Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16]

Share Name	Share Symbol	Market	Type
Vision Marine Technologies Inc	NASDAQ:VMAR	NASDAQ	Common Stock

	Price Change	% Change	Share Price	Bid Price	Offer Price	High Price	Low Price	Open Price	Shares Traded	Last Trade
	0.00	0.00%	1.50	1.49	1.53				0	00:00:00

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of January 2024

Commission File No. 001-39730

VISION MARINE TECHNOLOGIES INC.

(Translation of registrant’s name into English)

730 Boulevard du Curé-Boivin

Boisbriand, Québec, J7G 2A7, Canada

(Address of principal executive office)

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

Form 20-F

Form 40-F

Attached as Exhibit 99.1 is the registrant’s unaudited condensed interim consolidated financial statements for the three-month periods ended November 30, 2023 and November 30, 2022, and attached as Exhibit 99.2 is the registrant’s Management’s Discussion and Analysis for the three months ended November 30, 2023.

The information contained in Exhibits 99.1 and 99.2 to this Report on Form 6-K is hereby incorporated by reference into the registrant’s Registration Statement on Form F-3 (File No. 333-267893), Registration Statement on Form F-3 (File No. 333-274882) and Registration Statement on Form S-8 (File No. 333-264089).

Exhibits

Exhibit No.		Exhibit
99.1		Unaudited condensed interim consolidated financial statements for the three-month periods ended November 30, 2023 and November 30, 2022
99.2		Management’s Discussion and Analysis for the three months ended November 30, 2023
99.3		Form 52-109F2 Certification of Interim Filings –CEO
99.4		Form 52-109F2 Certification of Interim Filings –CFO

SIGNATURE

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

	VISION MARINE TECHNOLOGIES INC.

Date: January 16, 2024	By:	/s/ Kulwant Sandher
	Name:	Kulwant Sandher
	Title:	Chief Financial Officer

Exhibit 99.1

Vision Marine Technologies Inc.

Condensed Interim Consolidated Financial Statements

For the Three-Month Periods Ended November 30, 2023 and November 30, 2022

(Unaudited)

Vision Marine Technologies Inc.

Consolidated statements of financial position

[Going concern uncertainty – see note 2]

(Unaudited)

	As at November 30, 2023			As at August 31, 2023
	$			$
Assets
Current
Cash		841,988			3,359,257
Trade and other receivables [note 3]		500,676			550,836
Income tax receivable		89,953			98,540
Inventories [note 4]		3,182,731			2,445,554
Prepaid expenses		2,832,970			1,973,591
Share subscription receivable [note 14]		39,200			39,200
Advances to related parties [note 14]		17,384			20,135
Total current assets		7,504,902			8,487,113
Right-of-use assets [note 6]		2,282,815			2,414,593
Property and equipment [note 7]		2,244,064			2,313,926
Intangibles [note 8]		925,526			966,724
Goodwill [note 8]		9,714,558			9,680,941
Deferred income taxes		97,609			68,460
Other financial assets		115,155			114,755
Total assets		22,884,629			24,046,512

Liabilities and shareholders’ equity
Current
Credit facility [note 9]		210,000			155,000
Trade and other payables [notes 10 & 14]		2,836,494			1,754,900
Provision on onerous contracts		91,667			91,667
Contract liabilities [note 11]		1,851,353			1,815,731
Current portion of lease liabilities [note 12]		681,744			647,638
Current portion of long-term debt [note 13]		236,719			271,546
Other financial liabilities		95,074			113,695
Total current liabilities		6,003,051			4,850,177
Lease liabilities [note 12]		1,843,592			1,994,156
Long-term debt [note 13]		11,458			33,783
Derivative liabilities		913,387			5,558,822
Deferred income taxes		-			45,137
Total liabilities		8,771,488			12,482,075

Shareholders’ equity
Capital stock [note 15]		51,816,439			50,395,717
Contributed surplus [note 16]		11,759,162			11,684,829
Accumulated other comprehensive income		1,061,148			1,032,628
Deficit		(50,523,608	)		(51,548,737	)
Total shareholders’ equity		14,113,141			11,564,437
		22,884,629			24,046,512

See accompanying notes

Vision Marine Technologies Inc.

Consolidated statements of changes in equity (deficit)

[Going concern uncertainty – see note 2]

(Unaudited)

For the three-months ended November 30,

										Accumulated
										other
					Contributed					comprehensive
	Capital stock				surplus		Deficit			income		Total
	Units		$		$		$			$		$
Shareholders’ equity as at August 31, 2022		8,417,923		43,441,591		10,560,886		(30,671,552	)		697,671		24,028,596
Total comprehensive income (loss)		-		-		-		(6,786,441	)		356,062		(6,430,379	)
Share issuance		21,362		141,214		-		-			-		141,214
Share-based compensation [note 16]		-		-		312,878		-			-		312,878
Shareholders’ equity as at November 30, 2022		8,439,285		43,582,805		10,873,764		(37,457,993	)		1,053,733		18,052,309

Shareholders’ equity as at August 31, 2023		11,172,800		50,395,717		11,684,829		(51,548,737	)		1,032,628		11,564,437
Total comprehensive income		-		-		-		1,025,129			28,520		1,053,649
Share issuance [note 15]		476,519		1,420,722		-		-			-		1,420,722
Share-based compensation [note 16]		-				74,333		-			-		74,333
Shareholders’ equity as at November 30, 2023		11,649,319		51,816,439		11,759,162		(50,523,608	)		1,061,148		14,113,141

See accompanying notes

Vision Marine Technologies Inc.

Consolidated statements of comprehensive income (loss)

[Going concern uncertainty – see note 2]

(Unaudited)

For the three months ended November 30,

	2023			2022
	$			$
Revenues [note 17]		986,392			1,399,760
Cost of sales [note 4]		550,864			1,295,484
Gross profit		435,528			104,276

Expenses
Research and development		984,506			3,687,197
Office salaries and benefits		860,454			839,731
Selling and marketing expenses		789,332			642,078
Professional fees		1,092,852			860,585
Office and general		752,995			710,415
Share-based compensation [note 16]		74,333			312,878
Depreciation		203,209			91,744
Net finance income [note 18]		(5,224,179	)		(145,660	)
Other income		(66,244	)		(118,251	)
		(532,742	)		6,880,717

Income (loss) before tax		968,270			(6,776,441	)
Income taxes
Current tax expense		17,796			10,000
Deferred tax recovery		(74,655	)		-
		(56,859	)		10,000
Net income (loss) for the period		1,025,129			(6,786,441	)

Items of comprehensive income that will be
subsequently reclassified to earnings:
Foreign currency translation differences for foreign
operations, net of tax		28,520			356,062
Other comprehensive income, net of tax		28,520			356,062
Total comprehensive income (loss) for the period, net of tax		1,053,649			(6,430,379	)

Weighted average shares outstanding		11,537,941			8,430,080
Basic and diluted income (loss) per share		0.09			(0.81	)

See accompanying notes

Vision Marine Technologies Inc.

Consolidated statements of cash flows

[Going concern uncertainty – see note 2]

(Unaudited)

Three months ended November 30,

	2023			2022
	$			$
Operating activities
Net income (loss)		1,025,129			(6,786,441	)
Depreciation		275,839			266,670
Accretion on long-term debt and lease liability		43,904			39,156
Share-based compensation – options and warrants		74,333			312,878
Shares issued for services		405,262			122,503
Loss on investment in Limestone [note 5]		-			(202,000	)
Income tax expense		(56,859	)		10,000
Income tax paid		(8,802	)		-
Gain on disposal of property and equipment		(4,391	)		(39,346	)
Gain on derivative liabilities		(5,411,168	)		-
Gain on lease termination		-			(44,570	)
Effect of exchange rate fluctuation		287			58,559
		(3,656,466	)		(6,262,591	)
Net change in non-cash working capital items
Trade and other receivables		50,160			167,647
Inventories		(737,177	)		(540,629	)
Other financial assets		(399	)		10,545
Prepaid expenses		(859,379	)		1,340,839
Trade and other payables		1,081,594			1,348,316
Contract liabilities		35,622			(2,634	)
Other financial liabilities		(18,620	)		(12,182	)
Cash used in operating activities		(4,104,665	)		(3,950,689	)

Investing activities
Additions to property and equipment		(39,196	)		(343,786	)
Proceeds from the disposal of property and equipment		50,522			200,584
Cash provided by (used in) investing activities		11,326			(143,202	)

Financing activities
Change in credit facility		55,000			110,000
Repayment of long-term debt		(65,306	)		(22,115	)
Issuance of shares and warrants [note 15]		1,781,194			18,711
Repayment of lease liabilities		(194,818	)		(182,523	)
Cash provided by (used in) financing activities		1,576,070			(75,927	)

Net decrease in cash during the period		(2,517,269	)		(4,169,818	)
Cash, beginning of period		3,359,257			5,824,716
Cash, end of period		841,988			1,654,898

See accompanying notes

Vision Marine Technologies Inc.

Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2023

1. Incorporation and nature of business

Vision Marine Technologies Inc. [the “Company”] was incorporated on August 29, 2012 and its principal business is to manufacture and sell or rent electric boats. The Voting Common Shares of the Company are listed under the trading symbol “VMAR” on Nasdaq.

The Company is incorporated in Canada and its head office and registered office is located at 730 Curé-Boivin boulevard, Boisbriand, Quebec, J7G 2A7.

Business seasonality

The Company’s operating results generally vary from quarter to quarter as a result of changes in general economic conditions and seasonal fluctuations, among other things, in each of its reportable segments. This means the Company’s results in one quarter are not necessarily indicative of how the Company will perform in a future quarter.

Sale of electric boats

The sale of electric boats segment has a seasonal aspect to its operations. Most customers purchase their electric boats from the Company with the intention of utilizing them during the summer period which typically runs from early June to late August and corresponds to the Company’s fourth quarter of a financial year. As such, the revenues in this operating segment fluctuate based on the level of boat deliveries, with a high and a low in the fourth quarter and the first quarter, respectively.

Rental of electric boats

Revenue generated by the rental of electric boats segment also has a seasonal aspect to its operations. Boat rental as an activity is highly sought by customers when the weather is milder, which is typically the case during the period from May to August. A colder-than-expected or rainier summer in any given year could have an impact on the segment’s revenues and hence on its profitability. Revenue from the boat club memberships is not impacted by seasonality as the memberships are typically on an annual basis.

2. Basis of preparation and going concern uncertainty

Compliance with IFRS

These condensed interim consolidated financial statements are for the three-month period ended November 30, 2023 and have been prepared in accordance with IAS 34: Interim Financial Reporting. They do not include all of the information required in annual financial statements in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and should be read in conjunction with the consolidated financial statements for the year ended August 31, 2023.

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Company’s annual consolidated financial statements for the year ended August 31, 2023.

The condensed interim consolidated financial statements were authorized for issuance by the Board of Directors on January 12, 2024.

Vision Marine Technologies Inc.

Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2023

Going concern uncertainty

As of November 30, 2023, the Company has cash of $841,988 and working capital of $1,501,851. The Company has incurred recurring losses, has not yet achieved profitable operations and has a deficit of $50,523,608 since its inception. The cash flows from operations were negative for the three years ended August 31, 2023 as well as for the current three-month period ended November 30, 2023. Additional financing will be needed by the Company to fund its operations and to commercialize the E-Motion powertrain business. These matters, when considered in aggregate, indicate the existence of a material uncertainty that raises substantial doubt about the Company’s ability to continue as a going concern for at least 12 months from the issuance of these condensed interim consolidated financial statements. In view of these matters, continuation as a going concern is dependent upon the continued operations of the Company which will be determined by the Company’s ability to meet its financial requirements, including its ability to raise additional capital.

The Company is evaluating several different strategies and is actively pursuing actions that are expected to increase its liquidity position, including, but not limited to, pursuing additional cost savings initiatives and seeking additional financing from both the public and private markets through the issuance of equity securities. For the three-month period ended November 30, 2023, the Company was able to raise net proceeds from issuance of shares of $1,781,194. However, the Company's management cannot provide assurances that the Company will be successful in accomplishing any of its proposed financing plans. Management also cannot provide any assurance as to unforeseen circumstances that could occur within the next 12 months which could increase the Company’s need to raise additional capital on an immediate basis, which additional capital may not be available to the Company.

The accompanying condensed interim consolidated financial statements have been prepared on a going concern basis, which assumes the Company will continue its operations for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. These condensed interim consolidated financial statements as at and for the three-month period ended November 30, 2023 do not include any adjustments to the carrying amounts and classification of assets, liabilities and reported expenses that may otherwise be required if the going concern basis was not appropriate. Such adjustments could be material.

Basis of measurement

These condensed interim consolidated financial statements are presented in Canadian dollars and were prepared on a historical cost basis.

Basis of consolidation

The condensed interim consolidated financial statements include the accounts of the Company, and the subsidiaries that it controls. Control exists when the Company has the power over the subsidiary, when it is exposed or has rights to variable returns from its involvement with the subsidiary and when it has the ability to use its power to affect its returns. Subsidiaries that the Company controls are consolidated from the effective date of acquisition up to the effective date of disposal or loss of control.

Vision Marine Technologies Inc.

Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2023

Details of the Company’s significant subsidiaries at the end of the reporting period are set out below.

Name of subsidiary	Principal activity	Country of incorporation and operation	Proportion of ownership held by the Company
7858078 Canada Inc.	Owns an electric boat rental center	Canada		100	%
EB Rental Ltd.	Operates an electric boat rental center	United States		100	%
EB Rental Ventura Corp.	Operates an electric boat rental center	United States		100	%
EB Rental FL Corp.	Operates an electric boat rental center	United States		100	%
Vision Marine Technologies Corp.	Operates an electric boat service center	United States		100	%

Foreign currency translation

The Company’s condensed interim consolidated financial statements are presented in Canadian dollars, which is also the parent company’s functional currency. The functional currency of 7858078 Canada Inc. is the Canadian dollar, while the functional currency for EB Rental Ltd., EB Rental Ventura Corp., EB Rental FL Corp. and Vision Marine Technologies Corp. is the US dollar.

The exchange rates for the currencies used in the preparation of the interim condensed consolidated financial statements were as follows:

Exchange rate as at:

Average exchange rate for the three-month period ended

November 30,
2023

August 31,
2023

November 30,
2023

November 30,
2022

US dollar

1.3582

1.3535

1.3655

1.3484

Use of estimates and judgments

The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management’s best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates. Areas where judgments, estimates and assumptions are considered significant to the condensed interim consolidated financial statements remain unchanged to the 2023 annual financial statements.

Vision Marine Technologies Inc.

Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2023

3. Trade and other receivables

	As at November 30, 2023		As at August 31, 2023
	$		$
Trade receivables		58,827		59,364
Sales taxes receivable		242,228		159,114
R&D tax credit receivable		143,500		143,500
Other receivables		56,121		188,858
		500,676		550,836

Trade receivables disclosed above include amounts that are past due at the end of the reporting period for which the Company has not recognized an allowance for expected credit losses because there has not been a significant change in credit quality and the amounts are still considered recoverable.

As at November 30, 2023, trade receivables of $58,827 [August 31, 2023 – $59,364] were past due but not impaired. They relate to customers with no default history. The aging analysis of these receivables is as follows:

	As at November 30, 2023		As at August 31, 2023
	$		$
0 – 30		2,874		13,986
31 – 60		-		-
61 – 90		10,526		-
91 and over		45,427		45,378
		58,827		59,364

There were no movements in the allowance for expected credit losses for the three months ended November 30, 2023 and the year ended August 31, 2023.

4. Inventories

	As at November 30, 2023		As at August 31, 2023
	$		$
Raw materials		2,222,314		1,553,501
Work-in-process		408,210		369,753
Finished goods		552,207		522,300
		3,182,731		2,445,554

Vision Marine Technologies Inc.

Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2023

For the three months ended November 30, 2023, inventories recognized as an expense amounted to $550,864 [2022 – $693,715].

For the three months ended November 30, 2023, cost of sales includes depreciation of $72,630 [2022 – $174,926].

5. Investment in Limestone

On May 14, 2021, the Company subscribed for and purchased 3,400 senior unsecured subordinated convertible debentures of The Limestone Boat Company Limited [“Limestone”], a publicly traded company listed under the trading symbol "BOAT" on the TSX Venture Exchange [the "Debentures"], for an aggregate amount of $3,400,000.

The Debentures bore interest at a rate of 10% per annum, payable annually in arrears, and had a 36-month term [the “Term”]. The Debentures were convertible at any time at the option of the Company into common shares of Limestone [“Common Shares”] at a conversion price of $0.36 per Common Share [the “Conversion Price”]. If at any time following 120 days from the date of issuance of the Debentures [the “Closing Date“] and prior to the date that is 30 days prior to the end of the Term, the volume weighted average closing price of the Common Shares on the TSX Venture Exchange, or such other exchange on which the Common Shares may be listed, is equal to or higher than $0.50 per Common Share for 20 consecutive trading days, Limestone could have notified the Company that the Debentures will be automatically converted into Common Shares at the Conversion Price 30 days following the date of such notice.

The Investment in Limestone is carried at fair value through profit and loss and are considered as Level 2 financial instruments in the fair value hierarchy.

On January 20, 2023, Limestone announced that Limestone’s U.S. subsidiaries filed for voluntary petitions for relief under Chapter 7 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Middle District of Tennessee. As a result, the Company recorded an impairment on the entire value of the Debentures at the amount $2,637,000 for the year ended August 31, 2023.

On July 18, 2023, the Company agreed to give Limestone the right to convert the Debentures into common shares of Limestone at a conversion price of $0.071, which was approved by the shareholders of Limestone and is awaiting the issuance of the Company’s shareholder certificate, following the exercise of the conversion right by Limestone. The Company maintained the fair value of its investment in Limestone at nil as at November 30, 2023 [August 31, 2023 – Nil].

For the three months ended November 30, 2023, the Company recorded a loss of nil [2022 – $109,667] in net finance income for the change in the fair value of the Investment in Limestone [note 18].

Vision Marine Technologies Inc.

Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2023

6. Right-of-use assets

	Premises	Computer equipment	Rolling stock	Boat rental fleet	Total
	$	$	$	$	$
Cost
Balance at August 31, 2022	2,880,039	3,646	88,020	211,459	3,183,164
Additions	921,498	-	-	-	921,498
Disposals	-	-	(46,200)	(170,298)	(216,498)
Transferred to property and equipment	-	(3,646)	-	(41,161)	(44,807)
Currency translation	38,254	-	2,100	-	40,354
Balance at August 31, 2023	3,839,791	-	43,920	-	3,883,711
Additions	-	-	38,283	-	38,283
Currency translation	3,419	-	1,000	-	4,419
Balance at November 30, 2023	3,843,210	-	83,203	-	3,926,413

Accumulated depreciation
Balance at August 31, 2022	822,407	2,878	20,315	76,464	922,064
Depreciation	615,937	768	23,934	21,442	662,081
Disposal	-	(3,646)	(13,475)	(97,906)	(115,027)
Balance at August 31, 2023	1,438,344	-	30,774	-	1,469,118
Depreciation	169,013	-	5,467	-	174,480
Balance at November 30, 203	1,607,357	-	36,241	-	1,643,598

Net carrying amount
As at August 31, 2023	2,401,447	-	13,146	-	2,414,593
As at November 30, 2023	2,235,853	-	46,962	-	2,282,815

Vision Marine Technologies Inc.

Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2023

7. Property and equipment

	Machinery and equipment	Rolling stock	Computer equipment	Moulds	Leasehold improvements	Boat rental fleet	Total
	$	$	$	$	$	$	$
Cost
Balance at August 31, 2022	333,084	118,664	21,032	911,924	264,356	971,477	2,620,537
Additions	62,409	69,029	565	30,501	97,699	678,599	938,802
Disposals	-	(136,072)	-	-	-	(499,770)	(635,842)
Transferred from Right-of-use assets	-	-	3,646	-	-	41,161	44,807
Currency translation	-	(2,347)	-	-	-	(70,115)	(72,462)
Balance at August 31, 2023	395,493	49,274	25,243	942,425	362,055	1,121,352	2,895,842
Additions	29,196	-	-	-	10,000	-	39,196
Disposals	-	-	-	-	-	(54,328)	(54,328)
Currency translation	-	-	-	-	-	(1,661)	(1,661)
Balance at November 30, 2023	424,689	49,274	25,243	942,425	372,055	1,065,363	2,879,049

Accumulated depreciation
Balance at August 31, 2022	197,804	29,999	12,803	73,028	44,505	43,416	401,555
Depreciation	31,495	25,875	4,485	37,696	69,332	72,163	241,046
Disposal	-	(21,864)	-	-	-	(38,821)	(60,685)
Balance at August 31, 2023	229,299	34,010	17,288	110,724	113,837	76,758	581,916
Depreciation	9,040	1,344	1,094	9,423	21,699	18,666	61,266
Disposal	-	-	-	-	-	(8,197)	(8,197)
Balance at November 30, 2023	238,339	35,354	18,382	120,147	135,536	87,227	634,985

Net carrying amount
As at August 31, 2023	166,194	15,264	7,955	831,701	248,218	1,044,594	2,313,926
As at November 30, 2023	186,350	13,920	6,861	822,278	236,519	978,136	2,244,064

Vision Marine Technologies Inc.

Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2023

8. Intangible assets and goodwill

	Intellectual property	Software	Trade name	Backlog	Website	Total
	$	$	$	$	$	$
Cost
Balance at August 31, 2022	1,035,070	101,775	98,294	79,550	18,858	1,333,547
Additions	-	-	-	-	-	-
Currency translation	-	-	6,057	4,556	1,211	11,824
Balance at August 31, 2023	1,035,070	101,775	104,351	84,106	20,069	1,345,371
Currency translation	-	-	(559)	(435)	(111)	(1,105)
Balance at November 30, 2023	1,035,070	101,775	103,792	83,671	19,958	1,344,266

Accumulated depreciation
Balance at August 31, 2022	159,089	24,700	14,439	19,830	2,819	220,877
Depreciation	103,508	12,920	20,426	16,911	4,005	157,770
Balance at August 31, 2023	262,597	37,620	34,865	36,741	6,824	378,647
Depreciation	25,877	3,635	5,277	4,288	1,016	40,093
Balance at November 30, 2023	288,474	41,255	40,142	41,029	7,840	418,740

Net carrying amount
As at August 31, 2023	772,473	64,155	69,486	47,365	13,245	966,724
As at November 30, 2023	746,596	60,520	63,650	42,642	12,118	925,526

The balance of goodwill is $9,714,558 as at November 30, 2023 [August 31, 2023 – $9,680,941], with the change since acquisition date due to foreign exchange translation.

9. Credit facility

The Company has an authorized line of credit of $250,000, renewable annually, bearing interest at prime rate plus 1%, secured by a first ranking movable hypothec of $750,000 on all present and future accounts receivable and inventory. As at November 30, 2023, the Company has drawn an amount of $210,000 [August 31, 2023 - $155,000] on the line of credit.

10. Trade and other payables

	As at November 30, 2023		As at August 31, 2023
	$		$
Trade payable		2,312,297		1,107,310
Sales taxes payable		43,773		62,398
Salaries and vacation payable		480,424		585,192
		2,836,494		1,754,900

Vision Marine Technologies Inc.

Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2023

11. Contract liabilities

	As at November 30, 2023			As at August 31, 2023
	$			$
Opening balance		1,815,731			1,029,318
Payments received in advance		278,644			3,330,235
Boat sale deposits		-			151,572
Payments reimbursed		-			(8,131	)
Transferred to revenues		(246,581	)		(2,718,943	)
Currency translation		3,559			31,680
Closing balance		1,851,353			1,815,731

12. Lease liabilities

	As at November 30, 2023			As at August 31, 2023
	$			$
Opening balance		2,641,794			2,415,549
Additions		38,283			921,498
Repayment		(194,818	)		(726,893	)
Interest on lease liability		35,750			139,132
Lease termination		-			(151,800	)
Currency translation		4,327			44,308
Closing balance		2,525,336			2,641,794

Current		681,744			647,638
Non-current		1,843,592			1,994,156
		2,525,336			2,641,794

Future undiscounted lease payments as at November 30, 2023 are as follows:

	$
Less than one year		803,518
One to five years		1,930,685
		2,734,203

Vision Marine Technologies Inc.

Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2023

13. Long-term debt

	As at November 30, 2023		As at August 31, 2023
	$		$
The government assistance loan is non-interest bearing until December 31, 2023 at which time the loan bears interest at 5% per annum. The loan must be repaid by December 31, 2025.		40,000		40,000

Term loans, bearing interest at rates varying 9.44% and 10.71% per annum payable in monthly installments of $23,337 ending January 2025.		208,177		265,329
		248,177		305,329
Current portion of long-term debt		236,719		271,546
		11,458		33,783

14. Related party transactions

Companies related through common ownership

EB Rental Ltd. [prior to June 3, 2021]

7858078 Canada Inc. [prior to June 3, 2021]

Montana Strategies Inc.

Key management personnel of the Company have control over the following entities

California Electric Boat Company Inc.

9335-1427 Quebec Inc.

Hurricane Corporate Services Ltd.

Mac Engineering, SASU – Since February 16, 2021

Ultimate founder shareholders and their individually controlled entities

Alexandre Mongeon

Patrick Bobby

Robert Ghetti

Immobilier R. Ghetti Inc.

Société de Placement Robert Ghetti Inc.

Vision Marine Technologies Inc.

Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2023

The following table summarizes the Company’s related party transactions for the period:

	Three months ended November 30, 2023		Three months ended November 30, 2022
	$		$
Office salaries and benefits
Montana Strategies Inc.		-		19,519

Research and Development
Mac Engineering, SASU		791,906		49,964

The Company leases its Boisbriand premises from California Electric Boat Company Inc. As at November 30, 2023, the right-of-use assets and lease liabilities related to those leases amount to $1,182,284 and $1,317,323 respectively [August 31, 2023 – $1,270,955 and $1,395,732 respectively] [notes 6 and 12].

Remuneration of directors and key management of the Company

	Three months ended November 30, 2023		Three months ended November 30, 2022
	$		$
Wages		502,015		621,863
Share-based payments – capital stock		66,588		-
Share-based payments – stock options		21,554		64,291
		590,157		686,154

The amounts due to and from related parties are as follows:

	As at November 30, 2023		As at August 31, 2023
	$		$
Share subscription receivable
9335-1427 Quebec Inc.		25,000		25,000
Alexandre Mongeon		14,200		14,200
		39,200		39,200

Current advances to related party
Alexandre Mongeon		17,384		20,135

Vision Marine Technologies Inc.

Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2023

	As at November 30, 2023	As at August 31, 2023
	$	$
Amounts due to related parties included in trade and other payable
Alexandre Mongeon	10,769	19,384
Patrick Bobby	7,693	13,847
Kulwant Sandher	4,808	8,654
Xavier Montagne	5,808	10,454
Mac Engineering, SASU	200,405	9,935
	229,483	62,274

Advances from related parties are non-interest bearing and have no specified terms of repayment.

15. Capital stock

Authorized

Voting Common Shares – Series Founder, Series Investor 1, Series Investor 2, voting and participating

Non-Voting Common Shares, non-voting

Preferred Shares, without par value, non-cumulative annual dividend, redeemable at their issue price, non- participating, non-voting

Issued

	As at November 30, 2023		As at August 31, 2023
	$		$

11,649,319 Voting Common Shares [August 31, 2023 – 11,172,800]		51,816,439		50,395,717

During the three-month period ended November 30, 2023, the Company issued 103,649 Voting Common Shares to third parties in exchange for marketing services provided to the Company.

During the three-month period ended November 30, 2023, the Company issued 372,870 Voting Common Shares and warrants to purchase Voting Common Shares, respectively as part of the financing rounds for a total cash consideration price of $1,781,194, net of transaction costs of $246,298. During the three-month period ended November 30, 2023, the warrants issued are to purchase 372,870 Voting Common Shares of the Company for a period of three years from the issuance date at an exercise price at U.S. $4.05.

Vision Marine Technologies Inc.

Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2023

As at November 30, 2023, the derivative liabilities related to the warrants issued amounted to $765,733 [August 31, 2023 – $5,558,822]. For the three-month period ended November 30, 2023, the Company allocated transaction costs of $149,472 related to the warrants issued during the period, which were recorded in net finance income [2022 – Nil] [note 18].

The table below summarizes the movement in the derivative liabilities during the three-month period ended November 30, 2023 and the fiscal year ended August 31, 2023:

	As at November 30, 2023			As at August 31, 2023
	$			$
Opening balance		5,558,822			-
Additions		765,733			7,614,510
Change in estimate of fair value		(5,411,168	)		(2,055,688	)
Closing balance		913,387			5,558,822

16. Share-based payments

Description of the plan

The Company has a fixed option plan. The Company’s stock option plan is administered by the Board of Directors. Under the plan, the Company’s Board of Directors may grant stock options to employees, advisors and consultants, and designates the number of options and the share price pursuant to the new options, subject to applicable regulations. The options, when granted, will have an exercise price of no less than the estimated fair value of shares at the date of grant.

Stock options

On multiple grant dates, the Company granted stock options at exercise prices varying between $2.78 and $16.29 per share to directors, officers, employees and consultants of the Company. The stock options will expire 5 to 10 years from the grant dates.

The Company recognizes share-based payments expense for option grants based on the fair value at the date of grant using the Black-Scholes valuation model. The share-based payments expense recognized for the three months ended November 30, 2023 amounts to $74,333 [2022 – $312,878]. The table below lists the assumptions used to determine the fair value of these option grants. Volatility is based on the historical share price volatility of the Company and other public companies with characteristics similar to the Company.

Vision Marine Technologies Inc.

Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2023

Grant date	Exercise price	Market price	Expected volatility	Risk-free interest rate	Expected life
	$	$	%	%	[years]
May 27, 2020	3.70	3.70	84	0.4	5
May 27, 2020	2.78	3.70	84	0.4	5
October 23, 2020	3.70	3.70	97	0.4	5
November 24, 2020	16.29	13.03	101	0.4	5
November 24, 2020	5.68	5.72	75	3.6	4
February 23, 2021	15.75	15.05	103	0.6	5
May 14, 2021	5.68	5.72	75	3.6	3
July 14, 2021	9.25	9.01	105	0.7	5
September 21, 2021	8.85	8.58	106	0.9	5
January 22, 2022	5.65	5.52	107	1.5	5
November 30, 2022	6.09	6.09	107	3.1	5
December 1,2022	5.83	5.83	107	3.0	5
March 22, 2023	5.76	5.14	75	3.6	2
March 25, 2023	5.77	5.23	75	3.6	3
March 25, 2023	5.77	5.23	75	3.6	4
April 20, 2023	5.79	5.27	75	3.6	5

The following tables summarize information regarding the option grants outstanding as at November 30, 2023:

	Number of options			Weighted average exercise price
	#			$
Balance at August 31, 2022		1,706,418			9.45
Granted		88,500			5.80
Forfeited		(268,158	)		9.65
Stock options modifications		(370,000	)		5.78
Exercised		(57,219	)		2.86
Balance at August 31, 2023		1,099,541			5.22
Forfeited		(5,000	)		5.22
Balance at November 30, 2023		1,094,541			5.22

Exercise price range	Number of options outstanding		Weighted average grant date fair value		Weighted average remaining contractual life		Exercisable options
$	#		$		[years]		#
2.78 - 3.70		454,041		2.48		1.51		447,228
5.65 – 5.83		575,500		2.94		4.17		519,618
6.09 – 8.85		30,000		6.26		7.33		26,250
16.29		35,000		9.33		7.00		35,000

Vision Marine Technologies Inc.

Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2023

Warrants

On November 23, 2020, the Company granted the underwriter the option to purchase 151,800 Voting Common Shares of the Company for a period of five years from the date of the initial public offering at an exercise price of U.S. $12.50 ($16.53).

On August 5, 2022, the Company granted the underwriter the option to purchase 50,000 Voting Common Shares of the Company for a period of four years from the grant date at an exercise price of U.S. $8.00 ($10.30).

On January 19, 2023, as part of a share subscription, the Company issued warrants with the option to purchase 554,253 Voting Common Shares of the Company for a period of three years from the grant date at an exercise price of U.S. $4.21 ($5.63).

On February 17, 2023, as part of a share subscription, the Company issued warrants with the option to purchase 475,059 Voting Common Shares of the Company for a period of three years from the grant date at an exercise price of U.S. $4.21 ($5.67).

On April 19, 2023, as part of a share subscription, the Company issued warrants with the option to purchase 381,293 Voting Common Shares of the Company for a period of three years from the grant date at an exercise price of U.S. $4.21 ($5.64).

On June 16, 2023, as part of a share subscription, the Company issued warrants with the option to purchase 493,828 Voting Common Shares of the Company for a period of three years from the grant date at an exercise price of U.S. $4.21 ($5.35).

