carrying amount. Any excess of the assets carrying
amount over its recoverable amount is recognized immediately in profit or loss, unless the asset is carried at a revalued
amount in accordance with another accounting standard. Any impairment loss of a revalued asset is treated as a
revaluation decrease in accordance with that other accounting standard.
Depreciation and Amortization Expenses
Depreciation expense consists of costs associated with property, plant and equipment (“PP&E”) which are depreciated
over their expected useful lives. We expect that as we increase both our revenues and the number of our general and
administrative personnel, we will invest in additional PP&E to support our growth resulting in additional depreciation
expense.
Amortization expense consists of costs associated with technology intangible assets other than goodwill, which are
amortized over their expected useful lives.
65
Research and Development Costs
Research and development costs primarily represent the Company's investment in research and development activities
for our all-dry, zero-waste cathode synthesis process and our data analytics project. At present, our research and
development activities are conducted through our two core businesses: BTS and NAM; all-dry, zero-waste cathode
synthesis and data analytics falls under BTS R&D.
Research expenditures are recognized as an expense when incurred. Costs incurred on development projects (relating to
the design and testing of enhancements or extensions of products from the all-dry, zero-waste project) are recognized as
intangible assets when:
•
The technical feasibility of completing the intangible asset so that it will be available for use or sale;
•
The intention to complete the intangible asset and use it or sell it;
•
The ability to use or sell the intangible asset;
•
How the intangible asset will generate probable future economic benefits;
•
The availability of adequate technical, financial, and other resources to complete the development and to use
or sell the intangible asset; and
•
The ability to measure reliably the expenditure attributable to the intangible asset during its development.
The expenditure capitalized comprises all directly attributable costs, including costs of materials, services, direct labor and
an appropriate proportion of overhead. Other development expenditures that do not meet these criteria are recognized
as an expense when incurred. Development costs previously recognized as an expense are not recognized as an asset in a
subsequent period. Capitalized development costs are recorded as intangible assets and amortized from the point at
which the asset is ready for use on a straight-line basis over its useful life.
Share Based Compensation
Equity-settled share-based compensation benefits are provided to directors and employees. Equity-settled transactions
are awards of shares, options or performance rights over shares, that are provided to directors and employees in exchange
for the rendering of services.
The Company measures the cost of equity settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by using either a binomial or Monte Carlo
option pricing model taking into account the terms and conditions upon which the instruments were granted. The
accounting estimates and assumptions, including share price volatility, interest rates and vesting periods would have no
impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact the profit
or loss and equity.
The cost of equity-settled transactions is recognized as an expense with a corresponding increase in equity over the vesting
period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best
estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount
recognized in profit or loss for the reporting period is the cumulative amount calculated at each reporting date less
amounts already recognized in previous reporting periods.
Share-based payment expenses are recognized over the period during which the employee provides the relevant services.
This period may commence prior to the formal grant date, such as where the granting of options or performance rights
are subject to shareholder approval. In this situation, the entity estimates the grant date fair value of the equity
instruments for the purposes of recognizing an expense for the services received during the period between service
commencement date and grant date. Once the grant date has been established, the fair value of the equity instrument is
calculated, and the earlier estimate is revised so that the amount recognized for services received is ultimately based on
the grant date fair value of the equity instruments. Where there is a difference between the estimated grant date fair
66
value and the actual grant date fair value, adjusting entries are recognized in share-based payment expense and the share-
based payment reserve.
Employee Benefits Expense
Employee benefits expenses consist of fixed annual remuneration, short-term incentives, and long-term incentives.
Employees receive their fixed annual remuneration in cash. Short-term incentives are payable on achievement of mutually
agreed KPIs each fiscal year with short-term incentives being payable in either cash or by way of the issue of fully paid
ordinary shares. The Company has historically paid short-term incentives in cash.
At the Board’s discretion, employees are invited to participate in the long-term incentive program which comprises one-
off grants of options and/or performance rights, with varying vesting conditions.
Foreign Currency Gain (Loss)
Foreign currency gain (loss) results from a change in exchange rates between our functional currency and the currency in
which a foreign currency transaction is denominated.
Income Tax (Expense) Benefit
The income tax expense or benefit for the reporting period is the tax payable on that period’s taxable income based on
the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities
attributable to temporary differences, unused tax losses and the adjustment recognized for prior reporting periods, where
applicable.
Deferred tax assets and liabilities are recognized for temporary differences at the tax rates expected to be applied when
the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted,
except for:
•
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or
liability in a transaction that is not a business combination and that, at the time of the transaction, affects
neither the accounting nor taxable profits; or
•
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures,
the timing of the reversal can be controlled, and it is probable that the temporary difference will not reverse
in the foreseeable future.
Deferred tax assets are recognized for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilize those temporary differences and losses.
The carrying amount of recognized and unrecognized deferred tax assets are reviewed at each reporting date. Deferred
tax assets recognized are reduced to the extent that it is no longer probable that future taxable profits will be available
for the carrying amount to be recovered. Previously unrecognized deferred tax assets are recognized to the extent that it
is probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets
against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable
authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.
67
Results of Operations for the Years Ended December 31, 2024, and 2023
The following table sets forth a summary of our consolidated statements of profit or loss and other comprehensive income
for the periods presented.
Year Ended
December 31,
Year Ended
December 31,
2024 vs. 2023
($ in millions)
2024
2023
$ Change
Revenue
$
5.9
$
8.1
(2.2 )
Product manufacturing and operating costs
(1.8 )
(2.8 )
1.0
Administrative and other expenses
(19.9 )
(18.9 )
(1.0 )
Depreciation and amortization expenses
(4.6 )
(4.7 )
0.1
Loss on equity investment securities at fair value
through profit or loss
(15.3 )
—
(15.3 )
Research and development costs
(4.9 )
(5.8 )
0.9
Share based compensation
(5.5 )
(5.6 )
0.1
Employee benefits expense
(23.6 )
(20.3 )
(3.3 )
Borrowing costs
(3.6 )
(2.9 )
(0.7 )
Foreign currency (loss)/gain
(1.2 )
1.4
(2.6 )
(Loss)/gain on fair value of derivative financial
instruments
(4.5 )
1.5
(6.0 )
Other income, net
4.3
3.6
0.7
Loss before income tax (expense) benefit
(74.7 )
(46.4 )
(28.3 )
Income tax (expense) benefit
(0.1 )
0.2
(0.3 )
Net loss
(74.8 )
(46.2 )
(28.6 )
Other comprehensive loss, net of tax
Foreign currency translation of foreign operations
(3.8 )
(1.5 )
(2.3 )
Total comprehensive loss
$
(78.6 ) $
(47.7 )
(30.9 )
Revenue
Revenue decrease by $2.2 million to $5.9 million for the year ended December 31, 2024, compared to $8.1 million for the
year ended December 31, 2023. The decrease was primarily due to softer demand from existing customers and a lack of
new customers for hardware sales and consulting services in our BTS segment.
Product Manufacturing and Operating Costs
Product manufacturing and operating costs decreased $1.0 million to $1.8 million for the year ended December 31, 2024,
compared to $2.8 million for the year ended December 31, 2023. The decrease was due to cost savings achieved amongst
major suppliers.
Administrative and Other Expenses
Administrative and other expenses increased $1.0 million to $19.9 million for the year ended December 31, 2024,
compared to $18.9 million for the year ended December 31, 2023. The increase was primarily due legal and consulting
fees related to the DOE LPO loan application process.
68
Loss on equity investment securities at fair value through profit or loss
During the year ended December 31, 2024, the Company assessed the fair value of the investment in KORE Power and
determined that it should be reduced to $0 as of December 31, 2024, and recorded a loss of $15.3 million. This
determination was based in part on milestones regarding financing, construction and the timeline of KORE Power’s
KOREPlex facility planned in Arizona not being met and the resulting announcement that the KOREPlex facility was not
to be constructed and the change in Chief Executive Officer leadership of KORE Power.
Employee Benefits Expense
Employee Benefits expense increased $3.3 million to $23.6 million for the year ended December 31, 2024, compared to
$20.3 million for the year ended December 31, 2023. The increase was primarily driven by higher personnel-related costs
to support the alignment with the expansion of the business.
Foreign Currency (Loss)/Gain
Foreign currency loss for the year ended December 31, 2024, was $1.2 million compared to a foreign currency gain for the
year ended December 31, 2023, of $1.4 million. Our foreign currency gain/loss fluctuates based on our exposure to
transactions and balances denominated in currencies other than the functional currency of the related subsidiary.
(Loss)/Gain on fair value of derivative financial instruments
Loss on fair value of derivative financial instruments for the year ended December 31, 2024 was $4.5 million compared to
a gain of $1.5 million for the for the year ended December 31, 2023. The decrease is due to the revaluation of the derivative
component of the convertible notes issued to LGES in 2023.
Results of Operations for the Years Ended December 31, 2023 and December 31, 2022
For a comparison of our Results of Operations for the year ended December 31, 2023, to the year ended December 31,
2022, see "Item 5. Operating and Financial Review and Prospects” of our Form 20-F for the fiscal year ended December
31, 2023, filed with the SEC on February 28, 2024.
AUSTRALIAN DISCLOSURE REQUIREMENTS
Principal activities
During the year, the principal activities of the Company included investment in scalability efforts to increase production
capacity of anode materials, entered into customer offtake agreements for anode materials, commercialization of the
Company’s cathode technology and expansion of cell assembly and testing capabilities.
Company Secretary
The Company Secretary is Suzanne Yeates. Appointed to the position of Company Secretary on 18 September 2015, Ms.
Yeates is a Chartered Accountant and Founder and Principal of Outsourced Accounting Solutions Pty Ltd. She holds
similar positions with other public and private companies.
Events after the reporting date
Since December 31, 2024, the Company has:
•
issued 53,887,112 fully paid ordinary shares under a Share Purchase Plan at AUD$0.60 per share, raising
AUD$32,332,267.
69
•
issued 12,771,392 fully paid ordinary shares under an Institutional Placement to Phillips 66 Company at
AUD$0.60 per share, raising USD$5million
•
on January 21, 2025, announced the planned transition in our CEO role, with Dr. Chris Burns stepping down
as Chief Executive Officer effective January 24, 2025. Dr. Burns will continue to support the Company in an
advisory capacity, serving as Special Advisor to the Board, in order to provide continuity, support ongoing
operations of the Company and ensure a smooth transition. The Board has appointed Mr. Robert Long, our
Chief Financial Officer, to serve as interim CEO, effective January 24, 2025, until a permanent CEO is
appointed. Mr. Long will work closely with the Board to ensure a smooth transition and maintain our
momentum and focus on our key strategic goals.
There have been no other matters or circumstances that have arisen since the end of the twelve months ended
December 31, 2024, which significantly affected or could significantly affect the operations of the Company, the results
of those operations or the state of affairs of the Company in future financial years.
Significant Changes in the State of Affairs
There have been no significant changes in the state of our affairs during the year ended December 31, 2024 except as
noted in the "Business Overview" section included in Item 4.B.
Likely Developments and Expected Results of Operations
Comments on likely developments and expected results of operations are included in Item 5.
Environmental Regulations
The Company is subject to environmental regulations in respect of its exploration and development activities in Australia
and its operations in the United States and Canada and is committed to undertaking all its operations in an
environmentally responsible manner.
To the best of the Directors’ knowledge, the Company has adequate systems in place to ensure compliance with the
requirements of all environmental legislation and are not aware of any breach of those requirements during the financial
year and up to the date of the Directors’ report included in Item 6. Directors, Senior Management and Employees — B. -
Compensation.
B.
Liquidity and Capital Resources
The liquidity and capital resources discussion that follows contains certain estimates as of the date of this annual report
on Form 20-F of our estimated future sources and uses of liquidity (including estimated future capital resources and capital
expenditures) and future financial and operating results. These estimates represent forward looking information and
reflect numerous assumptions made by us with respect to industry performance, general business, economic, regulatory,
market and financial conditions and other future events, and matters specific to our businesses, all of which are difficult
or impossible to predict and many of which are beyond our control. See “Cautionary Note Regarding Forward-Looking
Statements.”
Material Cash Commitments and Contractual Maturities
The Company had commitments for payments under exploration permits of $470,763, $2,000, $4,000, and $15,853 as at
December 31, 2024, December 31, 2023, December 31, 2022, and June 30, 2022, respectively. The Company also has
contractual obligations in respect of a non-cancellable operating lease for its Lookout Valley facility in Chattanooga,
Tennessee of $7.0 million. The Company recognized a right-of-use asset for this lease. No other material commitments or
contractual obligations exist as at June 30, 2022.
70
As of December 31, 2024, the contractual maturities of the Company's non-derivative financial liabilities were as follows
($ in millions):
Contractual maturities of
financial liabilities
Less than
6 months
6 – 12
months
Between
1 and 2
years
Between
2 and 5
years
Over
5 years
Total
contractual
cash flows
Carrying
amount
At December 31, 2024
US$
US$
US$
US$
US$
US$
US$
Trade and other payables
$
8.5
$
—
$
—
$
—
$
—
$
8.5
$
8.5
Lease liabilities
0.4
0.4
0.8
2.7
4.2
8.5
7.0
Borrowings
1.4
1.4
2.8
41.9
31.7
79.2
64.4
Total non-derivatives
$
10.3
$
1.8
$
3.6
$
44.6
$
35.9
$
96.2
$
79.9
Funding Requirements
As of December 31, 2024, we had cash and cash equivalents of $42.6 million. On November 1, 2023 we were awarded a
$100 million grant from the Department of Energy Office of Manufacturing and Energy Supply Chains to be utilized in the
expansion of our Riverside facility. Receipts from this Grant will be paid against verified expenses and are required to be
matched with Company funding. During the year ended December 31, 2024, the Company claimed $19.2 million from the
$100 million DOE MESC grant. We continue to receive, install, and commission equipment at Riverside towards our initial
3,000 tpa of production capacity to support our planned start of production for Panasonic Energy in early 2026. Overall,
we plan to increase our production capacity at our existing, planned and potential facilities to 150,000 tpa in at least three
phases and over a time frame to be determined. Phase 1 of our production capacity plan is the full build-out and
commissioning of our Riverside facility in Chattanooga, Tennessee. In Phase 2, we plan to construct our Enterprise South
facility with an initial production capacity of 31,500 tpa taking our aggregate production capacity to 50,000 tpa between
both facilities. Phase 3 includes an expansion of the Enterprise South facility with plans to reach a targeted capacity of
75,000 tpa as well as a third greenfield manufacturing facility that would take the Company’s total production capacity to
150,000 tpa for targeted total production capacity, although plans for Phase 3 are still being developed and will be
dependent on customer demand. We have based these estimates on assumptions that may prove to be wrong, and we
could exhaust our available capital resources sooner than we expect. We will need to obtain additional funding to expand
our production facilities and meet our targeted production capacities and fund our continuing operations. See Item 3. Key
Information—D. Risk Factors ("We may need to obtain funding from time to time to finance our growth and operations,
which may not be available on acceptable terms, or at all. If we are unable to raise capital when needed, we may be
forced to delay, reduce or eliminate certain operations, and we may be unable to adequately control their costs.”).
Sources and Uses of Liquidity
We expect our expenses to continue to increase in connection with our ongoing activities, particularly as we continue
purchase additional production equipment associated with the manufacture of synthetic graphite. In November 2024, the
Company successfully completed a fully underwritten placement of new fully paid ordinary shares (“New Shares”) to
institutional and sophisticated investors (the “Institutional Offering”) at an offer price of A$0.60 per New Share
(“Institutional Placement”) for net proceeds of US$26.6 million. Under the Institutional Placement, the Company issued
approximately 74.1 million New Shares pursuant to the Company’s existing placement capacity under ASX Listing Rule 7.1.
The 74.1 million New Shares issued under the Institutional Placement rank equally with existing shares on issue. In
connection with this equity placement, the Company also (i) issued approximately 12.8 million shares under the second
placement to existing major shareholder Phillips 66 (the “Secondary Placement”) after shareholder approval at an
extraordinary general meeting on 22 January 2025 to raise US$5.0 million and (ii) offered a non-underwritten Share
Purchase Plan (“SPP”) which closed on 10 January 2025. The Company received valid applications from eligible
shareholders for 68.6 million fully paid ordinary shares in NOVONIX (“SPP Shares”) to raise US$25.8 million (before costs)
under the SPP. The SPP size was increased by US$22.5 million above its original target of US$3.3 million. Of the total
subscriptions received, the Company accepted US$20.2 million or approximately 78%.
71
The Company will use the proceeds from the Institutional Offering, the Secondary Placement and the SPP to purchase,
install, and commission additional equipment in the Company’s Riverside facility in Chattanooga, Tennessee, which was
purchased on July 28, 2021 for $42.6 million to expand our anode materials production facilities. In connection with the
purchase of this Riverside facility, the Company entered into a loan facility with DBR Investments Co. Limited for $30.1
million with an interest rate of 4.09%. The loan has been fully drawn down as of December 31, 2023. The total liability as
of December 31, 2024 was $27.7 million. In December, the Company announced a conditional commitment from the U.S.
Department of Energy through the Loan Programs Office for a direct loan of up to US$754.8 million ($692 million in
principal and $62.8 million in capitalized interest) to be applied towards partially financing a proposed new facility in
Chattanooga, Tennessee. If finalized, the loan would be applied towards partially financing the construction of the new
facility, Enterprise South, to be located in the Enterprise South Industrial Park in Chattanooga, Tennessee. This facility is
expected to produce approximately 31,500 tonnes per annum of synthetic graphite.
On June 21, 2023, pursuant to the LGES Note Agreement, we issued an aggregate principal amount of US$30 million
unsecured convertible notes to LGES (the “Convertible Notes”). The Convertible Notes bear interest at an annual
percentage rate of 4.0%, have a maturity date of June 7, 2028 and will mandatorily convert into ordinary shares upon
LGES' acceptance of the first purchase order under any purchase agreement that it may enter into with NOVONIX.
However, LGES may elect to convert some or all of the Convertible Notes prior to such time. No interest would be payable
on the Convertible Notes that are converted into ordinary shares prior to the maturity date. On the maturity date, LGES
may elect to redeem or convert all of the Convertible Notes then outstanding, in which case interest will be payable in
cash (in the case of redemption) or “in-kind” (in the case of conversion). The conversion price of the Convertible Notes is
AUD$1.60 per ordinary share. The proceeds from issuing the Convertible Notes have been utilized for continued
development of anode materials, operational needs and general corporate purposes. See Item 7. Major Shareholders and
Related Party Transactions.
In addition, we expect to incur significant commercialization expenses related to sales, marketing, and distribution to the
extent that such sales, marketing and distribution are not the responsibility of any future customers. Further, we expect
to incur additional costs associated with operating as a public company in Australia and the United States. We may find
that these efforts are more expensive than we currently anticipate or that these efforts may not result in revenues, which
would further increase our losses, impact our ability to repay our debt (including the Convertible Notes issued to LGES)
and require future capital raises to maintain our business.
We believe we will continue to incur operating and net losses in each fiscal year until at least the time we begin significant
production of our anode materials, which is not expected to occur earlier than 2026 and may occur later or not at all.
These conditions give rise to substantial doubt over our ability to continue as a going concern. If we were not able to
continue as a going concern, or if there were continued doubt about our ability to do so, additional financing may not be
available to us. See Item 3. Key Information—D. Risk Factors ("We have a history of financial losses and expect to incur
significant expenses and continuing losses in the near future.”).
Until we can generate a sufficient amount of revenue from the sale of synthetic graphite, if ever, we expect to finance our
operating activities through our existing liquidity and future financing activities, including a combination of equity
offerings, debt financings, collaborations, strategic partnerships and licensing arrangements. To the extent that we raise
additional capital through the sale of equity or convertible debt securities, ADS holders' ownership interests will be diluted,
and the terms of these securities may include liquidation or other preferences that adversely affect the rights of such
holders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to
take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise
funds through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish
valuable rights to our technologies, intellectual property, future revenue streams or product candidates. If we are unable
to raise additional funds through financings when needed, we may be required to delay, limit, reduce or terminate our
product development or future commercialization efforts or grant rights to develop and market product candidates that
we would otherwise prefer to develop and market ourselves. See Item 3. Key Information—D. Risk Factors (“We may need
to obtain funding from time to time to finance our growth and operations, which may not be available on acceptable
72
terms, or at all. If we are unable to raise capital when needed, we may be forced to delay, reduce or eliminate certain
operations, and we may be unable to adequately control their costs.”).
Our present and future funding requirements will depend on many factors, including, among other things:
•
the initiation, progress, timing, and costs associated with our planned capacity expansion, including but not
limited to onboarding and training production operators, installation of production equipment, and installation
and commissioning of required supporting building and equipment infrastructure;
•
costs associated with expanding our organization, including our management infrastructure;
•
selling and marketing activities undertaken in connection with the commercialization of our synthetic graphite
product; and
•
the costs of operating as a public listed company in both Australia and the United States.
Sources and Uses of Liquidity
The following table summarizes our cash flows for the periods presented.
Year Ended December 31,
Year Ended December
31, 2024 vs. 2024
($ in Millions)
2024
2023
$ Change
Net cash outflow from operating activities
$
(40.4 ) $
(36.2 ) $
(4.2 )
Net cash outflow from investing activities
(18.2 )
(11.7 )
(6.4 )
Net cash inflow from financing activities
25.2
29.3
(4.1 )
Net decrease in cash and cash equivalents
(33.4 )
(18.6 )
(14.8 )
Effects of foreign currency
(2.7 )
(1.7 )
(1.0 )
Cash and cash equivalents at the beginning of the year
78.7
99.0
(20.3 )
Cash and cash equivalents at the end of the year
$
42.6
$
78.7
$
(36.2 )
Cash Flows from Operating Activities
For the years ended December 31, 2024, and 2023, net cash used in operating activities was $40.4 million and $36.2
million, respectively. The increase in net cash used in operating activities was primarily due to an increase in payments to
suppliers and employees.
Payments to suppliers and employees increased to $50.3 million in the year ended December 31, 2024, from $45.6 million
in the year ended December 31, 2023, in line with increased business activities in both our BTS and NAM segments.
Year Ended December 31, 2023, compared to Year Ended December 31, 2022
For a comparison of our Cash Flows from Operating Activities for the year ended December 31, 2023, to the year ended
December 31, 2022, see "Item 5. Operating and Financial Review and Prospects” of our Form 20-F for the fiscal year
ended December 31, 2023, filed with the SEC on February 28, 2024.
Cash Flows from Investing Activities
For the years ended December 31, 2024, and 2023, net cash used in investing activities was $18.2 million and $11.7 million,
respectively. The increase was primarily due to an increase of $10.7 million in payments for property, plant and equipment
partially offset by government grants received.
Years Ended December 31, 2023, compared to Year Ended December 31, 2022
73
For a comparison of our Cash Flows from Investing Activities for the year ended December 31, 2023, to the year ended
December 31, 2022, see "Item 5. Operating and Financial Review and Prospects” of our transition report on Form 20-F
for the fiscal year ended December 31, 2023, filed with the SEC on February 28, 2024.
Cash Flows from Financing Activities
For the years ended December 31, 2024, and 2023, net cash provided by financing activities was $25.2 million and net
cash used in financing activities was $29.3 million, respectively. The decrease was primarily due to the net proceeds from
the issuance of the $30.0 million of Convertible Notes in 2023 compared to the $28.8 million in proceeds (net of issue
costs) from the issuance of new ordinary shares.
Year Ended December 31, 2023, compared to Year Ended December 31, 2022
For a comparison of our Cash Flows from Operating Activities for the year ended December 31, 2023, to the year ended
December 31, 20212, see "Item 5. Operating and Financial Review and Prospects” of our Form 20-F for the fiscal year
ended December 31, 2023, filed with the SEC on February 28, 2024.
Credit Risk
The Company has no significant concentration of credit risk with respect to any counterparties or on a geographical basis.
Amounts are considered as “past due” when the debt has not been settled, in line with the terms and conditions agreed
between the Company and the customer to the transaction.
The Company assesses impairment on trade and other receivables using the simplified approach of the expected credit
loss (ECL) model under AASB 9.
The balance of receivables that remain within initial trade terms are considered to be of high credit quality.
Emerging Growth Company Status
As a company with less than $1.235 billion in revenue during our last fiscal year, we qualify as an “emerging growth
company” as defined in the JOBS Act. As an emerging growth company, we may take advantage of specified reduced
disclosure and other requirements that are otherwise applicable generally to public companies. These provisions
include:
•
exemption from the auditor attestation requirement of Section 404 of the Sarbanes-Oxley Act of 2002, or the
Sarbanes-Oxley Act, in the assessment of our internal controls over financial reporting;
•
reduced disclosure obligations regarding executive compensation in our periodic reports and proxy
statements;·
•
exemptions from the requirements of holding a non-binding advisory vote on executive compensation,
including golden parachute compensation.
We may take advantage of these exemptions until such time that we are no longer an emerging growth company.
Accordingly, the information that we provide shareholders and holders of the ADSs may be different than you might obtain
from other public companies. We will cease to be an emerging growth company upon the earliest to occur of (i) the last
day of the fiscal year in which we have more than $1.235 billion in annual revenue; (ii) the last day of the fiscal year in
which we qualify as a “large accelerated filer”; (iii) the date on which we have, during the previous three-year period,
issued more than $1.0 billion in non-convertible debt securities; and (iv) the last day of the fiscal year in which the fifth
anniversary of the completion of our first sale of common equity securities pursuant to an effective registration statement
under the Securities Act.
74
Foreign Private Issuer Status
We are also considered a “foreign private issuer” under U.S. securities laws. In our capacity as a foreign private issuer, we
are exempt from certain rules under the Exchange Act that impose certain disclosure obligations and procedural
requirements for proxy solicitations under Section 14 of the Exchange Act. In addition, our senior management, the
members of our Board of Directors and our principal shareholders are exempt from the reporting and “short-swing” profit
recovery provisions of Section 16 of the Exchange Act and the rules under the Exchange Act with respect to their purchases
and sales of our securities. Moreover, we are not required to file periodic reports and financial statements with the SEC
as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. In addition, we
are not required to comply with Regulation FD, which restricts the selective disclosure of material information.
We may take advantage of these exemptions until such time as we are no longer a foreign private issuer. We will remain
a foreign private issuer until such time that 50% or more of our outstanding voting securities are held by U.S. residents
and any of the following three circumstances applies: (i) the majority of the members of Board of Directors or our senior
management are U.S. citizens or residents; (ii) more than 50% of our assets are located in the United States; or (iii) our
business is administered principally in the United States.
We have taken advantage of certain reduced reporting and other requirements in this annual report. Accordingly, the
information contained herein may be different from the information you receive from other public companies.
Passive Foreign Investment Company Status
Generally, we will be a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes for any taxable
year in which, after applying certain look-through rules with respect to the income and assets of our subsidiaries, either:
(1) at least 75% of our gross income is “passive income” or (2) at least 50% of the average quarterly value of our total gross
assets (which would generally be measured by fair market value of our assets) is attributable to assets that produce
“passive income” or are held for the production of “passive income.” Passive income for this purpose generally includes
dividends, interest, royalties, rents, gains from commodities and securities transactions and the excess of gains over losses
from the disposition of assets which produce passive income.
We believe that we were not a PFIC for U.S. federal income tax purposes for the taxable year ended December 31, 2024.
However, there can be no assurance that we will not be a PFIC for the current taxable year or for any subsequent year.
The determination of PFIC status is a factual determination that must be made annually and cannot be made until the
close of a taxable year. The determination depends on, among other things, the composition of our income and assets. In
this regard, cash generally is treated as a passive asset for PFIC purposes, and the composition of our income and assets
will be affected by the amount and timing of any cash we receive, including from any grant funding, government loans or
other sources, and the spending of such funds. The fair market value of our assets (including goodwill) may be determined
in large part based on the market price of the ADSs and our ordinary shares, which may fluctuate. Moreover, the
determination of PFIC status depends, in part, on the application of complex U.S. federal income tax rules which are
subject to differing interpretations. Accordingly, there can be no assurance that we would not be a PFIC for the current
taxable year or any future taxable year.
If we were to be a PFIC, a U.S. holder would be subject to increased tax liability (generally including an interest charge on
certain taxes treated as having been deferred under the PFIC rules) on any gain realized on a sale or other disposition of
the ADSs or ordinary shares and on the receipt of certain “excess distributions” received with respect to the ADSs or
ordinary shares, unless such U.S. holder makes certain elections. One such election, the “QEF Election,” will be unavailable
to a U.S. holder because we do not intend to provide information that a U.S. holder would need to make a valid QEF
Election.
U.S. holders should consult their tax advisors regarding the potential application of the PFIC rules to their ADSs or ordinary
shares. The language in this section supersedes the language included in Item 3. Key Information—D. Risk Factors (“If we
are a passive foreign investment company, there could be adverse U.S. federal income tax consequences to U.S.
75
holders.”) contained herein and supplements the discussion under Item 10. Additional Information—E. Taxation—U.S.
Federal Income Tax Considerations—Passive Foreign Investment Company Considerations contained herein.
C.
Research and Development, Patents and Licenses, Etc.
Information regarding our research and development and patent matters are detailed in Item 4.B. Business Overview of
our 2024 annual report.
D.
Trend Information
Our growth strategy and industry trends are detailed in Item 3. Key Information—B. Business Overview of this annual
report. The uncertainties and material commitments such as financial instruments that are likely to have a material effect
on our financial condition are described in Item 3. Key Information—D. Risk Factors contained herein and Item 5. Operating
and Financial Review and Prospects – B. Liquidity and Capital Resources, above.
E.
Critical Accounting Estimates
Our consolidated financial statements are prepared in conformity with IFRS, as issued by the IASB. In preparing our
consolidated financial statements, we make judgments, estimates and assumptions about the application of our
accounting policies which affect the reported amounts of assets, liabilities, revenue and expenses. Our critical accounting
estimates and judgments and sources of estimation uncertainty are described in Note 1 to our audited consolidated
financial statements, which are included elsewhere in this Annual Report.
76
Item 6. Directors, Senior Management and Employees
A.
Directors and Senior Management
The following table sets forth information relating to our directors and senior management, also referred to in this report
as key management personnel or "KMP," as of the date of this annual report on Form F-20.
Name
Age
Position
Senior Management
Robert Long
53
Interim Chief Executive Officer and Chief Financial Officer
Rashda Buttar
56
Chief Legal & Administrative Officer
Darcy MacDougald
45
Chief Operating Officer
Directors
Anthony Bellas
71
Deputy Chairman and Non-executive Director
Sharan Burrow AC
70
Non-executive Director
Ronald Edmonds
67
Executive Director and Interim Executive Officer - Finance
Nick Liveris
41
Non-executive Director
Robert Natter
79
Chairman and Non-executive Director
Jean Oelwang
60
Non-executive Director
Suresh Vaidyanathan
58
Non-executive Director
The business addresses for our senior management and Board of Directors are NOVONIX Limited, Level 38, 71 Eagle Street,
Brisbane, Queensland 4000, Australia.
Senior Management
Robert Long
Mr. Robert Long has been the Company’s interim CEO since January 2025, and also serves as its CFO. Mr. Long joined the
Company as its CFO effective September 1, 2024. Mr. Long brings over 25 years of experience in the business and finance
sectors. From 2020 to early-2024, he was the founder and Chief Executive Officer of Bridges Consumer Healthcare, a
private equity-backed provider of over-the-counter health and personal care brands. From 2019 to 2020, he was Senior
Vice President Strategy for Shaw Industries, and from 2015 to 2019. He served in various financial and accounting roles
with escalating responsibility and ultimately as Head of North America Region with Sanofi Consumer Healthcare.
Previously, Mr. Long was a Senior Audit Manager with Ernst & Young. Mr. Long is a Certified Public Accountant in the State
of Tennessee and a graduate of the University of Tennessee at Chattanooga.
Rashda Buttar
Ms. Rashda Buttar is the Company’s Chief Legal & Administrative Officer. Before joining the Company in April 2021, Ms.
Buttar served as Senior Vice President - General Counsel & Corporate Secretary of Foresight Energy LP from 2011 to 2017.
Ms. Buttar served as Vice President, Associate General Counsel and Corporate Secretary of Patriot Coal Corporation from
2007 to 2011 and Assistant General Counsel and Assistant Corporate Secretary of TALX Corporation from 2003 to 2007.
Ms. Buttar received her Juris Doctor from Saint Louis University School of Law and her undergraduate degree in Russian
and Eastern European Studies and Political Science from Saint Louis University.
Darcy MacDougald
Mr. Darcy MacDougald is the Chief Operating Officer of NOVONIX, he joined the Company in May 2021. Previously, Mr.
MacDougald served as President of NOVONIX Battery Technology Solutions. He is a seasoned business professional with
over 15 years of senior leadership experience scaling high-growth operations in both listed and PE-backed electronics
manufacturing, telecommunications, pharmaceutical marketing, and clinical research organizations. Prior to NOVONIX, he
served as Head of Operations at STI Technologies Inc., an IQVIA company, for nearly six years as a member of the executive
77
team responsible for Pharmacy Reimbursement Solutions, Data Analytics, and Patient Support Programs. Also, Mr.
MacDougald was a Senior Manager at BlackBerry for eight years accountable for Operations Management, Business
Management, Problem Management, Data Analytics, Customer Insight, and Strategic Technical Issues. Originally from
Prince Edward Island, Canada, Mr. MacDougald graduated from the University of New Brunswick, with a bachelor’s degree
in Electrical Engineering and holds a Master’s in Business Administration from Saint Mary’s University in Halifax, Nova
Scotia.
Non-executive Directors
Anthony Bellas
Mr. Anthony Bellas was appointed as Deputy Chairman of the Company on November 30, 2021. Mr. Bellas previously
served as the inaugural Chairman of the Company since August 11, 2015. He brings over 30 years of experience in the
public and private sectors. Mr. Bellas was previously CEO of the Seymour Group, one of Queensland’s largest private
investment and development companies. Prior to joining the Seymour Group, Mr. Bellas held the position of CEO of Ergon
Energy, a Queensland Government-owned corporation involved in electricity distribution and retailing. Before that, he
was CEO of CS Energy, also a Queensland Government-owned corporation and the State’s largest electricity generation
company, operating over 3,500 MW of gas-free and coal-free plants at four locations. Mr. Bellas had an extensive career
with Queensland Treasury, achieving the position of Deputy Under Treasurer. Mr. Bellas is also a director and Deputy
Chairman of State Gas Limited (ASX: GAS), Healthcare Logic Global Ltd, Loch Explorations Pty Ltd, Green and Gold Minerals
Pty Ltd and Burlington Mining Pty Ltd, and was a director of intelliHR Limited until 2023.
Sharan Burrow AC
In February 2024, Sharan Burrow AC was appointed to the Board of Directors, effective February 28, 2024. Ms. Burrow is
a global advocate for human rights, climate action, and Just Transition. She is the former General Secretary of the
International Trade Union Confederation (2010-2022). Previously she was President of the Australian Council of Trade
Unions (2000–2010). Ms. Burrow is well known for her international advocacy on employment, human rights, industrial
relations, corporate responsibility, and climate action with just transition solutions. She has represented workers and civil
society groups in global policy discussions in United Nations bodies, on the Governing Body of the International Labour
Organisation as well as at the tables of the G7, G20, World Bank, and International Monetary Fund. She has twice been a
Co-Chair of the World Economic Forum’s Annual Meeting in Davos. Ms. Burrow is currently a Visiting Professor in Practice
at the London School of Economics-Grantham Institute, a Vice Chair of the European Climate Foundation, a board member
of the Green Hydrogen Association, Co-Chair of the IEA Labour Council, a Commissioner for the Global Commission on
Climate Governance, a B Team Leader and formerly Co-chair of 100% Human at Work. Ms. Burrow has also been appointed
to the Temasek Sustainability Advisory Panel.
Ronald Edmonds
Mr. Ronald Edmonds joined our Board as a Non-executive Director in October 2022. Effective August 1, 2024, the Board
appointed Mr. Edmonds to an interim role as Executive Officer - Finance to ensure a smooth transition of the CFO role to
Mr. Long. From 2009 to June 2024, Mr. Edmonds was the Controller, Vice President of Controllers and Tax and the Chief
Accounting Officer of Dow, a materials science company with 2023 sales of $45 billion. He was formerly the Co-Controller
of DowDuPont, a $73 billion holding company comprised of The Dow Chemical Company and DuPont which was spun into
three independent, publicly traded companies in agriculture (Corteva), materials science (Dow) and specialty products
sectors (DuPont). Edmonds led all aspects of Dow’s Controllers & Tax organizations, overseeing 1,250 employees and is
responsible for all accounting, management reporting, external reporting, statutory reporting, internal controls, finance
systems, tax planning, tax operations & strategy, and tax controversy globally for 500 legal entities. He oversaw all
corporate controls that guide enterprise strategy, investment decisions, and global initiatives for Dow. Prior to Dow, he
served in finance and accounting roles at Chiquita Brands International, The Upjohn Company, and Arthur Andersen &
Company. He is a member of the Public Accounting Oversight Board’s Standards and Emerging Issues Advisory Group.
78
Nicholas Liveris
Mr. Nicholas Liveris was appointed to our Board effective September 1, 2024. Prior to such date he served as the
Company’s CFO since July 1, 2021. Mr. Liveris previously served as the operational CFO for NOVONIX Anode Materials and
NOVONIX Battery Technology Solutions. He also led business development initiatives for the Company. Mr. Liveris has
more than 10 years of experience in investment banking and management consulting. He was previously a Senior
Engagement Manager at McKinsey where he led transformation programs for automotive and manufacturing companies.
Before joining McKinsey, he was an Investment Banking Analyst at Merrill Lynch covering the transportation sector.
Robert Natter
Admiral Robert J. Natter serves as our Chairman and Non-executive Director effective as of November 30, 2021. He
previously served as an Executive Director from September 30, 2020 and has been a Director since 2017. He retired from
active military service with the U.S. Navy in 2003 and has 17 years' experience in the private sector of the U.S. and Australia
markets. During his Navy career, Admiral Natter served as the Commander of the U.S. Seventh Fleet, controlling all U.S.
Navy operations throughout the western Pacific and Indian Oceans. As a four-star Admiral, Natter was Commander in
Chief of the U.S. Atlantic Fleet and the first Commander of U.S. Fleet Forces Command, overseeing all Continental U.S.
Navy bases and the training and readiness of all Navy ships, submarines, and aircraft squadrons based there. He is on the
Board and chairs the Governance and Compensation Committee and the Government Security Committee of Allied
Universal Security Company with over 800,000 employees worldwide. He also served on the Board of Intellisense (ISI), a
privately held technology company based in Torrance, California, until 2023. Admiral Natter also serves on the U.S. Naval
Academy Foundation Board and was Chairman of the Academy Alumni Association, representing over 60,000 living
Academy alumni. He also served on the Navy Seal Museum and the Yellow Ribbon Fund Boards.
Jean Oelwang
Ms. Jean Oelwang joined our Board as a Non-executive Director in March 2022. Ms. Oelwang has 18 years of experience
in helping to start and lead telecommunications companies in South Africa, Colombia, Bulgaria, Singapore, Hong Kong,
Australia, and the U.S. This included roles in marketing, customer service, sales, and as a CEO. Over the last 20 years, she
has been the Founding CEO and Trustee of Virgin Unite, the independent non-profit foundation of the Virgin Group,
helping lead the incubation and start-up of several global initiatives, many with a focus on people and sustainability,
including: The Elders, The B Team, Planetary Guardians, The Carbon War Room (merged with RMI), Ocean Unite, 100%
Human at Work, and The Caribbean Climate Smart Accelerator. Ms. Oelwang also worked with 25 Virgin businesses across
15 industries to help embed purpose in all they do and served as a Partner in the Virgin Group leading their people
strategy. She is on the Advisory Council of The Elders, a B Team leader and Audit Chair, the co-founder and a trustee of
Plus Wonder, and the author of the book Partnering and has completed the Harvard Business School Corporate Director
Certificate program.
Suresh Vaidyanathan
Mr. Suresh Vaidyanathan joined our Board as Non-executive Director in September 2023. Mr. Vaidyanathan is currently
Vice President, Renewable Fuels for Phillips 66. He was appointed to succeed Ms. Zhanna Golodryga as Phillips 66's
nominee to the Board of the Company. A global business leader with more than 30 years in the oil and gas energy industry,
Mr. Vaidyanathan's career has spanned roles in technical, operations, and business functions and general management
around the world. Prior to assuming his current role with Phillips 66 in 2023, Mr. Vaidyanathan was Vice President & Chief
Engineer, Refining Business Improvement and led Phillips 66's effort to improve margins and costs, advance use of digital
technologies and jumpstart renewable energy activities.
79
Advisors
Christopher Burns
Dr. Christopher Burns, 37, is currently a Special Advisor to the Board and interim CEO. From September 2020, to January
2025, he was the Company’s CEO. He is the founder and CEO of NOVONIX Battery Technology Solutions, which he co-
founded in Canada in 2013, as well as CEO of NOVONIX Anode Materials. During his candidacy for his PhD at Dalhousie
University, he co-developed Ultra-High-Precision-Coulometry technology. While CEO of the Company, Dr. Burns also
managed NOVONIX’s sponsorship of Dr. Mark Obrovac’ s laboratory at Dalhousie University. He was also formerly a Senior
Research Engineer with Tesla. Mr. Burns is also a director of Axon Graphite Limited, a wholly owned subsidiary of Lithium
Energy Limited.
Dr. Jeff Dahn
Dr. Jeff Dahn, 67, is a leading researcher with over 40 years of experience in the field of lithium-ion batteries and materials
who currently serves as our Chief Scientific Advisor. Dr. Dahn obtained a B.Sc. degree in Physics from Dalhousie University
in 1978 and completed his Ph.D. at the University of British Columbia in 1982. After completing his Ph.D., Dr. Dahn worked
at the National Research Council of Canada (between 1982 and 1984) and at Moli Energy Limited (between 1985 and
1990), where he did pioneer work on lithium-ion battery technology. In 1990, Dr. Dahn accepted a faculty position within
the Physics department of Simon Fraser University. In 1996, Dr. Dahn returned to Dalhousie University.
In 2016, Dr. Dahn commenced a research partnership with Tesla, which has since been extended until 2026. Dr. Dahn is
the author or co-author of over 730 refereed academic publications and seventy-three inventions with patents issued or
fled.