On August 2, 2023, as part of a share subscription, the Company issued warrants with the option to purchase 493,832 Voting Common Shares of the Company for a period of three years from the grant date at an exercise price of U.S. $4.21 ($5.37).

On September 20, 2023, as part of a share subscription [note 15], the Company issued warrants with the option to purchase 372,870 Voting Common Shares of the Company for a period of three years from the grant date at an exercise price of U.S. $4.21 ($5.44).

The table below lists the assumptions used to determine the fair value of these warrants grants or issuances. Volatility is based on historical share price volatility of the Company and other public companies with characteristics similar to the Company.

Grant or issuance date	Exercise price		Market price		Expected volatility		Risk-free interest rate		Expected life
	$		$		%		%		[years]
August 5, 2022		10.30		7.20		100		2.9		3
January 19, 2023		5.63		5.63		100		3.4		3
February 17, 2023		5.67		6.05		100		4.0		3
April 19, 2023		5.64		5.55		75		3.9		3
June 16, 2023		5.35		5.50		75		4.1		3
August 2, 2023		5.37		5.10		75		4.8		3
September 20, 2023		5.44		4.40		75		4.8		3

Vision Marine Technologies Inc.

Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2023

Grant or issuance date	Exercise price		Number of warrants outstanding		Weighted average remaining contractual life
	$		#		[years]
November 23, 2020		16.53		151,800		1.98
August 5, 2022		10.30		50,000		1.68
January 19, 2023		5.63		554,253		2.14
February 17, 2023		5.67		475,059		2.22
April 19, 2023		5.64		381,293		2.39
June 16, 2023		5.35		493,828		2.55
August 2, 2023		5.37		493,832		2.67
September 20, 2023		5.44		372,870		2.81

17. Revenues

	Three months ended November 30, 2023		Three months ended November 30, 2022
	$		$
Sales of boats		88,093		157,285
Sales of parts and boat maintenance		30,497		90,836
Boat rental and boat club membership revenue		867,802		1,151,639
		986,392		1,399,760

The geographical distribution of revenues from external customers is as follows:

					Three months ended November 30, 2023
	Sale of electric boats		Rental of electric boats		Total
	$		$		$
Canada		45,326		-		45,326
USA		73,264		867,802		941,066
Other		-		-		-
		118,590		867,802		986,392

Vision Marine Technologies Inc.

Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2023

					Three months ended November 30, 2022
	Sale of electric boats		Rental of electric boats		Total
	$		$		$
Canada		-		-		-
USA		248,120		1,151,640		1,399,760
Other		-		-		-
		248,120		1,151,640		1,399,760

18. Net finance income

	Three months ended November 30, 2023			Three months ended November 30, 2022
	$			$
Interest and bank charges		64,563			56,340
Interest income		(27,046	)		(311,667	)
Loss on Debentures [note 5]		-			109,667
Transaction costs [note 15]		149,472			-
Gain on derivative liabilities [note 15]		(5,411,168	)		-
		(5,224,179	)		(145,660	)

19. Fair value measurement and hierarchy

The fair value measurement of the Company’s financial and non-financial assets and liabilities utilizes market observable inputs and data as far as possible. Inputs used in determining fair value measurements are categorized into different levels based on how observable the inputs used in the valuation technique utilized are (the “fair value hierarchy”):

●

Level 1: Quoted prices in active markets for identical items [unadjusted];

●

Level 2: Observable direct or indirect inputs other than Level 1 inputs; and

●

Level 3: Unobservable inputs [i.e., not derived from market data].

The classification of an item into the above levels is based on the lowest level of the inputs used that has a significant effect on the fair value measurement of the item. Transfers of items between levels are recognized in the period they occur.

The carrying amount of trade and other receivables, advances to/from related parties and trade and other payables are assumed to approximate their fair value due to their short-term nature.

Vision Marine Technologies Inc.

Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2023

The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market interest rate that is available for similar financial liabilities.

Classified as Level 2, the fair value of Debentures was estimated using the partial differential equation model to value convertible debentures that include a call feature. Key assumptions used in the model include volatility, which was based on actual trading data, difference in volatility since initial issuance of the instrument and similar instruments on the market, and credit spread, which was based on corporate bond yield spreads in the market and credit spread data for similar public companies. The model included a fair value adjustment based on an initial calibration exercise. During the three months ended February 28, 2023, the Company recorded an impairment loss on the Debentures based on the estimated recoverable amount of the financial asset [note 5].

The fair value of the derivative liabilities related to the warrants issued is classified as Level 2 in the fair value hierarchy and is calculated using the Black-Scholes Option Pricing Model using the historical volatility of comparable companies as an estimate of future volatility, as well as the current market price of the Voting Common Shares. As at November 30, 2023, the Company used volatility of approximately 75% over the remaining contractual life in order to determine the fair value of the derivative liabilities. As at November 30, 2023, if the volatility used was increased by 10% the impact would be an increase of $225,000 to the derivative liabilities with a corresponding decrease in total comprehensive income. As at November 30, 2023, if the current market price of the Voting Common Shares increased by 10%, the impact would be an increase of $198,000 to the derivative liabilities with a corresponding decrease in total comprehensive income.

20. Segment information

The Company operates in two reportable business segments.

The two reportable business segments offer different products and services, require different processes and are based on how the financial information is produced internally for the purposes of monitoring operating results and making decisions about resource allocation and performance assessment by the Company’s Chief Operating Decision Maker.

The following summary describes the operations of each of the Company’s reportable business segments:

Sale of electric boats – manufacture of customized electric boats for consumer market and sale of boat parts maintenance, and

Rental of electric boats – short-term rental operation and boat club membership.

Sales between segments are accounted for at prices that approximate fair value. No business segments have been aggregated to form the above reportable business segments.

Vision Marine Technologies Inc.

Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2023

	Three months ended November 30, 2023
	Sale of electric boats			Rental of electric boats			Inter-segment eliminations			Total
	$			$			$			$
Revenue from external customers		118,590			867,802			-			986,392
Revenue from other segments		18,894			6,908			(25,802	)		-
Segment revenues		137,484			874,710			(25,802	)		986,392
Segment gross profit (loss)		(28,743	)		184,254			280,017			435,528

Segment profit (loss) before tax		1,126,640	¹		(165,505	)		7,135			968,270
Research and development		984,506			-			-			984,506
Office salaries and benefits		680,994			179,460			-			860,454

	Three months ended November 30, 2022
	Sale of electric boats			Rental of electric boats		Inter-segment eliminations			Total
	$			$		$			$
Revenue from external customers		248,121			1,151,639		-			1,399,760
Revenue from other segments		221,915			127,111		(349,026	)		-
Segment revenues		470,036			1,278,750		(349,026	)		1,399,760
Segment gross profit (loss)		(443,679	)		651,526		(103,571	)		104,276

Segment profit (loss) before tax		(6,893,052	)		165,184		(48,573	)		(6,776,441	)
Research and development		3,769,103			-		(81,906	)		3,687,197
Office salaries and benefits		630,617			209,114		-			839,731

	As at November 30, 2023
	Sale of electric boats		Rental of electric boats		Inter-segment eliminations			Total
	$		$		$			$
Segment assets		19,472,818		13,751,281		(10,339,470	)		22,884,629
Cash		656,207		185,781		-			841,988
Additions to property and equipment		39,196		-		-			39,196
Segment liabilities		6,661,151		3,310,135		(1,199,798	)		8,771,488

¹ For the three-month period ended November 30, 2023, the segment profit for this segment includes a gain on derivative liabilities of $5,411,168 [see note 18].

Vision Marine Technologies Inc.

Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2023

	As at August 31, 2023
	Sale of electric boats		Rental of electric boats		Inter-segment eliminations			Total
	$		$		$			$
Segment assets		20,344,002		13,941,898		(10,239,388	)		24,046,512
Cash		3,025,565		333,692		-			3,359,257
Additions to property and equipment		194,820		974,533		(185,744	)		983,609
Segment liabilities		10,154,031		3,341,868		(1,013,824	)		12,482,075

The Company has disclosed the above amounts for each reportable segment because they are regularly reviewed by the Chief Operating Decision Maker.

21. Additional cash flows information

Financing and investing activities not involving cash:

	Three months ended November 30, 2023		Three months ended November 30, 2022
	$		$
Additions to right-of-use assets		38,283		307,525
Lease termination		-		100,350

22. Commitments

In addition to the obligations under leases [note 12], the Company is subject to supply agreements with minimum spend commitments. The amount of the minimum fixed and determinable portion of the unconditional purchase obligations over the next years, is as follows:

		$
2024			10,943,420

In October 2021, EB Rental Ltd. has entered into lease arrangement for premises, which has not commenced yet and therefore related right-of-use asset and lease liability are not recorded as at November 30, 2023. The lease offers EB Rental Ltd. a termination clause in case certain contractual requirements are not met by the lessor at the lease commencement date.

Vision Marine Technologies Inc.

Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2023

The Company’s undiscounted lease commitments related to this lease are as follows as at November 30, 2023:

	$
2024		67,910
2025		164,342
2026		167,629
2027 and thereafter		448,287

23. Subsequent events

During the months of December 2023 and January 2024, the Company issued a total of 10,870 Voting Common Shares to third parties in exchange of sub-contracting services provided to the Company related to investor relations.

On December 4, 2023, the Company announced a strategic partnership with Blue Water Boat Rental, a leader in internal combustion engine boat rentals. The Company will provide 8 electric boats and share 50% of the revenue generated by the partnership. Blue Water will provide the personnel, sales and marketing, slips and dock space and other items.

On December 13, 2023, the Company authorized the issuance of new Series A Preferred Shares. This new class of shares will rank senior to the Voting Common Shares but retain no voting rights. They will have a stated value of US$1,000 per share and will be convertible into Voting Common Shares of the Company at the election of the holder at any time at a price of US$1.05 per share, exercise price subject to adjustment. The Series A Preferred Shares are convertible at the election of its holder into that number of Voting Common Shares determined by dividing the Series A stated value (plus any and all other amounts which may be owing in connection therewith) by the exercise price, subject to certain beneficial ownership limitations which prohibit any holder from converting into an amount of Voting Common Shares that would cause such holder to beneficially own more than 4.99% of the then outstanding Voting Common Shares). On the one-year anniversary of the original issuance date, the Series A Preferred Shares will automatically convert into Voting Common Shares at the lesser of the then exercise price, and 80% of the average volume-weighted average price of the Company’s Voting Common Shares during the five trading days ending on, and including, such date. In no event shall the conversion price for the Series A Preferred Shares be less than US$0.30, subject to adjustment herein.

Concurrently, the Company has agreed to reduce the exercise price of 2,922,935 of its previously issued warrants from US$4.05 and US$4.25 to US$1.05, which includes certain participating investors, who have entered into warrant amendment agreements with the Company.

On December 21, 2023, the Company issued 2,900 Series A Preferred Shares and warrants to purchase 2,761,904 Voting Common Shares as part of a private placement for a total cash consideration price of $3,254,227, net of transaction costs of $605,963. Investors were also granted an option to purchase up to an additional 2,900 shares of Series A Preferred Shares and up to an additional 2,761,904 Warrants for a period of six (6) months from the execution of the definitive securities purchase agreements. The warrants issued are to purchase 2,761,904 Voting Common Shares of the Company for a period of 5 years from the grant date at an exercise price at U.S. $1.05.

On January 10, 2024, the Company announced that the Government of Québec, through Investissement Québec, will subscribe for up to US$3 million in preferred shares of the Company.

Exhibit 99.2

VISION MARINE TECHNOLOGIES INC.

Form 51-102F1 Management's Discussion & Analysis

For the three months ended November 30, 2023

1.1 Date January 12, 2024

Introduction

The following management's discussion and analysis, prepared as of November 30, 2023, is a review of operations, current financial position and outlook for Vision Marine Technologies Inc. (the "Company"), and should be read in conjunction with the Company's interim condensed consolidated financial statements for the three months ended November 30, 2023 and the audited consolidated financial statements for the years ended August 31, 2023 and 2022 and the notes thereto. Amounts are reported in Canadian dollars based upon the interim condensed consolidated financial statements prepared in accordance with IAS 34, Interim Financial Reporting and annual consolidated financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”) on SEDAR at www.sedar.com.

Forward-Looking Statements

Certain statements contained in the following Management’s Discussion and Analysis (“MD&A”) constitute forward-looking statements. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements.

Risks and Uncertainties

There is limited public information on our operating history.

Our limited public operating history makes evaluating our business and prospects difficult. Although we were formed in 2012, we did not provide public reports on the results of operations until our 2020 fiscal year. We only have six years of audited financial statements.

We currently have a net loss, and if we are unable to achieve and grow a net income in the future our ability to grow our business as planned will be adversely affected.

We have made significant up-front investments in research and development, sales and marketing, and general and administrative expenses to rapidly develop and expand our business. We had a net income of $1.025 million for the three months ending November 30, 2023 as compared to a net loss of $6.786 million for the three months ending November 30, 2022. We may never achieve net income or if we do it may fail to grow or even decline in certain circumstances, many of which are beyond our control. Our revenues might not ever significantly exceed our expenses, and may even be lower than our expenses. It may take us longer to obtain net income than we anticipate, if at all, or we may only do so at a much lower rate than we anticipate. Failure to obtain net income may mean that we will have to curtail our planned growth in operations or resort to financings to fund such growth in the future.

Our plan of operations entails promoting a product that we may never launch or which may not be commercially accepted if launched.

We have concentrated the majority of our research and development efforts on developing electric powertrain systems that we intend to rent and sell to Original Equipment Manufacturers (“OEM”) of boats. We expect the electric powertrain systems to represent the majority of our revenue in our coming accounting periods. We have built prototypes of our electronic powertrain. We do not know if OEMs will find our product candidate to be an attractive component in their boats or if they will find the price of our electric powertrains to be acceptable. We do not currently have any significant customers for our electric powertrains. Although we have received LOIs from OEMs for over 1,000 powertrains through the year ended August 31, 2024, such LOIs are non-binding and may never result in any actual sales. Even if we do develop such relationships, we might not be able to maintain them or grow them as anticipated. At the time of our initial public offering, we had expected to begin the commercialization of our electric powertrains in 2020 but were not able to meet that preferred timeline and we may not meet our new timelines. Additionally, we had anticipated developing a 335 horsepower within 18 months of our last annual report but currently do not believe that we will meet that anticipated date. If we are not successful in commercializing our product or if sales of our electric powertrain are less than we estimate, our business may not grow as expected, if at all, and we may fail.

To carry out our proposed business plan to build up inventory for order fulfilment, increase brand awareness and develop a new powertrain for our engines, we will require a significant amount of capital.

If current cash, cash equivalents and revenue from our business are not sufficient to cover our cash requirements, we will need to raise additional funds through the sale of debt or equity securities, in either private placements or additional registered offerings. If we are unsuccessful in raising enough funds through such capital-raising efforts, we may review other financing possibilities such as bank loans. Financing might not be available to us or, if available, only on terms that are not favorable or acceptable to us.

Our ability to obtain the necessary financing to carry out our business plan is subject to a number of factors, including general market conditions and investor acceptance of our business plan. These factors may make the timing, amount, terms and conditions of such financing unattractive or unavailable to us. If we are unable to raise sufficient funds, we will have to significantly reduce our spending, delay or cancel our planned activities or substantially change our current corporate structure. We might not be able to obtain any funding, and we might not have sufficient resources to conduct our business as projected, both of which could mean that we would be forced to curtail or discontinue our operations.

Terms of subsequent financings may adversely impact your investment.

We may have to engage in common equity, debt, or preferred share financings in the future. As a result, your rights and the value of your investment in our securities could be reduced. Interest on debt securities could increase costs and negatively impact operating results. Preferred shares could be issued in one or more series from time to time with such designation, rights, preferences, and limitations as determined by the Board. The terms of preferred shares could be more advantageous to those investors than to the holders of common shares. In addition, if we need to raise more equity capital from the sale of common shares, institutional or other investors may negotiate terms at least as, and possibly more, favorable than the terms of your investment in our common shares.

Our future growth depends upon consumers’ willingness to purchase electric powerboats.

Our growth highly depends upon the adoption by consumers of, and we are subject to an elevated risk of any reduced demand for, electric powerboats. Without such growth, sales of our electric powertrain, if any, and our electric boats may not grow at the rate that we anticipate, if such sales grow at all. If the market for electric powerboats does not develop as we expect or develops more slowly than we expect, our business, prospects, financial condition and operating results will be negatively impacted. Despite the long history of electric powerboats, the market for them is relatively new, rapidly evolving, characterized by rapidly changing technologies, price competition, additional competitors, evolving government regulation and industry standards, frequent new electric powerboat announcements and changing consumer demands and behaviors. Powerboats with conventional gas-powered motors may be deemed preferable to electric powerboats as they tend to be more powerful, have a longer range and/or cost less. Other factors that may influence the adoption of electric powerboats include:

the decline of an electric powerboats range resulting from deterioration over time in the battery’s ability to hold a charge;

concerns about electric grid capacity and reliability, which could derail our efforts to promote electric powerboats as a practical solution to powerboats which require gasoline;

improvements in the fuel economy of the internal combustion engine;

the availability of service for electric powerboats;

the environmental consciousness of consumers;

volatility in the cost of oil and gasoline;

consumers’ perceptions about convenience and cost to charge an electric powerboat;

the availability of tax and other governmental incentives to manufacture electric powerboats; and

perceptions about and the actual cost of alternative fuel.

Any of the factors described above may cause current or potential customers not to purchase our electric powerboat, which would materially adversely affect our business, operating results, financial condition and prospects.

Our future growth depends upon consumers’ preference for outboard motors.

We envision the majority of our growth deriving from the sale of our electric powertrain for an outboard motor. If consumer preferences lead to a decline in outboard motors, the OEMs we intend to sell our electric powertrain to may produce less electric boats, and we may not be able to sell as many electric powertrains as we anticipate, if we sell any at all. We may not be able to adapt the technology behind this powertrain for inboard motors or may only be able to do so in a way that is not cost effective.

We rely on a limited number of suppliers for key components of our finished products.

Although we manufacture all of our powerboats, we do so by assembling the component parts that we acquire from third-party suppliers rather than by producing any of those component parts ourselves. We materially depend on some of those third-party suppliers for certain components that we obtain from a limited number of suppliers, namely:

hulls: we purchase all of our hulls from Aqualux and Abitibi & Co.,

Motors: for our electric powertrains, we intend to purchase motors from Danfoss Technologies and E-Propulsion and for our boats, we purchase approximately 30% from Min-Kota, 35% from E-Tech and 20% from E-Propulsion;

powertrains: we purchase approximately 100% of our low powered powertrains from E-Propulsion, a Chinese company specialized in the research, development and production of components for electric outboard engines;

battery packs: we purchase our lithium-ion batteries (approximately 15% of all batteries we purchase) from Octillion and Neogy who in turn rely upon Samsung cells, We have an agreement with Octillion Power Systems (“Octillion”) to provide marine specific batteries to power the E-Motion powertrain; and

casings: we purchase the casings for our powertrains from Tohatshu Corporation, a Japanese company.

As we purchase our components and parts through purchase orders and informal arrangements rather than long-term purchase agreements, we have not contractually secured a supply chain for these components and parts. As a result of the COVID-19 pandemic, some of our third-party suppliers have experienced delays in delivering parts and components for our products. If we continue to experience delays in receiving our supplies from these third-parties, if they significantly increased the cost of these components or if they ceased offering us these components, we may have to find new suppliers, which might not be possible on a timely basis, or cease production of the products in which the components are included.

In June 2021, we acquired EB Rental, Ltd. (“EBR”), and the acquired company may not perform as we expect.

In June 2021, we acquired all of the equity interests of 7858078 Canada Inc. which wholly-owns EBR, an electric boat rental company operating at Lido Marina Village in Newport Beach, California. Integrating businesses is a difficult, expensive, and time-consuming process. Our principal executive offices and manufacturing facility are located in Quebec, Canada and EBR’s operations are conducted, and its employees are mostly located, in California. Failure to integrate successfully EBR’s business and operations with ours could lead to inefficiencies, the loss of staff or revenues below what we anticipated at the time of the acquisition.

Revenues from EBR may be affected by a variety of factors that are outside of our control.

Revenues from EBR represented 71% of our total revenues in our fiscal 2023. Future revenues from EBR may be affected by factors that are outside of our control, including:

the appearance, safety, economic health and ability to continue to attract visitors willing to rent electric vehicles at the Lido Village and Portside Ventura marinas;

the ability to successfully operate our rental operation in Ventura, California that was opened during the quarter ending May 31, 2023, with 6 boats

the continued desirability of boat rentals as a leisure activity; and

the local economic condition in and around the areas we offer rentals or may offer rentals in the future.

If EBR’s revenues decrease significantly, it may cease to be profitable or our revenues may not be as large as we currently project.

A portion of our assets consist of debentures in a third-party, and the ability of that third-party to repay those debentures is outside of our control. If those debentures were not to be repaid in full, our assets could be significantly reduced

On May 14, 2021, we purchased $3,400,000 in debentures (the “Debentures”) from The Limestone Boat Company Limited (“Limestone”). Limestone is a North American designer and manufacturer of recreational and commercial powerboats. Because (i) Limestone announced that in January 2023 that its wholly-owned subsidiaries had filed for voluntary petitions for relief under Chapter 7 of the Bankruptcy Code of the U.S. Bankruptcy Court for the Middle District of Tennessee, (ii) the market price of Limestone’s common shares had fallen significantly below the conversion price set out in the Debentures and (iii) because we deemed it unlikely that we would convert the debt pursuant to the original terms of the Debentures, the Company agreed to give Limestone the right to convert the Debentures into common shares of Limestone at a conversion price of $0.071, which was approved by the shareholders of Limestone and is awaiting the issuance of the Company’s shareholder certificate, following the exercise of the conversion right by Limestone. The Company maintained the fair value of its investment in Limestone at nil as at November 30, 2023 [August 31, 2023 – Nil].