Dr. Dahn has received a number of national and international awards and recognitions, including the Battery Division
Research Award from The Electrochemical Society in 1996, the “Technology Award” from the ECS Battery Division in 2011,
the Governor General’s Innovation Award in 2016 and the Gerhard Herzberg Gold Medal in Science and Engineering, which
is regarded as Canada’s top science award, in 2017. Dr. Dahn was appointed Fellow of the Royal Society of Canada in 2001
and named an Officer of the Order of Canada in 2020.
Andrew Liveris AO
Mr. Andrew Liveris AO is strategic advisor to the Company. From 2018 until April 2024, Mr. Liveris was a Non-executive
Director of the Company. A recognized global business leader with more than 40 years at the Dow Chemical Company,
Mr. Liveris' career has spanned roles in manufacturing, engineering, sales, marketing, and business and general
management around the world. During more than a decade as Dow’s CEO, Mr. Liveris led Dow’s transformation from a
cyclical commodity chemicals manufacturing company into a global specialty chemical, advanced materials, agro-sciences,
and plastics company. Mr. Liveris is a non-executive director of Lucid Motors (Nasdaq: LCID), a non-executive director of
Saudi Arabian Oil Company (Saudi Aramco), a non-executive director of Worley Parsons Limited (ASX: WOR) and a non-
executive director of International Business Machines (IBM) Corporation (NYSE: IBM). Mr. Liveris has also been appointed
as the Chair of the Brisbane Organising Committee for the 2032 Olympic and Paralympic Games.
Family Relationships
Andrew Liveris, a Non-executive Director until April 2024, is the father of the Company’s Non-executive Director and
former Chief Financial Officer, Nick Liveris.
B.
Compensation
Remuneration Report for Australian Disclosure Requirements
80
Dear NOVONIX shareholders.
On behalf of the Board of Directors and as Chair of the Remuneration Committee, I am pleased to present the remuneration report
for the financial year ended December 31, 2024.
Thanks to the team for a wonderful year where we 1) secured three cornerstone customers, 2) significantly advanced our production
capabilities to be on track to deliver product by early 2026 from our Riverside facility, 3) built up the team and the Board to prepare
for this next period of growth, and 4) secured $1,009M funding to help us scale our manufacturing operations.
Our efforts include bringing in Robert Long as Chief Financial Officer (“CFO”) in September 2024. Robert brings over 25 years of
experience in finance and executive leadership with both public and private companies. We also appointed Darcy MacDougald, Chief
Operating Officer, as KMP effective January 1, 2024. Both Robert and Darcy are based in Chattanooga. To further support management
during this critical time, Ron Edmonds, a seasoned finance leader and NOVONIX Board member, took on the interim role of Executive
Officer – Finance effective August 1, 2024.
As production is our major focus, we are working on recruiting a Chief Executive Officer who has deep manufacturing, production, and
scale-up experience and who will be based in Chattanooga with the team. Robert Long has been appointed Interim CEO during this
transition period. We are grateful to Dr. Chris Burns who will be staying on as a Special Advisor to the Board based in Halifax to ensure
continuity. We would like to thank Chris for all his hard work with the team to get the Company to this exciting moment. After many
years in the industry, he became CEO of NOVONIX in 2020 and we are very grateful that he is remaining as a critical supporter for the
Board and team in this next phase to ensure NOVONIX’s success.
On the Board, we were very pleased to add Sharan Burrow AC in February 2024 as an independent Board member. She has extensive
experience with governance, human capital, government relations, and manufacturing industries. Nick Liveris also joined the Board
on September 1, 2024, bringing extensive financial experience and continuity as he was the CFO of NOVONIX since July 2021. Andrew
Liveris stepped off the Board in April 2024 and will continue to serve as an advisor to play an important growth role with partners and
investors.
As you know, in 2024, we significantly revamped our remuneration framework to be in line with feedback from shareholders last year.
We are not planning on making any significant changes this year. We will continue to align with performance-based rewards as we
enter this growth phase.
The changes implemented to our compensation programs in response to that feedback were presented in last year’s Remuneration
Report at our 2024 AGM and received 90% support from shareholders. As such, we have continued these practices into our 2024
Remuneration Report with key elements such as:
•
the updated pay philosophy with guiding principles;
•
a streamlined and clear narrative in our annual remuneration report;
•
clear disclosures for short-term incentive (“STI”) metrics; and
•
equity grants under our long-term incentive plan (“LTIP”) consisting 100% of performance rights vesting based on
performance over a three-year period, using challenging relative total shareholder return (“TSR”) performance goals and
a revenue modifier. These equity grants included no performance rights with time-based vesting.
As always, we welcome your feedback and input to ensure we build this critical company as a leader in US production of synthetic
graphite.
We are all honored to be part of this important mission and are grateful for your support.
With gratitude,
Jean Oelwang
Chairperson of the Remuneration Committee
81
OVERVIEW OF THE REMUNERATION REPORT
The Board of Directors presents the NOVONIX Limited 2024 remuneration report, outlining key aspects of our
remuneration policy and framework and remuneration awarded this financial year ending December 31, 2024 to our Key
Management Personnel and our Non-Executive Directors. The remuneration report has been audited as required by s308
(3C) of the Corporations Act 2001 and contains the following sections:
•
Remuneration and our 2024 Performance
•
Key Management Personnel (each a “KMP and collectively “KMPs”) covered by the Remuneration Report
•
KMP Remuneration at a Glance
•
KMP Remuneration Governance
•
Our Remuneration Strategy
•
Our Remuneration Mix
•
Remuneration Outcomes for the Year Ended December 31, 2024
•
Other Aspects of our Remuneration Program
•
Remuneration Expenses for KMPs
•
Non-Executive Director Remuneration
•
Additional Statutory Information
REMUNERATION AND OUR 2024 PERFORMANCE
We are in the business of supplying advanced, high-performance battery materials, equipment, and services to the global
lithium-ion battery market. Founded in 2012 and publicly traded since 2015, we started as a company in a nascent industry
and continue to grow scale in an increasingly highly specialized industry.
As part of our business strategy, we maintain a lean but experienced team. To deliver on our ambitious business objectives,
we aim to attract and retain high-quality employees who embody our core values of curiosity, collaboration, and
commitment in a competitive market and even more competitive industry. We are a dual-listed Australian corporation
with a management team and operations based entirely in North America, with approximately 180 full-time employees in
the United States and Canada.
In 2024, our management made important strides in our business, executing on several critical business goals, namely:
completed independent engineering assessment of our Riverside facility
signed a binding offtake with Panasonic Energy for a minimum of 10,000 tonnes of high-performance synthetic
graphite
signed a binding offtake with Stellantis NV for a minimum of 86,250 tonnes of high-performance synthetic
graphite
signed a binding offtake with PowerCo SE for a minimum of 32,000 tonnes of high-performance synthetic
graphite
selected for US$103 Million Qualifying Advanced Energy Project Tax Credit to support our Riverside facility
offered a conditional commitment for US$754 Million loan from the U.S. Department of Energy for a new
synthetic graphite plant in Chattanooga, Tennessee
entered into a licensing agreement with Harper International for the rights and use of its continuous induction-
based graphitization furnace technology, since the conclusion of FY2024.
progressed our cathode technology commercialization through signing development agreements with CBMM
and ICoNiChem Widnes Limited
raised $28.8M on the ASX
82
As a growth stage company, we incurred in FY 2024, and have historically incurred, operating losses due to significant
expenses, which we expect will continue as we develop our technology and scale production ahead of eventual
commercialization, revenue growth, and, ultimately profitability. During the year, our share price also experienced some
decline, however less of a decline than others in our sector. This stemmed from various factors, many of which were
unrelated to Company performance but which we recognize still negatively impacted shareholders, including: fluctuations
in current and expected demand for EVs and ESS; trends in technology adoption; international market prices for battery
anode materials; potential changes in political administration in the United States; and general market sentiment towards
the battery materials and lithium-ion battery sectors. Given the nature of our activities and the consequential operating
results, we have not proposed or paid dividends to shareholders or returned capital to them.
In this critical growth phase where we aim to achieve important business milestones and the challenging goals we have
set for ourselves, while sustaining losses and seeing our share price fluctuate, we must take care that our remuneration
program accomplishes several aims: it must ensure the ability to attract and retain employees in an intensely competitive
global industry, it must incentivize and reflect the performance of our pre-profitability business assessed mainly on
technology and operating milestones, rather than conventional financial metrics; it must promote the interests of
shareholders, whose investment in us is often impacted by macroeconomic factors outside our control; and, as a dual-
listed Australian company, it must meet the expectations of both Australian and U.S. investors, each of whom have distinct
expectations around remuneration.
The 2024 remuneration program was designed to achieve these goals. The program incentivizes management to deliver
growth and results, while at the same time motivating and retaining key talent in the North American market where our
operations are located; we recognize these as vital to achieving both short and long-term business objectives and
enhancing shareholder value in the long term.
The following tables summarize the key financial and share price performance over the past five financial years, being
factors that have been considered in both STI and LTI outcomes.
The details of revenue and net profit (loss) before income tax:
Year Ended
December 31, 2024
Year Ended
December 31, 2023
Six months ended
December 31, 2022
Year Ended
June 30, 2022
Year Ended
June 30, 2021
Revenue
5,854,424
8,054,528
2,702,276
6,101,155
5,227,347
Net loss
(74,822,141 )
(46,248,261 )
(27,864,014 )
(51,860,307 )
(18,076,077 )
The details of share price movements are as follows:
December 31, 2024 December 31, 2023 December 31, 2022
June 30, 2022
June 30, 2021
Share price (AUD)
$
0.735
$
0.735
$
1.47
$
2.28
$
2.22
83
KEY MANAGEMENT PERSONNEL COVERED BY THE REMUNERATION REPORT
This remuneration report discusses the compensation of the KMP listed below (defined under Australian rules as
individuals who have authority and responsibility for planning, directing, and controlling the activities of the Company,
directly or indirectly, including all Directors).
Name
Position
Country
Term as KMP in FY2024
NON-EXECUTIVE DIRECTORS
R Natter
Independent Chairman
United States
Full year
A Bellas
Independent Deputy Chairman
Australia
Full year
S Burrow
Independent Non-executive Director
Australia
Appointed effective February 28, 2024
R Edmonds
Executive Officer – Finance (from August 1, 2024)
Independent Non-executive Director (to July 31, 2024)
United States
Full year
A Liveris
Non-executive Director
Australia
Resigned effective April 17, 2024.
N Liveris
Non-executive Director
United States
Appointed effective September 1, 2024
J Oelwang
Independent Non-executive Director
United States
Full year
S Vaidyanathan
Non-executive Director
United States
Full year
EXECUTIVE KMP
C Burns
Chief Executive Officer
Canada
Full year
R Buttar
Chief Legal & Administrative Officer
United States
Full year
N Liveris
Chief Financial Officer
United States
Resigned effective August 31, 2024.
R Long
Chief Financial Officer
United States
Appointed effective September 1, 2024.
D MacDougald
Chief Operating Officer
United States
Full year
As recently announced on January 20, 2025, Dr Chris Burns has stepped down as Chief Executive Officer effective January
24, 2025, and Robert Long has been appointed as Interim Chief Executive Officer.
Except as outlined above, there have been no other changes to KMPs, both since the end of the reporting period and as
of the date of this remuneration report.
KMP REMUNERATION AT A GLANCE
The following table summarizes total remuneration for each of the executive KMPs for 2024 showing the grant date fair
values of the equity grants.
Fixed Remuneration (USD$)
Variable Remuneration (USD$)
Name
Cash
Salary
Post-
Employment
Benefits
Annual Leave
Entitlements
Non-Monetary
Benefits
STI
Performance/
Share Rights
Options1
Total (USD$)
C Burns2
628,456
11,078
37,183
2,691
377,074
2,254,886
392,820
3,704,188
R Long
(appointed September 1,
2024)
133,333
—
12,821
6,276
60,000
74,794
—
287,224
R Buttar
381,563
6,221
22,012
2,631
228,938
665,892
—
1,307,257
D MacDougald
353,667
10,767
7,008
9,594
159,150
463,347
—
1,003,533
R Edmonds
(appointed executive August
1, 2024)
83,333
—
—
—
—
—
—
83,333
N Liveris
271,333
11,500
(15,653 )
12,644
—
(374,434 ) 3
(395,391 ) 3
(490,001 )
[1] Represents the expense for 2024 fiscal year associated options held by the relevant KMP during the 2024 fiscal year. No options were granted
during the 2024 fiscal year.
[2] Cash salary amounts for Chris Burns throughout this remuneration report represent the USD translated amount of the salary he received in CAD.
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The following table shows the total remuneration realized by our executive KMPs in 2024, based on the value of
outstanding equity awards that vested or were exercised during the year, excluding post-employment and annual leave
entitlements. For LTI awards granted for 2024, all performance rights vest based on corporate performance, with none
vesting solely based on time:
Fixed
Remuneration
(USD$)
Variable Remuneration (USD$)
Name
Cash Salary
STI
Intrinsic value
Realised on
Performance
Rights with
Performance
-Based Vesting
Intrinsic value
Realised on
Performance
Rights with
Only Time-
Based Vesting
Intrinsic value
Realised on
Options
Exercised
Total (USD$)
C Burns
628,456
377,074
25,486 1
333,572 1
133,806
1,498,394
R Long
133,333
60,000
—
—
—
193,333
R Buttar
381,563
228,938
4,607 1
139,960 1
—
755,068
D MacDougald
353,667
159,150
—
113,479 1
—
626,296
R Edmonds
83,333
—
—
26,384 1
—
109,717
N Liveris
271,333
—
12,052 1
157,768 1
133,806
574,959
[1] Value converted from AUD.
As shown by the two preceding tables, we determined to grant a significant portion of equity awards in 2024 so as to tie
KMPs’ incentives with the interests of shareholders. At the same time, the value of equity previously awarded to
management that vested in 2024 was significantly lower than the value of their 2024 grants, reflecting a strong link
between the interests of KMPs of those of shareholders during a period of reduced share price performance.
KMP REMUNERATION GOVERNANCE
Role of the Remuneration Committee
The Board is responsible for the Company’s remuneration strategy. The Remuneration Committee, comprised of a
majority of independent, non-executive Directors, advises the Board on remuneration policies and practices generally,
and makes specific recommendations on remuneration packages and other terms of employment for executive KMPs and
non-executive Directors. Individual pay structures and outcomes are developed in consultation with external and
independent remuneration consultants, and reviewed and approved by the Remuneration Committee, which then
recommends them for approval to the Board.
In making recommendations to the Board, the Remuneration Committee considers, among other things, relevant market
trends and practices, individual roles and responsibilities, legal and regulatory requirements, diversity (including with
respect to gender), and feedback from shareholders and other stakeholders. This governance structure is aimed at
ensuring that our remuneration program aligns the pay of our management team with shareholder value, within the
context of our Company’s unique situation as a dual-listed Australian company in a critical growth stage with a
management team and operations based entirely in North America.
85
Role of Management
Although the Remuneration Committee ultimately is responsible for reviewing and making recommendations to the Board
for the Company’s remuneration policies and framework, the Remuneration Committee may receive input from the
management team, which it reviews closely. The Remuneration Committee, at its discretion, may invite representatives
of management and other employed personnel to attend committee meetings. Our executive KMPs do not participate in
Remuneration Committee discussions about their own remuneration and do not have any indirect conflict in setting the
remuneration of other KMPs.
Role of Consultants
When appropriate, the Remuneration Committee will seek advice or recommendations from external and independent
expert consultants, including benchmarking studies. In 2024, the Remuneration Committee retained AON Consulting Inc.
(“AON”), which advised on various remuneration-related items, including peer group development, market practices,
industry trends, investor views, and market data. Advice provided by consultants during the year did not constitute a
“remuneration recommendation” as defined in section 9B of the Corporations Act and was received free from any undue
influence by KMPs to whom the advice related. Furthermore, our Remuneration Committee concluded that AON is
“independent” pursuant to Rule 5605(d)(3) of The Nasdaq Stock Market (“Nasdaq”).
Remuneration Peer Group
To understand the external market competitiveness of the compensation for our KMPs, our independent executive
remuneration consultant analyzes publicly available information and compares the compensation of each KMP to data for
comparable positions at companies in our peer group and provides a report to the Remuneration Committee. The
Remuneration Committee reviews our peer group periodically, with input from its independent executive remuneration
consultant. In creating the peer group, our independent executive remuneration consultant considers various factors,
including: (i) relative size to our Company (revenue, market capitalization, and other relevant criteria); and (ii) nature of
business (business focus, model, and location).
The 2024 compensation peer group consisted of 20 companies publicly traded in the United States in various industries,
including electronic equipment and instruments, specialty chemicals, electrical components and equipment, automobile
manufacturers, automotive retail, construction machinery and heavy transportation equipment, environmental and
facilities services, and diversified metals and mining, with revenues generally less than $1 billion.
86
Changes to our Remuneration Program in 2024
As previously disclosed, in response to shareholder and proxy advisor concerns in 2023, we committed to reforming our
remuneration program for 2024. The key changes made to the 2024 remuneration program were as follows:
What We Heard
What We Did
Remuneration was not sufficiently aligned with
performance.
STI performance criteria: STIs should be more
closely aligned to well-understood quantitative
and financial metrics.
For STIs granted in 2024, goals include forward-looking revenue and
revenue in-hand (aggregate 25% weight), budget variance (10% weight)
and access to capital (10% weight), with the rest made of up strategic,
operational, and people/ESG-based metrics, in light of our continued
emphasis on scaling our business as a growth-stage company.
STI performance criteria: STI payouts should
better reflect negative share price performance.
For STIs granted in 2024, the Remuneration Committee retains discretion
to reduce annual STI payout based on negative annual TSR and other
factors, thus further aligning management’s interests with those of
shareholders.
Long-term incentive (“LTI”) performance criteria:
With STI payouts linked to business goals, LTI
payouts should be better linked to share price
performance. LTI payouts should also be based
on multi-year performance.
For LTI awards granted in 2024, all performance rights vest based on
corporate performance, with none vesting solely based on time. Payouts
are measured based on achievement of relative TSR (versus a peer group
of 20 companies primarily focused in the diversified metals and electronic
equipment industries) over a three-year performance period and are
capped at the target opportunity. Performance rights require a minimum
level of relative TSR (35th percentile) to achieve any payout, regardless of
revenue earned, and a relative TSR of at least 60th percentile to pay out at
the target opportunity, which is the highest level. This establishes a
rigorous framework for evaluating Company performance and is directly
aligned with shareholders’ interests.
LTI performance criteria: LTI payouts should align
with longer-term business goal of achieving
revenues.
Performance rights granted in 2024 also include a revenue modifier based
on the attainment of a three-year revenue goal (with the payout still
capped at the target opportunity). The addition of this modifier reinforces
our focus on top-line revenue growth, a core metric for effectively scaling
and growing the business.
Size of equity grants was not in line with market
practice for Australia.
LTI quantum: Generally, local Australian
companies pay their executives LTIs of a more
modest quantum.
For LTIs granted in 2024, awarded LTI opportunities with a quantum
substantially below the median of our U.S. peer group.
Director compensation: Market in Australia is to
pay directors LTIs with a lower value.
For 2024, Director LTI quantum reduced 50% in value from the prior year.
OUR REMUNERATION STRATEGY
As discussed in “Remuneration and our 2024 Performance,” our remuneration strategy is informed by both U.S. and
Australian pay practices, our market, industry, and growth stage, and is designed to ensure we can:
•
attract and retain experienced leaders and key employees in the markets in which the Company operates in a
highly specialized and competitive industry,
•
link remuneration with performance to align pay outcomes with value created for the Company and its
shareholders,
•
reward performance that will support our long-term strategic growth, business objectives, innovation, and a
strong culture, and
•
encourage an ownership mentality across all levels of the Company.
87
These strategic priorities have led us to implement the following pay practices in 2024:
Fixed Remuneration1
Performance-Based Remuneration
Short-Term Incentives
Long-Term Incentives
Rationale
Attracts and retains key
personnel via competitive
baseline pay and provides a level
of cash income predictability and
stability.
Focuses attention on corporate KPIs
that promote achievement of
strategic objectives and shareholder
wealth.
Serves multi-pronged purpose:
•
retains employees.
•
provides a framework for
increasing shareholder
value and business
performance through key
objectives that we believe
are critical to long-term
profitability.
•
conserves cash.
Delivered as
Cash.
Cash.
Performance rights in our ordinary
shares.
Process
Set annually.
Granted annually. Remuneration
Committee sets one-year
performance goals upon grant at
beginning of year and assesses their
achievement after end of that year.
Granted annually. For performance-
vesting grants, Remuneration
Committee sets multi-year
performance goals upon grant at
beginning of year and assesses their
achievement after a 3-year period.
Quantum of
opportunity
Set according to each KMP’s
accountabilities, experience and
qualifications, and market
relativities.
Opportunity set as a percentage of
fixed remuneration. Pay outcomes are
variable based on the achievement of
performance criteria and
Remuneration Committee’s
discretion.
Opportunity set based on target
number of shares. Actual pay
outcomes following vesting are
variable subject to share price
fluctuations and/or the achievement
of performance criteria.
Performance
criteria
N/A
Corporate KPIs (business milestones
including financial metrics), allowing
use of negative discretion.
Relative TSR with a revenue modifier.
Performance and
service period
N/A
1 year.
3 years.
Cessation of
employment
N/A
No award will be made to employees
who have ceased employment.
Unvested performance rights are
forfeited, unless Board exercises
discretion.
1 Fixed remuneration includes cash salary, post-employment benefits, annual leave entitlements and non-monetary benefits.
OUR REMUNERATION MIX
Our Remuneration Committee reviews and recommends to the Board the remuneration strategy for our KMPs annually
to ensure it remains aligned to our business needs and outcomes. In our current, early stage of growth, setting quantitative
target performance levels can be challenging. This is further complicated by rapidly shifting market and regulatory
conditions. The majority of our target compensation is performance-based and at risk, and, for our CEO, was focused on
long-term performance. Our 2024 pay mix reflected significant reduction in LTI opportunity.
88
REMUNERATION OUTCOMES FOR THE YEAR ENDED DECEMBER 31, 2024
Cash Salary/Fixed Remuneration
The Remuneration Committee provides guidance in setting cash salaries for the Company’s KMPs at levels that reflect the
Remuneration Committee’s assessment of competitive compensation averages within our peer group for individuals with
similar responsibilities at companies with similar financial, operating and industry characteristics, in similar locations. The
members of the Remuneration Committee also evaluate KMP compensation using their accumulated individual
knowledge and industry experience, as well as publicly available compensation information with respect to companies
within our peer group.
In 2024, the Remuneration Committee kept KMPs’ cash salaries at the same level as 2023, as shown below.
KMP
2024 Cash
Salary (USD$)
2023 Cash
Salary (USD$)
% Change
Chris Burns
628,456 1
653,217
Nil
Rashda Buttar
381,563
381,563
Nil
Nick Liveris
407,000
407,000
Nil
Robert Long
400,000
N/A
N/A
Darcy MacDougald
353,667
N/A
N/A
Ron Edmonds
200,000
N/A
N/A
1 Cash salary for Chris Burns is denominated in CAD, which did not change from 2023 to 2024, however paid in USD and is translated into USD on a
quarterly basis at the average rate. The amount of his compensation is translated throughout this remuneration report to USD.
Short-term Incentives
The purpose of our STIs is to motivate and reward our KMPs for the attainment of measurable performance objectives,
including annually set goals for financing, strategic, and operational performance in line with KPIs. These are criteria that
management is focused on for the Company in our current growth stage. The KPIs are the same among all KMPs and
measure the Company’s achievement during the fiscal year. While financial metrics do not currently make up the majority
of KPIs, given that we remain focused on scaling the business and that certain of our long-term incentives include a
revenue metric, they represented 40% of all KPIs for the 2024 STIs.
During the year for which performance is measured, each KMP receives an STI target award, which is a percentage of their
salary for that year. Following the end of the year, Company performance against each KPI is measured. The level of
achievement on each KPI is multiplied by the relative weight for that KPI, which then translates to a defined payout
expressed as a percentage of the target STI.
For 2024, the target STI was 100% of salary for all KMPs. The table below shows the STI objectives and outcomes for the
fiscal year.
Metric Category
(Weighting)
Goals
% of Total STI
Assuming
Highest Rating
Rating
Outcome as
% of total STI
Operational
(40%)
3-year Forward Looking Revenue In-Hand
15%
100%
15%
Pilot Customer Qualified Materials
10%
83%
8%
NRS Graphitization Production Target
15%
-
-
Operational Subtotal
23%
People / ESG (15%) Total Recordable Incident Frequency Rate
5%
100%
5%
Employee Survey Engagement
5%
100%
5%
ESG Program
5%
100%
5%
People/ESG Performance Subtotal
15%
Strategic
(15%)
Cathode Commercial Partnerships
5%
75%
4%
Cathode Production Performance Delta from Commercial Standards
5%
100%
5%
89
BTS Non-Standard Service Agreements
3%
75%
2%
Data Solutions Customers
2%
-
-
Strategic Subtotal
11%
Financial
(30%)
Revenue
10%
-
-
Budget Variance
5%
56%
3%
Access to Strategic Capital
15%
50%
8%
Financial Subtotal
11%
STI Performance Ratio
60%
STI Payout Ratio Approved by the Committee and Board
60%
The Remuneration Committee assessed the Company’s performance of KPIs for the financial year ended December 31,
2024 as achieving 60% of target. This reflects achievement of several significant operational, financial, and people goals.
This led to the following payouts for 2024, which the Company believes reflects the close link between the STI
remuneration and the Company performance during the financial year.
KMP
Cash Salary
(USD$)
STI
Target (%)
Achieved
Performance
Ratio
STI
Payout
Ratio
Actual
Payout
(USD$)
Chris Burns
628,456
100 %
60 %
60 %
377,074
Rashda Buttar
381,563
100 %
60 %
60 %
228,938
Robert Long
400,000
75 %
60 %
60 %
60,000
Darcy MacDougald
353,667
75 %
60 %
60 %
159,150
Long-term Incentives
Performance rights
KMPs participate in the LTIP, composed of grants of performance rights with varying vesting conditions. The dollar value
of the LTI award is converted into a fixed number of performance rights based on the market value of NOVONIX shares at
the time of grant.
In 2024, 100% of our grants to all of our KMPs were performance rights vesting based on the achievement of performance
criteria, as shown below. None of these awards vest solely based on time.
Vesting is measured based on the relative Total Shareholder Return (rTSR) performance relative to the entities of a select
peer group of companies primarily in the diversified metals and electronic equipment industries over the Performance
Period (January 1, 2024 to December 31, 2026) as follows:
% of FY24 Performance Rights that vest
TSR Ranking
Below the 35th percentile
0% of FY24 Performance Rights will vest
At the 35th percentile
25% of FY24 Performance Rights will vest
At or above the 60th percentile
100% of FY24 Performance Rights will vest
Above the 35th percentile and below the 60th
percentile
Pro rata vesting between 25% and 100% of FY24
Performance Rights
The number of FY24 Performance Rights that will vest upon satisfaction of the TSR Measure (specified above) will be
adjusted based on the Company meeting certain revenue milestones in respect of the 2026 Financial Year (assessed as at
December 31, 2026), as follows:
90
Multiplier
Revenue target (USD)
0.7x Number of FY24 Performance Rights that have vested
Up to 35,000,000
1.5x Number of FY24 Performance Rights that have vested
70,000,000 or greater
Pro rata between 0.7x and 1.5x Number of FY24 Performance Rights
Above 35,000,000 and below 70,000,000
Notwithstanding the Revenue Target Modifier, the total number of Performance Rights that can vest shall not exceed the
number of Performance Rights representing the target opportunity.
The number of Performance Rights awarded to KMP during the financial year are set out in the table below:
KMP
Total Performance Rights (#)
Chris Burns
3,658,161
Nick Liveris
1,398,709
Robert Long
1,144,130
Darcy MacDougald
1,075,930
Rashda Buttar
1,075,930
The performance rights listed above were granted to executives on April 18, 2024, with the exception of Mr. Long whose
performance rights were granted on October 8, 2024. The long-term incentives were issued as performance rights under
the Company’s existing Performance Rights Plan. The target opportunities for all incentives were of a quantum
substantially below the median of our U.S. peer group.
Mr. Liveris ceased employment with the Company on August 31, 2024 and his performance rights lapsed at that time.
The Remuneration Committee believes that the performance criteria in the performance rights provide challenging but
appropriate incentives to KMPs given our focus on producing revenue over the coming years and our recognition of the
necessary runway for achieving that goal. As discussed above, the relative TSR performance goals establish a rigorous
framework for evaluating Company performance and are aimed at directly aligning the interests of our KMPs with those
of our shareholders. Additionally, the revenue modifier enhances our focus on top-line revenue growth, which is critical
for effectively scaling and growing the business.
Options
No options were awarded to executive KMPs during the 2024 financial year.
Post-Employment and Other Benefits
We provide certain pension and superannuation benefits to certain of our directors and members of our senior
management under Australian law. For the fiscal year ended December 31, 2024, the total amounts set aside or accrued
by us to provide pension, retirement or similar benefits to our directors and members of our senior management was
$56,853.
OTHER ASPECTS OF OUR REMUNERATION PROGRAM
Share Ownership Guidelines
To further align the interests of our non-executive Directors and other leadership with those of shareholders, the Company
has adopted share ownership guidelines in 2024. These require (1) each non-executive Director (other than those who do
not receive remuneration from us, as further described below) to retain ordinary shares having a value of at least three
times the annual cash retainer fee and (2) the Chief Executive Officer to retain ordinary shares having a value equal to
three times his annual salary. Until reaching the required ownership level, non-executive Directors covered by the
guidelines and the Chief Executive Officer are required to retain at least 50% of their shares, net of applicable tax
withholding and the payment of any exercise or purchase price (if applicable), received upon the vesting or settlement of
91
equity awards or the exercise of share options. Each non-executive Director covered by the guidelines and the Chief
Executive Officer has five years to comply with the guidelines, and options and unvested performance rights do not count
toward the requirement. The following shows compliance with the ownership guidelines as of December 31, 2024:
KMP
Share Ownership Guideline
(Multiple of Salary or Retainer)
Share Ownership as of
31 December 2024
C Burns
3x cash salary
Guidelines met
Non-executive Directors*
3x cash retainer
Guidelines met**
* Does not include Mr. Vaidyanathan, who is not permitted to receive remuneration, including any equity incentives, in his personal
capacity under the terms of his employment with Phillips 66 and terms of engagement with the Company (all of whose equity grants
are paid or granted directly to Phillips 66). In addition, includes Mr. Edmonds, who the Company has determined should remain
covered by these guidelines, as he was a non-executive Director before being named interim Executive Officer – Finance.
** Non-executive Directors who joined the Company in the past two years have not yet met the required ownership level but retain
at least 50% of their shares as required.
Clawback Policy
We maintain a clawback policy as required by the rules of Nasdaq. Our clawback policy covers each of our current and
former executive officers (i.e., executive KMPs). The policy provides that, subject to the limited exemptions provided by
the Nasdaq rules, if the Company is required to restate its financial results due to material noncompliance with financial
reporting requirements under the securities laws, the Remuneration Committee must reasonably promptly seek recovery
of any cash or equity-based incentive compensation (including vested and unvested equity) paid or awarded to the
covered individual, to the extent that the compensation (i) was based on erroneous financial data and (ii) exceeded what
would have been paid to the executive officer under the restatement. Recovery applies to any such excess cash or equity-
based bonus/other incentive compensation received by any covered individual, while he/she was an executive officer, on
or after October 2, 2023 during the three completed fiscal years immediately preceding the date on which the Company
determines an accounting statement is required. For more information, see the full text of our claw-back policy, which is
filed as an exhibit to our Annual Report on Form 20-F.
REMUNERATION EXPENSES FOR KMPS
The following table details the remuneration expenses recognized for the Company’s KMPs and non-executive Directors,
for the current period and previous financial year measured in accordance with accounting standard requirements.
92
Year ended December 31, 2024 – All amounts are shown in USD$.
Fixed Remuneration
Variable Remuneration
Name
Cash
Salary
Pension/
Superannuation
Benefits
Annual Leave
entitlements
Non-Monetary
Benefits1
STI
Performance/
Share Rights
Options2
Total
Key Management Personnel
Executives
C Burns
628,456
11,078
37,183
2,691
377,074
2,254,886
392,820
3,704,188
R Long
(appointed September 1, 2024)
133,333
—
12,821
6,276
60,000
74,794
—
287,224
R Buttar
381,563
6,221
22,012
2,631
228,938
665,892
—
1,307,257
D MacDougald
(KMP effective January 1, 2024)
353,667
10,767
7,008
9,594
159,150
463,347
—
1,003,533
R Edmonds
(Executive director from
August 1, 2024)
83,333
—
—
—
—
—
—
83,333
N Liveris3
(resigned August 31, 2024)
271,333
11,500
(15,653 )
12,644
—
(374,434 )
(395,391 )
(490,001 )
Non-executive Directors
A Bellas
89,831
10,107
—
—
—
69,893
—
169,831
S Burrow
(appointed February 28, 2024)
50,475
5,703
—
—
—
53,587
—
109,765
R Edmonds
(Non-executive director until
July 31, 2024)
37,500
—
—
—
—
69,893
—
107,393
A Liveris
(resigned April 17, 2024)
13,424
1,477
—
—
—
—
—
14,901
N Liveris
(appointed September 1, 2024)
16,667
—
—
—
—
—
—
16,667
R Natter
116,000
—
—
—
—
69,893
—
185,893
J Oelwang
74,167
—
—
—
—
69,893
—
144,060
S Vaidyanathan
57,500
—
—
—
—
69,893
—
127,393
Total KMP remuneration expensed
2,307,249
56,853
63,371
33,836
825,162
3,487,537
(2,571 )
6,771,437
1 Short-term benefits as per Corporations Regulation 2M.3.03(1) Item 6, primarily health insurance.
2 Represents options held by the relevant KMP during the 2024 fiscal year. No options were granted during the 2024 fiscal year.
3 Represents the reversal of share based payments that were forfeited on cessation of Nick Liveris' employment.
Year ended December 31, 2023 – All amounts are shown in USD$.
Fixed Remuneration
Variable Remuneration
Name
Cash
Salary
Pension/
Superannuation
Benefits
Annual Leave
entitlements
Non-Monetary
Benefits1
STI
Performance/
Share Rights
Options2
Total
Key Management Personnel
C Burns
659,571
11,469
25,648
1,915
215,562
1,106,175
60,594
2,080,934
N Liveris
405,833
11,250
7,961
26,594
134,310
325,469
12,065
923,482
R Buttar
380,469
5,720
252
8,401
125,916
573,629
—
1,094,387
Non-executive Directors
D Akerson
(Ceased December 20, 2023)
63,333
—
—
—
—
—
—
63,333
A Bellas
92,743
9,974
—
—
—
22,593
—
125,310
R Cooper
(Ceased April 5, 2023)
17,281
1,814
—
—
—
5,476
—
24,571
R Edmonds
60,000
—
—
—
—
31,943
—
91,943
Z Golodryga
(ceased September 7, 2023)
41,500
—
—
—
—
22,593
—
64,093
A Liveris
45,241
4,865
—
—
—
22,593
—
72,699
R Natter
116,000
—
—
—
—
22,593
—
138,593
J Oelwang
68,125
—
—
—
—
22,593
—
90,718
S Vaidyanathan
(appointed September 7, 2023)
18,034
—
—
—
—
—
—
18,034
Total KMP remuneration
expensed
1,968,130
45,092
33,861
36,910
475,788
2,155,657
72,659
4,788,097
1 Short-term benefits as per Corporations Regulation 2M.3.03(1) Item 6, primarily health insurance.
2 Represents options held by the relevant KMP during the 2023 fiscal year. No options were granted during the 2023 fiscal year.
There have been no other post-employment benefits or termination benefits paid to KMP.
93
Contractual Arrangements with KMPs
Component
Chris Burns
Robert Long
Rashda Buttar
Darcy MacDougald
Annual fixed remuneration (USD$)
653,217
400,000
381,563
353,667
Contract duration
Ongoing contract
Ongoing contract
Ongoing contract
Ongoing contract
Notice by the individual / Company
3 months
3 months
3 months
3 months
Termination arrangements
Entitled to severance
of 12 months' base
salary, 12 months of
STI, prorate STI for
year of termination
and 12 month
vesting of LTI post
termination
Entitled to severance
of 12 months' base
salary, 12 months of
STI, prorate STI for
year of termination
and 12 month
vesting of LTI post
termination
Entitled to severance
of 12 months' base
salary, 12 months of
STI, prorate STI for
year of termination
and 12 month
vesting of LTI post
termination
Entitled to severance
of 12 months' base
salary, 12 months of
STI, prorate STI for
year of termination
and 12 month
vesting of LTI post
termination
Except for their pension/superannuation benefits (which is outlined in the “Post-Employment Benefits” column of the
table under the heading “KMP REMUNERATION AT A GLANCE”), the KMPs are not entitled to any other termination
payments or benefits under their service contracts.
AON, an external remuneration consultant, is engaged to benchmark KMP salaries, with those salaries positioned at the
50th percentile of the peer group. KMP salaries also are set taking into account each KMP’s accountabilities, experience,
and qualifications.
NON-EXECUTIVE DIRECTOR REMUNERATION
Non-executive Director remuneration includes both a cash component and an annual grant of equity awards using a value-
based approach by issuing share rights to non-executive Directors each financial year.
As a sign of the Board’s long-term commitment to investors and the Company, effective January 1, 2024, Directors reduced
the value of share rights they received from $110,000 to $55,000. At the 2024 AGM, the shareholders approved the
granting of the financial year 2024 share rights to Directors. The number of share rights granted was calculated by dividing
the value of the share rights ($55,000) by the closing share price of the Company’s shares on the ASX on December 31,
2024, and the USD$/AUD$ spot rate as of December 31, 2024. The share rights automatically vested on December 31,
2024.
If a non-executive Director is appointed during the financial year, the number of share rights to be issued comprises a pro-
rata amount of the value of the share rights, based on the date of the non-executive Director’s appointment, as a
proportion of the financial year. The number of share rights is then calculated by dividing the value of the share rights by
the closing share price of the Company’s shares on the ASX and the USD$/AUD$ spot rate on the trading day immediately
prior to the non-executive Director’s appointment.
If a non-executive Director ceases to hold office as a Director prior to the vesting date, that person's share rights will lapse,
and they will be entitled to a pro-rata amount of shares representing the proportion of the relevant financial year that
such person was a non-executive Director.
Mr. Vaidyanathan is not permitted to receive remuneration, including any equity incentives, in his personal capacity under
the terms of their employment with Phillips 66 and terms of engagement with the Company. Accordingly, all fees earned
by, and all equity instruments granted to, Mr. Vaidyanathan are paid or granted directly to Phillips 66.
94
The table below shows the value of share rights that were granted, exercised and forfeited during the year ended
December 31, 2024.
Non-executive Director share rights
2024
Number
Granted
Value Granted
(AUD$)1
Value Exercised
(AUD$)1
Number
Forfeited
Value Forfeited
(AUD$)1
A Bellas
109,749
105,908
—
—
—
S Burrow
84,145
81,200
—
—
—
R Edmonds
109,749
169,024
63,116
—
—
N Liveris
—
—
—
—
—
R Natter
109,749
105,908
—
—
—
J Oelwang
109,749
105,908
—
—
—
S Vaidyanathan
109,749
105,908
—
—
—
1 Amounts are disclosed in AUD$ as the value is determined based on the ASX share price at grant date, which is denominated in AUD.
The non-executive Directors received the following cash fees:
USD$
Chairman
106,000
Base non-executive Director fee
50,000
Chair of Audit & Risk Committee
20,000
Member of Audit & Risk Committee
10,000
Chair of Nominating and Corporate Governance Committee
10,000
Member of Nominating and Corporate Governance Committee
5,000
Chair of Remuneration Committee
15,000
Member of Remuneration Committee
7,500
The current base fees were reviewed with effect from September 1, 2022.
The maximum annual aggregate non-executive Directors’ fee pool limit is $700,000 (excluding share-based payments) and
was approved by shareholders at the 2023 AGM.
Any Director who devotes special attention to the business of the Company, or who otherwise performs services which in
the opinion of the Directors are outside the scope of the ordinary duties of a Director may be paid extra remuneration as
determined by the Directors, which will not form part of the aggregate fee pool limit above. Non-executive Directors are
not entitled to any performance-related remuneration or retirement allowances outside of statutory superannuation
entitlements.
All non-executive Directors enter into a service agreement with the Company in the form of a letter of appointment. The
letter summarizes the Board policies and terms, including remuneration relevant to the office of Director.
ADDITIONAL STATUTORY INFORMATION
(i)
Performance Based Remuneration Granted, Forfeited, and Cancelled During the Year
The table below shows for each KMP how much of their STI cash bonus was awarded and how much was forfeited. It also
shows the fair value of performance rights that were granted, exercised, forfeited and cancelled (where applicable) during
95
the year ended December 31, 2024. The number of performance rights and percentages vested/forfeited for each grant
are disclosed in section (ii) on page 50 below.
Total STI Bonus
LTI Performance Rights
2024
Total STI
Opportunity
(USD$)
Awarded
%
Forfeited
%
Value Granted
AUD
$
Value Exercised
AUD
$*
C Burns
628,456
60 %
40 %
3,250,642
539,552
R Long
100,000
60 %
—
795,399
—
R Buttar
381,563
60 %
40 %
956,071
218,204
D MacDougald
265,250
60 %
—
956,071
113,479
N Liveris
—
-
—
—
255,190
* The value at the exercise date of options/performance rights that were granted as part of remuneration and were exercised during the year has been determined as
the intrinsic value of the options at that date.