. Prior to the conversion, the Company had recorded an impairment on the entire value of the Debentures at the amount of $2,637,000 for the year ended August 31, 2023.

The range of electric powerboats on a single charge declines over time which may negatively influence potential customers’ decisions whether to purchase our boats or boats containing our electric powertrains.

The range of electric powerboats on a single charge declines principally as a function of usage, time and charging patterns. For example, a customer’s use of their powerboat as well as the frequency with which they charge the battery can result in additional deterioration of the battery’s ability to hold a charge. During the lifetime of the lead acid batteries in powerboats, 500 to 1,000 recharge cycles are possible, and our lithium battery pack will retain approximately 85% of its ability to hold its initial charge after approximately 3,000 charge cycles and 8 years, which will result in a decrease to the boat’s initial range. Such battery deterioration and the related decrease in range may negatively influence potential customer decisions whether to purchase an electric boat, which may harm our ability to market and sell our boats. Likewise, if such reasoning deters potential customers from purchasing boats made by OEMs that use our electric powertrains, they may order fewer electric powertrains from us, if they ever order any at all.

Developments in alternative technologies or improvements in the internal combustion engine may materially adversely affect the demand for our electric powerboats.

Significant developments in alternative technologies, such as advanced diesel, ethanol, fuel cells or compressed natural gas, or improvements in the fuel economy of the internal combustion engine, may materially and adversely affect our business and prospects in ways we do not currently anticipate. For example, fuel which is abundant and relatively inexpensive in North America, such as compressed natural gas, may emerge as consumers’ preferred alternative to petroleum-based propulsion. Any failure by us to develop new or enhanced technologies or processes, or to react to changes in existing technologies, could materially delay our development and introduction of new and enhanced electric powerboats, which could result in the loss of competitiveness of our boats, decreased revenue and a loss of market share to competitors.

If we are unable to keep up with advances in electric powerboat technology, we may lose our competitive position in the industry.

We may be unable to keep up with changes in electric powerboats technology, particularly developments with powertrains. As a result, we may lose our competitive position in the industry. Any failure to keep up with advances in electric powerboat technology could result in a loss of our competitive position which would materially and adversely affect our business, prospects, operating results and financial condition. Our research and development efforts may not be sufficient to adapt to changes in electric powerboat technology. As technologies change, we plan to upgrade or adapt our electric powertrain. We would additionally upgrade our boats and introduce new models to take advantage of these changes. However, our technology and boats may not compete effectively with alternative technology or powerboats if we are not able to source and integrate the latest technology. For example, we do not manufacture lead or lithium battery cells, and as a result, we are dependent on suppliers of battery cell technology for our battery packs.

Demand in the powerboat industry is highly volatile.

Fluctuations in demand for recreational powerboats and electric powerboats may materially and adversely affect our business, prospects, operating results and financial condition. The markets in which we compete have been subject to considerable volatility in demand in recent periods. Demand for recreational powerboat and electric powerboat sales depends to a large extent on general, economic and social conditions in a given market. Historically, sales of recreational powerboats decrease during economic downturns. We have fewer financial resources than more established powerboat manufacturers to withstand adverse changes in the market and disruptions in demand.

Unfavorable weather conditions may have a material adverse effect on our business, financial condition, and results of operations, especially during the peak boating season.

Adverse weather conditions in any year, in any particular geographic region, may adversely affect sales in that particular geographic region, especially during the peak boating season in such particular geographic region. Sales of our products are generally stronger just before and during spring and summer, which represent the peak boating months in most of our markets, and favorable weather during these months generally has a positive effect on consumer demand for our products. Conversely, unseasonably cool weather, excessive rainfall, reduced rainfall levels, or drought conditions during these periods may close area boating locations or render boating dangerous or inconvenient, thereby generally reducing consumer demand for our products. Our annual results would be materially and adversely affected if our net sales were to fall below expected seasonal levels during these periods. We may also experience more pronounced seasonal fluctuation in net sales in the future as we continue to expand our businesses. Additionally, to the extent that unfavorable weather conditions are exacerbated by global climate change or otherwise, our sales may be affected to a greater degree than we have previously experienced. Adverse weather could also affect income from our rental business as we tend to rent significantly less boats on rainy or otherwise unappealing days than on sunny and attractive ones. If we experience more rainy or otherwise unappealing days at our marinas than normal, our income from the rental of electric boats could materially decline.

We intend to increasingly use our network of independent dealers, and we will face increasing competition for dealers and have little control over their activities.

Currently, most of our sales are directly placed with us online, but approximately 72% of our sales in the three months ended November 30, 2023 were derived from our network of independent dealers. We have agreements with dealers in our network that typically provide for terms of between 1 and 3 years. While we will continue to market direct sales through our website, we seek to increase revenues and diversify our sales points by expanding our network of independent dealers. We envision an increase in the number of dealers supporting our products and the quality of their marketing and servicing efforts being essential to our ability to increase sales. We may not be successful in our effort to grow our network of independent dealers.

Competition for dealers among recreational powerboat manufacturers continues to increase based on the quality, price, value and availability of the manufacturers’ products, the manufacturers’ attention to customer service and the marketing support that manufacturers provide to dealers. We will face intense competition from other recreational powerboat manufacturers in attracting and retaining dealers, and we might not be able to attract or retain relationships with qualified and successful dealers as well as our competition, if at all. We might not be able to maintain or improve our relationship with dealers or our market share position. In addition, independent dealers in the recreational powerboat industry have experienced significant consolidation in recent years, which could inhibit our ability to retain them or result in the loss of one or more of our dealers in the future if the surviving entity in any such consolidation purchases similar products from a competitor. If we do not establish a significant network of dealers, our future sales could fail to meet our projections, and our business, financial condition and results of operations may be adversely affected.

We envision that our success will depend, in part, upon the financial health of our dealers and their continued access to financing.

We seek to increase revenues and diversify our sales points by expanding our network of independent dealers. The financial health of our current and any future dealers is critical to our success. Our business, financial condition and results of operations may be adversely affected if the financial health of dealers that sell our products suffers. Their financial health may suffer for a variety of reasons, including a downturn in general economic conditions, rising interest rates, higher rents, increased labor costs and taxes, compliance with regulations and personal financial issues.

In addition, dealers require adequate liquidity to finance operations, including purchases of our products. Dealers are subject to numerous risks and uncertainties that could unfavorably affect their liquidity positions, including, among other things, continued access to adequate financing sources on a timely basis on reasonable terms. These sources of financing are vital to our ability to sell products through our distribution network. Access to floor plan financing generally facilitates dealers’ ability to purchase powerboats from us, and their financed purchases reduce our working capital requirements. If floor plan financing were not available to our dealers, our sales and our working capital levels could be adversely affected. The availability and terms of financing offered by dealers’ floor plan financing providers will continue to be influenced by:

their ability to access certain capital markets and to fund their operations in a cost-effective manner;

the performance of their overall credit portfolios;

their willingness to accept the risks associated with lending to dealers; and

the overall creditworthiness of those dealers.

Changes to trade policies, tariffs, and import/export regulations may have a material adverse effect on our business, financial condition, and results of operations.

Although we manufacture our products in Canada, in our last fiscal year approximately 91% of our sales and rentals occurred in the United States, a percentage that could increase as our operations expand. Changes in laws and policies governing foreign trade could adversely affect our business. As a result of recent policy changes, there may be greater restrictions and economic disincentives on international trade. We anticipate that we will be affected by the agreement between the United States of America, the United Mexican States, and Canada (commonly known as USMCA). Such agreement has the potential to adversely impact the global and local economies, our industry and global demand for our products and, as a result, could have a material adverse effect on our business, financial condition and results of operations.

Interest rates and energy prices affect marine products’ sales

Although our products are not frequently financed by our dealers and retail powerboat consumers, we envision this becoming more common as we expand our operations and grow our network of distributors. This may not occur if interest rates rise because higher rates increase the borrowing costs and, as a result, the cost of doing business for dealers and the cost of powerboat purchases for consumers. Energy costs can represent a large portion of the costs to manufacture our products and can increase their ultimate sales price. Therefore, higher interest rates and fuel costs can adversely affect consumers’ decisions relating to recreational powerboating purchases.

We have a large fixed cost base that will affect our profitability if our sales decrease.

The fixed cost levels of operating a recreational powerboat manufacturer can put pressure on profit margins when sales and production decline. Our profitability depends, in part, on our ability to spread fixed costs over a large number of products sold and shipped, and if we decide to reduce our rate of production, gross or net margins could be negatively affected. Consequently, decreased demand or the need to reduce production can lower our ability to absorb fixed costs and materially impact our financial condition or results of operations.

We depend on certain key personnel, and our success will depend on our continued ability to retain and attract such qualified personnel.

Our success depends on the efforts, abilities and continued service of Alexandre Mongeon, our Chief Executive Officer, Kulwant Sandher, our Chief Financial Officer, and Xavier Montagne, our Chief Operating Officer and Chief Technology Officer. A number of these key employees and consultants have significant experience in the recreational boating, manufacturing and electric vehicle industries. A loss of service from any one of these individuals may adversely affect our operations, and we may have difficulty locating, or may not be able to locate and hire a suitable replacement. We have not obtained any “key person” insurance on certain key personnel.

We are subject to numerous environmental, health and safety laws and any breach of such laws may have a material adverse effect on our business and operating results.

We are subject to numerous environmental, health and safety laws, including statutes, regulations, bylaws and other legal requirements. These laws relate to the generation, use, handling, storage, transportation and disposal of regulated substances, including hazardous substances (such as batteries), dangerous goods and waste, emissions or discharges into soil, water and air, including noise and odors (which could result in remediation obligations), and occupational health and safety matters, including indoor air quality. These regulations also apply to any contamination that our powerboats cause in the lakes and rivers in which they operate. These legal requirements vary by location and can arise under federal, provincial, state or municipal laws. Any breach of such laws and/or requirements could have a material adverse effect on our company and its operating results.

Our powerboats are subject to mandated safety standards and failure to meet those standards could have a material adverse effect on our business and operating results.

Given the inherent dangers involved with powerboats, all powerboats sold must comply with federal, state and provincial safety standards. Additionally, most powerboats sold in the United States meet the safety standards set by the American Boat and Yacht Counsel (“ABYC”), a non-profit, member organization that develops voluntary safety standards for the design, construction, maintenance, and repair of recreational powerboats and the National Marine Manufacturers Association (“NMMA”). Our powerboats have been certified by the United States Coast Guard and the Canadian Coast Guard, meet the ABYC safety standards and have received CE marking indicating their conformity with health, safety, and environmental protection standards within the European Economic Area. Loss of any of these certifications or failure to obtain them for future products could have a material adverse effect on our business and operating results.

We intend to rely on a third-party for the manufacture of what we envision will become our principal product.

If we are able to commercialize our E-Motion™ electric powertrain, we intend to use a third-party to mass produce our powertrains. In October 2021, we entered into a Manufacture and Supply Agreement with Linamar Corporation, a provider of manufacturing solutions and a developer of highly engineered products. Under the terms of the agreement, we intend for McLaren Engineering, Linamar’s technology and product development team for its advanced mobility segment, to manufacture and assemble our E-Motion™ technology through testing, parts, tooling development, and designing the union assembly for mass production of our electric powertrain at Linamar’s facility in Canada. Once we have scaled up the production of our electric powertrain, we intend for the Linamar Corporation to produce our electric powertrain for mass commercialization. If Linamar Corporation is unable to satisfactorily manufacture our E-Motion™ powertrains, we will be forced to find a new third-party manufacturer or to produce such powertrains inhouse (with our current facilities we believe that we are limited to producing 300 electric powertrains per year in addition to producing 150 boats per year). Any such change in manufacturers could lead to a delay in our ability to deliver on purchase orders or the loss of such purchase orders, which in turn could adversely affect our revenue or the timing of our revenue.

If we are unable to meet the service requirements of our customers, our business will be materially and adversely affected.

We do not offer warranties or provide service for our boats and do not intend to offer warranties on our powertrains systems. Instead, the purchasers of our boats and of our powertrains may rely upon the warranties and services of the manufacturers of the components used in our boats and powertrains. As all such warranties are provided by third-party suppliers, the quality and timeliness of such service is outside of our control. Additionally, the terms of such warranties, including the length of time of coverage, and servicing terms, including locations and labor cost, are not uniform. If our purchasers and potential purchasers believe that warranties and servicing capabilities provided by our third-party suppliers are inadequate, the reputation of our brand will suffer and business and prospects could be materially and adversely affected.

If we are unable to meet our production and development goals, we may need to change our business plans or the timeline in which we expect to carry them out.

Our ability to carry out our business plans depends upon meeting our production and development goals. Delays or failures in meeting these goals could require us to reassess our business plans and the timeline that it will take us to implement those plans. In the past we have not always met our production and development goals. For example, we expected to manufacture approximately 50 powerboats, and begin commercialization of our electric powertrains in calendar 2023, and we did not meet these goals. If any such delays or failures were to cause a material change to our proposed business plans, such change could result in materially adverse changes in our projected revenues or expenses.

We may not succeed in establishing, maintaining and strengthening the Vision Marine brand, which could materially and adversely affect customer acceptance of our boats and components and our business, revenues and prospects.

Our business and prospects heavily depend on our ability to develop, maintain and strengthen the Vision Marine brand and the brands of our powerboat models. Any failure to develop, maintain and strengthen these brands may materially and adversely affect our ability to sell our products. If we are not able to establish, maintain and strengthen our brands, we may lose the opportunity to build our customer base. We expect that our ability to develop, maintain and strengthen the Vision Marine brand will also depend heavily on the success of our marketing efforts. To further promote our brand, we may be required to change our marketing practices, which could result in substantially increased advertising expenses, including the need to use traditional media such as television, radio and print. Many of our current and potential competitors have greater name recognition, broader customer relationships and substantially greater marketing resources than we do. If we do not develop and maintain strong brands, our business, prospects, financial condition and operating results will be materially and adversely impacted.

Increases in costs, disruption of supply or shortage of raw materials, in particular lithium-ion cells, could harm our business.

Although we do not materially use raw materials in the production of our electronic powerboats, we purchase the necessary parts and components for our boats from third-party suppliers that do. Were those third-party suppliers to experience increases in the cost or a sustained interruption in the supply or shortage of raw materials, the corresponding parts and components could become more costly or less available (if still available at all). For example, our supply chain has been impacted by the COVID-19 pandemic as some of our third-party suppliers have experienced delays in delivering parts and components for our products. We are particularly exposed to a supply-chain risk as we have not contractually secured long-term supply commitments at fixed prices with our third-party suppliers. The prices for these raw materials fluctuate depending on market conditions and global demand for these materials and price fluctuations and material shortages could adversely affect our business and operating results. For instance, we are exposed to multiple risks relating to price fluctuations for lithium-ion cells. These risks include:

the inability or unwillingness of current battery manufacturers to build or operate battery cell manufacturing plants to supply the numbers of lithium-ion cells required to meet demand;

disruption in the supply of cells due to quality issues or recalls by the battery cell manufacturers; and

an increase in the cost of raw materials, such as cobalt, used in lithium-ion cells.

Our business depends on the continued supply of battery cells for our boats. We do not currently have any agreements for the supply of batteries and depend upon the open market for their procurement. Any disruption in the supply of battery cells from our supplier could temporarily disrupt the planned production of our boats until such time as a different supplier is fully qualified. Moreover, battery cell manufacturers may choose to refuse to supply electric boat manufacturers to the extent they determine that the boats are not sufficiently safe. Furthermore, current fluctuations or shortages in petroleum and other economic conditions may cause us to experience significant increases in freight charges and raw material costs. Substantial increases in the prices for our raw materials would increase our operating costs and could reduce our margins if we cannot recoup the increased costs through increased electric boat prices. We might not be able to recoup increasing costs of raw materials by increasing boat prices. We publish the price for the base model of our powerboats. However, any attempts to increase the published prices in response to increased raw material costs could be viewed negatively by our potential customers, result in cancellations of orders and could materially adversely affect our brand, image, business, prospects and operating results.

If our suppliers sell us parts or components containing conflict minerals, we may be required at significant expense to find suppliers that do not use conflict minerals.

In 2010, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) requiring the Securities and Exchange Commission (“SEC”) to issue rules specifically relating to the use of “Conflict Minerals” within manufactured products. Conflict Minerals are currently defined by U.S. Law as tin, tantalum, tungsten and gold (also known as “3TG”) and related derivatives. Within a year of becoming a public company, the SEC rules require any SEC registrant whose commercial products contain any 3TG (“3TG Product”) to determine whether the 3TG in the 3TG Product originated from the Democratic Republic of the Congo (“DRC”) or adjoining countries (collectively, the “DRC Region”) and, if so, whether the 3TG is “conflict free”. “3TG Conflict Free” means that the supply chain is transparent and the 3TG in 3TG Products does not directly or indirectly benefit armed groups responsible for serious human rights abuses in the DRC Region. By enacting this provision, Congress intends to further the humanitarian goal of ending the extremely violent conflict in the DRC Region, which has been partially financed by the exploitation and trade of 3TG originating in the DRC Region.

We will need to expend time and money on determining whether our products contain conflict minerals. If our suppliers use conflict minerals in the production of the parts and components that we purchase from them, we may need to find alternative suppliers. If possible, this may only be possible at significant expense or with material delays in production.

Our software to control our electric powertrain systems contains “open source” software, and any failure to comply with the terms of one or more of these open-source licenses could negatively affect our business.

We use software to control our electric powertrain systems that relies upon “open source” licenses and intend to use such software in the future. Although we do not believe that the open source code we have used imposes any limitations on the use of the software that we have developed, the terms of many open source licenses have not been interpreted by United States or other courts, and there is a risk that these licenses could be construed in a manner that could impose unanticipated conditions or restrictions on our ability to commercialize our solutions including requirements that we make available source code for modifications or derivative works we create based upon the open source software or license such modifications or derivative works. In addition to risks related to license requirements, usage of open-source software can lead to greater risks than use of third-party commercial software, as open-source licensors generally do not provide warranties or controls on origin of the software. We cannot be sure that all open source is submitted for approval prior to use in our solutions. In addition, many of the risks associated with use of open source cannot be eliminated, and could, if not properly addressed, negatively affect the performance of our electric powertrains and our business.

We rely on network and information systems and other technologies for our business activities and certain events, such as computer hackings, viruses or other destructive or disruptive software or activities may disrupt our operations, which could have a material adverse effect on our business, financial condition and results of operations.

Network and information systems and other technologies are important to our business activities and operations. Network and information systems-related events, such as computer hackings, cyber threats, security breaches, viruses, or other destructive or disruptive software, process breakdowns or malicious or other activities could result in a disruption of our services and operations or improper disclosure of personal data or confidential information, which could damage our reputation and require us to expend resources to remedy any such breaches. Moreover, the amount and scope of insurance we maintain against losses resulting from any such events or security breaches may not be sufficient to cover our losses or otherwise adequately compensate us for any disruptions to our businesses that may result, and the occurrence of any such events or security breaches could have a material adverse effect on our business and results of operations. The risk of these systems-related events and security breaches occurring has intensified, in part because we maintain certain information necessary to conduct our businesses in digital form stored on cloud servers. While we develop and maintain systems seeking to prevent systems-related events and security breaches from occurring, the development and maintenance of these systems is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated. Despite these efforts, there can be no assurance that disruptions and security breaches will not occur in the future. Moreover, we may provide certain confidential, proprietary and personal information to third parties in connection with our businesses, and while we obtain assurances that these third parties will protect this information, there is a risk that this information may be compromised. The occurrence of any of such network or information systems-related events or security breaches could have a material adverse effect on our business, financial condition and results of operations.

If the governmental grants and tax credits that we receive were to be no longer available, our net earnings would be materially reduced.

We receive governmental benefits in connection with our operations. In connection with the production of our powerboats and our research into green technology, we have been able to receive tax credits and grants provided by the Quebec provincial government and the Canadian federal government. During the three months ended November 30, 2023, the Company did not recognize any grants and investment tax credits. We intend to continue applying for such grants and receiving such tax credits. Without such grants and tax credits, our net loss in each of the past two fiscal years would have been larger. If they were no longer available, our business, prospects, financial condition and operating results could be adversely affected.

The unavailability, reduction or elimination of government economic incentives could have a material adverse effect on our business, financial condition, operating results and prospects.

Although we are unaware of substantial governmental economic incentives, such as tax credits and rebates, that customers may receive in connection with the purchase of our products, there are certain governmental regulations whose repeal could affect the desirability of our powerboats. In particular, local and regional restrictions of internal combustion engines on certain waterways, make electric boats an attractive alternative for use in such lakes and rivers. Any reduction, elimination or discriminatory application of such rules because of policy changes or other reasons may result in the diminished competitiveness of electric boats generally. This could materially and adversely affect the growth of our market and our business, prospects, financial condition and operating results.

If we fail to manage future growth effectively, we may not be able to market or sell our powerboats or powertrains successfully.

Any failure to manage our growth effectively could materially and adversely affect our business, prospects, operating results and financial condition. We plan to expand our operations in the near future. Our future operating results depend to a large extent on our ability to manage this expansion and growth successfully. Risks that we face in undertaking this expansion include:

training new personnel;

forecasting production and revenue;

expanding our marketing efforts, including the marketing of a new powertrain that we use;

controlling expenses and investments in anticipation of expanded operations;

establishing or expanding design, manufacturing, sales and service facilities;

implementing and enhancing administrative infrastructure, systems and processes; and

addressing new markets.

We intend to continue to hire a number of additional personnel, including design and manufacturing personnel and service technicians for our electric boats and powertrains. Competition for individuals with experience designing, manufacturing and servicing electric boats is intense, and we may not be able to attract, assimilate, train or retain additional highly qualified personnel in the future. The failure to attract, integrate, train, motivate and retain these additional employees could seriously harm our business and prospects.