(ii)
Terms and conditions of the share-based payment arrangements
Options
The terms and conditions of each grant of options affecting remuneration in the current or a future reporting period are
as follows:
Name
Grant Date
Vesting
Date
Expiry Date
Number
Under Option
Exercise Price
AUD
$
Value per Option
at Grant Date
AUD
$
Performance
Achieved
Vested %
C Burns
March 13, 2019
March 31, 2026~
Cessation of employment
850,000
$
0.50
$
0.54
—
—
March 13, 2019
June 30, 2026~
Cessation of employment
850,000
$
0.50
$
0.55
—
—
March 13, 2019
September 30, 2026~
Cessation of employment
850,000
$
0.50
$
0.56
—
—
March 13, 2019
September 30, 2026~
Cessation of employment
850,000
$
0.50
$
0.56
—
—
March 13, 2019
December 31, 2026~
Cessation of employment
850,000
$
0.50
$
0.57
—
—
March 13, 2019
December 31, 2026~
Cessation of employment
850,000
$
0.50
$
0.57
—
—
March 13, 2019
December 31, 2026~
Cessation of employment
850,000
$
0.50
$
0.57
—
—
March 13, 2019
September 30, 2027~
Cessation of employment
850,000
$
0.50
$
0.57
—
—
March 13, 2019
September 30, 2027~
Cessation of employment
850,000
$
0.50
$
0.58
—
—
March 13, 2019
September 30, 2027~
Cessation of employment
850,000
$
0.50
$
0.58
—
—
N Liveris
November 21, 2019
March 31, 2026~
Cessation of employment
250,000
$
0.50
$
0.36
—
—
November 21, 2019
June 30, 2026~
Cessation of employment
250,000
$
0.50
$
0.37
—
—
November 21, 2019 September 30, 2026~
Cessation of employment
250,000
$
0.50
$
0.38
—
—
November 21, 2019 September 30, 2026~
Cessation of employment
250,000
$
0.50
$
0.38
—
—
November 21, 2019 December 31, 2026~
Cessation of employment
250,000
$
0.50
$
0.39
—
—
November 21, 2019 December 31, 2026~
Cessation of employment
250,000
$
0.50
$
0.39
—
—
November 21, 2019 December 31, 2026~
Cessation of employment
250,000
$
0.50
$
0.39
—
—
November 21, 2019 September 30, 2027~
Cessation of employment
250,000
$
0.50
$
0.39
—
—
November 21, 2019 September 30, 2027~
Cessation of employment
250,000
$
0.50
$
0.40
—
—
November 21, 2019 September 30, 2027~
Cessation of employment
250,000
$
0.50
$
0.40
—
—
~ These options vest in 10 equal tranches upon the achievement of progressive incremental production milestones of 1,000 tonnes. The vesting dates in the table
represent the current estimate of when the vesting conditions will be met, and the options can be exercised.
The number of options over ordinary shares in the Company provided as remuneration to key management personnel is
shown in the table below on page 97. The options carry no dividend or voting rights. When exercisable, each option is
convertible into one ordinary share of NOVONIX Limited.
96
Performance Rights
The terms and conditions of each grant of performance rights affecting remuneration in the current or a future reporting
period are as follows:
KMP
Number
Grant Date
Vesting Date
Vesting Conditions
Grant Date
Fair Value
Per Unit
(AUD$)
C Burns
1,412,000
1/28/2022
6/30/2024
50% vest subject to continued employment at
$
7.21
N Liveris
667,831
10/26/2022
6/30/2024
30 June 2024 and 50% vest subject to achievement
$
2.90
R Buttar
255,238
1/28/2022
6/30/2024
of revenue for the period 1 July 2023 to 30 June 2024:
a)0-50% of award for linear revenue up to USD$45M
b)50-100% of award for incremental revenue linearly
from USD$45m - $105m.
$
7.21
C Burns
2,275,400
10/26/2022
6/30/2025
50% vest subject to continued employment at
$
2.90
N Liveris
778,400
10/26/2022
6/30/2025
30 June 2025 and 50% vest subject to achievement
$
2.90
R Buttar
359,300
10/26/2022
6/30/2025
of revenue, for the 12-month period preceding vesting
date as follows:
a)0-50% of award for linear revenue up to USD$75M
b)50-100% of award for incremental revenue linearly
from USD$75m - $180m.
$
2.90
C Burns
1,604,871
4/13/2025
12/31/2025
$
1.09
N Liveris
549,035
4/5/2023
12/31/2025
$
1.21
R Buttar
253,401
4/13/2023
12/31/2025 50% vest subject to continued employment at 31
December 2025 and 50% vest achievement of revenue
targets for the 2025 financial year as follows:
a)0-25% of award for linear revenue up to USD$50M
b)25-50% of award for incremental revenue linearly
from USD$50m - $125m+.
$
1.09
C Burns
3,658,161
4/18/2024
12/31/2026
$
0.89
R Long
1,144,130
10/8/2024
12/31/2026
$
0.70
D MacDougald
1,075,930
4/18/2024
12/31/2026
$
0.89
R Buttar
1,075,930
4/18/2024
12/31/2026 TSR performance relative to the entities of a select
group of comparable
listed battery technology entities over the Performance
Period
(1/1/24 to 31/12/26). The vesting percentage resulting
from the TSR
condition is subject to adjustment based on revenue
performance in FY26.
$
0.89
R Buttar
Tranche 2
37,500
10/6/2021
4/22/2024
Vest subject to continued service with the Company up
to the vesting date.
$
4.92
Tranche 3
37,500
10/6/2021
4/22/2025
$
4.92
The number of performance rights over ordinary shares in the Company provided as remuneration to KMPs is shown on
page 98. The performance rights carry no dividend or voting rights. Rights granted are dependent on the recipient’s
continued service, or achievement of performance related vesting conditions, by the vesting date.
Upon vesting, each performance right is convertible into one ordinary share of NOVONIX Limited. If a KMP ceases
employment before the rights vest, the rights will be forfeited, except in limited circumstances that they are approved by
the Board on a case-by-case basis.
97
Share Rights
The terms and conditions of each grant of share rights affecting remuneration in the current or a future reporting period
are as follows, for each of our non-executive Directors:
Number
Grant Date
Vesting Date
Grant Date Fair
Value Per Unit
AUD
$
A Bellas
109,749
April 17, 2024
December 31, 2024 $
0.965
S Burrow
84,145
April 17, 2024
December 31, 2024 $
0.965
R Edmonds
65,405
April 17, 2024
April 17, 2024 $
0.965
R Edmonds
109,749
April 17, 2024
December 31, 2024 $
0.965
N Liveris
—
—
—
—
R Natter
109,749
April 17, 2024
December 31, 2024 $
0.965
J Oelwang
109,749
April 17, 2024
December 31, 2024 $
0.965
S Vaidyanathan
109,749
April 17, 2024
December 31, 2024 $
0.965
The number of share rights over ordinary shares in the Company provided as remuneration to key management personnel
is shown on page 99. The share rights carry no dividend or voting rights.
These share rights vest in full in one installment based solely on service to us through the vesting date and do not have
any performance related vesting conditions.
Upon vesting, each share right is convertible into one ordinary share of NOVONIX Limited. If a non-executive Director
ceases to hold office before the share rights vest, the rights will vest on a pro rata basis representing the proportion of the
relevant financial year that such a person served as a non-executive Director. For example, if a non-executive Director
who is issued share rights ceases to hold office halfway through the financial year, then that non-executive Director will
only be entitled to half of the shares initially awarded.
(iii)
Reconciliation of options, performance rights, share rights and ordinary shares held by KMP
The table below shows a reconciliation of options held by each KMP (to the extent they held any options at all) from
January 1, 2024 to December 31, 2024.
Options
Balance at the Start of the
Period
Vested
Balance at the End of the Period
2024
Name & Grant Dates
Unvested
Vested
Granted as
Compensation
Number
%
Exercised
Other
Expired
Vested and
Exercisable
Unvested
R Natter
July 31, 2019
—
1,000,000
—
—
—
(1,000,000 )
—
—
—
A Liveris
July 31, 2019
—
9,000,000
—
—
—
—
(9,000,000 ) 1
—
—
—
C Burns
March 13, 2019
8,500,000
—
—
—
—
—
—
—
8,500,000
May 24, 2019
—
1,000,000
—
—
—
(1,000,000 )
—
—
—
N Liveris
July 31, 2019
—
1,000,000
—
—
—
(1,000,000 )
—
—
—
November 21, 2019
2,500,000
—
—
—
—
—
(2,500,000 )
—
—
1 Shareholding on date of appointment/resignation
98
The amounts paid per ordinary share on the exercise of options at the date of exercise were as follows:
Exercise Date
Exercise Price Per Share
July 16, 2024
$
0.50
No amounts are unpaid on any shares issued on the exercise of options.
The table below shows how many performance rights were granted and vested during the period. No performance
rights were forfeited during the period.
Performance Rights
Balance at the Start of the
Period
Vested &
Balance at the End of the
Period
Maximum
Value
Name & Grant Dates
Unvested
Vested
Granted as
Compensation
Other
exercised
During the
Period
Lapsed
During the
Period
Unvested
Vested
Yet to Vest*
USD$
C Burns
January 28, 2022
1,412,000
—
—
759,931
652,069
—
—
—
July 1, 2022
2,275,400
—
—
—
—
—
2,275,400
—
354,814
January 1, 2023
1,604,871
—
—
—
—
—
1,604,871
—
188,586
April 18, 2024
—
—
3,658,161
—
—
—
3,658,161
—
1,340,514
N Liveris
January 28, 2022
667,831
—
—
—
359,422
308,409
—
—
—
July 1, 2022
778,400
—
—
—
—
778,400
—
—
—
January 1, 2023
549,035
—
—
—
—
549,035
—
—
—
April 18, 2024
—
—
1,398,709
—
—
1,398,709
—
—
—
R Long
October 8, 2024
—
—
1,144,130
—
—
—
1,144,130
—
422,637
D MacDougald
December 2, 2021
—
—
—
50,000
25,000
—
25,000
—
22,265
July 1, 2022
—
—
—
70,645
23,549
—
47,096
—
17,580
July 1, 2022
—
—
—
84,146
28,049
—
56,097
—
20,940
January 3, 2023
—
—
—
70,064
17,516
—
52,548
—
12,875
September 2, 2023
—
—
—
300,000
75,000
—
225,000
—
66,931
April 18, 2024
—
—
1,075,930
—
—
—
1,075,930
—
394,269
R Buttar
October 6, 2021
75,000
—
—
—
37,500
—
37,500
—
9,892
January 28, 2022
255,238
—
—
—
137,368
117,870
—
—
—
July 1, 2022
361,831
—
—
—
120,611
—
241,220
—
90,041
July 1, 2022
359,300
—
—
—
—
—
359,300
—
56,027
January 1, 2023
253,401
—
—
—
—
—
253,401
—
29,777
April 18, 2024
—
—
1,075,930
—
—
—
1,075,930
—
394,269
* The maximum value of the performance rights yet to vest has been determined as the amount of the grant date fair value of the rights that are yet to be expensed at
December 31, 2024, converted at the USD$/AUD$ spot rate at December 31, 2024. The minimum value of deferred shares yet to vest is nil, as the shares will be forfeited
if the vesting conditions are not met.
1 Number of performance rights held on date of appointment as KMP
99
Share Rights
The table below shows a reconciliation of share rights held by each non-executive Director (to the extent they held any
share rights at all) from January 1, 2024 to December 31, 2024.
Balance at the Start of the
Period
Granted as
Exercised
During the Period
Vested During the Period
Balance at the End of the Period
Maximum
Value
Yet to Vest^
Name & Grant Dates
Unvested
Vested
Compensation
Number
%
Number
%
Unvested
Vested
US$
A Bellas
April 17, 2024
—
—
109,749
—
109,749 #
—
—
109,749
—
S Burrow
April 17, 2024
—
—
84,145
—
84,145 #
—
—
84,145
—
R Edmonds
April 17, 2024
65,405*
—
—
(65,405 )
100 %
—
—
—
—
—
April 17, 2024
—
—
109,749
—
109,749
#
—
—
109,749
—
R Natter
April 17, 2024
—
—
109,749
—
109,749
#
—
—
109,749
—
J Oelwang
April 17, 2024
—
—
109,749
—
109,749
#
—
—
109,749
—
S Vaidyanathan
April 17, 2024
—
—
109,749
—
109,749
#
—
—
109,749
—
^ The maximum value of the performance rights yet to vest has been determined as the amount of the grant date fair value of the rights that are yet to be expensed,
converted at the USD$/AUD$ spot rate at December 31, 2024. The minimum value of deferred shares yet to vest is nil, as the shares will be forfeited if the vesting
conditions are not met.
* Granted in the prior year subject to shareholder approval. Shareholder approval was received at the AGM held on April 17, 2024.
# Subsequent to December 31, 2024 shares were issued on the vesting of share rights that vested on December 31, 2024.
Shareholdings (Direct or indirect)
Name
Balance at
the Start of
the Period
Options
Exercised
Performance
Rights
Exercised
Share Rights
Exercised
Other
Changes
Balance at
the End of
the Period
Ordinary shares
A Bellas
2,599,328
—
—
—
—
2,599,328
S Burrow
—
—
—
—
—
—
R Edmonds
—
—
—
65,405
—
65,405
A Liveris
9,628,789
—
—
—
(9,628,789 ) 1
—
N Liveris
1,202,679
284,646
192,002
—
(284,646 ) 2
1,394,681
R Natter
2,717,000
284,646
—
—
(337,000 ) 2
2,664,646
J Oelwang
79,165
—
—
—
—
79,165
S Vaidyanathan
—
—
—
—
—
—
C Burns
3,448,936
284,646
349,568
—
—
4,083,150
R Buttar
126,660
—
165,208
—
—
291,868
R Long
—
—
—
—
—
—
D MacDougald
—
—
103,869
—
60,232 1
164,101
1 Shareholding on date of appointment/resignation
2 On-market sale.
(iv)
Loans with KMPs
During the financial year there were no loans to executive KMP during the financial year (2023: Nil)
(v)
Other transactions with KMPs
There have been no other transactions with KMPs.
100
(vi)
Reliance on external remuneration consultants
The Remuneration Committee engages AON to review its remuneration policies and to provide recommendations on KMP
cash salary, short-term and long-term incentive plan design. AON was engaged by the Remuneration Committee
independently of management. AON was paid $218,575 for these services during the year ended December 31, 2024.
End of remuneration report (audited)
101
AUSTRALIAN DISCLOSURE REQUIREMENTS
Options Granted as Remuneration
No options have been granted over unissued shares during or since the end of the year ended December 31, 2024, to our
Directors or senior management.
KMP Interests
The relevant interest of each KMP, as defined by section 608 or the Corporations Act, in the share capital of NOVONIX, as
notified by the directors to the ASX in accordance with section 205G(1) of the Corporations Act 2001, at the date of this
report is as follows:
Director
NOVONIX
Limited ordinary
shares
Share Rights
over NOVONIX
Limited ordinary
shares
Anthony Bellas
2,643,792
109,749
Sharan Burrow
—
84,145
Ron Edmonds
65,405
109,749
Nick Liveris
1,394,681
—
Admiral Robert Natter
2,664,646
109,749
Jean Oelwang
79,165
109,749
Suresh Vaidyanathan1
—
—
1 Mr. Vaidyanathan is not permitted to receive remuneration, including any equity incentives, in his personal capacity under the terms
of his employment with Phillips 66 and terms of engagement with the Company (all of whose equity grants are paid or granted directly
to Phillips 66).
Meetings of Directors
The number of meetings of the Company's Board of Directors and of each Committee held during the year ended
December 31, 2024, and the number of meetings attended by each Director were:
Full Meetings of
Directors
Meetings of Audit &
Risk Committee
Meeting of the
Remuneration
Committee
Meeting of the
Nominating and
Corporate
Governance
Committee
A
B
A
B
A
B
A
B
Admiral R J Natter
15
15
-
-
-
-
3
3
A Bellas
15
15
6
6
4
5
3
3
S Burrow
13
14
4
4
3
4
-
-
R Edmonds
15
15
3
3
-
-
-
-
A Liveris
2
2
-
-
-
-
-
-
N Liveris
8
8
-
-
-
-
-
-
J Oelwang
14
15
3
3
5
5
3
3
S Vaidyanathan
15
15
-
-
5
5
-
-
A = Number of meetings attended
B = Number of meetings held during the time the director held office, was a member of the committee during the year and was not absent from a meeting due to a
conflict of interest.
102
Shares under option
Unissued ordinary shares of NOVONIX Limited under option at the date of this report are as follows:
Date Options
Expiry
Exercise Price
Number Under Option
Granted
Date
AUD$
Vested
Unvested
March 13, 2019
Cessation of employment
$
0.50
—
8,500,000
March 14, 2019
Cessation of employment
$
0.50
516,667
—
December 17, 2019
Cessation of employment
$
0.50
—
1,000,000
February 4, 2020
Cessation of employment
$
0.50
—
1,000,000
Unissued ordinary shares of NOVONIX Limited under performance right at the date of this report totaled 15,343,410.
3,295,990 of the performance rights expire on December 31, 2027 and 1,858,272 expire on December 31, 2026 with the
balance expiring on cessation of employment of the holder. 8,032,746 of the performance rights on issue were granted
during the financial period, with the remaining 7,310,664 being granted in the prior financial years.
Unissued ordinary shares of NOVONIX Limited under share rights at the date of this report totaled 632,890. All of these
rights were granted during the financial period and vested on December 31, 2024.
No performance right holder, share right holder, or option holder has any right to participate in any other share issue of
the Company or any other entity.
Shares issued on the exercise of options during the year
The following ordinary shares of NOVONIX Limited were issued during the year ended December 31, 2024 on the exercise
of options. No further shares have been issued since that date. No amounts are unpaid on any of the shares.
Date options granted
Issue price of shares
AUD $
Number of shares
issued
March 14, 2021
$
0.50
$
33,334
July 31, 2019
$
0.70
$
3,415,759
Insurance of Officers and Indemnities
During the financial period, NOVONIX Limited paid a premium of $3,962,922 to insure the Directors and Secretaries of the
Company.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought
against the officers in their capacity as officers of entities in the Company, and any other payments arising from liabilities
incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from conduct
involving a willful breach of duty by the officers or the improper use by the officers of their position or of information to
gain advantage for themselves or someone else or to cause detriment to the Company. It is not possible to apportion the
premium between amounts relating to the insurance against legal costs and those relating to other liabilities.
Proceedings on Behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings. No proceedings have been brought or
intervened in on behalf of the Company with leave of the Court under section 237 of the Corporations Act 2001.
103
Audit and Non-Audit Services
Details of amounts paid or payable to the auditor (PricewaterhouseCoopers Australia) for audit and non-audit services
during the period are disclosed in Note 8 Auditor’s remuneration.
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the
auditor’s expertise and experience with the Company and/or the Company are important.
The Board has considered the position and, in accordance with advice received from the Audit & Risk Committee, is
satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by the auditor
did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:
•
all non-audit services have been reviewed by the Audit & Risk Committee to ensure they do not impact the
impartiality and objectivity of the auditor
•
none of the services undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants.
Auditor's Independence Declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 in relation
to the audit for the year ended December 31, 2024, is included in Exhibit 99 of this annual report on Form 20-F.
Directors' Resolution
This report is made in accordance with a resolution of Directors.
R Natter
Chairman
Brisbane February 28, 2025
104
C.
Board Practices
Board of Directors
Our Board of Directors currently consists of seven members. Under our Constitution and the ASX Listing Rules, we must
hold an election of directors each year at our annual general meeting of shareholders. A director (other than our managing
director) must not hold office (without re-election) past the third annual general meeting following the director’s
appointment or three years, whichever is longer. If there would otherwise not be a vacancy on the board, and no director
is required to retire, then the director who has been longest in office since last being elected must retire. The retirement
of a director from office under the Constitution and the re-election of a director or the election of another person to that
office (as the case may be) takes effect at the conclusion of the meeting at which the retirement and re-election or election
occurs.
The membership of our Board of Directors is directed by the following recommendations and requirements as set forth in
the Corporations Act, the ASX Listing Rules and Corporate Governance Principles and Recommendations, our Constitution,
and our Corporate Governance Charter, as applicable:
•
the ASX Listing Rules and the Corporations Act do not require that a majority of our directors be independent,
although it is recommended by recommendation 2.4 of the ASX Corporate Governance Principles and
Recommendations, which differs from the independence standards under Nasdaq corporate governance listing
standards. Our Board has determined that four of our seven directors are independent under the ASX
Corporate Governance Principles and Recommendations;
•
there must be a minimum of three directors, half of our directors should be non-executive directors, and, unless
shareholders in a general meeting resolve otherwise, there will be a maximum of 12 directors. The appointment
of an alternate director does not count towards the total number of directors. Within those limits, our Board
of Directors may determine the number of directors to serve on our board at any one time;
•
our Board of Directors has the power to appoint any person to be a director, either to fill a vacancy or as an
additional director (provided that the total number of directors does not exceed the maximum number of
directors permitted), and any director so appointed will hold office until the end of the next annual general
meeting when he or she must seek re-election by way of ordinary resolution;
•
a director may, with the approval of a majority of the Board of Directors, appoint a person to be that director’s
alternate director for any period that director decides, whom in the appointing director's absence may exercise
any power that the appointing director may exercise and attend and vote in place of or on behalf of the
appointing director, and will hold office until the office of the appointing director is vacated or the alternate
director’s appointment is terminated or suspended by a majority of the Board of Directors; and
•
our Board of Directors should, collectively, have a broad range of experience, expertise, skills, and contacts
relevant to the Company and its business.
Our Board of Directors has delegated responsibility for the strategic and operational management of our businesses to
the Chief Executive Officer but remains responsible for overseeing the performance of management. The principal roles
and responsibilities of our Board of Directors include the following:
•
providing leadership and setting the strategic objectives of the Company;
•
determining the Board’s composition, including appointment and retirement or removal of the Chairman and
Deputy Chairman (if applicable);
•
overseeing the Company, including its control and accountability systems;
•
appointing and removing the Chief Executive Officer or equivalent;
•
where appropriate, ratifying the appointment and the removal of senior executives of the Company;
•
reviewing, ratifying, and monitoring the risk management framework and setting the risk appetite within which
the Board expects management to operate;
105
•
approving and formulating company strategy and policy, monitoring senior executives’ implementation of
strategy;
•
approving and monitoring operating budgets and major capital expenditures;
•
overseeing the integrity of the Company’s accounting and corporate reporting systems, including the external
audit;
•
monitoring industry developments relevant to the Company and its business;
•
developing suitable key indicators of financial performance for the Company and its business;
•
overseeing the Company’s corporate strategy and performance objectives developed by management;
•
overseeing the Company’s compliance with its continuous disclosure obligations;
•
approving the Company’s remuneration framework;
•
monitoring the overall corporate governance of the Company (including its strategic direction and goals for
management, and the achievement of these goals); and
•
overseeing committees of the Board of Directors.
Our Board of Directors has established delegated limits of authority, which define the matters that are delegated to
management and those that require the Board of Directors’ approval. Under the Corporations Act, at least one of our
directors must be a resident Australian. None of our non-executive directors have any service contracts with us that
provide for benefits upon termination of employment. Under our Corporate Governance Charter, the Board of Directors
is required to meet at least six times per year.
Board Committees
To assist with the effective discharge of its duties, the Board of Directors has established an Audit and Risk Management
Committee, a Remuneration Committee and a Nominating and Corporate Governance Committee .Each of these
committees operates under a charter approved by our Board of Directors, which sets forth the purposes and
responsibilities of the committee as well as qualifications for committee membership, committee structure and operations
and committee reporting to the Board of Directors.
Audit and Risk Management Committee
The members of our Audit and Risk Management Committee are Mr. Bellas (Chair), Ms. Burrow and Ms. Oelwang. Each
member of our Audit and Risk Management Committee can read and understand fundamental financial statements in
accordance with applicable requirements. Mr. Bellas qualifies as an “audit committee financial expert,” as such term is
defined in the rules of the SEC, and all of the members of the Audit and Risk Management Committee are independent,
as independence is defined under the ASX Corporate Governance Principles and Recommendations as well as the SEC and
Nasdaq rules applicable to foreign private issuers.
The charter for our Audit and Risk Management Committee requires the committee to consist of at least three directors,
all of whom must be non-executive directors and a majority of whom must be independent directors. The chairperson of
our Audit and Risk Management Committee must be an independent director and cannot be the chairperson of our Board
of Directors. Under its charter, the Audit and Risk Management Committee meets as often as the Committee members
deem necessary in order to fulfil its role and at least twice each year.
The role of the Audit and Risk Management Committee is to advise our Board of Directors on the establishment and
maintenance of a framework of internal controls for the Company’s management and assist our Board of Directors with
policy on the quality and reliability of financial information prepared for use by the Board. Specific responsibilities of our
Audit and Risk Management Committee include:
•
monitoring the establishment of an appropriate internal control framework, including information systems,
and its operation and considering enhancements;
•
assessing corporate risk (including economic, environmental, social sustainability and cybersecurity risks) and
compliance with internal controls;
106
•
overseeing business continuity planning and risk mitigation arrangements;
•
assessing the objectivity and performance of the internal audit function and considering enhancements;
•
reviewing reports on any material misappropriation, frauds, and thefts from the Company;
•
reviewing reports on the adequacy of insurance coverage;
•
monitoring compliance with relevant legislative and regulatory requirements (including continuous disclosure
obligations) and declarations by the committee secretary in relation to those requirements;
•
reviewing material transactions which are not a normal part of the Company’s business;
•
reviewing the nomination, performance, and independence of the external auditors, including
recommendations to the Board for the appointment or removal of any external auditor and the rotation of the
audit engagement partner;
•
liaising with the external auditors and monitoring the conduct, scope, and adequacy of the annual external
audit;
•
reviewing management corporate reporting processes supporting external reporting, including the
appropriateness of the accounting judgments or choices made by management in preparing the financial
reports and statements;
•
reviewing financial statements and other financial information distributed externally, including considering
whether the financial statements reflect the understanding of the Audit and Risk Management Committee and
otherwise provide a true and fair view of the financial position and performance of the Company;
•
preparing and recommending for approval by the Board the corporate governance statement for inclusion in
the annual report or any other public document;
•
reviewing external audit reports and monitoring, where major deficiencies or breakdowns in controls or
procedures have been identified, remedial action taken by management;
•
reviewing any proposal for the external auditor to provide non-audit services and whether it might compromise
the independence of the external auditor; and
•
reviewing and monitoring compliance with the Code of Conduct.
Remuneration Committee
The members of our Remuneration Committee are Ms. Oelwang (Chair), Mr. Bellas, Ms. Burrow and Mr. Vaidyanathan.
The role of the Remuneration Committee is to advise our Board of Directors on remuneration and issues relevant to
remuneration policies and practices, including for our senior management and non-executive directors. The Remuneration
Committee is required to hold at least two regular meetings each year. Specific responsibilities of our Remuneration
Committee include:
•
reviewing and evaluating relevant market practices and trends for remuneration relevant to the Company;
•
reviewing and making recommendations to our Board of Directors for our remuneration practices, policies, and
framework, including in relation to equity-based remuneration plans and superannuation arrangements and
the allocation of the directors’ fee pool;
•
overseeing the performance and reviewing and making recommendations to our Board of Directors for the
remuneration packages of our senior management and non-executive directors;
•
preparing for our Board of Directors any report that may be required under applicable legal or regulatory
requirements about remuneration maters and reviewing our reporting and disclosure practices in relation to
the remuneration of our senior management and non-executive directors; and
•
reviewing, making recommendations to our Board of Directors on remuneration by gender and other diversity
criteria, reporting to our Board of Directors as necessary to facilitate compliance with our diversity policy, and
reviewing and reporting to the Board, at least annually, on the proportion of women and men in the workforce
at all levels of the Company, and their relative levels of remuneration.
•
assisting the Board with respect to, and, to the extent authority is so delegated to it by the Board, administering
the Company’s long-term incentive and equity-based plans; administering and making determinations under
and recommendations to the Board with respect to, the Company’s policy for the recovery of erroneously
awarded compensation (the "Clawback Policy");
107
•
preparing for the Board any report that may be required under applicable legal or regulatory requirements
about remuneration matters;
•
reviewing the Company’s reporting and disclosure practices in relation to the remuneration of directors and
senior executives;
•
reviewing, making recommendations to the Board on remuneration by gender (and other diversity
benchmarks) and reporting to the Board as necessary to facilitate compliance with the Company's Diversity
Policy; and
•
reviewing and reporting to the Board, at least annually, on the proportion of women and men in the workforce
at all levels of the Company, and their relative levels of remuneration.
The charter for our Remuneration Committee requires the committee to consist of at least three directors, all of whom
must be non-executive directors and, until such time as required by applicable law or listing rules to consist of 100%
independent directors, a majority of whom (including the committee Chair) must also be independent directors. Ms.
Oelwang, Mr. Bellas and Ms. Burrow are considered independent directors under the ASX Corporate Governance
Principles and Recommendations. Mr. Vaidyanathan represents a substantial shareholder and is therefore not considered
independent under the ASX Corporate Governance Principles and Recommendations.
Nominating and Corporate Governance Committee
The members of our Nominating and Corporate Governance Committee are Admiral Natter (Chair), Mr. Bellas, and Ms.
Oelwang. The role of the Nominating and Corporate Governance Committee is to to review and consider the structure
and balance of the Board, to make recommendations regarding the Company's director nominations process, and develop
and maintain the Company's corporate governance policies, having regard to the applicable law and good corporate
governance standards. The Nominating and Corporate Governance Committee is required to hold at least two regular
meetings each year. Specific responsibilities of our Nominating and Corporate Governance Committee include:
•
determining the qualifications, qualities, skills, and other expertise required to be a director and developing
and recommending to the Board for its approval and disclosure, a Board skills matrix setting out the mix of
skills and diversity that the Board currently has and/or is looking to achieve in its membership;
•
identifying and screening, and if thought fit, recommending to the Board, individuals qualified to become
members of the Board, after considering the necessary and desirable competencies of new Board members,
and the range and depth of skills and the diversity of the Board;
•
considering, and if thought fit, making recommendations to the Board regarding the re-election by
shareholders of any director under the retirement by rotation provisions or any director who must stand for
election as a result of extended tenure;
•
undertaking the appropriate checks on candidates for the Board (including checks concerning the person's
character, qualifications and experience, education, criminal record, bankruptcy history and independence as
a director) and providing that information, where material and relevant, to shareholders before recommending
a candidate for appointment or re-election;
•
enduring that the Company enters into a written agreement with each new Board member which sets out the
terms of their appointment;
•
assessing and considering the time required to be committed by a director to properly fulfil their duty to the
Company and advise the Board, and assisting with the conduct of an annual evaluation of the Board, its
committees and individual Directors, as well as the chair's annual performance review of the CEO and the
assessment of the performance of the Board chair;
•
reviewing the Board's committee structure and composition and making recommendations to the Board
regarding the appointment of directors to serve as members of each committee and committee chair annually;
108
•
identifying and making recommendations to the Board regarding the selection and approval of candidates to
fill any vacancy on the Board and/or any Board committee, either by election by shareholders or appointment
by the Board.
•
developing and overseeing a Company orientation program for new directors and a continuing education
program for current directors, periodically reviewing these programs and updating them as necessary;
•
developing and recommending to the Board for approval a succession plan for non-executive directors and the
CEO , reviewing such plan periodically, developing and evaluating potential candidates for the Board and
recommending to the Board any changes to and any candidates for succession under such plan, taking into
consideration, in the case of non-executive directors, the mix of skills, experience, expertise, diversity,
independence and other qualities of existing directors and how the candidate’s attributes will balance and
complement those qualities and address any potential skill gaps in relation to the current composition of the
Board;
•
assessing and making recommendations to the Board in relation to, the independence of non-executive
directors on appointment, and then annually and whenever any new interests or relationships are disclosed by
a director;
•
overseeing the Company's corporate governance practices and procedures, including identifying best practices
and, at least once a year, reviewing and recommending to the Board for approval any changes to the
documents, policies and procedures in the Company's corporate governance framework;
•
reviewing and overseeing the implementation of the Company's Diversity Policy and, with the appropriate
support and input from management, reviewing and reporting to the Board, on an annual basis, the
effectiveness of such policy and progress in achieving its measurable objectives, the division of responsibilities
and accountability for developing and implementing diversity initiatives across the organization, and the
relative proportions of identified minorities on the Board, in senior management positions and in the
Company's workforce;
•
reviewing and, if thought fit, recommending to the Board for approval the Corporate Governance Statement
for inclusion in the annual report;
•
developing and recommending to the Board for approval a Company policy for the review and approval of
related party transactions and to review, approve and oversee any transaction between the Company and any
related party on an ongoing basis; and
•
overseeing the Company’s ESG strategy and initiatives, including:
ο
considering current and emerging ESG trends that may affect the Company’s business, operations,
performance or reputation;
ο
periodically reviewing reports from management regarding the Company’s ESG strategy, initiatives,
objectives, and performance metrics, and the associated risks and opportunities with respect to ESG
matters;
ο
developing and recommending to the Board for approval policies and procedures relating to the
Company’s ESG strategy and initiatives;
ο
monitoring ongoing execution of the Company’s ESG strategy and initiatives, and performance against
key ESG metrics;
ο
reviewing ESG disclosures issued by the Company; and
ο
at least annually, assessing the overall effectiveness of the Company’s ESG programs and, as and when
appropriate, addressing with the Audit and Risk Management Committee issues that arise with respect
to environmental and social sustainability risks.
The charter for our Nominating and Corporate Governance Committee requires the committee to consist of at least three
directors, all of whom must be non-executive directors and a majority of whom (including the committee Chair) must also
be independent directors. All of the members of the Nominating and Corporate Governance Committee are non-executive
directors and are considered independent directors under the ASX Corporate Governance Principles and
Recommendations.
109
Foreign Private Issuer Exemption
We qualify as a “foreign private issuer” as defined in Section 405 of the Securities Act. As a foreign private issuer, we are
exempt from certain rules under the Exchange Act that impose disclosure requirements as well as procedural
requirements for proxy solicitations under Section 14 of the Exchange Act. In addition, the members of our Board of
Directors and senior management are not subject to short-swing profit and insider trading reporting obligations under
Section 16 of the Exchange Act. They are, however, subject to the obligations to report changes in share ownership under
Section 13 of the Exchange Act and related SEC rules, to the extent applicable.
The foreign private issuer exemption also permits us to follow home country corporate governance practices or
requirements instead of certain Nasdaq listing requirements, including the following:
•
We rely on an exemption from the requirement that our independent directors meet regularly in executive
sessions under Nasdaq listing rules. The ASX Listing Rules and the Corporations Act do not require the
independent directors of an Australian company to have such executive sessions.
•
We rely on an exemption from the quorum requirements applicable to meetings of shareholders under Nasdaq
listing rules. In compliance with Australian law, our Constitution provides that two shareholders present, in
person or by proxy, attorney or a representative, shall constitute a quorum for a general meeting. Nasdaq
listing rules require that an issuer provide for a quorum as specified in its by-laws for any meeting of the holders
of ordinary shares, which quorum may not be less than 33 1/3% of the outstanding voting ordinary shares.
•
We follow applicable Australian law and the ASX Listing Rules regarding prior shareholder approval in lieu of
the requirement prescribed by Nasdaq listing rules that issuers obtain shareholder approval prior to the
issuance of securities in connection with certain acquisitions, private placements of securities, or the
establishment or amendment of certain stock option, purchase, or other compensation plans. Applicable
Australian law and the ASX Listing Rules differ from Nasdaq requirements, with the ASX Listing Rules requiring
prior shareholder approval for issuance of equity securities in a number of circumstances, including (i) issuance
of equity securities exceeding 15% of our issued share capital in any 12-month period (but, in determining the
15% limit, securities issued under certain exceptions to the rule or with shareholder approval are not counted),
(ii) subject to certain exceptions, issuance of equity to related parties (as defined in the ASX Listing Rules) and
(iii) issuances of securities to directors or their associates under an employee incentive plan.
•
The ASX Listing Rules and the Corporations Act do not require the establishment of a Remuneration Committee
or a Nominating and Corporate Governance Committee, and, if established, do not require all members to be
independent directors. However, under Rule 10A-3 promulgated under the Exchange Act, all members of our
Audit and Risk Management Committee are required to be independent pursuant to the standards set forth in
such rule, and we currently comply with this requirement.
Rule 10A-3 under the Exchange Act provides that the Audit and Risk Management Committee must have direct
responsibility for the nomination, compensation, and choice of our auditors, as well as control over the performance of
their duties, management of complaints made, and selection of consultants. Under Rule 10A-3, if the laws of a foreign
private issuer’s home country require that any such matter be approved by the Board of Directors or the shareholders of
the Company, the Audit and Risk Management Committee’s responsibilities or powers with respect to such matter may
instead be advisory.
We intend to take all actions necessary for us to maintain compliance as a foreign private issuer under the applicable
corporate governance requirements of the Sarbanes-Oxley Act, the rules adopted by the SEC and the listing rules of
Nasdaq.
110
D.
Employees
We had 202 employees as of December 31, 2024, 122 of whom were located in the United States and 80 were located in
Canada. We believe we offer our employees competitive compensation packages and a dynamic work environment. We
have been able to attract and retain qualified employees and maintain a core management team. We plan to hire
additional experienced and talented employees in areas such as research and development, production, finance, and
marketing as we grow our business.
We believe that we maintain a good working relationship with our employees, and we have not experienced any major
labor disputes.
E.
Share Ownership
The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of December
31, 2024, for:
•
each member of our senior management;
•
each of our directors; and
•
all our directors and senior management as a group.
To our knowledge, as of December 31, 2024, approximately 79,148,084 ordinary shares, or 13.9% of our ordinary shares,
were held of record by 36 residents of the United States.
We have determined beneficial ownership in accordance with the rules and regulations of the SEC, and the information is
not necessarily indicative of beneficial ownership for any other purpose. Except as indicated by the footnotes below, we
believe, based on information furnished to us, that the people and entities named in the table below have sole voting and
sole investment power with respect to all shares that they beneficially own.
Applicable percentage ownership is based on 567,941,993 ordinary shares outstanding as of December 31, 2024. In
computing the number of shares beneficially owned by a person or entity and the percentage ownership of such person
or entity, we deemed to be outstanding all shares subject to options and performance rights held by the person or entity
that are currently exercisable, or exercisable within 60 days of December 31, 2024. However, except as described above,
we did not deem such shares outstanding for the purpose of computing the percentage ownership of any other person or
entity. The information contained in the following table is not necessarily indicative of beneficial ownership for any other
purpose, and the inclusion of any shares in the table does not constitute an admission of beneficial ownership of those
shares. Each of our shareholders is entitled to one vote per ordinary share. None of the holders of our ordinary shares
have different voting rights from other holders of ordinary shares. We are not aware of any arrangement that may, at a
subsequent date, result in a change of control of our company. For further information regarding options to purchase
111
ordinary shares and performance rights held by our directors and senior management, see “Management—
Remuneration.”
Name of Beneficial Owner
Number of
Ordinary
Shares
Beneficially
Owned
Percentage of
Shares
Beneficially
Owned
Dr. Christopher Burns(1)
4,083,150
*
Admiral Robert J Natter(2)
2,774,395
*
Mr. Anthony G Bellas(3)
2,709,077
*
Ms. Sharan Burrow (4)
84,145
*
Mr. Nicholas Liveris(5)
1,394,681
*
Ms. Rashda Buttar(6)
291,868
*
Mr. Darcy MacDougald(7)
164,101
*
Ms. Jean Oelwang(8)
188,914
*
Mr. Ron Edmonds (9)
175,154
*
All directors and senior management as a group (9 persons)
11,865,485
2.0 %
(1) Consists of 4,083,150 ordinary shares held beneficially by Dr. Christopher Burns, our Chief Executive Officer.
(2) Consists of 1,786,370 ordinary shares held by HSBC Custody Nominees (Australia) Limited, an entity that manages the investment
of Admiral Robert Natter, a member and Chairman of our Board of Directors, in the Company and 878,276 ordinary shares by Admiral
Robert Natter beneficially. It also includes 109,749 share rights issuable for vested share rights.
(3) Consists of 2,277,551 ordinary shares held by Loch Explorations Pty Ltd, and 321,777 ordinary shares held by AG Bellas Super Pty
Ltd, entities which a member and Deputy Chairman of our Board of Directors, Mr. Anthony Bellas, controls. It also includes 109,749
share rights issuable for vested share rights.
(4) Consists of 84,145 share rights issuable for vested share rights held beneficially by Ms. Sharan Burrow,a member of our Board of
Directors.
(5) Consists of 1,394,681 ordinary shares held beneficially by Mr. Nicholas Liveris,a member of our Board of Directors.
(6) Consists of 291,868 ordinary shares held beneficially by Ms. Rashda Buttar, our Chief Legal and Administrative Officer.
(7) Consists of 164,101 ordinary shares held beneficially by Mr. Darcy MacDougald, our Chief Operating Officer.
(8) Consists of 79,165 ordinary shares held beneficially by Ms. Jean Oelwang, a member of our Board of Directors. It also includes
109,749 share rights issuable for vested share rights.
(9) Consists of 65,405 ordinary shares held beneficially by Mr. Ron Edmonds, a member of our Board of Directors. It also includes
109,749 share rights issuable for vested share rights.
For information on arrangements for involving the employees in the capital of the Company as they relate to our directors
and members of our senior management, see Item 6.Directors, Senior Management and Employees — B. Compensation.
The Company maintains two plans to provide equity awards to its directors, executives, employees and consultants, the
Performance Rights Plan and the Executive Options Plan (the “Plans”). The Performance Rights Plan provides for
issuance of performance rights to eligible participants designated by the Board, which entitle the grantee to an ordinary
share (or the cash value) upon satisfaction of specified vesting conditions. Unvested performance rights generally lapse
upon a termination of employment, other than due to redundancy, death or disability.
112
The Executive Options Plan provides for the issuance of stock options to eligible participants (other than directors)
designated by the Board, which entitle the grantee to receive ordinary shares upon exercise once any vesting conditions
have been satisfied. Options generally lapse upon a termination of employment, unless otherwise determined by the
Board.
Performance rights (or a prorated portion, if determined by the Board) and stock options vest upon a change in control,
unless otherwise determined by the Board, with treatment of the vested award determined by the Board in accordance
with the applicable Plan.
Each of the Plans is administered by the Board. Performance rights and options have no voting rights, do not provide the
right to dividends and cannot be transferred without the Board’s approval.
F.
Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation.
Not applicable.
Item 7. Major Shareholders and Related Party Transactions
A.
Major Shareholders
Below is information with respect to the beneficial ownership of our ordinary shares as of December 31, 2024, for each
person or group of affiliated persons known by us to beneficially own more than 5% of our ordinary shares. We have
determined beneficial ownership in accordance with the rules and regulations of the SEC, and the information is not
necessarily indicative of beneficial ownership for any other purpose.
•
Phillips 66 Company beneficially owns 78,050,122 ordinary shares, or approximately 13.74% of our issued and
outstanding ordinary shares, and, we believe, based on information furnished to us, holds sole voting and
investment power with respect to such shares.
•
LGES beneficially owns 28,263,492 ordinary shares, or approximately 4.98% of our issued and outstanding
ordinary shares, and, we believe, based on information furnished to us, shares voting and investment power
with respect to such shares with LG Chem, Ltd., the controlling shareholder of LGES. In the event LGES elects
to convert all of the notes on the maturity date (in lieu of redeeming them), upon conversion, LGES would
beneficially own 34,475,363 ordinary shares, or approximately 6.07% of our issued and outstanding ordinary
shares. See Item 10. Additional Information — C. Material Contracts.
Applicable percentage ownership is based on 567,941,993 ordinary shares outstanding as of December 31, 2024. In
computing the number of shares beneficially owned by a person or entity and the percentage ownership of such person
or entity, we deemed to be outstanding all shares subject to options and performance rights held by the person or entity
that are currently exercisable, or exercisable within 60 days of December 31, 2024. However, except as described above,
we did not deem such shares outstanding for the purpose of computing the percentage ownership of any other person or
entity. The information set forth above is not necessarily indicative of beneficial ownership for any other purpose, and the
inclusion of any shares above does not constitute an admission of beneficial ownership of those shares. Each of our
shareholders is entitled to one vote per ordinary share. None of the holders of our ordinary shares have different voting
rights from other holders of ordinary shares. We are not aware of any arrangement that may, at a subsequent date, result
in a change of control of our company. For further information regarding options to purchase ordinary shares and
performance rights held by our directors and senior management, see “Management—Remuneration.”
Unless otherwise indicated, the address of each beneficial owner listed above is c/o NOVONIX Limited, Level 38, 71 Eagle
Street, Brisbane, Queensland 4000, Australia.
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B.
Related Party Transactions
During the fiscal year ended December 31, 2024:
•
On April 18, 2024, 3,658,161 performance rights were granted to Chris Burns as an LTI. The performance rights
(convertible to ordinary shares on a 1:1 basis) vest on December 31, 2026. The performance rights vest subject
to the achievement of performance conditions. An expense of $716,966 was recognized during the year ended
December 31, 2024, relating to these performance rights.
•
On April 18, 2024, 1,075,930 performance rights were granted to Rashda Buttar as an LTI. The performance
rights (convertible to ordinary shares on a 1:1 basis) vest on December 31, 2026. The performance rights vest
subject to the achievement of performance conditions. An expense of $210,918 was recognized during the year
ended December 31, 2024, relating to these performance rights.
•
On April 18, 2024, 1,398,709 performance rights were granted to Nick Liveris as an LTI. These performance
rights lapsed on cessation of Nick Liveris’ employment with the Company, and accordingly no expense was
recognized during the year ended December 31, 2024, relating to these performance rights.
•
On April 18, 2024, 1,075,930 performance rights were granted to Darcy MacDougald as an LTI. The performance
rights (convertible to ordinary shares on a 1:1 basis) vest on December 31, 2026. The performance rights vest
subject to the achievement of performance conditions. An expense of $210,873 was recognized during the year
ended December 31, 2024, relating to these performance rights.
•
On April 18, 2024, 109,749 share rights were granted to Tony Bellas. The share rights (convertible to ordinary
shares on a 1:1 basis) vest on December 31, 2024. An expense of $69,893 was recognized during the year ended
December 31, 2024, relating to these share rights.
•
On April 18,2024, 109,749 share rights were granted to Robert Natter. The share rights (convertible to ordinary
shares on a 1:1 basis) vest on December 31, 2024. An expense of $69,893 was recognized during the year ended
December 31, 2024, relating to these share rights.
•
On April 18, 2024, 109,749 share rights were granted to Phillips 66 Company. The share rights (convertible to
ordinary shares on a 1:1 basis) vest on December 31, 2024. An expense of $69,893 was recognized during the
year ended December 31, 2024, relating to these share rights.
•
On April 18, 2024, 109,749 share rights were granted to Jean Oelwang. The share rights (convertible to ordinary
shares on a 1:1 basis) vest on December 31, 2024. An expense of $69,893 was recognized during the year ended
December 31, 2024, relating to these share rights.
•
On April 18, 2024, 109,749 share rights were granted to Ron Edmonds. The share rights (convertible to ordinary
shares on a 1:1 basis) vest on December 31, 2024. An expense of $69,893 was recognized during the year ended
December 31, 2024, relating to these share rights.
•
On April 18, 2024, 84,145 share rights were granted to Sharan Burrow. The share rights (convertible to ordinary
shares on a 1:1 basis) vest on December 31, 2024. An expense of $53,587 was recognized during the year ended
December 31, 2024, relating to these share rights.
•
On October 8, 2024, 1,144,130 performance rights were granted to Robert Long as an LTI. The performance
rights (convertible to ordinary shares on a 1:1 basis) vest on December31, 2026. The performance rights vest
subject to the achievement of performance conditions. An expense of $74,794 was recognized during the year
ended December 31, 2024, relating to these performance rights.
•
During the year ended December 31, 2024, Phillips 66 were paid fees totaling $57,500 for Mr Suresh
Vaidyanathan’s services to the Company as a Director. Mr. Suresh Vaidyanathan is not permitted to receive
remuneration in his personal capacity under the terms of his employment with Phillips 66 and terms of
engagement with the Company. Accordingly, all fees earned by them are paid directly to Phillips 66.
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In addition, on January 28, 2025, in conjunction with the institutional placement of ordinary shares completed in
November 2024 and the non-underwritten share purchase plan completed in January 2025, the Company issued to Phillips
66 12,771,392 ordinary shares for approximately US$5.0 million. The placement to Phillips 66 was approved by the
Company’s shareholders at an extraordinary general meeting held on January 22, 2025.
There were no other related party transactions for the period from the beginning of our last full fiscal year up to the latest
practicable date. For details of disclosures relating to key management personnel, refer to Note 29.
Director and Senior Management Compensation
See Item 6.Directors, Senior Management and Employees — B. Compensation for information regarding compensation of
our senior management and directors.
Indemnification Agreements
Our Constitution provides that, to the full extent permitted by law, to the extent that an offer is not otherwise indemnified
pursuant to any insurance coverage, we will indemnify every person who is or has been an officer of the company against
any liability incurred by that person as an officer. This includes any liability incurred by that person in their capacity as an
officer of a related body corporate.
We intend to enter into Deeds of Indemnity, Insurance and Access, or Indemnity Deeds with each a non-executive director
and executive officer. Under the Indemnity Deeds, we will agree to indemnify (to the maximum extent permitted under
Australian law and our Constitution, subject to certain specified exceptions) each director and executive officer against all
liabilities incurred in any capacity, including acting as an authorized representative of NOVONIX, and any and all costs and
expenses relating to such a claim or to any notified event incurred by such director or executive officer, including costs
and expenses reasonably and necessarily incurred to mitigate any liability for such a claim or any claim which may arise
from such a notified event. The Indemnity Deeds will provide that the indemnities are unlimited as to amount, continuous
and irrevocable.
Separately, we intend to obtain insurance for our directors and executive officers, as will be required by the Indemnity
Deeds.
As far as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons
controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Related Person Transaction Policy
We comply with Australian law and the rules and regulations of the ASX regarding approval of transactions with related
parties. Under Australia’s securities laws and ASX rules, transactions with directors or significant shareholders of the
Company (or their associates) may require shareholder approval depending on the size or nature of the transaction.
All of the transactions described above were entered into prior to the adoption of the written policy, but our Board of
Directors and, where necessary, our shareholders, evaluated and approved all transactions that were considered to be
related party transactions under Australian law and the rules and regulations of the ASX at the time at which they were
consummated.
C.
Interests of Experts and Counsel
Not applicable.
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Item 8. Financial Information
A.
Consolidated Financial Statements and Other Financial Information
For a list of all financial statements filed as part of this annual report, see “Item 18. Financial Statements.” For information
on our dividend policy see “Item 10.B. Memorandum and Articles of Association.”
Legal Proceedings
We believe that we are currently not a party to any material legal proceedings. From time to time, we may become
involved in legal proceedings arising in the ordinary course of our business. Such claims or legal actions, even if without
merit, could result in the expenditure of significant financial and management resources and potentially result in civil
liability for damages. For risks related to legal proceedings, see “Risk Factors—From time to time, we may be involved in
litigation, regulatory actions or government investigations and inquiries, which could have an adverse impact on our
profitability and consolidated financial position,” and “Risk Factors—We may become involved in lawsuits or other
proceedings to protect or enforce our intellectual property, which could be expensive, time-consuming and unsuccessful
and have a negative effect on the success of our business.”
B.
Significant Changes
No significant change, other than as otherwise described in this annual report on Form 20-F, has occurred in our operations
since the date of our consolidated financial statements included in this annual report on Form 20-F.
Item 9. The Offer and Listing
A.
Offer and Listing Details
The principal trading market for our ordinary shares is the Australian Securities Exchange ("ASX"), on which the ordinary
shares have been listed since 2015 and trade under the symbol "NVX." Our ADSs are listed and trading on Nasdaq under
the symbol "NVX."
B.
Plan of Distribution
Not applicable.
C.
Markets
Our ordinary shares are publicly traded on the ASX under the symbol “NVX.”
Our ADSs, each representing four of our ordinary shares, are publicly traded on the Nasdaq Global Market under the
symbol “NVX.” The Bank of New York Mellon, acting as depositary, registers and delivers the ADSs.
D.
Selling Shareholders
Not applicable.
E.
Dilution
Not applicable.
F.
Expenses of the Issue
Not applicable.
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Item 10. Additional Information
A.
Share Capital
Not applicable.
B.
Memorandum and Articles of Association
Information called for by this Item 10.B is set forth in the section "Memorandum and Articles of Association" included in
Exhibit 2.3 to this annual report, filed in accordance with instruction 2(d) of the Instructions as to Exhibits of Form 20-F,
and is hereby incorporated by reference thereto.
C.
Material Contracts
Except as described below or elsewhere in this annual report, all material contracts entered into by us in the past two
years preceding the fling of this annual report were entered into in the ordinary course of business:
Subscription Agreement with Phillips 66.
On January 28, 2025, in conjunction with the institutional placement of ordinary shares and the non-underwritten share
purchase plan, the Company issued to Phillips 66 12,771,392 ordinary shares for US$5.0 million. The placement to Phillips
66 was approved by the Company’s shareholders at an extraordinary general meeting held on January 22, 2025.
Unsecured Convertible Note Agreement with LG Energy Solution.
On June 21, 2023, pursuant to the LGES Note Agreement, NOVONIX issued an aggregate principal amount of US$30 million
unsecured convertible notes to LGES. The convertible notes bear interest at a rate of four percent per annum and have a
maturity date of June 7, 2028. The notes will mandatorily convert into ordinary shares upon LGES' acceptance of the first
purchase order under any purchase agreement that it may enter into with NOVONIX. However, LGES may elect to convert
some or all of the notes prior to such time. No interest would be payable on the notes that are converted into ordinary
shares prior to the maturity date. On the maturity date, LGES may elect to redeem or convert all of the notes then
outstanding, in which case interest will be payable in cash (in the case of redemption) or “in-kind” (in the case of
conversion). The conversion price of the notes is AUD$1.60 per ordinary share. NOVONIX plans to utilize the proceeds for
continued development of anode materials, operational needs and general corporate purposes.
D.
Exchange Controls
Australia has largely abolished exchange controls on investment transactions. The Australian dollar is freely convertible
into U.S. dollars or other currencies. In addition, there are currently no specific rules or limitations regarding the export
from Australia of profits, dividends, capital or similar funds belonging to foreign investors, except that certain payments
to non-residents must be reported to the Australian Cash Transaction Reports Agency, which monitors such transaction,
and amounts on account of potential Australian tax liabilities may be required to be withheld unless a relevant taxation
treaty can be shown to apply and under such there are either exemptions or limitations on the level of tax to be withheld.
E.
Taxation
The following summary of material U.S. federal income tax and Australian tax considerations of an investment in the ADSs
is based upon the federal income tax laws of the United States and regulations promulgated thereunder and the tax laws
of Australia and the regulations promulgated thereunder, each as in effect as of the date of this annual report, all of which
are subject to change or differing interpretations, possibly with retrospective effect. This summary does not deal with all
possible tax consequences relating to an investment in the ADSs, including tax consequences under U.S. state or local tax
laws, U.S. federal tax laws other than U.S. federal income tax laws, certain Australian tax laws, and the tax laws of any
jurisdiction outside of the United States and Australia.
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U.S. Federal Income Tax Considerations
The following describes material U.S. federal income tax considerations relating to the acquisition, ownership, and
disposition of the ADSs, and the ownership and disposition of any ordinary shares received in exchange for such ADSs
from the depositary. This summary addresses these tax considerations only for U.S. holders (as defined below) that hold
ADSs, and any ordinary shares received in exchange for such ADSs from the depositary, as capital assets (generally,
property held for investment).
This summary is based on the U.S. Internal Revenue Code of 1986, as amended (the “Code”), existing, proposed and
temporary U.S. Treasury Regulations promulgated thereunder and administrative and judicial interpretations thereof, in
each case, as in effect on the date hereof and all of which are subject to change and to differing interpretations, possibly
with retroactive effect. Any such change or differing interpretations could affect the tax considerations described below.
There can be no assurances that the U.S. Internal Revenue Service (the “IRS”) will not take a position that differs from
those described below or that such a position would not be sustained by a court. We have not obtained, nor do we intend
to obtain, a ruling with respect to the U.S. federal income tax considerations of the purchase, ownership, or disposition of
the ADSs or ordinary shares. Accordingly, U.S. holders should consult their tax advisors concerning the U.S. federal, state,
local and non-U.S. tax consequences of acquiring, owning, and disposing of the ADSs or ordinary shares in their particular
circumstances.
This summary does not address any U.S. federal tax considerations other than U.S. federal income tax considerations (such
as estate or gift tax considerations, the Medicare contribution tax imposed on certain net investment income, or any state,
local, or non-U.S. tax considerations).
This summary does not address all U.S. federal income tax considerations that may be relevant to a U.S. holder based on
its particular circumstances. This summary also does not address U.S. federal income tax considerations applicable to a
U.S. holder that may be subject to special tax rules including the following:
•
banks, financial institutions, or insurance companies;
•
brokers, dealers, or traders in securities, currencies, commodities, or notional principal contracts;
•
tax-exempt entities;
•
individual retirement accounts and other tax-deferred accounts;
•
real estate investment trusts or regulated investment companies;
•
persons that hold the ADSs or our ordinary shares as part of a “hedging,” “integrated,” “wash sale” or
“conversion” transaction or as a position in a “straddle” for U.S. federal income tax purposes;
•
S corporations, partnerships, or other pass-through entities for U.S. federal income tax purposes and investors
in such entities;
•
former citizens or long-term residents of the United States;
•
persons that received the ADSs as compensation;
•
persons required to accelerate the recognition of any item of gross income as a result of any item of gross
income with respect to the ADSs or our ordinary shares being taken into account in an applicable financial
statement;
•
persons acquiring the ADSs in connection with a trade or business conducted outside of the United States,
including a permanent establishment or a fixed base in Australia;
•
persons subject to the alternative minimum tax;
•
holders that own directly, indirectly, or constructively, 10% or more of the voting power or value of our equity
interests; and
•
holders that have a “functional currency” other than the U.S. dollar.
Persons who hold the ADSs and fall within one of the categories above are advised to consult their tax advisor regarding
the specific U.S. federal income tax consequences which may apply to their particular situation.
118
For the purposes of this description, a “U.S. holder” is a beneficial owner of the ADSs or our ordinary shares that is, for
U.S. federal income tax purposes:
•
an individual who is a citizen or resident of the United States;
•
a corporation created or organized under the laws of the United States, any state thereof or the District of
Columbia;
•
an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
•
a trust, if a court within the United States is able to exercise primary supervision over its administration and
one or more U.S. persons have the authority to control all of the substantial decisions of such trust, or if such
trust has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person.
If an entity treated as a partnership for U.S. federal income tax purposes holds the ADSs or our ordinary shares, the U.S.
federal income tax consequences relating to an investment in the ADSs, and our ordinary shares will depend in part upon
the status of the partner and the activities of the partnership. Such a partner or partnership should consult its tax advisor
regarding the specific U.S. federal income tax considerations of acquiring, owning, and disposing of the ADSs or our
ordinary shares in its particular circumstances.
U.S holders of the ADSs should consult their tax advisors as to the particular tax consequences applicable to them
relating to the acquisition, ownership, and disposition of the ADSs or our ordinary shares, including the applicability of
U.S. federal, state and local tax laws, Australian tax laws and other non-U.S. tax laws.
ADSs. In general, for U.S. federal income tax purposes, a U.S. holder holding ADSs will be treated as the owner of the
ordinary shares represented by the ADSs. Accordingly, exchanges with the depositary of ADSs for ordinary shares, and of
ordinary shares for ADSs, generally will not be subject to U.S. federal income tax.
Distributions. As described under the heading “Dividend Policy,” we do not expect to make any distributions in respect of
the ADSs or our ordinary shares. Subject to the discussion under “—Passive Foreign Investment Company Considerations,”
below, the gross amount of any distribution (including any amounts withheld in respect of Australian tax or in respect of
fees payable to the depositary) actually or constructively received by a U.S. holder with respect to the ADSs or our ordinary
shares generally will be taxable to the U.S. holder as a dividend to the extent of the U.S. holder’s pro rata share of our
current or accumulated earnings and profits as determined under U.S. federal income tax principles. Generally,
distributions in excess of our current and accumulated earnings and profits will be treated as a non-taxable return of
capital to the extent of the U.S. holder’s adjusted tax basis in the ADSs or our ordinary shares, and thereafter as capital gain
from the disposition of the ADSs or our ordinary shares. However, since we do not intend to calculate our earnings and
profits under U.S. federal income tax principles, it is expected, and U.S. holders should assume, that any distribution will
be reported as a dividend and will constitute ordinary dividend income to a U.S. holder. Any dividends will generally be
treated as foreign source and will not be eligible for the dividends-received deduction generally allowed to corporate U.S.
holders.
Subject to the discussion under “—Passive Foreign Investment Company Considerations,” below, dividends paid to non-
corporate U.S. holders may qualify as “qualified dividend income” eligible for the preferential rates of taxation applicable
to long-term capital gains if we are a “qualified foreign corporation” and certain other requirements (discussed below) are
met. We generally will be considered to be a qualified foreign corporation (a) if we are eligible for the benefits of the
Convention between the Government of the United States of America and the Government of Australia for the Avoidance
of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, signed on August 6, 1982, as
amended and currently in force (the “U.S.-Australia Tax Treaty”), or (b) the ADSs or our ordinary shares are readily tradable
on an established securities market in the United States. The ADSs are currently listed on the Nasdaq Global Market, which
is an established securities market in the United States, although there can be no assurance that the ADSs will remain
listed on Nasdaq or be considered readily tradable on an established securities market in the United States now or in the
future. In addition, we believe that we qualify as a resident of Australia for purposes of, and are eligible for the benefits
of, the U.S.-Australia Tax Treaty, although there can be no assurance in this regard. Therefore, subject to the discussion
under “—Passive Foreign Investment Company Considerations,” below, any dividends on the ADSs or our ordinary shares
119
generally will be “qualified dividend income” in the hands of individual U.S. holders, provided that a holding period
requirement (more than 60 days of ownership, without protection from the risk of loss, during the 121-day period
beginning 60 days before the ex-dividend date) and certain other requirements are met.
A U.S. holder may be able to claim as a credit against its U.S. federal income tax liability the amount of any Australian tax
withheld from any dividends at a rate not exceeding an applicable rate under the U.S.-Australia Tax Treaty. Alternatively,
a U.S. holder may deduct such Australian taxes from its U.S. federal taxable income, provided that the U.S. holder elects
to deduct rather than credit all foreign income taxes paid or accrued for the relevant taxable year. The rules governing
U.S. foreign tax credits are complex. Each U.S. holder should consult its tax advisors regarding the foreign tax credit rules.
In general, the amount of any distribution paid to a U.S. holder in a foreign currency will be the U.S. dollar value of the
foreign currency calculated by reference to the spot exchange rate on the day the depositary receives the distribution (in
the case of ADSs) or on the day the distribution is received by the U.S. holder (in the case of ordinary shares), regardless
of whether the foreign currency is converted into U.S. dollars at that time. If distributions received in a foreign currency
are converted into U.S. dollars on the day they are received, a U.S. holder should not be required to recognize foreign
currency gain or loss in respect of the distribution. A U.S. holder that does not convert foreign currency received as a
distribution on an ordinary share into U.S. dollars on the date of receipt generally will have a tax basis in such foreign
currency equal to the U.S. dollar value of such foreign currency on the date of receipt. Any foreign currency gain or loss a
U.S. holder recognizes on a subsequent conversion of foreign currency into U.S. dollars will be U.S. source ordinary income
or loss.
As discussed below under “Item 12. Description of Securities Other Than Equity Securities – American Depositary Shares–
Fees and Expenses,” the amount of any distribution that is paid to a U.S. holder will be reduced by certain fees that such
U.S holder is required to pay to the depositary. The amount of any dividend a U.S. holder is deemed to receive and include
in income for U.S. federal income tax purposes will not be reduced by the amount of any fees that are withheld, and a U.S.
holder would be deemed to pay the amount of such fees to the depositary. Any such fees generally will be treated as
items of investment expense which may not be deductible in the case of certain investors due to general limitations on
the deductibility of investment expenses. U.S. holders should consult their tax advisor with respect to the tax treatment
of the payment of any such fees to the depositary.
Sale or Other Taxable Disposition. A U.S. holder generally will recognize gain or loss for U.S. federal income tax purposes
upon the sale or other taxable disposition of the ADSs or the ordinary shares in an amount equal to the difference between
the U.S. dollar value of the amount realized from such disposition and the U.S. holder’s adjusted tax basis in those ADSs
or ordinary shares, determined in U.S. dollars. Subject to the discussion under “—Passive Foreign Investment Company
Considerations” below, any such gain or loss generally will be a capital gain or loss and will be long-term capital gain or
loss if the U.S. holder’s holding period for such ADSs or ordinary shares is more than one year at the time of such
disposition. A U.S. holder’s adjusted tax basis in the ADSs or our ordinary shares generally will be equal to the cost of such
ADSs or ordinary shares. Any long-term capital gain from the disposition of the ADSs or our ordinary shares by a non-
corporate U.S. holder generally is eligible for a preferential rate of taxation. The deductibility of capital losses for U.S.
federal income tax purposes is subject to limitations. Any such gain or loss that a U.S. holder recognizes generally will be
treated as U.S. source gain or loss for foreign tax credit limitation purposes.
For a cash basis taxpayer, any units of foreign currency received on a disposition of the ADSs or our ordinary shares that
are treated as traded on an established securities market are translated into U.S. dollars at the spot exchange rate on the
settlement date of the disposition. No foreign currency exchange gain or loss will result for a cash basis taxpayer from
currency fluctuations between the trade date and the settlement date of such a disposition.
An accrual basis taxpayer may elect the same treatment required of cash basis taxpayers with respect to dispositions of
the ADSs or our ordinary shares that are traded on an established securities market, provided the election is applied
consistently from year to year. Such an election may not be changed without the consent of the IRS. For an accrual basis
taxpayer who does not make such election or if the ADSs or our ordinary shares that are not treated as traded on an
established securities market, any units of foreign currency received on a disposition of the ADSs or our ordinary shares
120
are translated into U.S. dollars at the spot exchange rate on the trade date of the disposition. In such case, the taxpayer
may recognize exchange gain or loss based on currency fluctuations between the trade date and the settlement date. Any
foreign currency gain or loss a U.S. holder recognizes will be U.S. source ordinary income or loss.
Passive Foreign Investment Company Considerations. Generally, we will be a “passive foreign investment company”
(“PFIC”) for U.S. federal income tax purposes for any taxable year in which, after applying certain look-through rules with
respect to the income and assets of our subsidiaries, either: (1) at least 75% of our gross income is “passive income” or (2)
at least 50% of the average quarterly value of our total gross assets (which would generally be measured by fair market
value of our assets) is attributable to assets that produce “passive income” or are held for the production of “passive
income.” For purposes of these calculations, we will be treated as holding our proportionate share of the assets of and
receiving directly our proportionate share of the income of, any corporation in which we directly or indirectly own at least
25% (by value) of the shares. Passive income for this purpose includes dividends, interest, royalties, rents, gains from
commodities and securities transactions and the excess of gains over losses from the disposition of assets which produce
passive income.
Based on our current and anticipated operations and composition of our assets and income, we believe that we were not
a PFIC for U.S. federal income tax purposes for our tax year ended December 31, 2023. However, there can be no assurance
that we will not be a PFIC for the current taxable year or any subsequent year The determination of PFIC status is a factual
determination that must be made annually and cannot be made until the close of a taxable year. In particular, our PFIC
status may be determined in large part based on the market price of the ADSs and our ordinary shares. The market price
of the ADSs and our ordinary shares may fluctuate, and a significant decrease in the market price could cause us to be
treated as a PFIC. Moreover, the determination of PFIC status depends, in part, on the application of complex U.S. federal
income tax rules which are subject to differing interpretations. Accordingly, there can be no assurance that we would not
be a PFIC for the current taxable year or any future taxable year.
If we are a PFIC, a U.S. holder will be subject to a special tax at ordinary income tax rates on “excess distributions,” including
certain distributions by us and any gain that the U.S. holder recognizes on the sale or other disposition of the ADSs or our
ordinary shares. Distributions received by a U.S. holder (other than distributions in the first year that a U.S. holder holds
the ADSs or ordinary shares) in a taxable year that exceed 125% of the average annual distributions received during the
shorter of the three preceding taxable years or the portion of the U.S. holder’s holding period for the ADSs or ordinary
shares that precedes the taxable year of the distribution will be treated as an excess distribution. The amount of U.S.
federal income tax on any excess distributions will be increased by an interest charge to compensate for the tax deferral,
calculated as if the excess distributions were earned ratably over the period that the U.S. holder has held the ADSs or
ordinary shares. Dividends received with respect to the ADSs, or our ordinary shares will not be eligible for the preferential
tax rate applicable to “qualified dividend income” received by non-corporate U.S. holders if we are a PFIC for the taxable
year of the distribution or for the preceding taxable year. Classification as a PFIC may also have other adverse tax
consequences. A U.S. holder may be able to mitigate certain of these adverse tax consequences if it is able to make a
timely qualified electing fund election (a “QEF election”) or a mark to market election with respect to the ADSs. However,
a QEF election may only be made by a U.S. holder if we provide such holder with certain information, and we do not expect
to provide U.S. holders with the information necessary to make a QEF election in the event we were to be a PFIC.
If we are a PFIC in any year in which a U.S. holder owns the ADSs or our ordinary shares, we would continue to be treated
as a PFIC with respect to such U.S. holder in all succeeding years during which the U.S. holder owns the ADSs or ordinary
shares, regardless of whether we continue to meet the tests described above, unless we cease to be a PFIC and the U.S.
holder has made certain elections under applicable U.S. Treasury regulations with respect to its ADSs or ordinary shares.
If a U.S. holder owns the ADSs or our ordinary shares during any taxable year in which we are a PFIC, the U.S. holder
generally will be required to file an IRS Form 8621 (Information Return by a Shareholder of a Passive Foreign Investment
Company or Qualified Electing Fund) with respect to the Company, generally with the U.S. holder’s U.S. federal income
tax return for that year. U.S. holders should consult their tax advisor regarding any annual filing requirements.
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The U.S. federal income tax rules relating to PFICs are complex. Prospective U.S. holders should consult their tax
advisors with respect to the acquisition, ownership and disposition of the ADSs or our ordinary shares, the
consequences to them of an investment in a PFIC, any elections available with respect to the ADSs or ordinary shares
(including QEF elections and mark-to-market elections) and the IRS information reporting obligations with respect to
the acquisition, ownership and disposition of the ADSs and ordinary shares.
Backup Withholding and Information Reporting. U.S. holders generally will be subject to information reporting
requirements with respect to dividends paid on the ADSs or our ordinary shares, and on the proceeds from the sale,
exchange or other disposition of the ADSs or our ordinary shares that are paid within the United States or through U.S.-
related financial intermediaries, unless the U.S. holder is an “exempt recipient.” In addition, U.S. holders may be subject
to backup withholding on such payments, unless the U.S. holder provides a correct taxpayer identification number and a
duly executed IRS Form W-9 or otherwise establishes an exemption. Backup withholding is not an additional tax, and the
amount of any backup withholding will be allowed as a credit against a U.S. holder’s U.S. federal income tax liability and
may entitle such holder to a refund, provided that the required information is timely furnished to the IRS.
Foreign Asset Reporting. Certain U.S. holders who are individuals are required to report information relating to an interest
in the ADSs and our ordinary shares, subject to certain exceptions (including an exception for ADSs and ordinary shares
held in accounts maintained by U.S. financial institutions) by fling IRS Form 8938 (Statement of Specified Foreign Financial
Assets) with their U.S. federal income tax return. Substantial penalties may be imposed upon a U.S. holder that fails to
comply. U.S. holders should consult their tax advisors regarding their information reporting obligations, if any, with respect
to their ownership and disposition of the ADSs or our ordinary shares.
THE DISCUSSION ABOVE IS A SUMMARY OF THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF AN INVESTMENT IN
THE ADSs AND IS BASED UPON LAWS AND RELEVANT INTERPRETATIONS THEREOF IN EFFECT AS OF THE DATE OF THIS
ANNUAL REPORT, ALL OF WHICH ARE SUBJECT TO CHANGE OR DIFFERING INTERPRETATION, POSSIBLY WITH
RETROACTIVE EFFECT. EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS TAX ADVISOR ABOUT THE TAX
CONSEQUENCES TO IT OF AN INVESTMENT IN THE ADSs IN LIGHT OF THE INVESTOR’S OWN CIRCUMSTANCES.
Australian Tax Considerations
In this section, we discuss material Australian income tax, landholder duty and goods and services tax considerations
related to the acquisition, ownership, and disposal by the absolute beneficial owners of the ADSs or ordinary shares
represented by ADSs. It is based upon existing Australian tax law and administrative practice as of the date of this annual
report, which is subject to change, possibly retrospectively. This discussion does not address all aspects of Australian tax
law which may be important to particular investors in light of their individual investment circumstances, such as ADSs or
shares held by investors subject to special tax rules (for example, authorized deposit-taking institutions, insurance
companies or tax-exempt organizations). In addition, this summary does not discuss any non-Australian or state tax
considerations, other than landholder duty.
Prospective investors are urged to consult their tax advisors regarding the Australian and non-Australian income and other
tax considerations of the acquisition, ownership, and disposal of the ADSs or shares, including before the deposit of shares
with the depositary in exchange for ADSs. This summary is based upon the premise and assumption that the holder of an
ADS is not an Australian tax resident and is not carrying on business in Australia through a permanent establishment or
similar taxable nexus (referred to as a “Non-Australian Holder” in this summary).
Nature of ADSs for Australian Taxation Purposes
Prospective investors and non-Australian holders of ADSs should obtain specialist Australian tax advice regarding their
rights and obligations under the deposit agreement with the depositary, including whether the deposit arrangement
would result in the holders of an ADS being “absolutely entitled” to the underlying shares represented by the ADS for
Australian taxation purposes, especially before the prospective investor or Non-Australian Holder takes any Acton either
to: (1) deposit ordinary shares to the depositary in exchange for ADSs; or (2) surrender ADSs to the depositary for
cancellation to receive the ordinary shares underlying the Non-Australian Holder's ADSs. Apart from certain aspects of the
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Australian tax legislation (for example, the Australian capital gains tax and withholding tax provisions, which are discussed
below), there is no express legislative basis for disregarding “bare trusts” or similar arrangements for Australian tax
purposes generally, and the Australian Taxation Office has not published any binding guidance in respect of ADS
arrangements.
Consistent with our understanding that the deposit agreement, which is proposed for the holders of ADSs, is on similar
terms to agreements that govern ADSs in respect of other foreign private issuers, this summary proceeds on the
assumption that the deposit arrangement results in holders of ADSs being “absolutely entitled” to the underlying shares
and also “presently entitled” to any dividend paid on the underlying ordinary shares. On this basis, holders of ADSs can be
treated as the owners of the underlying ordinary shares for Australian capital gains tax purposes and dividends paid on
the underlying ordinary shares will also be treated as dividends derived by the holders of ADSs as the persons presently
entitled to those dividends.
The Australian tax implications of depositing shares with the depositary in exchange for ADSs will depend on the individual
circumstances of the investor. For investors who hold such shares on capital account, on the basis of the assumption
regarding absolute entitlement the deposit of such shares with the depositary should not be subject to Australian capital
gains tax.
Taxation of Dividends
Australia operates a dividend imputation system under which dividends may be declared to be “franked” to the extent
they are paid out of company profits that have been subject to income tax. Fully franked dividends are not subject to
dividend withholding tax. To the extent that dividends are unfranked, or partly franked, the unfranked amount of
dividends payable to Non-Australian Holders will be subject to dividend withholding tax except to the extent they are
declared to be “conduit foreign income,” or CFI. Dividend withholding tax will be imposed at 30%, unless a shareholder or
other specified recipient is a resident of a country with which Australia has a double taxation treaty and qualifies for the
benefits of the treaty. For example, under the provisions of the current Double Taxation Convention between Australia
and the United States, the Australian tax withheld on unfranked dividends that are not declared to be CFI paid by us to
which a resident of the United States is beneficially entitled generally is limited to 15%.
However, under the Double Taxation Convention between Australia and the United States, if a U.S. resident company that
is a Non-Australian Holder directly owns a 10% or more voting interests in NOVONIX, the Australian tax withheld on
unfranked dividends that are not declared to be CFI paid by us to which the company is beneficially entitled is generally
limited to 5%.
Character of ADSs or Shares for Australian Taxation Purposes
The Australian income tax treatment of a sale or disposal of the ADSs or underlying shares will depend on whether they
are held on revenue or capital account. ADSs may be held on revenue rather than capital accounts, for example, where
they are held by share traders, or any profit arises from a profit-making undertaking or scheme entered into by the holder.
Non-Australian Holders of ADSs should obtain specialist Australian tax advice regarding the characterization of any gain
or loss on a sale or disposal of the ADSs or underlying shares as revenue or capital in nature.
Regarding the landholder duty considerations for the sale/disposal of the ADSs or underlying shares, please refer to the
below comments under "Landholder Duty".
Regarding the goods and services tax considerations for the sale/disposal of the ADSs or underlying shares, please refer
to the below comments under "Goods and Services Tax".
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Tax on Sales or other Dispositions of Shares or ADSs—Capital Gains Tax
Non-Australian Holders who are treated as the owners of the underlying shares on the basis that they are absolutely
entitled to those shares will not be subject to Australian capital gains tax on the gain made on a sale or other disposal of
ordinary shares, provided the shares are not “taxable Australian property.” Taxable Australian property includes “indirect
Australian real property interests,” which are interests in a company where:
•
that Non-Australian Holder, together with its associates (as defined in the relevant Australian tax legislation),
holds 10% or more of that company’s issued shares, at the time of disposal or for a 12-month period during the
two years prior to disposal; and
•
more than 50% of that company’s assets held directly or indirectly, determined by reference to market value,
consists of Australian real property (which includes land and leasehold interests) or Australian mining,
quarrying or prospecting rights at the time of disposal.
Australian capital gains tax applies to net capital gains at a taxpayer’s marginal tax rates. Net capital gains are calculated
after reduction for capital losses, which may only be offset against capital gains.
If a Non-Australian Holder of ADSs was not absolutely entitled to the underlying shares, and the ADSs were held on capital
account, the same principles would apply in determining whether a gain on the sale or disposal of the ADSs would be
subject to Australian capital gains tax. That is, a Non-Australian Holder should not be directly subject to Australian capital
gains tax on the sale or disposal of the ADSs provided the ADSs are not “taxable Australian property.”
The 50% capital gains tax discount is not available to Non-Australian Holders on gains from assets where they were non-
Australian tax residents during the entire holding period. An apportioned discount rate may be available where the holder
has been both a Non-Australian Holder and an Australian Tax Resident throughout the holding period. Companies are not
entitled to a capital gains tax discount.
Broadly, where there is a disposal of “taxable Australian property,” which includes indirect Australian real property
interests, the purchaser will be required to withhold and remit to the Australian Taxation Office, or the ATO, 12.5% of the
proceeds from the sale. A transaction is excluded from the withholding requirements in certain circumstances, including
where the transaction has a market value of $750,000 or less, or is an on-market transaction conducted on an approved
stock exchange, a securities lending arrangement, or is conducted using a broker operated crossing system. There may
also be an exception to the requirement to withhold where a Non-Australian Holder provides a declaration that their
ordinary shares are not “indirect Australian real property interests.”
Tax on Sales or other Dispositions of ADSs—Revenue Account
Non-Australian Holders who hold their ADSs on revenue account may have the gains made on the sale or other disposal
of the ADSs included in their assessable income under the ordinary income provisions of the income tax law if the gains
are sourced in Australia. In the case of gains which are ordinary income, there are no express provisions which treat
holders of ADSs as the owners of the underlying shares where they are absolutely entitled to those shares.
Non-Australian Holders assessable under these ordinary income provisions in respect of gains made on ADSs held on
revenue account would be assessed for such gains at the Australian tax rates for non-Australian residents, which start at
a marginal rate of 32.5% for individuals and would be required to file an Australian tax return. Some relief from Australian
income tax may be available to a Non-Australian Holder who is resident of a country with which Australia has a double
taxation treaty, qualifies for the benefits of the treaty and does not, for example, derive the gain in carrying on business
through a permanent establishment (or similar taxable nexus) in Australia.
To the extent an amount would be included in a Non-Australian Holder’s assessable income under both the capital gains
tax provisions and the ordinary income provisions, the capital gain amount may be reduced, so that the holder may not
be subject to double Australian tax on any part of the gain.
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The statements under “—Tax on Sales or Other Dispositions of Shares—Capital Gains Tax” regarding a purchaser being
required to withhold 12.5% tax on the acquisition of certain taxable Australian property are also relevant where the
disposal of the ADSs by a Non-Australian Holder is likely to generate gains on revenue account, rather than a capital gain.
Dual Residency
If a holder of ADSs is a resident of both Australia and another jurisdiction (such as the United States) under those countries’
domestic taxation laws, that holder may be subject to tax as an Australian resident. If, however, the holder is determined
to be a resident of that other jurisdiction for the purposes of the applicable double tax treaty, for example the Double
Taxation Convention between the United States and Australia and qualifies for the benefit of that treaty, the Australian
tax may be subject to limitation by that double tax treaty. Holders should obtain specialist taxation advice in these
circumstances.
Landholder Duty
We understand the only landholdings in Australia are located in Queensland. Generally landholdings includes resource
authorities, leases over land and things fixed to the land. Where the market value of all landholdings in Queensland in
NOVONIX Limited and its subsidiaries are AUD$2,000,000 or greater NOVONIX Limited will be a landholder in Queensland.
A liability to duty should not arise in Queensland for an investor on a transfer or issue of ordinary shares or ADSs in
NOVONIX Limited, provided that a single Investor (alone or together with any associates or under related transactions)
does not acquire a ‘significant interest’. Where a company is listed on a recognized exchange a ‘significant interest’ is an
interest of 90% or more.
Australian Death Duty
Australia does not have estate or death duties. As a general rule, no capital gains tax liability is realized upon the
inheritance of a deceased person’s shares. The disposal of inherited shares by beneficiaries may, however, give rise to a
capital gains tax liability if the gain falls within the scope of Australia’s jurisdiction to tax. Holders should obtain specialist
taxation advice in these circumstances.
Goods and Services Tax
No Australian goods and services tax should be payable on the transfer or issue of ADSs or ordinary shares.
THE DISCUSSION ABOVE IS A SUMMARY OF THE AUSTRALIAN TAX CONSEQUENCES OF AN INVESTMENT IN OUR ORDINARY
SHARES OR ADSs AND IS BASED UPON LAWS AND RELEVANT INTERPRETATIONS THEREOF IN EFFECT AS OF THE DATE OF
THIS annual report, ALL OF WHICH ARE SUBJECT TO CHANGE, POSSIBLY WITH RETROSPECTIVE EFFECT. EACH PROSPECTIVE
INVESTOR IS URGED TO CONSULT ITS OWN TAX ADVISOR ABOUT THE TAX CONSEQUENCES TO IT OF AN INVESTMENT IN
OUR ORDINARY SHARES OR ADSs IN LIGHT OF THE INVESTOR’S OWN CIRCUMSTANCES.
BEPS Pillar Two
The Organization for Economic Co-operation and Development (“OECD”) has released the Base Erosion and Profit Shifting
framework 2.0 (“Pillar Two”) to introduce a global minimum corporate tax of 15% for companies with global revenues and
profits above certain thresholds. As of December 31, 2024, Canada and Australia have enacted legislation related to the
global minimum tax rules under Pillar Two. The United States has not yet enacted legislation to adopt Pillar Two. After
considering the applicable tax law changes associated with Pillar Two legislation, we do not believe the Company falls
within the scope of this legislation due to not exceeding the minimum revenue standard (EUR 750 million). At this time
there are no recorded tax effects for Pillar Two.
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F.
Dividends and Paying Agents
Not applicable.
G.
Statement by Experts
Not applicable.
H.
Documents on Display
We are subject to the periodic reporting and other informational requirements of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”). Under the Exchange Act, we are required to file reports and other information with the
SEC. Specifically, we are required to file annually a Form 20-F within 120 days of the end of each fiscal year. The SEC
maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information
regarding registrants that make electronic flings with the SEC using its EDGAR system. As a foreign private issuer, we are
exempt from the rules under the Exchange Act prescribing the furnishing and content of quarterly reports and proxy
statements, and officers, directors and principal shareholders are exempt from the reporting, and short swing profit
recovery provisions contained in Section 16 of the Exchange Act.
In addition, because our ordinary shares are traded on the ASX, we file annual and semi-annual reports with, and furnish
information to, the ASX, as required under the ASX Listing Rules and the Corporations Act. Copies of our filings with the
ASX can be retrieved electronically at www.asx.com.au. We also maintain a web site at www.novonixgroup.com. The
information contained on our website or available through our website is not incorporated by reference into and should
not be considered a part of this annual report on Form 20-F, and the reference to our website in this annual report on
Form 20-F is an inactive textual reference only.
I.
Subsidiary Information
Not applicable.
J.
Annual Report to Security Holders
If we are required to provide an annual report to security holders in response to the requirements of Form 6-K, we will
submit the annual report to security holders in electronic format in accordance with the EDGAR Filer Manual.
Item 11. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to a variety of risks in the ordinary course of our business, including, but not limited to, credit risk, liquidity
risk and interest rate risk. We regularly assess each of these risks to minimize any adverse effects on our business as a
result of those factors. For discussion and sensitivity analyses of our exposure to these risks, see Note 31 - Financial Risk
Management to the consolidated financial statements included in this annual report.
Item 12. Description of Securities Other than Equity Securities
A.
Debt Securities
Not applicable.
B.
Warrants and Rights
Not applicable.
C.
Other Securities.
Not applicable.
126
D.
American Depositary Shares Fees and Expenses
Persons depositing or withdrawing Shares or ADSs must
pay:
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)
$.05 (or less) per ADS a fee equivalent to the fee that
would be payable if securities distributed to you had been
shares and the shares had been deposited for issuance of
ADSs
$.05 (or less) per ADS per calendar year registration or
transfer fees.
For:
Delivery of ADSs, including deliveries resulting from a
distribution of shares or rights or other property
Surrender of ADSs for the purpose of withdrawal,
including if the deposit agreement terminates
Any cash distribution to ADS holders
Distribution of securities distributed to holders of
deposited securities (including rights) that are distributed
by the depositary to ADS holders
Depositary services
Transfer and registration of shares on our share register
to or from the name of the depositary or its agent when
you deposit or withdraw shares
Expenses of the depositary
Cable (including SWIFT) and facsimile transmissions
(when expressly provided in the deposit agreement)
Converting foreign currency to U.S. dollars
Converting foreign currency to U.S. dollars
Taxes and other governmental charges the depositary or
the custodian has to pay on any ADSs or shares underlying
ADSs, such as stock transfer taxes, stamp duty or
withholding taxes
As necessary
Any charges incurred by the depositary or its agents for
servicing the deposited securities.
As necessary
The depositary collects its fees for delivery and surrender of ADSs directly from investors depositing shares or surrendering
ADSs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making
distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable
property to pay the fees. The depositary may collect its annual fee for depositary services by deduction from cash
distributions or by directly billing investors or by charging the book-entry system accounts of participants acting for them.
The depositary may collect any of its fees by deduction from any cash distribution payable (or by selling a portion of
securities or other property distributable) to ADS holders that are obligated to pay those fees. The depositary may
generally refuse to provide fee-attracting services until its fees for those services are paid.
From time to time, the depositary may make payments to us to reimburse us for costs and expenses generally arising out
of establishment and maintenance of the ADS program, waive fees and expenses for services provided to us by the
depositary or share revenue from the fees collected from ADS holders. In performing its duties under the deposit
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agreement, the depositary may use brokers, dealers, foreign currency dealers or other service providers that are owned
by or affiliated with the depositary and that may earn or share fees, spreads, or commissions.
The depositary may convert currency itself or through any of its affiliates, or the custodian or we may convert currency
and pay U.S. dollars to the depositary. Where the depositary converts currency itself or through any of its affiliates, the
depositary acts as principal for its own account and not as agent, advisor, broker, or fiduciary on behalf of any other person
and earns revenue, including, without limitation, transaction spreads, that it will retain for its own account. The revenue
is based on, among other things, the difference between the exchange rate assigned to the currency conversion made
under the deposit agreement and the rate that the depositary or its affiliate receives when buying or selling foreign
currency for its own account. The depositary makes no representation that the exchange rate used or obtained by it or its
affiliate in any currency conversion under the deposit agreement will be the most favorable rate that could be obtained
at the time or that the method by which that rate will be determined will be the most favorable to ADS holders, subject
to the depositary’s obligation to act without negligence or bad faith. The methodology used to determine exchange rates
used in currency conversions made by the depositary is available upon request. Where the custodian converts currency,
the custodian has no obligation to obtain the most favorable rate that could be obtained at the time or to ensure that the
method by which that rate will be determined will be the most favorable to ADS holders, and the depositary makes no
representation that the rate is the most favorable rate and will not be liable for any direct or indirect losses associated
with the rate. In certain instances, the depositary may receive dividends or other distributions from us in U.S. dollars that
represent the proceeds of a conversion of foreign currency or translation from foreign currency at a rate that was obtained
or determined by us and, in such cases, the depositary will not engage in, or be responsible for, any foreign currency
transactions, neither the depositary nor the Company makes any representation that the rate obtained or determined by
us is the most favorable rate, and neither the depositary nor the Company will be liable for any direct or indirect losses
associated with the rate.
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PART II
Item 13. Defaults, Dividend Arrearages and Delinquencies.
Not applicable.
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds.
Not applicable.
Item 15. Controls and Procedures
Disclosure controls and procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and
principal financial officer, we conducted an evaluation (pursuant to Rule 13a-15(b) of the Exchange Act) of the
effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) under the Exchange Act as of
December 31, 2024.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information
required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized,
and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include
controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under
the Exchange Act is accumulated and communicated to management, including our interim Chief Executive Officer and
Chief Financial Officer, to allow timely decisions regarding required disclosure.
Based on the evaluation of our disclosure controls and procedures, our interim Chief Executive Officer and Chief Financial
Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2024, due to the
material weaknesses identified and described below.
Notwithstanding the assessment that our disclosure controls and procedures are not effective and that material
weaknesses existed as of December 31, 2024, we believe that we have performed sufficient supplementary procedures
to ensure that the consolidated financial statements for the periods covered by and included in this annual report on Form
20-F fairly state, in all material respects, our financial position, results of operations and cash flows for the periods
presented in conformity with IFRS.
Management’s annual report on internal control over financial reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as
defined in Rules 13a-15 (f) under the Exchange Act. Our management, with the participation of our interim Chief Executive
Officer and our Chief Financial Officer, evaluated the effectiveness of our internal control over financial reporting based
on criteria established in the framework in Internal Control—Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations (“COSO”) of the Treadway Commission. Based on this evaluation, our management has
concluded that our internal control over financial reporting was not effective as of December 31, 2024, because of the
material weaknesses described below.
Material Weaknesses in Internal Control over Financial Reporting
We previously disclosed in our annual report on 20-F for the year ended December 31, 2023, certain control deficiencies
in the design and implementation of our internal control over financial reporting that constituted material weaknesses.
These material weaknesses have not been remediated as of December 31, 2024.
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A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that
there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected
on a timely basis.
The material weaknesses in internal control over financial reporting are summarized below:
•
Limited personnel in our accounting and finance functions have resulted in our inability to establish sufficient
segregation of duties across the key business and financial processes of our organization.
•
Lack of appropriately designed, implemented, and documented procedures and controls to allow us to achieve
complete, accurate and timely financial reporting, including controls over the preparation and review of
account reconciliations and journal entries, and controls over information technology including access and
program change management to ensure access to financial data is adequately restricted to appropriate
personnel.
This annual report does not include an attestation report of our independent registered public accounting firm due to an
exemption from the auditor attestation requirements of the Sarbanes-Oxley Act as available to emerging growth
companies.
Remediation Plan
The status of the remediation measures we have implemented to improve our internal control over financial reporting
to address the underlying causes of the material weaknesses are summarized below:
•
During 2024, we continued to design and implement additional internal controls that are relevant to the
preparation of our financial statements. Key Finance and Accounting personnel. These internal resources have
been supplemented with additional external advisory assistance, which will continue to provide ongoing
support regarding complex accounting matters, judgmental areas, and changes in accounting standards. New
roles and responsibilities have been implemented to reduce the risk created by segregation of duties in some
areas, complemented by the implementation of an enhanced ERP system in 2023 that will support automated
enforcement of segregated roles and responsibilities. However, as of December 31, 2024, the segregation of
duties material weakness has not been fully remediated. As the Company grows, the number of skilled and
experienced employees is expected to increase, which will enable the Company to implement adequate
segregation of duties within the internal control framework.
•
During 2024, the Company made progress on many of its remedial actions with a focus on enhancing business
processes and controls as the Company continues to mature. This included completion of formalized individual
risk and control matrices for substantially all of the business processes of the Company and all domains of
information technology general controls (“ITGCs”). However, many of these remedial actions, most importantly
the new control activities, were not fully designed and implemented and/or operated contemporaneously and
continuously as of December 31, 2024, and therefore the material weakness was not fully remediated at year-
end. The Company plans to continue the refinement of the control environment by designing and implementing
controls to mitigate the business risks and assess the operating effectiveness of the internal controls over
financial reporting. We will continue to devote significant time and attention to these remediation efforts.
However, the material weaknesses cannot be considered remediated until the applicable controls operate for
a sufficient period of time and management has concluded, through testing, that these controls are operating
effectively.
Attestation report of the registered public accounting firm
This annual report does not include an attestation report of our independent registered public accounting firm due to an
exemption from the auditor attestation requirements of the Sarbanes-Oxley Act as available to emerging growth
companies.
130
Changes in internal control over financial reporting
Except for the improvements to our internal control over financial reporting to remediate the material weaknesses
discussed above, there have been no changes in our internal control over financial reporting during the fiscal year ended
December 31, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over
financial reporting.
Item 16. [RESERVED]
Item 16A. Audit Committee Financial Expert
The Board of Directors has determined that Mr. Anthony Bellas qualifies as an “audit committee financial expert,” as such
term is defined in the rules of the SEC, and all of the members of the Audit and Risk Management Committee are
independent, as independence is defined under the rules of the SEC and Nasdaq applicable to foreign private issuers.
Item 16B. Code of Ethics
Our Corporate Governance Charter contains a code of conduct applicable to all our directors and is available on our
website at https://ir.novonixgroup.com/corporate-governance/documents-charters. Our Board of Directors has also
adopted a Code of Conduct applicable to our officers, senior executives, employees, consultants, and contractors, which
is also available on our website at www.novonixgroup.com. We will post on our website all disclosures to the extent
required by the rules of the SEC and/or the listing standards of Nasdaq concerning amendments to, or waivers from, any
provision of the Code of Conduct applicable to our directors and executive officers. The reference to our website address
does not constitute incorporation by reference of the information contained at or available through our website, and you
should not consider it to be a part of, this annual report.
Item 16C. Principal Accountant Fees and Services
Audit Fees
The information set forth in Note 8 to the Company's Consolidated Financial Statements included in "Item 18. Financial
Statements" of this annual report is incorporated herein by reference.
Audit-Related Fees
The information set forth in Note 8 to the Company's Consolidated Financial Statements included in "Item 18. Financial
Statements" of this annual report is incorporated herein by reference.
Tax Fees
The information set forth in Note 8 to the Company's Consolidated Financial Statements included in "Item 18. Financial
Statements" of this annual report is incorporated herein by reference.
All Other Fees
The information set forth in Note 8 to the Company's Consolidated Financial Statements included in "Item 18. Financial
Statements" of this annual report is incorporated herein by reference.
Pre-Approval Policies and Procedures
The Audit and Risk Management Committee has adopted policies and procedures relating to the approval of all audit and
non-audit services that are to be performed by our independent registered public accounting firm. These policies provide
that we will not engage our independent registered public accounting firm to render audit or non-audit services unless
the service is specifically approved in advance by the Audit and Risk Management Committee, or the engagement is
entered into pursuant to the pre-approval procedure described below.
131
From time to time, the Audit and Risk Management Committee pre-approves specified types of services that are expected
to be provided to us by our independent registered public accounting firm during the next 12 months. Any such pre-
approval is detailed as to the particular service or type of services to be provided and is also generally subject to a
maximum dollar amount. In fiscal 2024, our Audit and Risk Management Committee approved all the services provided
by PricewaterhouseCoopers Australia, our external auditors.
Item 16D. Exemptions from the Listing Standards for Audit Committees
Not applicable.
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
Not applicable.
Item 16F. Change in Registrant’s Certifying Accountant
Not applicable.
Item 16G. Corporate Governance
Under Nasdaq Listing Rule 5615(a)(3), a foreign private issuer, such as our company, is permitted to follow certain home
country corporate governance practices instead of certain provisions of the Nasdaq listing rules. A foreign private issuer
electing to follow a home country practice instead of any such Nasdaq rule must submit to Nasdaq, in advance, a written
statement from an independent counsel in such issuer’s home country certifying that the issuer’s practices are not
prohibited by the home country’s laws. We submitted such a written statement to Nasdaq. See “Item 6. Directors, Senior
Management and Employees—C. Board Practices— Foreign Private Issuer Exemption” for a concise summary of any
significant ways in which our corporate governance practices differ from those followed by domestic companies under
the Nasdaq listing rules.
Item 16H. Mine Safety Disclosure
Not applicable.
Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
Item 16J. Insider Trading policies
Our Securities Trading Policy sets forth requirements and procedures governing the purchase, sale, and other dispositions
of the Company’s securities by directors, senior management, and employees that are reasonably designed to promote
compliance with applicable insider trading laws, rules and regulations, and listing standards applicable to the Company.
The Securities Trading Policy is filed as an exhibit to this annual report.
Item 16K. Cybersecurity
Risk Management and Strategy
We believe an effective cybersecurity program is critical to guard the confidentiality, integrity, and availability of our
information systems and data residing in those systems. We have built and continue to evolve processes for assessing,
identifying, and managing material risks from cybersecurity threats. We have embedded the oversight and management
of cybersecurity risk within our enterprise risk management framework to help drive a company-wide culture of
cybersecurity risk management, and we have established policies and procedures as well as a reporting line of governance
that guide our cybersecurity risk management program.
132
The Company’s Information Technology Department uses cybersecurity risk assessments, security monitoring tools,
phishing testing, security training, system scanning, and penetration testing, among other technology and human
resources, to monitor and identify cybersecurity threats and incidents. We engage a third party to perform a 24/7
cybersecurity monitoring, detection and response service. With the third party’s assistance, our Information Technology
Department track metrics that demonstrate our cybersecurity risk posture, including identified cybersecurity threats and
risks, security awareness proficiency of employees, and system vulnerabilities and patching requirements.
We require all third-party vendors that may have access to Company, employee, customer, or other third-party data to
undergo a vetting process prior to being approved and onboarded. The vetting process includes a review of the vendor’s
relevant policies and procedures, technology architecture, business practices and cybersecurity profile. Third-party vendor
agreements include confidentiality obligations and specify data elements that the third party has access to, how the third
party protects the data, and procedures for the return or destruction of protected data. The vendor also must report all
cybersecurity incidents immediately to the Company’s responsible functional manager and to the Director of Information
Technology.
In addition to the above processes and resources, we maintain a cybersecurity incident response process. Within the
Information Technology department, we have an Incident Response Team, which maintains and is responsible for
communicating any cybersecurity incidents in accordance with a written incident response plan (the “Incident Response
Plan”). The Incident Response Plan defines responsibilities and immediate actions necessary to mitigate risk, report on the
incident to management, and identify necessary steps to remediate the incident and prevent future incidents. The Incident
Response Team is responsible for identifying and assessing the impact of several factors, including duration of the breach
or other incident, the number of systems and users affected, the actual or potential system downtime and associated
financial impact, as well as the cost and timing of system and data recovery. Our Director of Information Technology is
responsible for reporting cybersecurity incidents immediately to our senior management team. Depending on the nature
and severity of an incident, the incident may also need to be reported to our Management Disclosure Committee to
determine whether the incident is or is reasonably likely to become material and whether the Company must disclose the
incident publicly, as well as to the Audit and Risk Management Committee and the Board of Directors.
Governance
Our Board of Directors recognizes the importance of managing the risk of cybersecurity threats to the Company. The Board
is responsible for overseeing our enterprise risk management activities in general, and each of our Board committees
assists the Board in the role of risk oversight. The Audit and Risk Management Committee is responsible for, among other
things, overseeing our compliance with internal controls and our management of enterprise risks, including cybersecurity
risks and risk mitigation framework.
The Audit and Risk Management Committee meets at least twice each year and as often as necessary to fulfill its
responsibilities. Our senior management team, which includes our CEO, CFO, Chief Legal and Administrative Officer, and
our Chief Operating Officer, together with the Director of Information Technology, reports on a regular basis to the Audit
and Risk Management Committee on cybersecurity risks and trends and other information necessary to assess such risks
and oversee the development and performance of our risk mitigation processes.
The Director of Information Technology leads our Information Technology Department and is responsible for overseeing
our information security program. Reporting to our Chief Operating Officer, the Director of Information Technology has
over 30 years of industry experience, including serving in similar roles leading and overseeing information and data
security at other public companies. The Director of Information Technology is responsible for assessing and managing
cybersecurity risks, as well as communicating cybersecurity incidents, matters and trends to Company management, the
Audit and Risk Management Committee, and the Board of Directors. Team members who support our information security
program have relevant educational and industry experience and regularly report to the Director of Information
Technology. Our Information Technology Department regularly reports to senior management and other relevant teams
on various cybersecurity threats, assessments, and findings.
133
We face risks from cybersecurity threats that could have a material adverse effect on our business, strategy, financial
condition, results of operations, cash flows or reputation. However, to date, we have not experienced any cybersecurity
incidents that have had or are reasonably likely to have such a material adverse effect. See Item 3. Key Information—D.
Risk Factors (“Our systems and data may be subject to disruptions or other security incidents, and we may face alleged
violations of laws, regulations, or other obligations relating to handling our employees' personal data or confidential
data of our customers and other business partners that could result in liability and adversely impact our reputation and
future sales.”).
134
PART III
Item 17. Financial Statements.
The Company has elected to furnish the financial statements and related information specified in "Item 18. Financial
Statements" of this annual report.
Item 18. Financial Statements.
The consolidated financial statements and related notes required by this Item 18 are included in this annual report on
Form 20-F beginning on page F-1.
F-1
NOVONIX LIMITED
ABN 54 157 690 830
FINANCIAL STATEMENTS – December 31, 2024
Financial statements
Consolidated statements of profit or loss and other comprehensive income
F-2
Consolidated balance sheets
F-3
Consolidated statements of changes in equity
F-4
Consolidated statements of cash flows
F-5
Notes to the consolidated financial statements
F-6
Report of Independent Registered Public Accounting Firm (PCAOB ID Number: 1379)
F-65
These financial statements are consolidated financial statements for the Company consisting of NOVONIX Limited and its
subsidiaries. A list of major subsidiaries is included in Note 27 – Interests in Subsidiaries.
The financial statements are presented in U.S. dollars.
NOVONIX Limited is a Company limited by shares, incorporated and domiciled in Australia.
F-2
NOVONIX Limited Consolidated Statements of Profit or Loss and Other Comprehensive
Income for the Years Ended December 31, 2024 and 2023, Six Months Ended December 31, 2022 and
Year Ended June 30, 2022
(in U.S dollars)
Year ended December 31,
Six Months Ended
December 31,
Year Ended June 30,
Notes
2024
2023
2022
2022
Revenue
3
$
5,854,424
$
8,054,528
$
2,702,276
$
6,101,155
Product manufacturing and operating
costs
(1,770,517 )
(2,817,269 )
(1,319,682 )
(1,724,625 )
Administrative and other expenses
5
(19,919,292 )
(18,863,896 )
(11,481,647 )
(12,591,709 )
Depreciation and amortization expenses
(4,568,969 )
(4,740,135 )
(2,572,019 )
(4,214,617 )
Loss on equity investment securities at
fair value through profit or loss
(15,308,187 )
—
—
(8,113,657 )
Research and development costs
(4,849,571 )
(5,750,574 )
(2,020,656 )
(5,102,824 )
Nasdaq listing related expenses
—
—
—
(4,226,062 )
Share based compensation
28
(5,523,560 )
(5,621,959 )
(5,354,429 )
(14,530,749 )
Employee benefits expense
(23,632,917 )
(20,339,880 )
(8,549,850 )
(12,736,589 )
Borrowing costs
5
(3,566,998 )
(2,864,102 )
(943,421 )
(1,512,548 )
Foreign currency (loss) gain
(1,175,500 )
1,359,857
1,360,308
5,195,798
(Loss)/gain on fair value of derivative
financial instruments
22
(4,536,546 )
1,525,320
—
—
Other income, net
4
4,273,179
3,609,900
315,106
1,596,120
Loss before income tax (expense) benefit
(74,724,454 )
(46,448,210 )
(27,864,014 )
(51,860,307 )
Income tax (expense) benefit
6
(97,687 )
199,949
—
—
Net loss
(74,822,141 )
(46,248,261 )
(27,864,014 )
(51,860,307 )
Other comprehensive loss, net of tax
Foreign currency translation of foreign
operations
(3,815,336 )
(1,489,976 )
(2,445,538 )
(17,751,688 )
Total comprehensive loss
(78,637,477 )
(47,738,237 )
(30,309,552 )
(69,611,995 )
Net loss per share attributable to the
ordinary equity holders – basic and diluted
$
(0.15 )
$
(0.09 )
$
(0.06 )
$
(0.11 )
Weighted average shares outstanding –
basic and diluted
496,862,010
487,474,460
486,616,365
464,437,628
The above consolidated statements of profit or loss and other comprehensive income should be read in conjunction with
the accompanying notes.
F-3
NOVONIX Limited Consolidated Balance Sheets
As at December 31, 2024 and 2023
(in U.S. dollars)
December 31,
December 31,
Notes
2024
2023
ASSETS
Current assets
Cash and cash equivalents
$
42,557,621
$
78,713,885
Trade and other receivables
10
8,158,174
3,564,333
Inventory
13
1,383,904
2,000,808
Prepayments
11
1,700,788
1,859,797
Escrow reserves
12
1,452,187
794,500
Assets classified as held for sale
16
2,044,673
2,219,952
Total current assets
57,297,347
89,153,275
Non-current assets
Property, plant and equipment
14
149,310,343
139,793,447
Investment securities at fair value through profit or loss
15
—
16,666,665
Right-of-use assets
20
6,356,771
4,484,521
Intangible assets and goodwill
17
11,975,024
11,990,309
Other assets
1,156,056
1,254,826
Total non-current assets
168,798,194
174,189,768
Total assets
$
226,095,541
$
263,343,043
LIABILITIES
Current liabilities
Trade and other payables
18 $
8,524,141
$
5,760,061
Contract liabilities
3, 19
126,056
285,221
Lease liabilities
20
522,297
345,933
Derivative financial instruments
22
5,368,624
866,278
Borrowings
21
31,668,810
29,895,899
Current tax liabilities
31,966
107,458
Total current liabilities
46,241,894
37,260,850
Non-current liabilities
Contract liabilities
19
3,000,000
3,000,000
Lease liabilities
20
6,488,119
4,479,627
Borrowings
21
32,775,271
34,666,291
Total non-current liabilities
42,263,390
42,145,918
Total liabilities
88,505,284
79,406,768
Net assets
137,590,257
183,936,275
EQUITY
Contributed equity
23
367,537,075
338,425,286
Reserves
24
29,723,162
30,358,828
Accumulated losses
(259,669,980 )
(184,847,839 )
Total equity
$
137,590,257
$
183,936,275
The above consolidated balance sheets should be read in conjunction with the accompanying notes.
Certain balances on the comparative period have changed due to the retrospective adoption of accounting standards as
indicated in Note 22.
F-4
NOVONIX Limited Consolidated Statements of Changes in Equity
For the Year Ended December 31, 2024 and 2023, Six Months Ended December 31, 2022, and Year Ended June 30, 2022
Reserves
Consolidated Group (in U.S dollars)
Contributed
equity
Accumulated
losses
Share based
payments
reserve
Foreign
currency
translation
reserve
Convertible
loan note
reserve
Total
Equity
Balance at June 30, 2021
$
167,744,960
$
(58,875,257 )
$
19,996,754
$
5,060,282
$
4,523,095
$
138,449,834
Net loss
—
(51,860,307 )
—
—
—
(51,860,307 )
Other comprehensive loss
—
—
—
(17,751,688 )
—
(17,751,688 )
Total comprehensive loss
—
(51,860,307 )
—
(17,751,688 )
—
(69,611,995 )
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (Note 22(b))
170,266,882
—
—
—
—
170,266,882
Settlement of limited recourse loan (Note 22(j))
—
—
—
—
—
—
Share-based payments
—
—
12,028,757
—
—
12,028,757
Balance at June 30, 2022
338,011,842
(110,735,564 )
32,025,511
(12,691,406 )
4,523,095
251,133,478
Net loss
—
(27,864,014 )
—
—
—
(27,864,014 )
Other comprehensive income
—
—
—
(2,445,538 )
—
(2,445,538 )
Total comprehensive (loss)/income
—
(27,864,014 )
—
(2,445,538 )
—
(30,309,552 )
Transactions with owners in their capacity as owners:
—
—
—
—
—
—
Contributions of equity, net of transaction costs
96,356
—
—
—
—
96,356
Share-based payments
—
—
5,135,987
—
—
5,135,987
Balance at December 31, 2022
338,108,198
(138,599,578 )
37,161,498
(15,136,944 )
4,523,095
226,056,269
Net loss
—
(46,248,261 )
—
—
—
(46,248,261 )
Other comprehensive loss
—
—
—
(1,489,976 )
—
(1,489,976 )
Total comprehensive loss
—
(46,248,261 )
—
(1,489,976 )
—
(47,738,237 )
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (Note 22(b))
317,088
—
—
—
—
317,088
Share-based payments
—
—
5,301,155
—
—
5,301,155
Balance at December 31, 2023
338,425,286
(184,847,839 )
42,462,653
(16,626,920 )
4,523,095
183,936,275
Net loss
—
(74,822,141 )
—
—
—
(74,822,141 )
Other comprehensive loss
—
—
—
(3,815,336 )
—
(3,815,336 )
Total comprehensive loss
—
(74,822,141 )
—
(3,815,336 )
—
(78,637,477 )
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (Note 22(b))
29,111,789
—
—
—
—
29,111,789
Share-based payments
—
—
3,179,670
—
—
3,179,670
Balance at December 31, 2024
$
367,537,075
$ (259,669,980 )
$
45,642,323
$
(20,442,256 )
$
4,523,095
$
137,590,257
The above consolidated statements of changes in equity should be read in conjunction with the accompanying notes.
F-5
NOVONIX Limited Consolidated Statements of Cash Flows
For the Year Ended December 31, 2024 and 2023, Six Months Ended December 31, 2022, and Year
Ended June 30, 2022
(in U.S. dollars)
Year ended December 31,
Six Months Ended
December 31,
Year Ended June 30,
2024
2023
2022
2022
Notes
Cash flows from operating activities
Receipts from customers (inclusive of consumption tax)
$
7,902,051
$
7,708,839
$
4,095,716
$
6,173,683
Payments to suppliers and employees (inclusive of
consumption tax)
(50,303,125 )
(45,629,733 )
(22,516,447 )
(37,928,213 )
Interest received
1,372,651
1,621,201
18,242
8,314
Payment of borrowing costs
(1,766,465 )
(1,872,154 )
(898,461 )
(1,465,946 )
Government grants received
2,377,119
1,943,424
434,379
3,982,807
Net cash outflow from operating activities
26
(40,417,769 )
(36,228,423 )
(18,866,571 )
(29,229,355 )
Cash flows from investing activities
Payments for exploration assets
(27,116 )
(13,665 )
(18,534 )
(74,041 )
Payments for escrow funds
—
—
(934,628 )
(14,520,001 )
Proceeds from release of escrow funds
—
8,343,107
1,887,579
4,429,445
Payments for investments
—
—
—
(12,767,817 )
Payments for intangibles
—
—
—
(27,686 )
Payments for security deposits
(657,688 )
(882,325 )
—
(161,812 )
Refunds of security deposit
—
—
—
10,000
Government grants received
12,391,330
—
—
—
Payments for property, plant and equipment
(29,879,456 )
(19,182,131 )
(24,497,314 )
(83,688,360 )
Net cash outflow from investing activities
(18,172,930 )
(11,735,014 )
(23,562,897 )
(106,800,272 )
Cash flows from financing activities
Proceeds on issue of shares
28,818,616
338,327
12,061
150,967,705
Payment of share issue expenses
(1,276,436 )
(12,529 )
(8,024 )
(137,982 )
Proceeds from convertible note issues
—
30,000,000
—
—
Payment of convertible note issue expenses
—
(47,338 )
—
—
Payment of withholding tax - Performance Rights
28
(603,932 )
(295,043 )
(131,506 )
(2,501,992 )
Proceeds from borrowings
—
752,831
—
33,241,890
Principal elements of lease repayments
(296,865 )
(353,378 )
(166,741 )
(308,405 )
Repayment of borrowings
(1,428,429 )
(1,073,082 )
(483,620 )
(573,445 )
Net cash inflow (outflow) from financing activities
25,212,954
29,309,788
(777,830 )
180,687,771
Net (decrease) increase in cash and cash equivalents
(33,377,745 )
(18,653,649 )
(43,207,298 )
44,658,144
Effects of foreign currency
(2,778,519 )
(1,671,638 )
(490,892 )
(4,522,034 )
Cash and cash equivalents at the beginning of the year
78,713,885
99,039,172
142,737,362
102,601,252
Cash and cash equivalents at the end of the year
$
42,557,621
$
78,713,885
$
99,039,172
$
142,737,362
Non–cash financing and investing activities
26(b)
The above consolidated statements of cash flows should be read in conjunction with the accompanying notes.
F-6
Note 1 Summary of Material Accounting Policy Information
Corporate Information
NOVONIX Limited (“NOVONIX,” the “Company,” or the “Group”) is a battery technology and materials business that
provides advanced products and mission critical services to leading battery manufacturers, materials companies,
automotive original equipment manufacturers (“OEMs”) as well as consumer electronics manufacturers at the forefront
of the global electrification economy. NOVONIX Limited is referred to in these financial statements as the "Parent Entity".
NOVONIX was incorporated under the laws of Australia in 2012 under the name Graphitecorp Pty Limited. In 2015, the
Company completed an initial public offering of its ordinary shares and the listing of its ordinary shares on the Australian
Securities Exchange, or the ASX, and changed the Company’s name to GRAPHITECORP Limited. In 2017, the Company
changed its name to NOVONIX Limited.
The Company’s principal place of business is located at Level 38, 71 Eagle Street, Brisbane, Queensland 4000, Australia,
and the Company’s registered office is located at Level 11, 66 Eagle Street, Brisbane Queensland, Australia.
The financial statements were authorized for issue by the Directors on February 28, 2025. The Directors have the power
to amend and reissue the financial statements.
Basis of Preparation
These general-purpose consolidated financial statements of the Company have been prepared in accordance with
International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board (“IASB”).
Material accounting policies adopted in the preparation of these consolidated financial statements are presented below
and have been consistently applied unless stated otherwise.
Except for cash flow information, the consolidated financial statements have been prepared on an accruals basis and are
based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets,
financial assets and financial liabilities.
Applying Materiality
Management provides the specific accounting policies and disclosures required by IFRS unless the information is not
applicable or is considered immaterial to the decision-making of the primary users of these financial statements.
Going Concern
The consolidated financial statements have been prepared on a going concern basis, which contemplates continuity of
normal business activities and the realization of assets and settlement of liabilities in the normal course of business.
For the year ended December 31, 2024, the Company incurred a net loss of $74.8 million (year ended December 31, 2023:
$46.2 million) and net operating cash outflows of $40.4 million (year ended December 31, 2023: $36.2 million). As of
December 31, 2024, the Company has a cash balance of $42.6 million (December 31, 2023: $78.7 million) and net current
assets of $11.1 million (December 31, 2023: $51.9 million).
The net loss and cash outflows incurred during the period principally relate to the Company continuing to execute its
expansion plans to reach a production capacity of 150,000 tpa. This will involve significant capital expenditure to scale
operations in line with customer offtake agreements, as well as current and future customer demand. The funding of
these expansionary activities will require additional funding beyond the existing cash balance as of December 31, 2024,
and forecasted customer inflows, in the twelve months from the date of approval of these financial statements. These
conditions give rise to a material uncertainty which may cast significant doubt (or raise substantial doubt as contemplated
by Public Company Accounting Oversight Board (“PCAOB”) standards) over the Company’s ability to continue as a going
F-7
concern. Should the Company be unable to continue as a going concern, it may be unable to realize its assets and discharge
its liabilities in the normal course of business, and at amounts stated in the financial report.
The ability of the Company to continue as a going concern is principally dependent upon one or more of the following
•
continuing to be able to claim balances against the USD$100 grant from the Office of Manufacturing & Energy
Supply Chains ("MESC") of the U.S. Department of Energy ("DOE"). During the year ended December 31, 2024,
the Company submitted $19.2 million in reimbursement requests to the DOE Office of MESC for investments
made at its Riverside facility in Chattanooga, Tennessee. An additional $5.1 million in reimbursement requests
have been submitted to the DOE to the date of issuance of the financial statements.
•
the ability of the Company to raise funds as and when necessary, from either customers, governments, and/or
investors in the form of debt or equity;
•
the successful and profitable growth of the battery materials, battery consulting, and battery technology
businesses; and
•
the ability of the Company to meet its cash flow forecasts.
The directors believe that the going concern basis of preparation is appropriate as the Company has a strong history of
being able to raise capital from debt and equity sources, including through the issue of:
•
$25.8 million equivalent to 68.6 million ordinary shares to eligible shareholders pursuant to a share purchase
plan in January 2025;·
•
$5 million equivalent to 12.8 million ordinary shares to Phillips 66 in a conditional placement that in January
2025;
•
$26.6 million equivalent to 74.1 million ordinary shares in a fully underwritten institutional placement in
November 2024; and·
•
$30 million of unsecured convertible loan notes to LG Energy Solution, Ltd. ("LG Energy Solution" or "LGES"))
in June 2023 (Note 22 - Unsecured convertible loan notes and derivative financial instruments).
The Company is continuing to actively engage with strategic partners, customers, investors, and government agencies, to
source additional funding to support the Company's growth and fund the planned expansionary activities.
In addition, in April 2024, the Company was selected to receive a US$103 million tax credit (the “48C tax credit”) under
the Qualifying Advanced Energy Project Allocation Program (the “48C program”), to support production of critical battery
materials from its Riverside facility in Chattanooga, Tennessee. No funds have been claimed against the 48C tax credit
mainly as the qualifying asset has not been placed in service as of December 31, 2024, and to the date of issuance of the
financial statements.
These consolidated financial statements do not include any adjustments relating to the recoverability and classification of
recorded asset amounts or the amounts or classification of liabilities and appropriate disclosures that may be necessary
should the Company be unable to continue as a going concern.
Principles of Consolidation
These consolidated financial statements incorporate the assets and liabilities of all subsidiaries of NOVONIX Limited as of
December 31, 2024, and the results of all subsidiaries for the year then ended.
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Subsidiaries are all those entities over which the Company has control. The Company controls an entity when the Company
is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which
control is transferred to the Company. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealized gains on transactions between entities in the Company are
eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of the impairment of the asset
transferred. The accounting policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Company.
Where equity instruments are issued in a business combination, the fair value of the instruments is their published market
price as at the date of exchange. Costs arising from a business combination are expensed when incurred. The consideration
transferred also includes the fair value of any asset or liability resulting from a contingent consideration arrangement.
With limited exceptions, all identifiable assets acquired, and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the acquisition date. The excess of the consideration transferred,
amount of any non-controlling interest in the acquired entity, over the net fair value of the Company's share of the
identifiable net assets acquired is recognized as goodwill. If the consideration transferred of the acquisition is less than
the Company's share of the net fair value of the identifiable net assets of the subsidiary, the difference is recognized as a
gain in the profit and loss in the Consolidated Statement of Profit or Loss and Other Comprehensive Income, but only after
a reassessment of the identification and measurement of the net assets acquired.
Where settlement of any part of the cash consideration is deferred, the amounts payable in the future are discounted to
their present value, as at the date of exchange. The discount rate used is the entity's incremental borrowing rate, being
the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and
conditions.
Fair Value Measurements
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. For some assets and liabilities, observable market transactions or market
information is available. For other assets and liabilities, observable market transactions or market information might not
be available. When a price for an identical asset or liability is not observable, another valuation technique is used. To
increase consistency and comparability in fair value measurements, there are three levels of the fair value hierarchy based
on the inputs used:
•
Level 1 – Inputs are unadjusted quoted prices in active markets for identical assets or liabilities,
•
Level 2 – Inputs are inputs other than quoted prices included within Level 1, which are observable for the asset
or liability either directly or indirectly,
•
Level 3 – Inputs are unobservable inputs for the asset or liability.
The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during
which the change has occurred.
Income Tax Expense (Benefit)
The income tax expense or benefit for the period is the tax payable on that period’s taxable income based on the applicable
income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to
temporary differences, unused tax losses and the adjustment recognized for prior periods, where applicable.
F-9
Deferred tax assets and liabilities are recognized for temporary differences at the tax rates expected to be applied when
the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted,
except for:
•
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or
liability in a transaction that is not a business combination and that, at the time of the transaction, affects
neither the accounting nor taxable profits; or
•
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures
and the timing of the reversal can be controlled, and it is probable that the temporary difference will not
reverse in the foreseeable future.
Deferred tax assets are recognized for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilize those temporary differences and losses.
The carrying amount of recognized and unrecognized deferred tax assets are reviewed at each reporting date. Deferred
tax assets recognized are reduced to the extent that it is no longer probable that future taxable profits will be available
for the carrying amount to be recovered. Previously unrecognized deferred tax assets are recognized to the extent that it
is probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets
against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable
authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.
Revenue Recognition
Revenue from contracts with customers is recognized when control of the goods is transferred, or services are provided
to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange
for those goods or services.
Sales of Goods
Revenue for the hardware is recognized at a point in time when the hardware is delivered and the legal title has passed.
Consulting Services
The consulting division provides battery cell design, implementation and support services under fixed-price and variable
price contracts. Revenue from providing services is recognized in the accounting period in which the services are rendered.
For fixed-price contracts, revenue is recognized based on the actual service provided to the end of the reporting period
relative to the remaining services under the contract because the customer receives and uses the benefits simultaneously.
This is determined based on the actual labor hours spent relative to the total expected labor hours.
Where the contracts include multiple performance obligations, the transaction price will be allocated to each performance
obligation based on the stand-alone selling prices. Where these are not directly observable, they are estimated based on
expected cost-plus margin.
Contract Balances
Trade and Other Receivables
A receivable is recognized when the Company’s right to consideration is unconditional, which is generally when goods are
delivered or services are performed, as only the passage of time is required before payment is due.
F-10
Contract Liabilities
A contract liability is the obligation to transfer goods or provide services to a customer for which the Company has received
consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the
Company transfers goods or services to the customer, a contract liability is recognized when the payment is made, or the
payment is due (whichever is earlier). Contract liabilities are recognized as revenue when the Company performs under
the contract.
Other Income
Interest
Interest income is recognized as interest accrues using the effective interest method. This is a method of calculating the
amortized cost of a financial asset and allocating the interest income over the relevant period using the effective interest
rate, which is the rate that discounts estimated future cash receipts through the expected life of the financial asset to the
net carrying amount of the financial asset.
Grant Revenue
Grants from government bodies, including transferable 48C tax credits, are recognized where there is a reasonable
assurance that the grant will be received, and the Company will comply with all attached conditions. When a grant relates
to an expense item, it is recognized as income on a systematic basis over the periods that the related expenses, for which
it is intended to compensate, are expensed. Where a grant relates to an asset, it is recognized as an adjustment to the
carrying amount of the related asset.
Operating Segments
Operating segments are presented using the ‘management approach’, where the information presented is on the same
basis as the internal reports provided to the Chief Operating Decision Makers ("CODMs"). The CODMs are responsible for
the allocation of resources to operating segments and assessing their performance.
Current and Non-Current Classification
Assets and liabilities are presented in the balance sheet based on current and non-current classification.
An asset is classified as current when: it is either expected to be realized or intended to be sold or consumed in normal
operating cycle; it is held primarily for the purpose of trading; it is expected to be realized within 12 months after the
reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability
for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in normal operating cycle; it is held primarily for
the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no right to defer the
settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash
and which are subject to an insignificant risk of changes in value.
F-11
Inventories
Inventories are measured at the lower of cost and net realizable value. Cost is determined based on the standard cost
method, which approximates first-in, first-out. The cost of manufactured products includes direct materials.
Exploration and Evaluation Assets
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. Such
expenditures comprise net direct costs and an appropriate portion of related overhead expenditure but do not include
overheads or administration expenditure not having a specific nexus with a particular area of interest. These costs are
only carried forward to the extent that they are expected to be recouped through the successful development of the area
or where activities in the area have not yet reached a stage which permits reasonable assessment of the existence of
economically recoverable reserves and active or significant operations in relation to the area are continuing.
A regular review has been undertaken on each area of interest to determine the appropriateness of continuing to carry
forward costs in relation to that area of interest.
An impairment charge is recognized when the Directors are of the opinion that the carried forward net cost may not be
recoverable or the right of tenure in the area lapses.
When production commences, the accumulated costs for the relevant area of interest are amortized over the life of the
area according to the rate of depletion of the economically recoverable reserves.
Borrowings
Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured
at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is
recognized in profit or loss over the period of the borrowings using the effective interest method.
The fair value of the liability (borrowings) portion of a convertible bond is determined using a market interest rate for an
equivalent non-convertible bond. This amount is recorded as a liability on an amortized cost basis until extinguished on
conversion or maturity of the bonds. The remainder of the proceeds is allocated to the conversion option. Alternatively,
the fair value of the conversion option is determined using Monte Carlo Simulation methodology, with the remainder of
the proceeds allocated to the liability (borrowings) portion.
Convertible Loan Notes
Convertible loan notes are initially measured at fair value less transaction costs.
Amortized cost is calculated as the amount at which the loan note is measured at initial recognition less principal
repayments and adjusted for any cumulative amortization of the difference between that initial amount and the maturity
amount calculated using the effective interest method.
The effective interest method is used to allocate interest expense over the relevant period and is equivalent to the rate
that discounts estimated future cash payments over the expected life of the financial instrument to the net carrying
amount of the financial liability.
Non-derivative financial liabilities, other than financial guarantees, are subsequently measured at amortized cost. Gains
or losses are recognized in profit or loss through the amortization process and when then financial liability is derecognized.
Convertible notes are classified as current liabilities unless, at the end of the reporting period, the Company has a right to
defer settlement of the liability for at least 12 months after the reporting period. Where convertible notes can be settled,
at the option of the counterparty, by the transfer of the entity’s own equity instruments, such settlement terms do not
affect the classification of the liability as current or non-current where the option is classified as an equity instrument.
With respect to the Company’s convertible notes, the conversion option is accounted for as a derivative liability and can
F-12
be exercised by the holder at any time - as disclosed in Note 22. As such, the conversion feature must be considered when
assessing whether the Company has a right to defer settlement.
Property, Plant, and Equipment
Property, plant, and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost
includes expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment
(excluding land) over their expected useful lives as follows:
Buildings
25 - 39 years
Plant and equipment
3 - 20 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting
date.
An item of plant and equipment is derecognized upon disposal or when there is no future economic benefit to the
Company. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
Trade and Other Payables
These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial year
and which are unpaid. Due to their short-term nature, they are measured at amortized cost and are not discounted. The
amounts are unsecured and are usually paid within 30 days of recognition.
Leases
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease
agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor.
Leased assets may not be used as security for borrowing purposes.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net
present value of the following lease payments:
•
fixed payments (including in-substance fixed payments), less any lease incentives receivable,
•
variable lease payments that are based on an index or a rate, initially measured using the index or rate as at
the commencement date,
•
amounts expected to be payable by the Company under residual value guarantees,
•
the exercise price of a purchase option if the Company is reasonably certain to exercise that option,
•
payments of penalties for terminating the lease, if the lease term reflects the Company exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the
liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined,
which is generally the case for leases in the Company, the lessee’s incremental borrowing rate is used, being the rate that
the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-
use asset in a similar economic environment with similar terms, security and conditions.
F-13
To determine the incremental borrowing rate, the Company:
•
where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted
to reflect changes in financing conditions since third party financing was received,
•
uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by
NOVONIX Limited, which does not have recent third-party financing,
•
makes adjustments specific to the lease, e.g., term, country, currency and security.
The Company is exposed to potential future increases in variable lease payments based on an index or rate, which are not
included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take
effect, the lease liability is reassessed and adjusted against the right-of-use asset.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the
lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Right-of-use assets are measured at cost comprising the following:
•
the amount of the initial measurement of lease liability,
•
any lease payments made at or before the commencement date less any lease incentives received,
•
any initial direct costs,
•
restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-
line basis. If the Company is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over
the underlying asset’s useful life. The Company does not revalue the right-of-use buildings held by the Company.
Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognized
on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.
Low-value assets comprise IT equipment and small items of office furniture.
Extension options are included in property and equipment leases across the Company. These are used to maximize
operational flexibility in terms of managing the assets used in the Company’s operations. The extension options held are
exercisable only by the Company and not by the lessor.
When the Company revises its estimate of the term of any lease (because, for example, it re-assesses the probability of a
lessee extension or termination option being exercised), it adjusts the carrying amount of the lease liability to reflect the
payments to make over the revised term, which are discounted using a revised discount rate. The carrying value of lease
liabilities is similarly revised when the variable element of future lease payments dependent on a rate or index is revised,
except the discount rate remains unchanged. In both cases an equivalent adjustment is made to the carrying value of the
right-of-use asset, with the revised carrying amount being amortized over the remaining (revised) lease term. If the
carrying amount of the right-of-use asset is adjusted to zero, any further reduction is recognized in profit or loss.
When the Company renegotiates the contractual terms of a lease with the lessor, the accounting depends on the nature
of the modification:
•
if the renegotiation results in one or more additional assets being leased for an amount commensurate with
the standalone price for the additional rights-of-use obtained, the modification is accounted for as a separate
lease in accordance with the above policy,
•
in all other cases where the renegotiated increases the scope of the lease (whether that is an extension to the
lease term, or one or more additional assets being leased), the lease liability is remeasured using the discount
rate applicable on the modification date, with the right-of-use asset being adjusted by the same amount,
F-14
•
if the renegotiation results in a decrease in the scope of the lease, both the carrying amount of the lease
liability and right-of-use asset are reduced by the same proportion to reflect the partial of full termination of
the lease with any difference recognized in profit or loss. The lease liability is then further adjusted to ensure
its carrying amount reflects the amount of the renegotiated payments over the renegotiated term, with the
modified lease payments discounted at the rate applicable on the modification date. The right-of-use asset is
adjusted by the same amount.
Specific details about the Company’s leasing policy are provided in Note 20.
Investments and Other Financial Assets
Classification
The Company classifies its financial assets in the following measurement categories:
•
those to be measured subsequently at fair value (either through OCI or through profit or loss),
•
those to be measured at amortized cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual terms of
the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity
instruments that are not held for trading, this will depend on whether the Company has made an irrevocable election at
the time of initial recognition to account for the equity investment at fair value through other comprehensive income
(FVOCI).
Recognition and Derecognition
Regular way purchases and sales of financial assets are recognized on trade date, being the date on which the Company
commits to purchase or sell the asset. Financial assets are derecognized when the rights to receive cash flows from the
financial assets have expired or have been transferred and the Company has transferred substantially all the risks and
rewards of ownership.
Measurement
At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at
fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial
asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.
The Company subsequently measures all equity investments at fair value. Where the Company’s management has elected
to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification or fair value
gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments continue
to be recognized in the consolidated statement of profit or loss and other comprehensive (loss) income as other income
when the Company’s right to receive payment is established.
Changes in fair value of financial assets at FVPL are recognized in other gains/(losses) in the Consolidated Statement of
Profit or Loss and Other Comprehensive Income as applicable. Impairment losses (and reversal of impairment losses) on
equity investments measured at FVOCI are not reported separately from other changes in fair value.
F-15
Employee Benefits
Short-Term Employee Benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be
settled within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are
settled.
Short-term incentives are payable on achievement of mutually agreed KPIs each fiscal year with short-term incentives
being payable in either cash or by way of the issue of fully paid ordinary shares. The Company has historically paid short-
term incentives in cash.
Other Long-Term Employee Benefits
The liability for long service leaves not expected to be settled within 12 months of the reporting date is measured as the
present value of expected future payments to be made in respect of services provided by employees up to the reporting
date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience
of employee departures and periods of service. Expected future payments are discounted using market yields at the
reporting date on corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated
future cash outflows.
Share-Based Payments
Equity-settled share-based compensation benefits are provided to employees. Equity-settled transactions are awards of
shares, options or performance rights over shares, that are provided to employees in exchange for the rendering of
services.
The cost of equity-settled transactions is measured at fair value on grant date. Fair value is determined using various
valuation methods including Black Scholes, Binomial and the Monte Carlo Simulation method that takes into account the
exercise price, the term of the performance right, the impact of dilution, the share price at grant date and expected price
volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the
performance right award.
The cost of equity-settled transactions is recognized as an expense with a corresponding increase in equity over the vesting
period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best
estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount
recognized in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already
recognized in previous periods.
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market
conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other
conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognized as if the modification has not been made.
An additional expense is recognized, over the remaining vesting period, for any modification that increases the total fair
value of the share-based compensation benefit as at the date of modification.
Share-based payment expenses are recognized over the period during which the employee provides the relevant services.
This period may commence prior to the grant date. In this situation, the entity estimates the grant date fair value of the
equity instruments for the purposes of recognizing the services received during the period between service
commencement date and grant date. Once the grant date has been established, the earlier estimate is revised so that the
amount recognized for services received is ultimately based on the grant date fair value of the equity instruments.
F-16
If the non-vesting condition is within the control of the Company or employee, the failure to satisfy the condition is treated
as a cancellation. If the condition is not within the control of the Company or employee and is not satisfied during the
vesting period, any remaining expense for the award is recognized over the remaining vesting period, unless the award is
forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining
expense is recognized immediately. If a new replacement award is substituted for the cancelled award, the cancelled and
new award is treated as if they were a modification.
Issued Capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of
tax, from the proceeds.
Impairment of Non-Financial Assets
At the end of each reporting period, the Company assesses whether there is any indication that an asset may be impaired.
The assessment will include the consideration of external and internal sources of information, including dividends received
from subsidiaries, associates or joint ventures deemed to be out of pre-acquisition profits. If such an indication exists, an
impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the
asset’s fair value less costs of disposal and value in use, to the asset’s carrying amount. Any excess of the assets carrying
amount over its recoverable amount is recognized immediately in profit or loss, unless the asset is carried at a revalued
amount in accordance with another Standard. Any impairment loss of a revalued asset is treated as a revaluation decrease
in accordance with that other Standard.
Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable
amount of the cash-generating unit to which the asset belongs.
Impairment testing is performed annually for goodwill, intangible assets with indefinite lives and intangible assets not yet
available for use.
Intangible Assets Other than Goodwill
Technology
Technology is recognized at fair value on the date of acquisition. It has a finite life and is subsequently carried at cost less
any accumulated amortization and any impairment losses. Technology is amortized over its useful life of 5 years.
Software
Software is measured at cost (at acquisition or development costs) and amortized on a straight-line basis over its useful
life, generally 3 years. Maintenance cost of software is expensed as incurred. Development costs directly attributable to
the design and creation of software that are identifiable and unique, and that may be controlled by the Company, are
recognized as an intangible asset providing the following conditions are met:
•
It is technically feasible for the intangible asset to be completed so that it will be available for use or sale,
•
Management intends to complete the asset for use or sale,
•
The Company has the capacity to use or sell the asset,
•
It is possible to show evidence of how the intangible asset will generate probable future economic benefits,
•
Adequate technical, financial, and other resources are available to complete the development and to use or
sell the intangible asset,
•
The outlay attributable to the intangible asset during its development can be reliably determined.
F-17
Directly attributable costs capitalized in the value of the software include the cost of personnel developing the programs.
Costs that do not meet the criteria listed above are recognized as an expense as incurred. An example of this is Software
as a Service ("SaaS"). The cloud computing is a model for delivering information technology services through web-based
tools and applications. In such contracts, the customer generally does not obtain a software license or have a right to take
possession of the software. The contract conveys to the customer the right to receive access to the supplier’s application
software over the contract term. That right to receive access does not provide the customer with a software asset and,
therefore, the access to the software is a service that the customer receives over the contract term.
Goodwill
Goodwill acquired on a business combination is initially measured at cost, being the excess of the consideration
transferred for the business combination over the Company’s interest in the net fair value of the acquiree’s identifiable
assets, liabilities and contingent liabilities.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.
Goodwill is reviewed for impairment, annually, or more frequently, if events or changes in circumstances indicate that the
carrying value may be impaired (Note 17 - Intangible Assets).
As at the acquisition date, any goodwill acquired is allocated to each of the cash-generating units that are expected to
benefit from the combination’s synergies.
Impairment is determined by assessing the recoverable amount of the cash-generating unit to which the goodwill relates.
Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is
recognized.
Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed, the goodwill
associated with the disposed operation is included in the carrying amount of the operation when determining the gain or
loss on disposal of the operation.
Disposed goodwill in this circumstance is measured on the basis of the relative values of the disposed operation and the
portion of the cash-generating unit retained.
Research and Development Costs
Research and development costs primarily represent the Company’s investment in research and development activities
for the all-dry, zero-waste cathode synthesis project. At present, the Company's research and development activities are
conducted through our two core businesses: BTS and NAM; cathode falls under BTS R&D.
Research expenditures are recognized as an expense when incurred. Costs incurred on development projects (relating to
the design and testing of enhancements or extensions of products from the all-dry, zero-waste cathode synthesis project)
are recognized as intangible assets when:
•
the technical feasibility of completing the intangible asset so that it will be available for use or sale,
•
the intention to complete the intangible asset and use it or sell it,
•
the ability to use or sell the intangible asset,
•
how the intangible asset will generate probable future economic benefits,
•
the availability of adequate technical, financial, and other resources to complete the development and to use
or sell the intangible asset,
•
the ability to measure reliably the expenditure attributable to the intangible asset during its development.
F-18
The expenditures capitalized comprise all directly attributable costs, including costs of materials, services, direct labor and
an appropriate proportion of overhead. Other development expenditures that do not meet these criteria are recognized
as an expense when incurred. Development costs previously recognized as an expense are not recognized as an asset in a
subsequent period. Capitalized development costs are recorded as intangible assets and amortized from the point at
which the asset is ready for use on a straight-line basis over its useful life.
Borrowing Costs
Borrowing costs are recognized in profit or loss in the period in which they are incurred.
Foreign Currency Transactions and Balances
Functional and Presentation Currency
The functional currency of each of the Company’s entities is the currency of the primary economic environment in which
that entity operates. Effective July 1, 2022, the Company’s reporting currency is the U.S. dollar. The Company changed its
reporting currency from Australian dollars to U.S. dollars to enhance the relevance of the Company’s financial information
and comparability with its industry peer group.
Transactions and Balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of
the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items
measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items
measured at fair value are reported at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognized in profit or loss, except were deferred
in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognized directly in other comprehensive
income to the extent that the underlying gain or loss is recognized in other comprehensive income; otherwise, the
exchange difference is recognized in profit or loss.
Group Companies
The financial results and position of foreign operations, whose functional currency is different from the Company’s
presentation currency, are translated as follows:
•
Assets and liabilities are translated at exchange rates prevailing at the end of the reporting period,
•
Income and expenses are translated at the average exchange rates for the period,
•
Accumulated losses are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations with functional currencies other than U.S. dollars are
recognized in other comprehensive income and included in the foreign currency translation reserve in the consolidated
balance sheet. The cumulative amount of these differences is reclassified into profit or loss in the period in which the
operation is disposed of.
F-19
Earnings Per Share
Basic Earnings Per Share
Basic earnings per share is calculated by dividing the profit attributable to the owners of the Company, excluding any costs
of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the
financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted Earnings Per Share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the
weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
Goods and Services Tax (‘GST’) and Other Similar Taxes
Revenues, expenses and assets are recognized net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognized as part of the cost of the acquisition of the asset or as part
of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the balance sheet.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
Assets Held for Sale
Non-current assets, or disposal groups comprising assets and liabilities, are classified as held-for-sale if it is highly
probable that they will be recovered primarily through sale rather than through continuing use.
Such assets, or disposal groups, are generally measured at the lower of their carrying amount and fair value less costs to
sell. Any impairment loss on a disposal group is allocated first to goodwill, and then to the remaining assets and liabilities
on a pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit
assets, investment property or biological assets, which continue to be measured in accordance with the Company’s
other accounting policies. Impairment losses on initial classification as held-for-sale or held-for-distribution and
subsequent gains and losses on remeasurement are recognized in profit or loss.
Once classified as held-for-sale, intangible assets and property, plant and equipment are no longer amortized or
depreciated, and any equity-accounted investee is no longer equity accounted.
New and Amended Standards and Interpretations
The following amendments are effective for the period beginning January 1,2024 and are applicable to the consolidated
financial statements of the Company:
•
Classification of Liabilities as Current or Non-Current (Amendments to IAS 1); and
•
Segment reporting (Amendments to IFRS 8).
F-20
A summary of the changes to the accounting standards and on how the amendments affected the consolidated financial
statements is presented below.
Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)
The IASB issued amendments to IAS 1 on the Classification of Liabilities as Current or Non-current in January 2020. The
amendments clarify the following:
•
An entity's right to defer settlement of a liability for at least twelve months after the reporting period must
have substance and must exist at the end of the reporting period.
•
If an entity’s right to defer settlement of a liability is subject to covenants, such covenants affect whether that
right exists at the end of the reporting period only if the entity is required to comply with the covenant on or
before the end of the reporting period.
•
The classification of a liability as current or non-current is unaffected by the likelihood that the entity will
exercise its right to defer settlement.
•
In case of a liability that can be settled, at the option of the counterparty, by the transfer of the entity’s own
equity instruments, such settlement terms do not affect the classification of the liability as current or non-
current only if the option is classified as an equity instrument.
These amendments have no effect on the measurement of any items in the consolidated financial statements of the
Company. However, the classification of the convertible loan notes has changed from non-current to current as result of
the application of the amendments for the current financial year as well as the comparative period, Note 22- Unsecured
Convertible Loan notes and Derivative Financial Instruments for further details.
In July 2024, the IFRS Interpretations Committee (the Committee) published an agenda decision in response to a number
of questions asked about how IFRS 8.23 should be applied in practice. IFRS 8.23 requires entities to disclose specific income
and expenses included in the segment profit amount provided to the Chief Operating Decision Maker (CODM), irrespective
of whether these items are separately presented to the CODM. ‘Material items of income and expense’ to be disclosed
does not only mean those items that are qualitatively material because they are unusual/and or non-recurring in nature;
material items mean any items that are material, regardless of the reason for the assessment. Determining the appropriate
level of detail in preparing disclosures relating to reportable segments requires judgment, considering the entity's specific
circumstances, the core principles outlined in IAS 1 Presentation of Financial Statements. The adoption of the
interpretation did not have a material impact on the consolidated financial statements. Refer to Note 25 - Operating
Segments for further details.
The Company noted that no other new IFRS Accounting Standards amendments or interpretations that became effective
in 2024 had a material impact on the Company’s consolidated financial statements.
Standards and Interpretations not yet Effective
The Company has decided not to early adopt new standards, amendments to standards, and interpretations which have
been issued by the IASB that are effective in future accounting periods, which include:
•
Lack of Exchangeability (Amendment to IAS 21 The Effects of Changes in Foreign Exchange Rates), effective for
the annual period beginning January 1, 2025;
•
Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 Financial
Instruments and IFRS 7), effective for the annual period beginning January 1, 2026;
F-21
•
Contracts Referencing Nature-dependent Electricity (Amendments to IFRS 9 and IFRS 7), effective for the
annual period beginning January 1, 2026;
•
IFRS 18 Presentation and Disclosure in Financial Statements, effective for the annual period beginning January
1, 2027; and
•
IFRS 19 Subsidiaries without Public Accountability: Disclosures, effective for the annual period beginning
January 1, 2027.
The Company is currently assessing the effect of these new accounting standards and amendments.
Critical Accounting Estimates and Judgments
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgment in the process of applying the Company’s accounting policies. The areas involving a
higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial
statements, are disclosed below.
Valuation of Unsecured Convertible Notes and Embedded Derivatives
The fair value of the conversion feature is determined using a Monte Carlo Simulation, taking into account the terms and
conditions upon which the convertible loan notes were issued. The key assumptions include:
•
The probability of the timing of when the parties will enter into a purchase order for material, which will lead
to the mandatory conversion of all loan notes into ordinary shares,
•
The risk-free rate,
•
The volatility of the NOVONIX share price.
Impairment of Goodwill and Identifiable Intangible Assets
The Company determines whether goodwill is impaired on an annual basis. This assessment requires an estimation of the
recoverable amount of the cash-generating units to which the goodwill is allocated.
Share Based Payment Transactions
The Company has issued options where individual tranches have variable vesting dates due to the performance conditions
being linked to the achievement of incremental production targets. At each reporting period, an estimate is made of the
expected vesting dates for each of the tranches based on the expectation of when performance conditions will be met,
and where necessary, an adjustment to the share-based payment expense is recognized.
Fair Value of Financial Instruments Carried at Fair Value through Profit Loss
The fair value of financial instruments that are not traded in an active market is determined using valuation techniques.
The Company uses its judgment to select a variety of methods and make assumptions that are mainly based on market
conditions existing at the end of each reporting period. For details of the key assumptions used and the impact of changes
to these assumptions see Note 15 - Financial Assets at Fair Value Through Profit or Loss.
Government Grants
In April 2024, the Company was selected to receive a $103 million tax credit (the “48C tax credit”) under the Qualifying
Advanced Energy Project Allocation Program (the “48C program”), to support production of critical battery materials from
its Riverside facility in Chattanooga, Tennessee. The Company has applied judgment to determine whether there is
reasonable assurance that the conditions associated with the 48C tax credits will be completed and the grant will be
F-22
received. The Company has determined that at the reporting date there is no reasonable assurance that the conditions
associated with the 48C tax credit will be completed. As such, the grant is not recognized in the financial statements.
Other areas of critical accounting estimates and judgments include:
•
unused tax losses for which no deferred tax asset has been recognized (See Note 6 – Income Tax (Benefit)
Expense).
•
the impairment testing of goodwill (See Note 17 – Intangible Assets).
F-23
Note 2 Parent Entity Financial Information
The following information has been extracted from the books and records of the parent and has been prepared in
accordance with International Financial Reporting Standards.
As of December 31,
As of December 31,
(in U.S. Dollars)
2024
2023
Balance sheet
ASSETS
Current assets
Cash and cash equivalents
$
39,222,311
$
72,819,657
Trade and other receivables
92,533
62,513
Prepayments
64,749
12,992
39,379,593
72,895,162
Assets classified as held for sale
2,197,607
2,372,886
Total current assets
41,577,200
75,268,048
Non-current assets
Amounts due from related parties
132,012,140
121,976,670
Exploration and evaluation assets
—
—
Investment securities at fair value through profit or loss
—
16,429,244
Other assets
5,234
5,741
Total non-current assets
132,017,374
138,411,655
Total assets
$
173,594,574
$
213,679,703
LIABILITIES
Payables
$
275,118
$
322,940
Borrowings
30,360,575
28,554,210
Derivative financial instruments
5,368,624
866,278
Total current liabilities
36,004,317
29,743,428
Total liabilities
36,004,317
29,743,428
Net assets
137,590,257
183,936,275
EQUITY
Contributed equity
367,537,075
338,425,286
Reserves
2,844,337
25,017,175
Accumulated losses
(232,791,155 )
(179,506,186 )
Total equity
$
137,590,257
$
183,936,275
At December 31,
At December 31,
2024
2023
Statement of Profit or Loss and Other Comprehensive Income
Total loss and total comprehensive loss
$
(53,284,969 )
$
(47,135,365 )
F-24
Guarantees
NOVONIX Limited has not entered into any guarantees, in the current or previous reporting period, in relation to the debts
of its subsidiaries.
Contingent liabilities
At December 31, 2024, NOVONIX Limited did not have any contingent liabilities (December 31, 2023: Nil).
Contractual Commitments
At December 31, 2024, NOVONIX Limited did not have any contractual commitments (December 31, 2023: Nil).
Note 3 Revenue
Revenue
The Company derives revenue from the transfer of goods and provision of services in the following major product lines
and segments:
Year Ended December 31, 2024 (in U.S.$)
Graphite
Exploration
Battery
Technology
Battery
Materials
Total
Hardware sales
$
—
$
1,805,745
$
—
$
1,805,745
Consulting sales
—
4,048,679
—
4,048,679
Revenue from external customers
$
—
$
5,854,424
$
—
$
5,854,424
Timing of revenue recognition
At a point in time
$
—
1,805,745
$
—
$
1,805,745
Over time
—
4,048,679
—
4,048,679
$
—
$
5,854,424
$
—
$
5,854,424
Year Ended December 31, 2023 (in U.S.$)
Graphite
Exploration
Battery
Technology
Battery
Materials
Total
Hardware sales
$
—
$
2,999,533
$
—
$
2,999,533
Consulting sales
—
5,054,995
—
5,054,995
Revenue from external customers
$
—
$
8,054,528
$
—
$
8,054,528
Timing of revenue recognition
At a point in time
$
—
2,999,533
$
—
$
2,999,533
Over time
—
5,054,995
—
5,054,995
$
—
$
8,054,528
$
—
$
8,054,528
Six Months Ended December 31, 2022 (in U.S.$)
Graphite
Exploration
Battery
Technology
Battery
Materials
Total
Hardware sales
$
—
$
403,860
$
—
$
403,860
Consulting sales
—
2,298,596
—
2,298,596
Revenue from external customers
$
—
$
2,702,456
$
—
$
2,702,456
Timing of revenue recognition
At a point in time
$
—
$
403,680
$
—
$
403,680
Over time
—
2,298,596
—
2,298,596
$
—
$
2,702,276
$
—
$
2,702,276
F-25
Year Ended June 30, 2022 (in U.S.$)
Graphite
Exploration
Battery
Technology
Battery
Materials
Total
Hardware sales
$
—
$
2,549,308
$
—
$
2,549,308
Consulting sales
—
3,551,847
—
3,551,847
Revenue from external customers
$
—
$
6,101,155
$
—
$
6,101,155
Timing of revenue recognition
At a point in time
$
—
$
2,549,308
$
—
$
2,549,308
Over time
—
3,551,847
—
3,551,847
$
—
$
6,101,155
$
—
$
6,101,155
Revenues from external customers come from the sale of battery testing hardware equipment and the provision of battery
testing and development consulting services.
Assets and Liabilities Related to Contracts with Customers
The Company has recognized the following assets and liabilities related to contracts with customers:
At December 31,
At December 31,
(in U.S. Dollars)
2024
2023
Contract liabilities – Hardware sales
$
—
$
56,653
Contract liabilities – Services sales
126,056
228,568
Total other current liabilities
$
126,056
$
285,221
Revenue Recognized in Relation to Contract Liabilities
The following table shows how much of the revenue recognized in the current reporting period relates to brought-forward
contract liabilities.
Year Ended
December 31,
Six Months
Ended December
31,
Year Ended June
30,
(in U.S. Dollars)
2024
2023
2022
2022
Revenue recognized that was included
in the contract liability balance at the
beginning of the period
Hardware sales
$
285,221
$
71,985
$
2,715
$
232,800
The Company had no contract assets as of December 31, 2024, and December 31, 2023. See Note 10, Trade and other
receivables, for trade receivables.
The Company had no remaining performance obligations which have an original expected term of more than one year.
F-26
Note 4 Other Income, Net
Year Ended
December 31,
Six Months Ended
December 31,
Year Ended June
30,
(in U.S. dollars)
2024
2023
2022
2022
Interest income
$
1,370,929
$
1,611,128
$
19,416
$
8,314
Manufacturing and Energy Supply
Chains Grant
470,783
—
—
—
Other grant funding
1,827,882
1,161,992
260,536
982,767
Fair value gain on borrowings (refer
Note 21)
—
—
—
219,557
Research and development tax incentive
593,521
689,089
—
—
Other
10,064
147,691
35,154
385,482
Total
$
4,273,179
$
3,609,900
$
315,106
$
1,596,120
In November 2023, the Company was selected to receive a $100 million grant from the U.S. Department of Energy ("DOE")
office of Manufacturing and Energy Supply Chains ("MESC") to enhance domestic production of high-performance
synthetic graphite anode materials at its Riverside facility in Chattanooga, Tennessee. During the year ended December
31, 2024, the Company submitted reimbursement requests totaling $19,156,398 against the available grant funds. In
accordance with the schedule of expenditures, $470,783 relates to payroll and salary related expense claims which have
been accounted for as other income and $18,677,454 relates to capital expenditure claims which have been offset against
the related Construction in Progress additions in Property, Plant and Equipment (Note 14).
Note 5 Loss before Income Taxes
Loss before income taxes includes the following specific expenses:
Year Ended
December 31,
Six Months Ended
December 31,
Year Ended
June 30,
(in U.S. dollars)
2024
2023
2022
2022
Share-based payments expense^
Performance rights granted
$
5,591,417
$
5,094,244
$
4,857,249
$
11,307,550
Share rights granted
444,613
399,982
444,480
2,260,399
Options granted
(512,470 )
127,734
52,700
962,800
Total share-based compensation expense
$
5,523,560
$
5,621,960
$
5,354,429
$
14,530,749
^ Refer to note 28 for further information
regarding share-based payments.
Borrowing costs
Interest accrued on loan notes
$
1,776,230
$
980,852
$
—
$
—
Unwinding of fair value gain
25,510
18,553
25,945
43,979
Interest accrued on borrowings
1,765,258
1,864,697
917,476
1,468,569
Total borrowing costs
$
3,566,998
$
2,864,102
$
943,421
$
1,512,548
F-27
(in U.S. dollars)
Year Ended December 31,
Six Months Ended
December 31,
Year Ended June
30,
Administrative and other expenses
2024
2023
2022
2022
Insurance
$
4,125,899
$
6,750,308
$
4,019,027
$
3,842,129
Legal fees
2,735,055
1,730,766
895,138
1,426,081
Occupancy expenses
2,470,502
418,206
628,816
1,729,282
Consulting fees
4,298,968
3,672,513
751,047
1,080,601
Software implementation and systems-
related expenses
1,214,833
1,758,962
1,034,420
—
Other
5,074,035
4,533,142
4,153,199
4,513,616
Total administrative and other expenses
$
19,919,292
$
18,863,896
$
11,481,647
$
12,591,709
Note 6 Income Tax (Benefit) Expense
This note provides an analysis of the Company’s income tax expense (benefit), the amounts are recognized directly in
equity and how the tax expense (benefit) is affected by non-assessable and non-deductible items. It also explains
significant estimates made in relation to the Company’s tax position.
Year Ended
December 31,
Six Months Ended
December 31,
Year Ended June 30,
(in U.S. Dollars)
2024
2023
2022
2022
(a) Numerical reconciliation of income tax expense to prima facie
tax payable
Loss before income tax expense
$
(74,724,454 )
$
(46,448,210 )
$
(27,864,014 )
$
(51,860,307 )
Tax at the Australian tax rate of 30% (2023: 30%)
(22,417,336 )
(13,934,463 )
(8,359,204 )
(12,965,077 )
Tax effect of amounts which are not tax deductible (taxable) in
calculating taxable income:
Share-based payments
1,268,814
1,262,386
1,087,931
3,153,550
State tax expense
19,285
—
—
—
Government grants
49,333
507,207
104,079
49,458
Unrealized foreign exchange gain
—
—
(7,459 )
38,172
(Loss)/Gain on fair value of derivative instruments
2,760,350
6,582
—
—
Borrowing costs
—
—
7,524
13,107
Other non-deductible amounts
60,834
2,793
68,801
727,362
Other deferred basis adjustments
(2,169,023 )
—
—
3,099
Difference in overseas tax rate
3,367,164
2,232,607
670,144
(560,684 )
Adjustments for current tax of prior periods
(158,880 )
(102,522 )
(292,141 )
—
Adjustment to deferred tax assets and liabilities for tax losses and
temporary differences not recognized
17,317,146
9,825,461
6,720,325
9,541,013
Income tax (benefit) expense
$
97,687
$
(199,949 )
$
—
$
—
(b) Tax losses
Unused tax losses for which no deferred tax asset has been
recognized
$
150,819,578
$
115,482,188
$
82,326,319
$
85,249,412
Potential tax benefit
$
45,245,873
$
34,644,656
$
24,697,896
$
21,312,383
(c) Tax expense (income) recognized directly in equity
Aggregate current and deferred tax arising in the reporting period
and not recognized in net profit or loss or other comprehensive
income but directly debited or credited to equity:
Deferred tax: Share issue costs
$
—
$
—
$
—
$
—
F-28
Year Ended
December 31,
Six Months Ended
December 31,
Year Ended June 30,
(in U.S. dollars)
2024
2023
2022
2022
(d) Deferred tax assets
The balance comprises temporary differences attributable to:
Tax losses
$
37,950,397
$
34,644,656
$
24,697,896
$
21,312,353
Exploration and evaluation assets
192,271
365,919
522,068
545,211
Business capital costs
789,677
1,566,275
2,143,430
1,733,648
Other non-current assets
14,237,476
8,116,735
4,759,740
2,055,471
Right of use asset
141,193
92,858
79,151
58,650
Unrealized exchange loss on borrowings
—
259,804
433,514
213,791
Accrued expenses
66,059
98,303
307,811
468,644
Deferred revenue
648,024
—
—
—
Other
36,410
21,438
19,686
330,510
Total deferred tax assets
54,061,507
45,165,988
32,963,296
26,718,278
Set-off of deferred tax liabilities pursuant to set-off provisions
(3,719,657 )
(4,970,299 )
(2,913,574 )
(1,495,735 )
Deferred tax assets not recognized
(50,225,561 )
(39,994,325 )
(30,049,722 )
(25,222,543 )
Net deferred tax assets
$
116,289
$
201,364
$
—
$
—
(e) Deferred tax liabilities
The balance comprises temporary differences attributable to:
Other non-current assets
$
(3,059,287 )
$
(4,162,691 )
$
(2,031,711 )
$
(351,147 )
Prepayments
(161,500 )
(224,008 )
(215,967 )
(1,144,588 )
Foreign currency (loss)/gain
(498,870 )
(583,600 )
(665,896 )
—
Total deferred tax liabilities
(3,719,657 )
(4,970,299 )
(2,913,574 )
(1,495,735 )
Set-off of deferred tax liabilities pursuant to set-off provisions
3,719,657
4,970,299
2,913,574
1,495,735
Net deferred tax liabilities
$
—
$
—
$
—
$
—
Deferred tax assets are only recognized for deductible temporary differences and unused tax losses if it is probable that
future taxable amounts will be available to utilize those temporary differences and losses. An amount of $116,289 has
been recognized in relation to the deferred tax assets of NOVONIX Corp, as it has been determined that future taxable
amounts will be available to utilize temporary differences.
Unused losses which have not been recognized as an asset, will only be obtained if:
•
the Company derives future assessable income of a nature and of an amount sufficient to enable the losses to be
realized,
•
the Company continues to comply with the conditions for deductibility imposed by the law,
•
no changes in tax legislation adversely affect the Company in realizing the losses.
As of December 31, 2024, the Company has no tax-related contingent liabilities for uncertain tax treatment.
The Company is not under examination in any of its tax-filing jurisdictions.
The net operating losses in the United States, Canada, and Australia of $150,819,578 are principally indefinite-lived;
however, $15,224,909 is subject to expiration with the earliest expiration beginning in 2042.
Offsetting within Tax Consolidated Entity
NOVONIX Limited and its wholly-owned Australian subsidiaries have applied the tax consolidation legislation which means
that these entities are taxed as a single entity. As a consequence, the deferred tax assets and deferred tax liabilities of
these entities have been offset in the consolidated financial statements.
F-29
Note 7 Key Management Personnel Compensation
The totals of remuneration paid to key management personnel (KMP) of the Company are as follows:
Year Ended December 31,
Six Months Ended
December 31,
Year Ended June 30,
(in U.S. dollars)
2024
2023
2022
2022
Short-term employee benefits
$
3,229,618
$
2,514,689
$
1,457,899
$
3,202,116
Post-employment benefits
56,853
45,092
20,997
144,594
Termination benefits
—
—
—
—
Share-based compensation
3,484,966
2,228,316
4,006,327
12,118,927
Total KMP compensation
$
6,771,437
$
4,788,097
$
5,485,223
$
15,465,637
Short-term employee benefits
These amounts include fees and benefits paid to the non-executive Chairman as well as all salary, paid leave benefits and
fringe benefits paid to Executive Directors.
Post-employment benefits
These amounts are the superannuation contributions made during the year.
Share-based compensation
These amounts represent the expense related to the participation of KMP in equity-settled benefit schemes as measured
by the fair value of the options and performance rights on grant date.
Note 8 Auditor’s Remuneration
The following fees were paid or payable for services provided by PricewaterhouseCoopers Australia (PwC) as the auditor
of the Company:
Year End December 31,
Six Months Ended
December 31,
Year Ended June
30,
(in U.S. dollars)
2024
2023
2022
2022
Audit fees
$
423,235
$
412,793
$
471,568
$
266,000
Audit-related fees
10,391
—
—
—
Other fees in relation to prior year's audit
42,222
8,382
—
—
Other assurance services
13,811
13,291
—
—
All other fees
—
—
—
276,498
Total
$
489,659
$
434,466
$
471,568
$
542,498
1 Audit-related fees related to services performed in respect of the US IPO and US filing processes during the six months
ended December 31, 2022, and year ended June 30, 2022.
F-30
Note 9 Earnings per Share
Years Ended December 31,
Six Months
Ended December
31,
Years Ended June
30,
(in U.S. dollars)
2024
2023
2022
2022
Basic net loss per share
Total basic net loss per share attributable to the
ordinary equity holders of the Company
$
(0.15 ) $
(0.09 ) $
(0.06 ) $
(0.11 )
Diluted net loss per share
Total diluted net loss per share attributable to
the ordinary equity holders of the Company
$
(0.15 ) $
(0.09 ) $
(0.06 ) $
(0.11 )
Reconciliations of net loss used in calculating net loss per share
Years Ended December 31,
Six Months Ended
December 31,
Years Ended June 30,
(in U.S. dollars)
2024
2023
2022
2022
Basic net loss per share
Net loss attributable to the ordinary equity holders of the
Company used in calculating basic net loss per share
$
(74,822,141 )
$
(46,248,261 )
$
(27,864,014 )
$
(51,860,307 )
Diluted net loss per share
Net loss attributable to the ordinary equity holders of the
Company used in calculating diluted net loss per share
$
(74,822,141 )
$
(46,248,261 )
$
(27,864,014 )
$
(51,860,307 )
Weighted average number of shares used as the denominator
Year Ended December 31,
Six Months Ended
December 31,
Year Ended June 30,
2024
2023
2022
2022
Weighted average number of ordinary shares used as the
denominator in calculating basic and diluted net loss per share
496,862,010
487,474,460
486,616,365
464,437,628
Information concerning the classification of securities
Options and Rights
Options, rights and convertible notes (refer to Note 22 - Unsecured convertible loan notes and derivative financial
instruments) on issue during the year ended December 31, 2024, and 2023, six months ended December 31, 2022, and
year ended June 30, 2022 are not included in the calculation of diluted earnings per share because they are antidilutive.
These options, rights and convertible notes could potentially dilute basic earnings per share in the future. Details relating
to options and rights are set out in Note 28 - Share-based Payments.
F-31
Note 10 Trade and Other Receivables
December 31,
December 31,
(in U.S. dollars)
2024
2023
Trade debtors
$
1,627,393
$
3,034,897
MESC grant funds receivable
6,323,492
—
Loss allowance
(252,429 )
—
Other receivables
459,717
529,436
Total trade and other receivables
$
8,158,173
$
3,564,333
At December 31, 2024, the Company had $6.3 million in claims receivable against the $100 million MESC grant from the
DOE which have been subsequently fully collected prior to the issuance of these consolidated financial statements.
Credit Risk
The Company has no significant concentration of credit risk with respect to any counterparties or on a geographical basis.
Amounts are considered as “past due” when the debt has not been settled, in line with the terms and conditions agreed
between the Company and the customer to the transaction.
The Company assesses impairment of trade and other receivables using the simplified approach of the expected credit
loss (ECL) model under IFRS 9, Financial Instruments.
The balance of receivables that remain within initial trade terms are considered to be of high credit quality.
Note 11 Prepayments
December 31,
December 31,
(in U.S. dollars)
2024
2023
Prepayments of inventory components
$
393,788
$
753,973
Prepaid general and administrative expenses
1,307,000
1,105,824
Total
$
1,700,788
$
1,859,797
Prepaid general and administrative expenses consisted primarily of prepaid property insurance premiums for our Riverside
facility of $617,947 and $745,693 at December 31, 2024, and December 31, 2023, respectively.
Note 12 Escrow Reserves
December 31,
December 31,
2024
2023
(in U.S. dollars)
Escrow reserves
$
1,452,187
$
794,500
The reserves are funds deposited with the Lender for capital expenditures, insurance, tax, and production as additional
collateral for the loan obtained in relation to the purchase of the new facility in Chattanooga, Tennessee. Reserves are
released as the conditions of the loan are satisfied. All conditions are expected to be satisfied within 12 months from the
balance sheet date.
During the year and in accordance with all applicable loan conditions, the Company received the remaining disbursement
of the capital expenditure and earnout reserves as the scheduled capital expenditure work was completed, installed, and
being utilized by the Company in the ordinary course of business.
F-32
Note 13 Inventory
December 31,
December 31,
(in U.S. dollars)
2024
2023
Raw materials
$
10,083
$
507,326
Components and assemblies
1,240,568
1,403,873
Finished goods – at cost
133,253
89,609
Total Inventory
$
1,383,904
$
2,000,808
Amounts Recognized in Profit or Loss
Inventories recognized as an expense during the year ended December 31, 2024, amounted to $0.7 million. Inventories
recognized as an expense during the year ended December 31, 2023, amounted to $1.1 million. These were included in
product manufacturing and operating costs (exclusive of depreciation presented separately) in the consolidated
statements of profit or loss and other comprehensive (loss) income.
F-33
Note 14 Property, Plant, and Equipment
(in U.S. dollars)
Land
Buildings
Leasehold
improvements
Machinery and
equipment
Construction
work in
progress
Total
At January 1, 2023
Cost
$
2,314,473
$
47,602,298
$
1,148,447
$
24,816,965
$
56,715,250
$
132,597,433
Accumulated depreciation
—
(2,763,232 )
(569,337 )
(3,948,116 )
—
(7,280,685 )
Net book amount
$
2,314,473
$
44,839,066
$
579,110
$
20,868,849
$
56,715,250
$
125,316,748
Opening net book amount at January 1, 2023
$
2,314,473
$
44,839,066
$
579,110
$
20,868,849
$
56,715,250
$
125,316,748
Additions
—
113,215
193,251
877,938
17,341,364
18,525,768
Disposals
—
—
—
(193,160 )
—
(193,160 )
Transfers
—
—
88,882
1,939,982
(2,028,864 )
—
Depreciation charge
—
(1,304,113 )
(436,474 )
(2,385,633 )
—
(4,126,220 )
Exchange differences
16,353
138,061
—
96,025
19,872
270,311
Closing net book amount at December 31, 2023
$
2,330,826
$
43,786,229
$
424,769
$
21,204,001
$
72,047,622
$
139,793,447
Additions
—
—
—
—
33,290,758
33,290,758
Manufacturing and Energy Supply Chains Grant
(18,677,454 )
(18,677,454 )
Disposals
—
—
—
(55,033 )
(151,880 )
(206,913 )
Transfers
—
—
—
530,013
(530,013 )
—
Depreciation charge
—
(1,284,120 )
(196,815 )
(2,454,098 )
—
(3,935,033 )
Exchange differences
(58,529 )
(487,960 )
—
(391,524 )
(16,448 )
(954,461 )
Closing net book amount at December 31, 2024
$
2,272,297
$
42,014,149
$
227,954
$
18,833,359
$
85,962,585
$
149,310,343
At December 31, 2024
Cost
$
2,272,297
$
47,322,495
$
1,430,580
$
27,370,268
$
85,962,585
164,358,225
Accumulated depreciation
—
(5,308,346 )
(1,202,626 )
(8,536,910 )
—
(15,047,882 )
Net book amount
$
2,272,297
$
42,014,149
$
227,954
$
18,833,358
$
85,962,585
$
149,310,343
F-34
Note 15 Financial Assets at Fair Value Through Profit or Loss
Classification of Financial Assets at Fair Value through Profit or Loss
The Company classifies equity investments for which it has not elected to recognize fair value gains and losses through
OCI as financial assets at fair value through profit or loss (FVPL).
Financial assets measured at FVPL include the following:
December 31,
December 31,
(in U.S. dollars)
2024
2023
US unlisted equity securities
$
—
$
16,666,665
On January 31, 2022, NOVONIX Limited entered into a Securities Purchase Agreement with KORE Power, Inc. (“KORE
Power”) a U.S. based developer of battery cell technology for the clean energy industry, under which NOVONIX Limited
acquired 3,333,333 shares of KORE Power Common Stock at an issue price of $7.50 per share, representing approximately
5% of the common equity of KORE Power. The consideration for the shares in KORE Power totaled $25 million (AUD
$35,131,550) and was settled through a combination of 50% cash and 50% through the issue of 1,974,723 ordinary shares
in NOVONIX Limited.
The equity investment was revalued in 2022 to $5.00 per share, which was the share price for a significant capital raise
undertaken by KORE Power in November 2022. At December 31, 2024, the investment in KORE Power represents
approximately 3.7% of the common equity of KORE Power.
Amounts Recognized in Profit or Loss
During the year ended December 31, 2024, the Company recognized a loss in the consolidated statement of profit or loss
and other comprehensive income related to equity investments held at FVPL as a result of the fair value measurement
described in the Valuation Techniques using Significant Unobservable Inputs – Level 3 section below.
Fair Value Hierarchy
U.S. unlisted equity securities are classified as a Level 3 fair value in the fair value hierarchy as one or more of the significant
inputs is not based on observable market data.
The following table presents the changes in level 3 instruments during the year ended December 31, 2024 (in U.S. dollars):
December 31,
December 31,
2024
2023
Opening balance
$
16,666,665 $
16,490,271
Changes during the period:
Loss on equity investment securities at fair value through profit or loss
(15,308,187 )
—
Exchange difference
(1,358,478 )
176,394
Balance at December 31, 2024
$
— $
16,666,665
There were no transfers between levels 1, 2 or 3 for recurring fair value measurements during the year. The Company’s
policy is to recognize transfers into and out of fair value hierarchy levels as at the end of the reporting period.
F-35
Valuation Techniques using Significant Unobservable Inputs – Level 3
This category includes assets where the valuation incorporates significant inputs that are not based on observable market
data (unobservable inputs). Unobservable inputs are those not readily available in an active market due to market
illiquidity or complexity of the product. These inputs are generally derived and extrapolated from observable inputs to
match the risk profile of the financial instrument, and are calibrated against current market assumptions, historic
transactions and economic models, where available.
In 2022, the primary approach used in the determination of the fair value of the investment in KORE Power was with
reference to the pricing of significant external capital raising activity undertaken by KORE Power. The most recent
significant external capital raising undertaken by KORE Power was in November 2022 and no further capital raising has
occurred in the year ended December 31, 2023.
In December 2024, the Company considered available information produced by management of KORE Power as well as
factors impacting KORE Power’s operations and concluded that the fair value of the investment had been reduced to nil.
This was further confirmed by KORE Power’s decision to cancel its plans to develop its KOREPlex battery manufacturing
facility in Buckeye, Arizona and the resignation of its CEO, announced on January 31, 2025.
Note 16 Exploration and Evaluation Assets
December 31,
December 31,
(in U.S. dollars)
2024
2023
Exploration and evaluation assets – at cost
$
—
$
—
The capitalized exploration and evaluation assets carried forward above have been
determined as follows:
Balance at the beginning of the period
$
—
$
2,212,013
Expenditure incurred during the period
—
16,691
Exchange differences
—
(8,752 )
Assets classified as held for sale
—
(2,219,952 )
Balance at the end of the period
$
—
$
—
December 31,
December 31,
(in U.S. dollars)
2024
2023
Assets classified as held for sale
$
2,044,673
$
2,219,952
Balance at the beginning of the period
$
2,219,952
$
—
Expenditure incurred during the period
36,604
—
Exchange differences
(211,883 )
—
Assets classified as held for sale
—
2,219,952
Balance at the end of the period
$
2,044,673
$
2,219,952
The Company holds tenement rights to a high-grade natural flake graphite deposit located in Northern Queensland,
Australia. In October 2023, the Company decided to pursue potential opportunities to realize the value of these assets
through a strategic transaction. All tenement rights remain current, exploration activity is continuing to the extent
required under the tenement rights, a resource, principally high-grade graphite, has been identified, and the assets are
available for sale in their current conditions. In April 2024, the Company signed a Share Sale and Purchase Agreement
under which its wholly owned subsidiary, MD South Tenements Pty Ltd, which holds the Mount Dromedary natural
graphite exploration interests, will be divested to Axon Graphite Limited (“Axon Graphite”), a wholly owned subsidiary of
Lithium Energy Limited (“Lithium Energy”). As a consideration for the transaction, the Company will receive shares in Axon
F-36
Graphite, subject to the completion of the parties’ due diligence enquiries, completion of the initial public offering (“IPO”)
of Axon Graphite, and receipt of approval and admission of Axon Graphite to the Australian Securities Exchange (“ASX”).
On September 9, 2024, the Company and Lithium Energy provided an update on the spin-out and IPO and ASX listing of
Axon Graphite, which encompasses the merger of the high-grade natural graphite assets of Lithium Energy (known as the
Burke and Corella Deposits) and the Company (known as the Mt Dromedary Deposit) to form a distinct vertically integrated
Battery Anode Material business in Queensland, Australia. The timing of this strategic transaction is out of management's
control.
Note 17 Intangible Assets
December 31,
December 31,
(in U.S. dollars)
2024
2023
Goodwill
$
11,975,024
$
11,975,024
Technology
—
15,285
Total
$
11,975,024
$
11,990,309
(in U.S. dollars)
Goodwill
Technology
Software
Total
Balance at December 31, 2022
$
11,975,024
$
198,686
$
—
$
12,173,710
Additions
—
—
—
—
Amortization
—
(183,401 )
—
(183,401 )
Balance at December 31, 2023
$
11,975,024
$
15,285
$
-
$
11,990,309
Additions
—
—
—
—
Amortization
—
(15,285 )
—
(15,285 )
Balance at December 31, 2024
$
11,975,024
$
—
$
—
$
11,975,024
Intangible assets, other than goodwill, have finite useful lives. The current amortization charges for intangible assets are
included under depreciation and amortization expense in the statement of profit or loss and other comprehensive (loss)
income. Goodwill has an indefinite useful life.
The Company performs its annual impairment testing on June 30 each year. For the purposes of impairment testing, the
cash generating unit has been defined as the business to which the goodwill relates where individual cash flows can be
ascertained for the purposes of discounting future cash flows.
For the 2024 annual impairment test, the recoverable amount of the Cash Generation Unit ("CGU") was determined based
on a ‘Fair Value Less Costs to Sell’ (“FVLCS”) calculation, based on the current Riverside Project Plan which assumes that
commercial offtake will commence in 2025. The calculation of FVLCS involves the use of significant estimates and
assumptions which include volume, growth rates and gross margins used to calculate projected future cash flows. The
valuation is considered to be level 3 in the fair value hierarchy due to unobservable inputs used in the valuation. The
F-37
present value of the expected cash flows is determined by applying an appropriate discount rate, which reflects the risks
specific to the CGU.
The recoverable amount of the NOVONIX Anode Materials CGU (“NAM CGU”) was deemed to be in excess of the carrying
value of the NAM CGU, and therefore no impairment was recognized as of June 30, 2024.
The calculations use cashflow projections based on financial budgets approved by management and the Board covering a
10-year period which management has determined is appropriate to reflect existing binding customer contracts and the
ramp up in production to get to full capacity by 2028, at which point the operations of the business will normalize.
The key assumptions used in the FVLCS calculations are: (i) post-tax discount rate of 11.5%, (ii) revenue sales prices initially
range from USD $7-10/Kg in line with the Company's previously disclosed estimates for production economics (which
reflect the contracts signed with various customers to supply up to 157,000 tonnes of anode material over the period
2026 to 2034), with inflationary and other expected pricing increases assumed thereafter, (iii) sales volume growth rates
are based on current and expected customer demand, reflecting the ramp up of production equipment commissioning
and product being available for sale with no incremental production volume growth expected after full production
capacity of 20,000 tpa is reached, (iv) operating costs of $6-8/Kg, based on the current Riverside Project Plan and adjusted
for inflationary increases; and (v) terminal value used to extrapolate cash flows beyond the forecast period of 2.5% based
on future expectations for growth in the context of inflation expectations in the country in which the NAM CGU operates.
Management recognizes that there are various reasons that estimates used in these assumptions may vary. Management
does not believe that there are reasonably possible changes in any one key assumption that would result in the carrying
amount of the NAM CGU to exceed its recoverable amount.
The directors have assessed impairment triggers since the annual impairment test was performed at June 30, 2024, and
have not identified any indicators of impairment at December 31, 2024.
For the 2023 annual impairment test, the recoverable amount of the NAM CGU was determined based on an FVLCS basis.
To determine the recoverable amount, the FVLCS was calculated with reference to the allocated portion of the Company’s
enterprise value (EV). The EV model calculation considered the following:
• The market capitalization of the Company on the (ASX:NVX) as of June 30, 2023;
• The volatility of the share price of the Company as of June 30, 2023; and
• The issuance of the convertible notes in June 2023 given that the convertible loan note issuance is directly
associated with the planned future expansion of the NAM CGU.
The recoverable amount of the NOVONIX Anode Materials CGU is deemed to be in excess of the carrying value of the CGU,
and therefore no impairment has been recognized at December 31, 2024.
F-38
Note 18 Trade and other Payables
December 31,
December 31,
(in U.S. dollars)
2024
2023
Unsecured liabilities:
Trade payables
$
998,258
$
1,342,369
Sundry payables and accrued expenses
7,171,820
4,102,800
Employee entitlements
354,063
314,892
Total
$
8,524,141
$
5,760,061
Note 19 Contract Liabilities
December 31,
December 31,
(in U.S. dollars)
2024
2023
Current - contract liabilities
$
126,056
$
285,221
Non-current - other liabilities
3,000,000
3,000,000
Total
$
3,126,056
$
3,285,221
During the 2021 financial year, the Company received grant funds of $3,000,000 from the Department of Economic and
Community Development in the State of Tennessee, USA. The grant funds are conditional upon the Company creating,
filling, and maintaining 290 jobs in the State of Tennessee.
The grant becomes fully earned once 90% of the performance target is achieved by March 2026, and is repayable in full if
a minimum of 50% of the performance target is not achieved by March 2026. The grant is proportionately repayable
between 50% and 90% of the performance target being achieved.
Accordingly, as at December 31, 2024, and 2023, the full amount of the grant has been deferred and classified as a contract
liability and will be either released to income (in full or proportionately) or repayable (in full or proportionately) depending
on the performance target achieved by March 2026. Income has not been recognized at December 31, 2024, as the
Company can not reliably measure compliance of the conditions attaching to the grant with “reasonable assurance” to
determine the grant has become receivable.
Note 20 Leases
This note provides information for leases where the Company is the lessee.
Amounts Recognized in the Balance Sheet
December 31,
December 31,
(in U.S. dollars)
2024
2023
Right-of-use assets - Buildings
$
6,356,771
$
4,484,521
Lease liabilities
Current
$
522,297
$
345,933
Non-current
6,488,119
4,479,627
Total
$
7,010,416
$
4,825,560
F-39
In March 2024, the Company extended its lease term for a period of five years, which resulted in a revaluation of the right-
of-use assets during the 2024 fiscal year. The movement of $1,935,600 during the year ended December 31, 2024, relates
to the allocation of revised lease payments due to the extended lease term. Refer to Note 31, Financial risk management,
for a maturity analysis of lease liabilities.
Amounts recognized in the statement of profit or loss and other comprehensive (loss) income
Year Ended
December 31,
Six Months
Ended December
31,
Year Ended June
30,
(in U.S. dollars)
2024
2023
2022
2022
Depreciation of right-of-use assets - Buildings
$
618,651
$
430,514
$
215,257
$
430,514
Interest expense
$
276,728
$
212,354
$
111,593
$
233,229
The total cash outflow for leases in the years ended December 31, 2024 and 2023, are $573,600 and $565,732,
respectively. The Company had no short-term leases at December 31, 2024, and 2023.
Note 21 Borrowings
December 31, 2024
Reclassified December 31, 2023
(in U.S. dollars)
Current
Non-Current
Total
Current
Non-Current
Total
Secured
Bank loans (i)
$
1,033,578
$
31,650,244
$
32,683,822
$
1,167,301
$
33,044,170
$
34,211,471
Total secured borrowings
$
1,033,578
$
31,650,244
$
32,683,822
$
1,167,301
$
33,044,170
$
34,211,471
Unsecured
Convertible notes
$
30,360,575
$
—
$
30,360,575
$
28,554,210
$
—
$
28,554,210
Other loans (ii)
274,657
1,125,027
1,399,684
174,388
1,622,121
1,796,509
Total unsecured borrowings
30,635,232
1,125,027
31,760,259
28,728,598
1,622,121
30,350,719
Total borrowings
$
31,668,810
$
32,775,271
$
64,444,081
$
29,895,899
$
34,666,291
$
64,562,190
Secured Liabilities and Assets Pledged as Security
On December 1, 2017, the Company purchased freehold land and buildings at 177 Bluewater Road, Bedford Canada for
CAD$1,225,195 and from where the consulting services business now operates. The Company entered into a loan facility
of CAD $2,680,000 to purchase the land and buildings secured by a first mortgage over the property. At December 31,
2024, the facility had been fully drawn down. The total liability at December 31, 2024, is $1,601,796 (CAD $2,304,712).
The facility is repayable in monthly installments ending September 15, 2044. The carrying amount of this asset at
December 31, 2024 and December 31, 2023 was $2,145,772 and $2,842,406, respectively.
On May 28, 2021, the Company purchased commercial land and buildings in Nova Scotia, Canada for CAD$3,550,000 from
which the hardware and cathode businesses operates. The Company entered into a loan facility to purchase the land and
buildings. The total available under the facility is CAD $4,985,000 and it has been drawn down to CAD$4,923,000 as at
December 31, 2023. The total liability at December 31, 2024 is $3,177,058 (CAD $4,571,428). The full facility is repayable
in monthly installments, commencing December 2022 and ending in January 2048. The Company’s freehold land and
buildings at 110 Simmonds Drive, Dartmouth, Canada are pledged as collateral against the bank loan. The carrying amount
of this asset at December 31, 2024, and December 31, 2023 was $3,284,556 and $3,329,187, respectively.
On January 24, 2022, the Company entered into a loan facility to purchase equipment. The total amount available under
the facility is CAD $500,00 and has been fully drawn down at December 31, 2024. The total liability at December 31, 2024
was $213,785 (CAD $307,600). The facility is repayable in monthly installments, commencing in December 2023 and
ending in January 2034. Equipment being purchased with the loan funds are pledged as collateral against the loan.
F-40
On July 28, 2021, the Company purchased commercial land and buildings in Chattanooga, USA for $42,600,000 to expand
the NAM business. The Company entered into a loan facility with PNC Real Estate for $30,100,000 to purchase the land
and buildings. The loan has been fully drawn down at December 31, 2024. The total liability at December 31, 2024, is
$27,691,183. The facility is repayable in monthly installments, which commenced in September 2021 and ending in August
2031. The land and buildings at 1029 West 19th Street, Chattanooga, USA have been pledged as security for the loan, with
a carrying amount of $38,174,386 and $39,202,599 at December 31, 2023 and December 31, 2022, respectively. Lastly,
the Company has pledged additional collateral with the Lender for capital expenditures, insurance, tax, and production,
Note 12.
Loan Covenants
This loan imposes certain covenants to ensure that the following financial ratios are met:
•
net assets of $30.1 million to be maintained (exclusive of the land and buildings secured by this loan and
minimum liquidity of $3.1 million)
•
a debt service coverage ratio of 1.2 to 1 is to be maintained.
Compliance with Loan Covenants
The Company has complied with the financial covenants of its borrowing facilities during the years ended December 31,
2024 and 2023.
Other Loans
ACOA Loans
In December 2017, the Company entered into a contribution agreement with Atlantic Canada Opportunities Agency
("ACOA"), for CAD$500,000. At December 31, 2024, CAD$500,000 of the facility has been drawn down. The funding was
to assist with expanding the market to reach new customers through marketing and product improvements. The facility
is repayable in monthly installments which commenced in September 2019 and ending in May 2027.
In October 2018, the Company entered into another contribution agreement with ACOA, for CAD$500,000. At December
31, 2024, CAD$500,000 of the facility has been drawn down. The funding was to assist in establishing a battery cell
manufacturing facility. The facility is repayable in monthly installments which commenced in January 2021 and ending in
December 2026.
In July 2021, the Company entered into a further contribution agreement with ACOA, for CAD$250,000. At December 31,
2024, the facility has been fully drawn down. The funding was to assist in expanding the BTS operations. The facility is
repayable in monthly installments commencing in January 2024 and ending in December 2026.
In December 2021, the Company entered into a further contribution agreement with ACOA for CAD$1,000,000. At
December 31, 2024, it has been fully drawn down. The funding will be used to will assist with purchasing equipment for
the cathode pilot line and expansion of cell making capabilities. The facility is repayable in monthly installments
commencing in January 2025 and ending in December 2036.
In March 2023, the Company entered into a further contribution agreement with ACOA for CAD$886,000. At December
31, 2024, the facility has been fully drawn down. The funding will be used to will assist with purchasing equipment for the
cathode pilot line and expansion of cell making capabilities. The facility is repayable in monthly installments commencing
in January 2025 and ending in December 2036.
F-41
Fair Value
For all borrowings, other than the ACOA loan noted at (ii) above, the fair values are not materially different to their carrying
amounts, since the interest payable on those borrowings is either close to current market rates or the borrowings are of
a short-term nature.
The ACOA loans are interest free. The initial fair value of the ACOA loans were determined using a market interest rate for
equivalent borrowings at the issue date. This resulted in a day one gain of $100,152 in FY2018 (December 2017 loan), a
day one gain of $114,106 in FY2019 (October 2018 loan) and a day one gain of $219,557 in the year ended June 30, 2022.
Note 22 Unsecured Convertible Loan notes and Derivative Financial Instruments
On June 21, 2023, the Company issued 45,221,586 convertible loan notes, with a face value of AUD$1.00 per note, a
coupon rate of 4%, and a maturity date of June 7, 2028, for proceeds of $30 million to LGES. The notes have a conversion
price of AUD$1.60 per ordinary share. The convertible notes will mandatorily convert into ordinary shares upon
acceptance of the first purchase order under the purchase agreement with LGES, although LGES may elect to convert
some or all the notes prior to such time. No interest would be payable on the notes in these circumstances.
The convertible notes may be redeemed or converted (at the election of LGES) on the maturity date, in which case interest
is payable in cash (in respect of a redemption) or "in-kind" (in the case of conversion). The conversion option with LGES is
accounted for as a derivative instrument.
As the Company does not have the right to defer settlement of the liability, adoption of the amendments to IAS 1 resulted
in the Company updating its accounting policy for the classification of convertible notes as indicated in Note 1 - Summary
of Material Accounting Policy Information. This new policy is applied retrospectively and resulted in a change in the
classification of convertible notes and associated derivative financial instruments from non-current to current. The effects
of the adoption of IAS 1 in the balance sheet as of December 31, 2023, as previously reported, are detailed in the table
below:
(in U.S. dollars)
As presented
Reclassified
December 31,
Reclassification
December 31,
2023
2023
Current liabilities
Borrowings
1,341,689
28,554,210
29,895,899
Derivative Financial Instruments
—
866,278
866,278
Total current liabilities
$
1,341,689
$
29,420,488 $
30,762,177
Non-current liabilities
Borrowings
63,220,501
(28,554,210 )
34,666,291
Derivative Financial Instruments
866,278
(866,278 )
—
Total non-current liabilities
$
64,086,779
$
(29,420,488 ) $
34,666,291
The effect of the adoption of the amendments to IAS 1 have no impact on the consolidated statement of profit and loss
and other income, or net assets of the Company as previously reported.
F-42
The convertible notes are presented in the consolidated balance sheet as follows:
Borrowings (current liabilities)
(in U.S. dollars)
December 31, December 31,
2024
2023
Opening balance
$
28,554,210
—
Initial recognition
—
27,640,052
Costs of issue of convertible notes
—
(43,614 )
Interest expense*
1,806,365
957,772
Balance at December 31, 2024
$
30,360,575 $
28,554,210
* Interest expense, for the year ended December 31, 2024, is calculated by applying the effective interest rate of 6.564%
to the liability component.
Derivative Financial Instruments (current liabilities)
(in U.S. dollars)
December 31,
December 31,
2024
2023
Opening balance
$
866,278
—
Initial Recognition
—
2,359,948
Costs of issue of convertible notes
—
(3,724 )
Fair value loss (gain)
4,536,546
(1,525,320 )
Effect of foreign currency movements
(34,200 )
35,374
Balance at December 31, 2024
$
5,368,624 $
866,278
The fair value of the conversion option (derivative financial liability) was determined using Monte Carlo Simulation
methodology. The derivative financial liability is carried at fair value at each reporting date, with gains or losses being
recognized in the consolidated statement of profit or loss and other comprehensive income. The remainder of the
proceeds were allocated to borrowings with the liability recognized at amortized cost until extinguished on conversion or
maturity of the notes. Interest is applied using the effective interest rate.
Fair Value Hierarchy
The derivative financial liability is classified as a Level 3 fair value in the fair value hierarchy as one or more of the significant
inputs is not based on observable market data.
The valuation model is highly sensitive to the probability weights applied to the timing of the placement of the purchase
order, which is a significant unobservable input. In the event the purchase order is placed before maturity date of the
notes, the interest rate would become zero-coupon and, the fair value of the derivative would decrease by $0.9 million.
Note 23 Contributed Equity
Share capital
December 31,
December 31,
December 31,
December 31,
2024
2023
2024
2023
Number of
shares
Number of
shares
Amount
(USD)
Amount
(USD)
Ordinary shares
Fully paid
567,941,993
488,733,461
$
367,537,075
$
338,425,286
F-43
Ordinary Share Capital
Date
Details
Note
Number of
Shares
Issue
Price
(AUD)
Amount
(USD)
January 1, 2023
Balance
486,774,622
$
—
$ 338,108,198
March 15, 2023
Exercise of options
(e)
33,333
$
0.50
11,080
Exercise of performance rights
(c)
8,309
$
—
—
March 23, 2023
Exercise of options
(e)
66,666
$
0.90
40,273
April 12, 2023
Exercise of performance rights
(c)
1,910
$
—
—
May 1, 2023
Exercise of performance rights
(c)
23,356
$
—
—
June 29, 2023
Exercise of performance rights
(c)
39,515
$
—
—
July 21, 2023
Exercise of performance rights
(c)
314,276
$
—
—
August 1, 2023
Exercise of performance rights
(c)
6,002
$
—
—
August 21, 2023
Exercise of performance rights
(c)
4,312
$
—
—
August 29, 2023
Exercise of options
(e)
500,000
$
0.70
225,729
Exercise of share rights
(f)
419,719
$
—
—
September 1, 2023
Exercise of performance rights
(c)
250,000
$
—
—
October 20, 2023
Exercise of performance rights
(c)
18,174
$
—
—
October 24, 2023
Exercise of options
(e)
150,000
$
0.55
52,439
November 21, 2023
Exercise of performance rights
(c)
7,526
$
—
—
November 28, 2023
Exercise of performance rights
(c)
2,178
$
—
—
December 8, 2023
Exercise of performance rights
(c)
21,563
$
—
—
December 14, 2023
Exercise of performance rights
(c)
92,000
$
—
—
Share issue costs
(12,433 )
December 31, 2023
Balance
488,733,461
$ 338,425,286
January 19, 2024
Exercise of performance rights
(c)
125,200
$
—
—
February 15, 2024
Exercise of performance rights
(c)
7,130
$
—
—
March 14, 2024
Exercise of performance rights
(c)
3,841
$
—
—
April 18, 2024
Exercise of options
(e)
33,334
$
0.50
10,727
April 19, 2024
Exercise of performance rights
(c)
9,041
$
—
—
May 2, 2024
Exercise of performance rights
(c)
35,490
$
—
—
June 4, 2024
Exercise of performance rights
(c)
8,987
$
—
—
June 13, 2024
Exercise of performance rights
(c)
32,042
$
—
—
June 28, 2024
Exercise of performance rights
(c)
15,409
$
—
—
July 12, 2024
Exercise of performance rights
(c)
297,885
$
—
—
July 16, 2024
Exercise of options
(e)
3,415,759
$
—
1,605,677
July 29, 2024
Exercise of performance rights
(c)
16,684
$
—
—
September 2, 2024
Exercise of performance rights
(c)
250,000
$
—
—
September 2, 2024
Exercise of share rights
(f)
65,405
$
—
—
September 4, 2024
Exercise of performance rights
(c)
618,129
$
—
—
September 19, 2024
Exercise of performance rights
(c)
46,005
$
—
—
September 24, 2024
Exercise of performance rights
(c)
33,193
$
—
—
October 2, 2024
Exercise of performance rights
(c)
2,479
$
—
—
November 1, 2024
Exercise of performance rights
(c)
7,321
$
—
—
November 12, 2024
Exercise of performance rights
(c)
7,522
$
—
—
December 2, 2024
Placement shares
74,064,647
$
0.60
28,807,889
December 12, 2024
Exercise of performance rights
(c)
113,029
$
—
—
Share issue costs
—
(1,312,504 )
December 31, 2024
Balance
567,941,993
367,537,075
F-44
Exercise of Performance Rights
During the year ended December 31, 2024, 110,686 ordinary shares were issued to non-KMP employees, and 1,518,701
were issued to KMP on the exercise of vested performance rights (Chris Burns 759,931; Nick Liveris 359,422; Rashda Buttar
295,479; Darcy MacDougald 103,869).
During the year ended December 31, 2023, 699,961 ordinary shares were issued to non-KMP employees, and 89,160 were
issued to KMP Rashda Buttar, on the exercise of vested performance rights.
Exercise of Options
On July 16, 2024, 12,000,000 options were exercised at AUD $0.50 per share using the cashless exercise mechanism,
resulting in the issue of 3,415,759 ordinary shares.
On April 18, 2024, 33,334 options were exercised at AUD $0.50 per share.
On October 24, 2023, 150,000 options were exercised at AUD$0.55 per share.
On August 29, 2023, 500,000 options were exercised at AUD $0.70 per share.
On March 23, 2023, 66,666 options were exercised at AUD$0.90 per share.
On March 15, 2023, 33,333 options were exercised at AUD$0.50 per share.
Exercise of Share Rights
On August 29, 2023, 419,719 ordinary shares were issued to Directors on the vesting of share rights (See Note 28 - Share-
based Payments).
On July 7, 2022, 302,539 ordinary shares were issued to Directors on the vesting of share rights (See Note 28 – Share-
based Payments).
Capital Management
The Company’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can
continue to provide returns for shareholders, benefits for other stakeholders and to maintain an optimal capital structure
to reduce the cost of capital.
The capital structure of the Company includes equity attributable to equity holders, comprising of issued capital, reserves
and accumulated losses. In order to maintain or adjust the capital structure, the Company may issue new shares, sell
assets to reduce debt or adjust the level of activities undertaken by the company.
The Company monitors capital on the basis of cash flow requirements for operational, and exploration and evaluation
expenditure. The Company will continue to use capital market issues to satisfy anticipated funding requirements.
The Company has no externally imposed capital requirements. The Company’s strategy for capital risk management is
unchanged from prior years.
F-45
Note 24 Reserves
December 31,
December 31,
(in U.S. dollars)
2024
2023
Share-based payment reserve
$
45,642,323
$
42,462,654
Foreign currency translation reserve
(20,442,256 )
(16,626,921 )
Convertible loan note reserve
4,523,095
4,523,095
$
29,723,162
$
30,358,828
Share-based Payment Reserve
December 31,
December 31,
(in U.S. dollars)
2024
2023
Share-based payment reserve
$
45,642,323
$
42,462,654
Movements:
Opening balance
42,462,654
37,161,498
Performance rights cash settled in current period (See Note 28 – Share-based
Payments)
(603,932 )
(296,432 )
Cashless exercise of options
(1,605,677 )
—
Equity settled share-based payments
5,523,560
5,621,960
Exchange differences
(134,282 )
(24,372 )
Closing balance
$
45,642,323
$
42,462,654
The share-based payment reserve includes items recognized as expenses on valuation of director, employee and
contractor options and performance rights.
Foreign Currency Translation Reserve
December 31,
December 31,
(in U.S. dollars)
2024
2023
Foreign currency translation reserve
$
(20,442,256 ) $
(16,626,918 )
Movements:
Opening balance
(16,626,918 )
(15,136,944 )
Exchange differences on translation of foreign operations
(3,813,897 )
(1,489,974 )
Closing balance
$
(20,440,815 ) $
(16,626,918 )
The foreign currency translation reserve includes exchange differences arising on translation of a foreign-controlled
subsidiary.
F-46
Note 25 Operating Segments
The Company has identified its operating segments based on the internal reports that are reviewed and used by the
Executive Key Management Personnel Board of Directors (Chief Operating Decision Makers or “CODM”) in assessing
performance and determining the allocation of resources. The Company is managed primarily on an operational basis.
Operating segments are determined on the basis of financial information reported to the Board.
The CODM has identified three operating segments being Battery Materials, Battery Technology and Graphite Exploration.
The Battery Materials segment develops and manufactures battery anode materials, and the Battery Technology segment
develops battery cell testing equipment, performs consulting services and carries out research and development in battery
development. The Graphite Exploration segment manages the maintenance and future development of Mount
Dromedary natural graphite deposit. The Company will reassess reportable segments if and when the assets held for sale
are sold. See Note 16 - Exploration and Evaluation Assets.
Basis of Accounting for Purposes of Reporting by Operating Segments
•
Accounting policies adopted: Unless stated otherwise, all amounts reported to the Board, being the chief
operating decision makers, with respect to operating segments, are determined in accordance with accounting
policies that are consistent with those adopted in the annual consolidated financial statements of the
Company.
•
Segment assets: Where an asset is used across multiple segments, the asset is allocated to the segment that
receives the majority of the economic value from the asset. In most instances, segment assets are clearly
identifiable on the basis of their nature and physical location.
•
Segment liabilities: Liabilities are allocated to segments where there is a direct nexus between the incurrence
of the liability and the operations of the segment. Borrowings and tax liabilities are generally considered to
relate to the Company as a whole and are not allocated. Segment liabilities include trade and other payables.
•
Unallocated items: The following items for revenue, expenses, assets and liabilities are not allocated to
operating segments as they are not considered part of the core operations of any segment:
–
Interest income
–
Corporate administrative and other expenses
–
Income tax expense
–
Corporate share-based payment expenses
–
Corporate marketing and project development expenses
–
Corporate cash and cash equivalents
–
Corporate trade and other payables
–
Corporate trade and other receivables
F-47
Segment Information
Segment Performance
Year Ended December 31, 2024 (in U.S. dollars)
Battery
Materials
Battery
Technology
Graphite
Exploration
Segment revenue1
$
—
$
5,854,424
$
—
Other income
959,122
1,933,064
—
Total income
959,122
7,787,488
—
Product manufacturing and operating costs (exclusive of depreciation presented
separately)
—
(1,770,517 )
—
Administrative and other expenses
(11,679,814 )
(2,252,663 )
—
Depreciation and amortization expenses
(3,562,475 )
(1,006,494 )
—
Research and development costs
(4,127,248 )
(722,322 )
—
Employee benefits expense
(15,106,300 )
(8,474,395 )
—
Borrowing costs
(1,445,374 )
(345,394 )
—
Segment net loss before tax
$
(34,962,089 )
$
(6,784,297 )
$
—
Aggregated Segment net loss before tax
$
(41,746,386 )
Interest income
1,370,930
Other income
10,063
Other expenses
(1,175,499 )
Administrative and other expenses
(5,986,817 )
Employee benefits expense
(52,223 )
Loss on equity investment securities at fair value through profit or loss
(15,308,187 )
Share based compensation
(5,523,560 )
Borrowing costs
(1,776,230 )
(Loss)/gain on fair value of derivative financial instruments
(4,536,546 )
Net loss before tax
$
(74,724,454 )
Year Ended December 31, 2023 (in U.S. dollars)
Battery
Materials
Battery
Technology
Graphite
Exploration
Segment revenue1
$
—
$
8,054,529
$
—
Other income
37,360
1,936,862
—
Total income
37,360
9,991,391
—
Product manufacturing and operating costs (exclusive of depreciation presented
separately)
—
(2,817,269 )
—
Administrative and other expenses
(9,658,074 )
(2,686,861 )
—
Impairment losses
—
—
—
Depreciation and amortization expenses
(3,798,626 )
(941,509 )
—
Research and development costs
(5,458,721 )
(291,853 )
—
Employee benefits expense
(10,196,303 )
(8,221,139 )
—
Borrowing costs
(1,408,421 )
(474,829 )
—
Segment net loss before tax
$
(30,482,785 )
$
(5,442,069 )
$
—
Aggregated Segment net loss before tax
$
(35,924,854 )
Interest income
1,611,128
Other income
24,550
Other expenses
1,359,866
Administrative and other expenses
(6,518,961 )
Employee benefits expense
(1,922,438 )
Loss on equity investment securities at fair value through profit or loss
—
Share based compensation
(5,621,969 )
Borrowing costs
(980,852 )
(Loss)/gain on fair value of derivative financial instruments
1,525,320
Net loss before tax
$
(46,448,210 )
F-48
Six Months Ended December 31, 2022 (in U.S. dollars)
Battery
Materials
Battery
Technology
Graphite
Exploration
Segment revenue1
$
—
$
2,702,276
$
—
Other income
35,154
260,536
—
Total income
35,154
2,962,812
—
Product manufacturing and operating costs (exclusive of depreciation presented
separately)
—
(1,319,682 )
—
Administrative and other expenses
(3,562,171 )
(846,562 )
Impairment losses
—
—
—
Depreciation and amortization expenses
(2,204,862 )
(367,157 )
—
Research and development costs
(1,729,910 )
(290,746 )
Employee benefits expense
(4,531,566 )
(3,363,334 )
—
Borrowing costs
(723,225 )
(220,196 )
Segment net loss before tax
$
(12,716,580 )
$
(3,444,865 )
$
—
Aggregated Segment net loss before tax
$
(16,161,445 )
Interest income
19,416
Other expenses
1,360,308
Administrative and other expenses
(7,072,914 )
Employee benefits expense
(654,950 )
Share based compensation
(5,354,429 )
Net loss before tax
$
(27,864,014 )
Year Ended June 30, 2022
Battery
Materials
Battery
Technology
Graphite
Exploration
Segment revenue1
$
—
$
6,099,815
$
—
Other income
385,482
1,202,324
—
Interest income
—
—
—
Total income
385,482
7,302,139
—
Product manufacturing and operating costs (exclusive of depreciation presented
separately)
(15,255 )
(1,709,369 )
—
Administrative and other expenses
(4,033,109 )
(1,854,309 )
—
Borrowing costs
(1,264,020 )
(248,197 )
—
Depreciation and amortization expenses
(3,436,998 )
(777,619 )
—
Research and development costs
(3,800,667 )
(1,302,157 )
—
Employee benefits expense
(5,640,607 )
(4,787,680 )
—
Segment net loss before tax
$
(17,805,174 )
$
(3,377,192 )
—
Aggregated Segment net loss before tax
$
(21,182,366 )
Segment revenue1
1,340
Interest income
8,314
Other expenses
5,195,797
Administrative and other expenses
(6,704,291 )
Employee benefits expense
(2,308,302 )
Nasdaq listing related expenses
(4,226,062 )
Loss on equity investment securities at fair value through profit or loss
(8,113,657 )
Share based compensation
(14,530,749 )
Borrowing costs
(331 )
Net loss before tax
$
(51,860,307 )
1See Note 3 - Revenue, for segment revenue by product line for the year ended December 31, 2024 and 2023, six
months ended December 31, 2022, and year ended June 30, 2022.
Segment Assets
At December 31, 2024 (in U.S. dollars)
Battery
Materials
Battery
Technology
Graphite
Exploration
Unallocated
Total
Segment assets
$
169,314,731
$
15,235,436
$
2,049,907
$
39,495,467
$
226,095,541
At December 31, 2023 (in U.S. dollars)
Battery
Materials
Battery
Technology
Graphite
Exploration
Unallocated
Total
Segment assets
$
147,476,907
$
20,367,755
$
2,225,693
$
93,272,688
$
263,343,043
F-49
Segment liabilities
December 31, 2024 (in U.S. dollars)
Battery
Materials
Battery
Technology
Graphite
Exploration
Unallocated
Total
Segment liabilities
$
44,383,959
$
8,085,044
$
—
$
36,036,281
$
88,505,284
December 31, 2023 (in U.S. dollars)
Battery
Materials
Battery
Technology
Graphite
Exploration
Unallocated
Total
Segment liabilities
$
69,102,062
$
9,874,301
$
—
$
430,405
$
79,406,768
Geographical Segments
For the purposes of segment reporting, all segment activities relating to Graphite Exploration are carried out in Australia
and all segment activities relating to Battery Materials and Battery Technology are carried out in North America.
For the year ended December 31, 2024, North America, Asia, Australia, and Europe accounted for 71%, 22%, 3%, and 4%
of revenues, respectively. For the year ended December 31, 2023, North America, Asia, Australia, and Europe accounted
for 82%, 8%, 6% and 4% of revenues, respectively. For the six months ended December 31, 2022, North America, Asia,
Australia, and Europe accounted for 85%, 11%, 3% and 1% of revenues, respectively. For the year ended June 30, 2022,
North America, Asia, and Europe accounted for 79%, 17% and 4% of revenues, respectively.
For the year December 31, 2024, the Company had two customers, included in the consulting services revenue stream
that accounted for approximately 13% and 12% of total revenues, respectively and one major customer, included in the
hardware sales revenue stream, that accounted for 16% of total revenue. For the year ended December 31, 2023, the
Company had two customers, included in consulting services revenue stream, that accounted for approximately 17% and
15% of total revenues, respectively. For the six months December 31, 2022, the Company had three major customers,
included in the consulting services revenue stream, that accounted for approximately 27%, 22%, and 11% of total revenue,
respectively and two major customers, included in the hardware revenue stream, that accounted for approximately 25%
and 12% of total revenues, respectively. For the year ended June 30, 2022, the Company had two customers, included in
the consulting services revenue stream, that accounted for approximately 15%, and 12% of total revenues, respectively
and one major customer, included in the hardware and consulting services revenue streams, that accounted for 11% of
total revenue.
F-50
Note 26 Cash Flow Information
Reconciliation of net profit / (loss) to net cash outflow from operating activities:
Year Ended December 31,
Six Months Ended
December 31,
Year Ended June 30,
2024
2023
2022
2022
(in U.S. dollars)
Net loss
$
(74,822,141 )
$
(46,248,261 )
$
(27,864,014 )
$
(51,860,307 )
Adjustments for
Share-based compensation
5,523,560
5,620,643
5,357,063
14,680,945
Borrowing costs
1,825,132
983,833
44,960
46,603
Fixed assets written off
103,299
—
—
—
Loss on sale of fixed assets
—
—
33,485
—
Software written off
—
—
96,596
—
Fair value movement in derivative (gain) / loss
4,536,546
(1,512,859 )
—
—
Loss on equity investment securities at fair value through
profit or loss
15,308,187
—
—
7,937,633
Impairment expense
—
Foreign exchange (gain) / loss
(512,273 )
(137,781 )
(1,368,856 )
(5,144,766 )
Non-cash termination settlement
—
—
—
—
Depreciation and amortization expense
4,568,969
4,739,719
2,572,018
4,214,620
Government incentives
—
—
—
(219,557 )
Change in operating assets and liabilities:
Decrease/(increase) in other trade receivables
1,595,928
(567,851 )
232,354
(991,503 )
Decrease /(increase) in inventories
455,643
1,202,967
(1,383,644 )
166,178
(Increase)/Decrease in other operating assets
(1,530,827 )
629,315
2,432,642
(3,543,910 )
(Increase)/decrease in deferred tax assets
85,121
(200,992 )
—
—
Increase/(decrease) in trade creditors
1,415,363
(1,368,063 )
1,340,692
(90,690 )
Increase in income taxes payable
—
107,458
—
—
Decrease/(increase) in other operating liabilities
1,029,724
523,449
(359,867 )
5,575,399
Net cash outflow from operating activities
$
(40,417,769 )
$
(36,228,423 )
$
(18,866,571 )
$
(29,229,355 )
Net Debt Reconciliation
This section sets out an analysis of net debt and the movements in net debt for each period presented.
December 31,
December 31,
2024
2023
(in U.S. dollars)
Cash and cash equivalents
$
42,557,621
$
78,713,885
Lease liability - repayable within one year
(522,297 )
(345,933 )
Borrowings – repayable within one year (including overdraft)
(31,668,810 )
(29,895,899 )
Lease liability - repayable after one year
(6,488,119 )
(4,479,627 )
Borrowings – repayable after one year
(32,775,271 )
(34,666,291 )
Net cash (debt)
$
(28,896,876 ) $
9,326,135
Cash and cash equivalents
42,557,621
78,713,885
Gross debt – fixed interest rates
(38,770,675 )
(35,176,279 )
Gross debt – variable interest rates
(32,683,822 )
(34,211,471 )
Net cash (debt)
$
(28,896,876 ) $
9,326,135
F-51
Liabilities from financing
activities
(in U.S. dollars)
Cash
Borrowings
due
within 1 year
Borrowings
due
after 1 year
Total
Net cash as of January 1, 2023
$ 99,039,172
$ (1,438,692 ) $ (39,903,148 ) $ 57,697,332
Cashflows
(18,653,649 )
1,428,959
(30,752,830 )
(47,977,520 )
Other non-cash movements
(1,671,638 )
(1,677,889 )
2,955,850
(393,677 )
Net cash as of December 31, 2023
78,713,885
(1,687,622 )
(67,700,128 )
9,326,135
Cashflows
(36,156,264 )
1,587,931
—
(34,568,333 )
Other non-cash movements
—
(31,569,119 )
34,924,857
3,355,738
Net cash as of December 31, 2024
$ 42,557,621
$ (31,668,810 ) $ (32,775,271 ) $ (21,886,460 )
Non-cash Investing and Financing Activities
Non-cash investing and financing activities disclosed in other notes are:
•
Right of use assets – See Note 20 - Leases
•
Options and shares issued to employees – See Note 28 – Share-based Payments
Note 27 Interests in Subsidiaries
Information about Principal Subsidiaries
The Company’s material subsidiaries at December 31, 2023, are set out in the following table. Unless otherwise stated,
each entity has share capital consisting solely of ordinary shares that are held by the Company, and the proportion of
ownership interest held equals the voting rights held by the Company. The country of incorporation or registration is also
their principal place of business. The functional currency of each of the Company’s entities is the currency of the primary
economic environment in which that entity operates. The consolidated financial statements are presented in U.S. dollars
(See Note 1 – Summary of Material Accounting Policy Information).
Ownership
interest
held of the
Company
Place of
business
/ country of
Functional
2024
2023
Principal
Name of entity
incorporation
Currency
%
%
activities
MD South Tenements Pty Ltd
Australia
AUD
100%
100%
Graphite exploration
NOVONIX Battery Technology
Solutions, Inc.
Canada
CAN
100%
100%
Battery technology services
NOVONIX Corp
USA
USD
100%
100%
Investment and management
NOVONIX Anode Materials, LLC
USA
USD
100%
100%
Battery materials development
and production
NOVONIX 1029, LLC
USA
USD
100%
100%
Real estate borrower
F-52
Note 28 Share-based payments
Performance Rights and Options
Employees of the Company participate in the Company’s long-term incentive program (“LTIP”) comprising grants of
performance rights and options with varying vesting conditions. The performance rights and options carry no dividend or
voting rights. Performance rights and options may vest immediately or dependent on the recipient remaining in
employment, or achievement of performance-related vesting conditions, by the vesting date. Upon vesting, each
performance right and option is convertible into one ordinary share of NOVONIX Limited. If an executive ceases
employment before the rights or options vest, the rights or options will be forfeited, except in limited circumstances that
they are approved by the Board on a case-by-case basis.
Share Rights
Non-executive Directors participate on an annual grant of equity awards using a value-based approach, which the Board
has adopted by issuing Share Rights to Non-executive Directors of the Company each financial year with a fixed US dollar
value. As a sign of the Board’s long-term commitment to investors and the Company, effective January 1, 2024, Directors
reduced the value of share rights they received from $110,000 to $55,000.
The share rights carry no dividend or voting rights. Upon vesting, each share right is convertible into one ordinary share
of NOVONIX Limited. If a non-executive director ceases to hold office before the share rights vest, the rights will convert
on a prorate basis.
The following table presents the composition of share-based payments expense for the years ended December 31, 2024
and 2023, six-months ended December 31, 2022, and the year ended June 30, 2022.
Year Ended December 31,
Six Months Ended
December 31,
Year Ended June 30,
(in U.S. dollars)
2024
2023
2022
2022
Share rights granted in current year
$
402,966
$
31,943
$
444,480
2,620,399
Share rights granted in prior year
—
368,039
—
—
Performance rights granted in current year
2,407,539
989,336
2,274,551
10,810,456
Performance rights granted in prior years
3,225,525
4,104,908
2,582,698
192,285
Options granted in current year
—
—
—
—
Options granted in prior years
(512,470 )
127,734
52,700
907,609
Share based payment expense
5,523,560
5,621,960
5,354,429
14,530,749
Payments of withholding tax - Performance rights
(603,932 )
(296,432 )
(133,878 )
(2,501,992 )
Cashless exercise of options
(1,605,677 )
—
—
—
Exchange differences
(134,282 )
(24,373 )
(84,564 )
—
Movement in share-based payments reserve
$
3,179,669
$
5,301,155
$
5,135,987
$
12,028,757
F-53
SHARE RIGHTS
A summary of movements of all share rights issued is as follows:
Number on issue
Share rights outstanding at January 1, 2023
436,403
Granted
65,405
Forfeited
(16,684 )
Exercised
(419,719 )
Share rights outstanding at December 31, 2023
65,405
Share rights exercisable at January 1, 2024
65,405
Granted
632,890
Forfeited
—
Exercised
(65,405 )
Share rights outstanding at December 31, 2024
632,890
Share rights exercisable at December 31, 2024
632,890
During the year ended December 31, 2024, share rights were granted to non-executive Directors, as set out in the table
below. The share rights are convertible to ordinary shares on a 1:1 basis and vest on receipt of Shareholder approval. The
value of each share right was determined with reference to the market value of the underlying securities on grant date.
An expense of $402,966 was recognized for the year ended December 31, 2024. During the year ended December 31,
2023, share rights were granted to a non-executive Director, Ron Edmonds, subject to shareholder approval at the 2024
Annual General Meeting. The share rights are convertible to ordinary shares on a 1:1 basis and vest on receipt of
Shareholder approval. The value of each share right was determined with reference to the market value of the underlying
securities on grant date. An expense of $31,943 was recognized for the year ended December 31, 2023.
Further details of the share rights granted during the year December 31, 2024, are set out in the table below:
Name
Grant date
Number
Vesting date
Fair value
(AUD)
Expiry
Expense
recognized
(USD)
Anthony Bellas
January 1, 2024
109,749
December 31, 2024
$
0.97
December 31, 2025
$
69,878
Sharan Burrow
January 1, 2024
84,145 December 31, 2024
$
0.97 December 31, 2025
$
53,576
Ron Edmonds
January 1, 2024
109,749
December 31, 2024
$
0.97
December 31, 2025
$
69,878
Robert Natter
January 1, 2024
109,749
December 31, 2024
$
0.97
December 31, 2025
$
69,878
Jean Oelwang
January 1, 2024
109,749
December 31, 2024
$
0.97
December 31, 2025
$
69,878
Phillips 66
January 1, 2024
109,749
December 31, 2024
$
0.97
December 31, 2025
$
69,878
Total expense recognized $
402,966
PERFORMANCE RIGHTS
For executive LTI awards granted in 2024, all performance rights vest based on corporate performance, with others vesting
solely based on time. Payouts are measured based on achievement of relative TSR (versus a peer group of 20 companies
primarily focused on the diversified metals and electronic equipment industries) over a three-year performance period
and are capped at the target opportunity. Performance rights require a minimum level of relative TSR (35th percentile) to
achieve any payout, regardless of revenue earned, and a relative TSR of at least 60th percentile to pay out at the highest
level.
Performance rights granted in 2024 also include a revenue modifier based on the attainment of a three-year revenue goal
(with the payout still capped at the target opportunity).
F-54
The number of FY24 Performance Rights that will vest upon satisfaction of the TSR Measure (specified above) will be
adjusted based on the Company meeting certain revenue milestones in respect of the 2026 Financial Year (assessed as at
December 31, 2026).
Notwithstanding the Revenue Target Modifier, the total number of Performance Rights that can vest shall not exceed the
number of Performance Rights representing the target opportunity.
Other Performance rights outstanding prior to December 31, 2024, are vesting, based on the achievement of performance
criteria, such as corporate goals (achievement of revenue targets for a specified period of time) , and those vesting only
based on continued service over time.
A summary of movements of all performance rights issued is as follows:
Number on issue
2024
Performance rights outstanding at January 1, 2023
11,011,895
Granted
4,631,721
Forfeited
(962,688 )
Exercised
(1,252,558 )
Performance rights outstanding at December 31, 2023
13,428,370
Granted
16,287,972
Forfeited
(5,819,922 )
Exercised
(2,879,589 )
Performance rights outstanding at December 31, 2024
21,016,831
Performance rights vested at December 31, 2024
—
Performance Rights Granted in the Current Period
During the years ended December 31, 2024 and 2023, performance rights (convertible to ordinary shares on a 1:1 basis)
were granted to Key Management Personnel, other employees and contractors as set out in the table below. The value of
each performance right was determined with reference to the market value of the underlying securities on grant date.
F-55
Further details of the performance rights are set out in the table below:
Name
Grant date
Number
Vesting date
Fair value
(AUD)
Expiry
Expense
recognized
(USD)
Rashda Buttar
April 18, 2024
1,075,930
December 31, 2026
$
0.89
Cessation of employment
$
210,918
Chris Burns
April 18, 2024
3,658,161
December 31, 2026
$
0.89
Cessation of employment
$
716,965
Darcy MacDougald
April 18, 2024
1,075,930
December 31, 2026
$
0.89
Cessation of employment
$
210,872
Robert Long
October 8, 2024
1,144,130
December 31, 2026
$
0.70
Cessation of employment
74,794
Nick Liveris
April 18, 2024
1,398,709
December 31, 2026
$
0.89
Cessation of employment
—
Non-KMP employees
January 31, 2024
5,523,634
¼ January 5, 2025
$
0.57
Cessation of employment
824,722
¼ January 5, 2026
Cessation of employment
¼ January 5, 2027
Cessation of employment
¼ January 5, 2028
Cessation of employment
Non-KMP employees
February 16, 2024
722,884
¼ January 5, 2025
$
0.84
Cessation of employment
172,554
¼ January 5, 2026
Cessation of employment
¼ January 5, 2027
Cessation of employment
¼ January 5, 2028
Cessation of employment
Non-KMP employees
February 21, 2024
172,400
$
0.80
Cessation of employment
43,841
Non-KMP employees
March 11, 2024
96,014
$
1.01
Cessation of employment
—
Non-KMP employees
March 25, 2024
96,014
$
0.87
Cessation of employment
22,195
Non-KMP employees
April 5, 2024
17,195
$
1.01
Cessation of employment
7,189
Non-KMP employees
April 8, 2024
80,612
4 equal annual
$
0.87
Cessation of employment
17,610
Non-KMP employees
April 15, 2024
181,376
tranches
$
0.83
Cessation of employment
37,030
Non-KMP employees
April 29, 2024
82,425
commencing on the
$
0.72
Cessation of employment
13,818
Non-KMP employees
May 27, 2024
58,423
anniversary of
$
0.69
Cessation of employment
8,265
Non-KMP employees
August 23, 2024
171,834
employment
$
0.61
Cessation of employment
14,096
Non-KMP employees
October 16, 2024
93,328
$
0.81
Cessation of employment
6,626
Non-KMP employees
October 22, 2024
382,022
$
0.84
Cessation of employment
19,097
Non-KMP employees
November 12, 2024
45,822
$
0.84
Cessation of employment
2,425
Non-KMP employees
December 2, 2024
211,129
$
0.72
Cessation of employment
4,522
Total number issued
16,287,972
$
2,407,539
Performance Rights Net Settled for Withholding Tax Obligations
The Company has an obligation to withhold tax on the vesting of performance rights for employee’s resident in the USA
and Canada. As consideration for the withholding tax, the Company reduces the number of shares to be issued to the
employees (net settled).
During the year ended December 31, 2024, the Company net settled the following share-based payments:
Name
Performance
rights
vested &
exercised
Net settled shares
Withholding
obligation
(USD)
Non-KMP employees
1,295,643
818,740
$
235,153
Chris Burns
759,931
349,568
196,487
Rashda Buttar
295,479
165,208
63,723
Nick Liveris
359,422
192,002
79,103
Darcy MacDougald
169,114
103,869
29,466
Total $
603,932
F-56
OPTIONS
A summary of movements of all options issued is as follows:
Number on
issue
Weighted
Average
Exercise Price
(AUD)
Options outstanding as of January 1, 2023
29,093,334 $
0.52
Granted to employees
—
—
Forfeited
(133,334 ) $
1.30
Exercised
(749,999 ) $
0.68
Options outstanding as of December 31, 2023
28,210,001 $
0.50
Vested options outstanding as of December 31, 2023
12,676,667 $
0.50
Forfeited
(5,010,000 ) $
0.50
Exercised
(12,033,334 ) $
0.50
Options outstanding as of December 31, 2024
11,166,667 $
0.50
Vested options outstanding as of December 31, 2024
666,667 $
0.50
The weighted average remaining contractual life of options outstanding at December 31, 2024 was 4.3 years, and at
December 31, 2023 was 3.4 years.
The exercise price for options outstanding at December 31, 2024, was AUD$0.50, and at December 31, 2023 the range of
exercise prices was AUD$0.50 to AUD$0.55.
There were no options granted during the years ended December 31, 2024 and 2023.
Note 29 Related Party Transactions
During the year ended December 31, 2024 there were the following related party transactions:
•
On April 18, 2024, 3,658,161 performance rights were granted to Chris Burns as an LTI. The performance rights
(convertible to ordinary shares on a 1:1 basis) vest on December 31, 2026. The performance rights vest subject
to the achievement of performance conditions. An expense of $716,966 was recognized during the year ended
December 31, 2024, relating to these performance rights.
•
On April 18, 2024, 1,075,930 performance rights were granted to Rashda Buttar as an LTI. The performance
rights (convertible to ordinary shares on a 1:1 basis) vest on December 31, 2026. The performance rights vest
subject to the achievement of performance conditions. An expense of $210,918 was recognized during the year
ended December 31, 2024, relating to these performance rights.
•
On April 18, 2024, 1,398,709 performance rights were granted to Nick Liveris as an LTI. These performance
rights lapsed on cessation of Nick Liveris’ employment with the Company, and accordingly no expense was
recognized during the year ended December 31, 2024, relating to these performance rights.
•
On April 18, 2024, 1,075,930 performance rights were granted to Darcy MacDougald as an LTI. The performance
rights (convertible to ordinary shares on a 1:1 basis) vest on December 31, 2026. The performance rights vest
subject to the achievement of performance conditions. An expense of $210,873 was recognized during the year
ended December 31, 2024, relating to these performance rights.
•
On April 18, 2024, 109,749 share rights were granted to Tony Bellas. The share rights (convertible to ordinary
shares on a 1:1 basis) vest on December 31, 2024. An expense of $69,893 was recognized during the year ended
December 31, 2024, relating to these share rights.
F-57
•
On April 18, 2024, 109,749 share rights were granted to Robert Natter. The share rights (convertible to ordinary
shares on a 1:1 basis) vest on December 31, 2024. An expense of $69,893 was recognized during the year ended
December 31, 2024, relating to these share rights.
•
On April 18, 2024, 109,749 share rights were granted to Phillips 66 Company. The share rights (convertible to
ordinary shares on a 1:1 basis) vest on December 31, 2024. An expense of $69,893 was recognized during the
year ended December 31, 2024, relating to these share rights.
•
On April 18, 2024, 109,749 share rights were granted to Jean Oelwang. The share rights (convertible to ordinary
shares on a 1:1 basis) vest on December 31, 2024. An expense of $69,893 was recognized during the year ended
December 31, 2024, relating to these share rights.
•
On April 18, 2024, 109,749 share rights were granted to Ron Edmonds. The share rights (convertible to ordinary
shares on a 1:1 basis) vest on December 31, 2024. An expense of $69,893 was recognized during the year ended
December 31, 2024, relating to these share rights.
•
On April 18, 2024, 84,145 share rights were granted to Sharan Burrow. The share rights (convertible to ordinary
shares on a 1:1 basis) vest on December 31, 2024. An expense of $53,587 was recognized during the year ended
December 31, 2024, relating to these share rights.
•
On October 8, 2024, 1,144,130 performance rights were granted to Robert Long as an LTI. The performance
rights (convertible to ordinary shares on a 1:1 basis) vest on December 31, 2026. The performance rights vest
subject to the achievement of performance conditions. An expense of $74,794 was recognized during the year
ended December 31, 2024, relating to these performance rights.
•
During the year ended December 31, 2024, Phillips 66 were paid fees totaling $57,500 for Mr Suresh
Vaidyanathan’s services to the Company as a Director. Mr. Suresh Vaidyanathan is not permitted to receive
remuneration in his personal capacity under the terms of his employment with Phillips 66 and terms of
engagement with the Company. Accordingly, all fees earned by them are paid directly to Phillips 66.
During the year ended December 31, 2023 there were the following related party transactions:
•
On April 5, 2023, 1,604,871 performance rights were granted to Chris Burns as an LTI. The performance rights
(convertible to ordinary shares on a 1:1 basis) vest on December 31, 2025. 50% of the performance rights vest
subject to continued employment over the vesting period, and 50% vest subject to the achievement of
performance conditions. An expense of $119,312 was recognized during the six-months ended June 30, 2023
relating to these performance rights.
•
On April 5, 2023, 253,401 performance rights were granted to Rashda Buttar as an LTI. The performance rights
(convertible to ordinary shares on a 1:1 basis) vest on December 31, 2025. 50% of the performance rights vest
subject to continued employment over the vesting period, and 50% vest subject to the achievement of
performance conditions. An expense of $18,839 was recognized during the six-months ended June 30, 2023,
relating to these performance rights.
•
On April 5, 2023, 549,035 performance rights were granted to Nick Liveris as an LTI. The performance rights
(convertible to ordinary shares on a 1:1 basis) vest on December 31, 2025. 50% of the performance rights vest
subject to continued employment over the vesting period, and 50% vest subject to the achievement of
performance conditions. An expense of $40,818 was recognized during the six-months ended June 30, 2023,
relating to these performance rights.
•
During the year ended December 31, 2023, Phillips 66 were paid fees totaling $59,534 for Ms. Zhanna
Golodryga's and Mr. Suresh Vaidyanathan’s services to the Company as Directors. Ms. Zhanna Golodryga and
Mr. Suresh Vaidyanathan are not permitted to receive remuneration in their personal capacity under the terms
of their employment with Phillips 66 and terms of engagement with the Company. Accordingly, all fees earned
by them are paid directly to Phillips 66.
F-58
There were no other related party transactions during the year ended December 31, 2024, or prior fiscal years. For details
of disclosures relating to key management personnel, see Note 7 - Key Management Personnel Compensation.
Note 30 Commitments and Contingencies
Exploration Commitments
December 31,
December 31,
(in U.S. dollars)
2024
2023
Commitments for payments under exploration permits in existence at the
reporting date but not recognized as liabilities payable
$
470,763
$
2,000
So as to maintain current rights to tenure of various exploration tenements, the Company will be required to outlay
amounts in respect of tenement exploration expenditure commitments. These outlays, which arise in relation to granted
tenements are noted above. The outlays may be varied from time to time, subject to approval of the relevant government
departments, and may be relieved if a tenement is relinquished.
Exploration commitments are calculated on the assumption that each of these tenements will be held for its full term.
But, in fact, commitments will decrease materially as exploration advances and ground that is shown to be unprospective
is progressively surrendered. Expenditure commitments on prospective ground will be met out of existing funds, farm-
outs, and new capital raisings.
Capital Commitments
Significant capital expenditure contracted for at the end of the reporting period but not recognized as liabilities is as
follows:
December 31,
December 31,
(in U.S. dollars)
2024
2023
Property, plant and equipment
$
52,968,336
$
9,321,453
The capital commitments relate to purchases of property, plant and equipment in connection with the expansion of our
business and development of our technologies in the NAM and BTS business segments and are expected to be recognized
within the next twelve months.
Legal Proceedings
The Company is currently not a party to any material legal proceedings. From time to time, the Company may become
involved in legal proceedings arising in the ordinary course of business. Such claims or legal actions, even if without merit,
could result in the expenditure of significant financial and management resources and potentially result in civil liability for
damages.
F-59
Note 31 Financial Risk Management
This note explains the Company’s exposure to financial risks and how these risks could affect the Company’s future
financial performance. The current year profit or loss information has been included where relevant to add further
context.
The totals for each category of financial instruments, measured in accordance with IAS 39: Financial Instruments:
Recognition and Measurement, as detailed in the accounting policies to these consolidated financial statements, are as
follows:
December 31,
December 31,
2024
2023
(in U.S. dollars)
Notes
Financial assets
Cash and cash equivalents
$
42,557,621
$
78,713,885
Trade and other receivables
10, 12
9,610,361
4,358,833
Financial assets at fair value through profit or loss
15
—
16,666,665
Total financial assets
52,167,982
99,739,383
Financial liabilities
Trade payables
18
998,258
1,342,369
Lease liabilities
20
7,010,416
4,825,560
Borrowings
21
64,444,081
64,562,190
Total financial liabilities
$
72,452,755
$
70,730,119
The Board has overall responsibility for the determination of the Company’s risk management objectives and policies. The
overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the
Company’s competitiveness and flexibility.
Market Risk
Market risk is the risk that the change in market prices, such as foreign exchange rates, interest rates and equity prices
will affect the Company’s income or the value of its holdings of financial instruments. The Company is exposed to price
risk for its investment in KORE Power (Note 15).
Foreign Currency Risk
Foreign exchange risk arises from future transactions and recognized assets and liabilities denominated in a currency that
is not the functional currency of the relevant Company entity. Exposure to foreign currency risk may result in the fair value
or future cash flows of a financial instrument fluctuating due to movement in foreign exchange rates of currencies in which
the Company holds financial instruments which are other than the USD.
With instruments being held by overseas operations, fluctuations in the Canadian dollar may impact on the Company’s
financial results.
The following table shows the foreign currency risk as on the financial assets and liabilities of the Company’s operations
denominated in currencies other than the functional currency of the operations.
F-60
The Company’s exposure to foreign currency risk at the end of the reporting period, expressed in U.S. dollars, was as
follows:
December
31, 2024
CAD
December
31, 2023
CAD
December
31, 2024
USD
December
31, 2023
USD
Cash at bank
$
— $
— $
2,351,324 $ 32,748,324
Trade receivables
—
—
1,507,778
2,427,380
Trade payables
3,623
—
50,778
37,283
Cash Flow and Fair Value Interest Rate Risk
The Company’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company
to cash flow interest rate risk. During the year ended December 31, 2024, the Company’s borrowings at variable rates
were denominated in Canadian and U.S. dollars.
As the Company has interest-bearing cash assets, the Company’s income and operating cash flows are exposed to changes
in market interest rates. The Company manages its exposure to changes in interest rates by using fixed term deposits.
At December 31, 2024, if interest rates had changed by -/+ 100 basis points from the year-end rates with all other variables
held constant, post-tax profit / (loss) for the year ended December 31, 2023, would have been $98,738 ($445,024 for the
year ended December 31, 2023) lower/higher, as a result of higher/lower interest income from cash and cash equivalents.
Credit Risk
Credit risk is managed on a Company basis. Credit risk arises primarily from cash and cash equivalents and deposits with
banks and financial institutions, and trade and other receivables. For banks and financial institutions, only independently
rated parties with a minimum rating of ‘AAA’ are accepted.
For trade and other receivables, amounts are considered as “past due” when the debt has not been settled, in line with
the terms and conditions agreed between the Company and the customer to the transaction. Due to a strong credit
approval process, the Company has a minimal history of bad debt write-offs.
The balance of receivables that remain within initial trade terms are considered to be of high credit quality. The credit
quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if
available).
Liquidity Risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities to meet obligations when
due.
The Company manages liquidity risk by continuously monitoring forecast and actual cash flows. No finance facilities were
available to the Company at the end of the reporting period.
All financial assets mature within one year. The maturity of all financial liabilities is set out in the table below.
Financing Arrangements
The Company’s undrawn borrowing facilities as at December 31, 2024 totals $62,000 which relates to the loan facilities
secured over commercial land and buildings (See Note 21 - Borrowings).
F-61
Maturities of Financial Liabilities
As of December 31, 2024, the contractual maturities of the Company’s non-derivative financial liabilities were as follows:
Contractual maturities of
financial liabilities
Less than
6 months
6 – 12
months
Between
1 and 2
years
Between
2 and 5
years
Over
5 years
Total
contractual
cash flows
Carrying
amount
At December 31, 2024
US$
US$
US$
US$
US$
US$
US$
Trade and other payables
$
8,524,141
$
—
$
—
$
—
$
—
$
8,524,141
$
8,524,141
Lease liabilities
404,400
404,400
841,152
2,730,770
4,178,969
8,559,691
7,010,416
Borrowings*
1,392,972
1,390,774
2,766,961
41,890,779
31,699,815
79,141,300
64,444,081
Total non-derivatives
$ 10,321,513
$
1,795,174
$
3,608,113
$ 44,621,549
$ 35,878,784
$ 96,225,132
$ 79,978,638
* Includes convertible notes (note 22) with terms that allow for redemption in cash at maturity (June 2028) at the option of the
holder.
Note 32 Events after the Reporting Date
Since December 31, 2024, the Company has:
•
issued 53,887,112 fully paid ordinary shares under a Share Purchase Plan at AUD$0.60 per share, raising
AUD$32,332,267.
•
issued 12,771,392 fully paid ordinary shares under an Institutional Placement to Phillips 66 Company atc
AUD$0.60 per share, raising USD$5million
•
on January 21, 2025, announced the planned transition in our CEO role, with Dr. Chris Burns stepping down
as Chief Executive Officer effective January 24, 2025. Dr. Burns will continue to support the Company in an
advisory capacity, serving as Special Advisor to the Board, in order to provide continuity, support ongoing
operations of the Company and ensure a smooth transition. The Board has appointed Mr. Robert Long, our
Chief Financial Officer, to serve as interim CEO, effective January 24, 2025, until a permanent CEO is
appointed. Mr. Long will work closely with the Board to ensure a smooth transition and maintain our
momentum and focus on our key strategic goals.
There have been no other matters or circumstances that have arisen since the end of the twelve months ended
December 31, 2024, which significantly affected or could significantly affect the operations of the Company, the results
of those operations or the state of affairs of the Company in future financial years.
Note 33 Unaudited Half Year Report
The Company did not apply the amendments to IAS 1 in the unaudited Half-Year Report for the six months ended June 30,
2024, and therefore, the convertible notes of $29,452,429 and the related derivative financial instruments of $426,553
were incorrectly presented as non-current liabilities instead of current liabilities. As a result of the correction of an error
to reflect the adoption of the amendments to IAS 1, current borrowings and current derivative financial liabilities should
have been $30,856,176 and $426,553, respectively. The effect of the adoption of the amendments to IAS 1 have no impact
on the consolidated statement of profit and loss and other income, or net assets of the Company as previously reported.
F-62
AUSTRALIAN DISCLOSURE REQUIREMENTS
Consolidated Entity Disclosure Statement
The following table contains details of each entity within the company’s consolidated group:
Entity Name
Entity Type
% of share
capital
held
Place of
incorporation
Australian
resident or
foreign
resident
Foreign
jurisdiction of
foreign
residents
NOVONIX Limited
Body Corporate
N/A
Australia
Australia
N/A
NOVONIX BTS Holding 1 Limited
Body Corporate
100%
Canada
Foreign
Canada
NOVONIX BTS Holding 2 Limited
Body Corporate
100%
Canada
Foreign
Canada
NOVONIX Battery Technology Solutions,
Inc
Body Corporate
100%
Canada
Foreign
Canada
Graphitecorp Operations Pty Ltd
Body Corporate
100%
Australia
Australia
N/A
MD South Tenements Pty Ltd
Body Corporate
100%
Australia
Australia
N/A
NOVONIX Corp
Body Corporate
100%
United States
Foreign
United States
NOVONIX 1029 LLC
Body Corporate
100%
United States
Foreign
United States
NOVONIX Anode Materials LLC
Body Corporate
100%
United States
Foreign
United States
NAM IP LLC
Body Corporate
100%
United States
Foreign
United States
NOVONIX Enterprise South LLC
Body Corporate
100%
United States
Foreign
United States
NOVONIX Enterprise South HoldCo LLC
Body Corporate
100%
United States
Foreign
United States
Basis of preparation
This Consolidated Entity Disclosure Statement (CEDS) has been prepared in accordance with the Corporations Act 2001
and includes information for each entity that was part of the consolidated entity at the end of the financial year in
accordance with IFRS 10 Consolidated Financial Statements.
Determination of tax residency
Section 295(3A)(vi) of the Corporations Act 2001 defines tax residency as having the meaning in the Income Tax
Assessment Act 1997. The determination of tax residency involves judgment as there are different interpretations that
could be adopted, and which could give rise to a different conclusion on residency.
In determining tax residency, the consolidated entity has applied the following interpretations:
•
Australian tax residency: The consolidated entity has applied current legislation and judicial precedent,
including having regard to the Tax Commissioner's public guidance in Tax Ruling TR 2018/5.
•
Foreign tax residency: Where necessary, the consolidated entity has used independent tax advisers in foreign
jurisdictions to assist in its determination of tax residency to ensure applicable foreign tax legislation has
been complied with (see section 295(3A)(vii) of the Corporations Act 2001).
PricewaterhouseCoopers, ABN 52 780 433 757
480 Queen Street, BRISBANE QLD 4000, GPO Box 150, BRISBANE QLD 4001
T: +61 7 3257 5000, F: +61 7 3257 5999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Auditor’s Independence Declaration
As lead auditor for the audit of NOVONIX Limited for the year ended 31 December 2024, I declare that
to the best of my knowledge and belief, there have been:
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b)
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of NOVONIX Limited and the entities it controlled during the period.
Michael Crowe
Brisbane
Partner
PricewaterhouseCoopers
28 February 2025
F-63
F-64
Directors' Declaration
In the Directors’ opinion:
(a)
the financial statements and notes set out on pages F-1 to F-62 are in accordance with the Corporations Act
2001, including:
(i)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements, and
(ii)
giving a true and fair view of the consolidated entity’s financial position as at 31 December 2024 and of
its performance for the financial period ended on that date, and
(iii)
the consolidated entity disclosure statement is true and correct, and
(b)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
Note 1 confirms that the financial statements also comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board.
The Directors have been given the declarations by the Managing Director and Chief Financial Officer required by section
295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Directors.
R Natter
Director
Brisbane, February 28, 2025
PricewaterhouseCoopers, ABN 52 780 433 757
480 Queen Street, BRISBANE QLD 4000, GPO Box 150, BRISBANE QLD 4001
T: +61 7 3257 5000, F: +61 7 3257 5999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Independent auditor’s report
To the members of NOVONIX Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of NOVONIX Limited (the Company) and its controlled entities
(together the Group) is in accordance with the Corporations Act 2001, including:
(a)
giving a true and fair view of the Group's financial position as at 31 December 2024 and of its
financial performance for the year then ended
(b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The financial report comprises:
•
the consolidated balance sheet as at 31 December 2024
•
the consolidated statement of profit or loss and other comprehensive income for the year then
ended
•
the consolidated statement of changes in equity for the year then ended
•
the consolidated statement of cash flows for the year then ended
•
the notes to the consolidated financial statements, including material accounting policy
information and other explanatory information
•
the consolidated entity disclosure statement as at 31 December 2024
•
the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
F-65
Material uncertainty related to going concern
We draw attention to Note 1 in the financial report, which indicates that the Group incurred a net loss
of $74.8 million and net operating cash outflows of $40.4 million during the year ended 31 December
2024, and is dependent upon raising additional funding to finance its ongoing expansionary activities.
These conditions, along with other matters set forth in Note 1, indicate that a material uncertainty
exists that may cast significant doubt on the Group’s ability to continue as a going concern. Our
opinion is not modified in respect of this matter.
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
Audit Scope
•
Our audit focused on where the Group made subjective judgements; for example, significant
accounting estimates involving assumptions and inherently uncertain future events.
•
In designing the scope of our audit, we considered the structure of the Group, which includes
three continuing business segments being Battery Materials (NAM), Battery Technology (BTS),
and Graphite Exploration (MDG) as well as Corporate and Other operations.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. The key audit matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. Further, any commentary on the outcomes of a
particular audit procedure is made in that context. We communicated the key audit matters to the Audit
and Risk Management Committee.
In addition to the matter described in the Material uncertainty related to going concern section, we
have determined the matters described below to be the key audit matters to be communicated in our
report.
F-66
Key audit matter
How our audit addressed the key audit matter
Assessment of the fair value of the investment in
KORE Power Inc
(Refer to note 15 Financial assets at fair value through
profit or loss)
The Group has 3,333,333 shares in KORE Power Inc.
(“KORE Power”), which represents approximately 3.7%
of the common equity of KORE Power. At 31
December 2024, the investment has been remeasured
to nil from $16.7 million at 1 January 2024.
The investment is accounted for as a financial asset
measured at fair value through profit or loss and is
classified as Level 3 in the fair value hierarchy as the
valuation incorporates significant inputs that are not
based on observable market data.
This was a key audit matter because of the:
•
Significance of the investment to the Consolidated
balance sheet and the remeasurement to the
Consolidated statement of profit or loss and other
comprehensive income; and
•
Judgement required by the Group in assessing the
fair value of the KORE Power investment.
Our procedures in relation to assessing the fair value of
the investment in KORE Power included, amongst
others:
•
evaluating the Group’s assessment of fair value at
31 December 2024, including assessing the
appropriateness of the data and assumptions
included in management’s fair value assessment
by considering the events that occurred during the
year which had an impact on the valuation of the
KORE Power investment and comparing to publicly
available information on KORE Power, including
publicly available information released subsequent
to the year end;
•
enquiring of the Group’s Board of Directors as it
relates to their views on the determination of fair
value and whether any amount of the investment
could be recovered through the sale of the shares
or other means; and
•
assessing the appropriateness of the related
disclosures in the notes to the consolidated
financial statements against the requirements of
Australian Accounting Standards.
Assessment of the fair value of the unsecured
convertible loan notes issued to LG Energy
Solution, Ltd.
(Refer to note 22 Unsecured convertible loan notes and
derivative financial instruments)
On 21 June 2023, the Group issued 45,221,586
unsecured convertible loan notes (the “convertible
notes”), with a face value of AUD $1.00 per note, a
coupon rate of 4% and a maturity date of 7 June 2028
for proceeds of US$30.0 million to LG Energy
Solutions, Ltd (LGES).
For accounting purposes, the convertible notes were
initially measured at fair value less transaction costs,
and subsequently carried at amortised cost. The
conversion option is an embedded financial derivative
that is measured at fair value at each reporting date,
utilising a valuation model based on a market
approach.
At 31 December 2024, these financial liabilities were
classified as Level 3 in the fair value hierarchy as the
valuation incorporates significant inputs that are not
based on observable market data.
Our procedures in relation to the accounting of the
convertible notes and the associated financial
derivative included:
•
assessing the appropriateness of the valuation
methodology adopted by the Group, with the
assistance of PwC valuation experts;
•
evaluating the accuracy of the modelled valuation
of both the financial liability and embedded
derivative components of the convertible notes at
the balance date, with the assistance of PwC
valuation experts;
•
evaluating the appropriateness of the significant
inputs and assumptions used in the valuation
model, including the Group’s assumption on the
probability weights applied to the timing of the
placement of the purchase order;
•
assessing whether the subsequent measurement
of both the financial liability and embedded
derivative components of the convertible notes
were in accordance with the requirements of
Australian Accounting Standards; and
•
assessing the appropriateness of the related
F-67
Key audit matter
How our audit addressed the key audit matter
This was a key audit matter because of the:
•
Significance of the amounts to the Consolidated
balance sheet;
•
Complexity in applying relevant Australian
Accounting Standards to account for the convertible
notes; and
•
Judgements applied in the valuation of both the
financial liability and embedded derivative
components of the convertible notes.
disclosures in the notes to the consolidated
financial statements against the requirements of
Australian Accounting Standards.
Impairment assessment of the NOVONIX Anode
Materials cash generating unit
(Refer to note 17 Intangible assets)
At 31 December 2024, the Group had $12.0 million of
goodwill relating to the NOVONIX Anode Materials
(“NAM”) cash generating unit (“CGU”).
As required by Australian Accounting Standards, the
Group is required to test goodwill for impairment
annually and consider definite lived non-current assets
for impairment indicators.
The Group performed their annual impairment testing
for the NAM CGU at 30 June 2024, and an impairment
indicators assessment was then performed at the year
end.
This was a key audit matter because of the:
•
Significance of the goodwill balance to the
Consolidated balance sheet; and
•
Degree of judgement involved in determining the
key assumptions in the models, including forecast
performance, growth rates and the discount rate.
Our procedures in relation to the impairment
assessment of the NAM CGU included:
•
evaluating the Group’s assessment of impairment
indicators for the NAM CGU by considering the
Group’s operational activities during the past year
and external factors;
•
evaluating the Group’s impairment valuation
methodology and their documented basis for
significant assumptions utilised in the impairment
model;
•
testing the mathematical accuracy, on a sample
basis, of the calculations in the impairment model;
•
assessing whether the NAM CGU appropriately
included assets, liabilities and cash flows directly
attributable to the NAM CGU;
•
comparing the key inputs and assumptions
underpinning the impairment model, where
possible, to the Board approved budget and other
relevant evidence obtained throughout the course
of the audit, including relevant market data;
•
assessing whether the discount rate appropriately
reflects the risks of the CGU, with the assistance of
PwC valuation experts; and
•
evaluating the appropriateness of the disclosures in
the notes to the consolidated financial statements,
including those regarding the key assumptions, in
light of the requirements of Australian Accounting
Standards.
F-68
Key audit matter
How our audit addressed the key audit matter
Accounting for Construction work in progress
assets
(Refer to note 14 Property, plant and Equipment –
Construction work in progress)
The Group has continued to invest in engineering
works, modifications, and furnace technology.
The consolidated balance of Construction work in
progress at 1 January 2024 was $72.0 million. During
the year, a further $14.6 million was spent, bringing the
total balance to $86.0 million.
The Group capitalises costs in line with the
requirements of Australian Accounting Standards.
This was a key audit matter because of the:
•
Significance of the Construction work in progress
balance to the Consolidated balance sheet,
including the additions made during the year;
•
Judgement applied in determining whether costs
met the criteria for capitalisation and / or remain
required for the project to which they relate; and
•
Consideration of the timing of when the assets
should be transferred from Construction work in
progress to the appropriate Property, plant and
equipment class to commence depreciation.
Our procedures in relation to assessing costs
capitalised to Construction work in progress included:
•
developed an understanding of and evaluated the
Group’s cost capitalisation policy;
•
compared costs capitalised to Construction work in
progress to supporting documentation on a sample
basis, including assessing whether the costs meet
the criteria for capitalisation with reference to
Australian Accounting Standards;
•
assessed for a sample of items that have been in
Construction work in progress for over 12 months
that these assets are recoverable and still intended
to be in use in the future;
•
obtained representations from management of the
Group on the future intended use and recoverability
of the assets in Construction work in progress; and
•
assessed for a sample of items in Construction
work in progress whether the items were not in use
at year-end, and therefore have appropriately not
yet been capitalised to the appropriate Property,
plant and equipment asset class and were not
depreciated during the year.
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 31 December 2024, but does not include
the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon through our opinion on the financial report. We
have issued a separate opinion on the remuneration report.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
F-69
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report in accordance
with Australian Accounting Standards and the Corporations Act 2001, including giving a true and fair
view, and for such internal control as the directors determine is necessary to enable the preparation of
the financial report that is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing
and Assurance Standards Board website at: https://auasb.gov.au/media/bwvjcgre/ar1_2024.pdf. This
description forms part of our auditor's report.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in the directors’ report for the year ended
31 December 2024.
In our opinion, the remuneration report of NOVONIX Limited for the year ended 31 December 2024
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
PricewaterhouseCoopers
Michael Crowe
Brisbane
Partner
28 February 2025
F-70
135
Shareholder Information
The shareholder information set out below was applicable as at 6 February 2025.
A.
Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
Class of equity security
1 - 1,000
13,903
1,001 - 5,000
9,329
5,001 - 10,000
2,983
10,001 - 100,000
4,466
100,001 and over
532
31,213
There were no holders of less than a marketable parcel of ordinary shares.
B.
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest holders of quoted equity securities are listed below:
Ordinary shares
Name
Number held
% of issued
shares
PHILLIPS 66 COMPANY
90,821,514
14.29
CITICORP NOMINEES PTY LIMITED
59,511,377
9.37
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
47,442,759
7.47
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
19,569,328
3.08
ARGO INVESTMENTS LIMITED
15,550,000
2.45
BNP PARIBAS NOMINEES PTY LTD
12,515,520
1.97
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
10,297,901
1.62
CARPE DIEM ASSET MANAGEMENT PTY LTD
9,047,622
1.42
BNP PARIBAS NOMS PTY LTD
7,460,146
1.17
LAPANA PTY LTD
5,952,136
0.94
BNP PARIBAS NOMINEES PTY LTD
5,507,915
0.87
MR ANDREW NICHOLAS LIVERIS
5,069,995
0.80
WHALE WATCH HOLDINGS LIMITED
4,000,000
0.63
MR GEORGE EDWARD CHAPMAN
3,600,000
0.57
WARBONT NOMINEES PTY LTD
3,267,133
0.51
DAVID ANDREW STEVENS
2,900,000
0.46
FINCLEAR SERVICES PTY LTD
2,888,687
0.45
MS ZHEN TIAN
2,610,000
0.41
MIDDLETON CAPITAL INVESTMENT PTY LTD
2,560,000
0.40
MRS MINGMIN LU
2,491,086
0.39
TOTAL
313,063,119
49.27
136
Unquoted equity securities
Number on issue
Number of holders
Performance rights
15,343,410
65
Share options
11,016,667
7
Share rights
632,890
6
Holders of more than 20% of unquoted share options on issue
Number held
% of total on issue
Chris Burns
8,500,000
77.2 %
Holders of more than 20% of unquoted performance rights on issue
Number held
% of total on issue
Chris Burns
3,880,271
25.3 %
There are no holders of more than 20% of unquoted share rights on issue.
C.
Substantial holders
Substantial holders in the company are set out below:
Number held
% of total on issue
Ordinary shares
Phillips 66 Company
90,821,514
14.3 %
D.
Voting rights
The voting rights attaching to each class of equity securities are set out below:
(a)
ordinary shares: on a show of hands every member present at a meeting in person or by proxy shall have one
vote and upon a poll each share shall have one vote.
(b)
performance rights: no voting rights
(c)
share options: no voting rights
(d)
share rights: no voting rights.
END OF SHAREHOLDER INFORMATION
137
Corporate Directory
Directors
Admiral R J Natter
A Bellas
S Burrow
R Edmonds
N Liveris
J Oelwang
S Vaidyanathan
Secretary
S M Yeates CA, B.Bus
Registered office in Australia
McCullough Robertson
Level 11, Central Plaza Two
66 Eagle Street
Brisbane QLD 4000
Principal place of business
Level 38, 71 Eagle Street
Brisbane QLD 4000
Share register
Link Market Services Limited
Level 21, 10 Eagle Street
Brisbane QLD 4000
www.linkmarketservices.com.au
Auditor
PricewaterhouseCoopers
480 Queen Street
Brisbane QLD 4000
www.pwc.com.au
Solicitors
Allens Linklaters
Level 26
480 Queen Street
Brisbane QLD 4000
Bankers
J.P. Morgan Chase
Stock exchange listing
NOVONIX Limited ordinary shares are listed on the
Australian Securities Exchange (“ASX”) and American
Depositary Receipts (“ADR’s”) are listed on the Nasdaq
Stock Market.
Website address
www.novonixgroup.com
ACN 157 690 830
Level 38, 71 Eagle Street
Brisbane, QLD 4000, Australia
novonixgroup.com