Our business may be adversely affected by labor and union activities.

None of our employees are currently represented by a labor union. It is common in Quebec for employees of manufacturers of a certain size to belong to a union. Although we do not believe that we are currently of a size where our employees will unionize, were they to do so now or in the future, we would be at risk for higher employee costs and increased risk of work stoppages. We also directly and indirectly depend upon other companies with unionized work forces, such as parts suppliers and trucking and freight companies, and work stoppages or strikes organized by such unions could have a material adverse impact on our business, financial condition or operating results. If a work stoppage occurs among our key suppliers or our network of distributors, it could materially reduce the manufacture and sale of our boats and have a material adverse effect on our business, prospects, operating results or financial condition.

Our ability to meet our manufacturing workforce needs is crucial to our results of operations and future sales and profitability.

We rely on the existence of an available hourly workforce to manufacture our products. We cannot assure you that we will be able to attract and retain qualified employees to meet current or future manufacturing needs at a reasonable cost, or at all. For instance, the demand for skilled employees has increased recently with the low unemployment rates in the regions where we have manufacturing facilities. Also, although none of our employees are currently covered by collective bargaining agreements, we cannot assure you that our employees will not elect to be represented by labor unions in the future. Additionally, competition for qualified employees could require us to pay higher wages to attract a sufficient number of employees. Significant increases in manufacturing workforce costs could materially adversely affect our business, financial condition or results of operations.

We compete with a variety of other activities for consumers’ leisure time.

Our powerboats are used for recreational and sport purposes, and demand for our powerboats may be adversely affected by competition from other activities that occupy consumers’ leisure time and by changes in consumer lifestyle, usage pattern or taste. Similarly, an overall decrease in consumer leisure time may reduce consumers’ willingness to purchase and enjoy our products.

Product liability, warranty, personal injury, property damage and recall claims may materially affect our financial condition and damage our reputation.

We are engaged in a business that exposes us to claims of product liability and warranty claims in the event our products actually or allegedly fail to perform as expected or the use of our products results, or is alleged to result, in property damage, personal injury or death. Our products involve kinetic energy, produce physical motion and are to be used on the water, factors which increase the likelihood of injury or death. Our products contain Lithium-ion batteries, which have been known to catch fire or vent smoke and flame, and chemicals which are known to be, or could later be proved to be, toxic carcinogenic. Any personal injury or wrongful death claim could, even if not justified, prove expensive to contest.

We do not provide warranties for our powerboats but instead rely upon the warranties provided by the third-party manufacturers from whom we purchase the components for our powerboats. Although we maintain product and general liability insurance of the types and in the amounts that we believe are customary for the industry, we are not fully insured against all such potential claims. We may experience legal claims in excess of our insurance coverage or claims that are not covered by insurance, either of which could adversely affect our business, financial condition and results of operations. Adverse determination of material product liability and warranty claims made against us could have a material adverse effect on our financial condition and harm our reputation. In addition, if any of our products or components in our products are, or are alleged to be, defective, we may be required to participate in a recall of that product or component if the defect or alleged defect relates to safety. Any such recall and other claims could be costly to us and require substantial management attention.

Our intellectual property is not protected through patents or formal copyright registration. As a result, we do not have the full benefit of patent or copyright laws to prevent others from replicating our products, product candidates and brands.

Apart from trademark applications that we filed with the Canadian Intellectual Property Office and the U.S. Patent and Trademark Office for our logo and the brand name “E-Motion”, we have not protected our intellectual property rights through patents or formal copyright or trademark registration, and we do not currently have any patent applications pending. As we intend to transition into the production of electric powertrains to OEMs, we envision our intellectual property and its security becoming more vital to our future. Until we protect our intellectual property through patent, trademarks and registered copyrights, we may not be able to protect our intellectual property and trade secrets or prevent others from independently developing substantially equivalent proprietary information and techniques or from otherwise gaining access to our intellectual property or trade secrets. In such an instance, our competitors could produce products that are nearly identical to ours resulting in us selling less products or generating less revenue from our sales.

Confidentiality agreements with employees and others may not adequately prevent disclosure of trade secrets and other proprietary information.

We rely on trade secrets, know-how and technology, which are not protected by patents, to protect the intellectual property behind our electric powertrain and for the construction of our boats. We do not yet use confidentiality agreements with our collaborators, employees, consultants, outside scientific collaborators and sponsored researchers and other advisors to protect our proprietary technology and processes. We intend to use such agreements in the future, but these agreements may not effectively prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. In addition, others may independently discover trade secrets and proprietary information, and in such cases we could not assert any trade secret rights against such party. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position.

Any patent applications that we file may not result in issued patents, which may have a material adverse effect on our ability to prevent others from interfering with our commercialization of our products

To date, we have not filed any patent applications, and we might not ever file patent applications. The registration and enforcement of patents involves complex legal and factual questions and the breadth and effectiveness of patented claims is uncertain. If we ever file patent applications in connection with our electric outboard powertrain systems or other matters, we cannot be certain that we will be first to file patent applications on those or other inventions, nor can we be certain that such patent applications will result in issued patents or that any of our issued patents will afford sufficient protection against someone creating competing products, or as a defensive portfolio against a competitor who claims that we are infringing its patents. In addition, patent applications filed in foreign countries are subject to laws, rules and procedures that differ from those of the United States, and thus we cannot be certain that foreign patent applications, if any, will result in issued patents in those foreign jurisdictions or that such patents can be effectively enforced, even if they relate to patents issued in the United States.

We have limited registered trademarks for our products and trade names

We have submitted applications for registered trademarks for our name and some of our brands, but not all of these applications have been granted. Any pending trademark applications that we filed with a relevant governmental authority for brand names/logos might not be approved as might any such future applications. Failure to obtain such approval could limit our ability to use the brand names/logos in those territories or lead our products to be confused with, and/or tarnished by, competing products. Even if appropriate applications were made and approved, third parties may oppose or otherwise challenge such applications or registrations.

We may need to defend ourselves against patent or trademark infringement claims, which may be time-consuming and would cause us to incur substantial costs.

The status of the protection of our intellectual property is unsettled as we do not have any patents, trademarks or registered copyrights and have not applied for the same. Companies, organizations or individuals, including our competitors, may hold or obtain patents, trademarks or other proprietary rights that would prevent, limit or interfere with our ability to make, use, develop, sell or market our powerboats and electric powertrains or use third-party components, which could make it more difficult for us to operate our business. From time to time, we may receive communications from third parties that allege our products or components thereof are covered by their patents or trademarks or other intellectual property rights. Companies holding patents or other intellectual property rights may bring suits alleging infringement of such rights or otherwise assert their rights. If we are determined to have infringed upon a third party’s intellectual property rights, we may be required to do one or more of the following:

cease making, using, selling or offering to sell processes, goods or services that incorporate or use the third-party intellectual property;

pay substantial damages;

seek a license from the holder of the infringed intellectual property right, which license may not be available on reasonable terms or at all;

redesign our boats or other goods or services to avoid infringing the third-party intellectual property;

establish and maintain alternative branding for our products and services; or

find-third providers of any part or service that is the subject of the intellectual property claim.

In the event of a successful claim of infringement against us and our failure or inability to obtain a license to the infringed technology or other intellectual property right, our business, prospects, operating results and financial condition could be materially adversely affected. In addition, any litigation or claims, whether or not valid, could result in substantial costs, negative publicity and diversion of resources and management attention.

You may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited because we are incorporated under the laws of the Province of Quebec, a substantial portion of our assets are in Canada and the majority of our directors and executive officers reside outside the United States.

We are constituted under the laws of the Business Corporations Act (Quebec) (the “Business Corporation Act”), and our executive offices are located outside of the United States in Boisbriand, Quebec. Our officers and the majority of our directors reside outside the United States. In addition, a substantial portion of their assets and our assets are located outside of the United States. As a result, you may have difficulty serving legal process within the United States upon us or any of these persons. You may also have difficulty enforcing, both in and outside of the United States, judgments you may obtain in U.S. courts against us or these persons in any action, including actions based upon the civil liability provisions of U.S. Federal or state securities laws. Furthermore, there is substantial doubt as to the enforceability in Canada against us or against any of our directors and officers who are not residents of the United States, in original actions or in actions for enforcement of judgments of U.S. courts, of liabilities based solely upon the civil liability provisions of the U.S. federal securities laws. In addition, shareholders in Quebec corporations may not have standing to initiate a shareholder derivative action in U.S. federal courts.

As a result, our public shareholders may have more difficulty in protecting their interests through actions against us, our management, our directors or our major shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States.

Global economic conditions could materially adversely impact demand for our products and services.

Our operations and performance depend significantly on economic conditions. Global financial conditions continue to be subject to volatility arising from international geopolitical developments and global economic phenomenon, as well as general financial market turbulence, including growing inflationary concerns, resulting in a significant reduction in many major market indices. Uncertainty about global economic conditions could result in

customers postponing purchases of our products and services in response to tighter credit, unemployment, negative financial news and/or declines in income or asset values and other macroeconomic factors, which could have a material negative effect on demand for our products and services; and

third-party suppliers being unable to produce parts and components for our products in the same quantity or on the same timeline or being unable to deliver such parts and components as quickly as before or subject to price fluctuations, which could have a material adverse effect on our production or the cost of such production; and

accordingly, on our business, results of operations or financial condition. Access to public financing and credit can be negatively affected by the effect of these events on Canadian, U.S. and global credit markets. The health of the global financing and credit markets may affect our ability to obtain equity or debt financing in the future and the terms at which financing or credit is available to us. These instances of volatility and market turmoil could adversely affect our operations and the trading price of our common shares.

Our business may be materially affected by the COVID-19 Outbreak

The continued novel coronavirus (COVID-19) pandemic, including variations from new strains, may disrupt our business and operational plans. These disruptions may include disruptions resulting from (i) shortages of employees, (ii) unavailability of contractors and subcontractors, (iii) interruption of, or price fluctuations in, supplies from third parties upon which we rely, (iv) restrictions that governments impose to address the COVID-19 outbreak, and (v) restrictions that we and our contractors and subcontractors impose to ensure the safety of employees and others. Although we have not noticed any decrease to orders that we would attribute to COVID-19, we believe that COVID-19 is impacting our supply chain by increasing the amount of time between ordering third-party materials needed for our boats and their delivery. Continued delays in our supply chain could adversely impact our production and, in turn, our revenues. Further, it is presently not possible to predict the extent or durations of these disruptions. These disruptions may have a material adverse effect on our business, financial condition and results of operations. Such adverse effect could be rapid and unexpected. These disruptions may severely affect our ability to carry out our business plans for 2024 and 2025.

Fluctuations in currency exchange rates may significantly impact our results of operations.

Our operations are conducted in the United States and Canada, but approximately 91% of our sales and rentals have occurred in the United States. As a result, we are exposed to an exchange rate risk between U.S. and Canadian dollars. The exchange rates between these currencies in recent years have fluctuated significantly and may continue to do so in the future. In our fiscal 2023, the monthly average exchange rate as published by the Bank of Canada ranged from a high of US1.3700:$1.00 to a low of US$1.3215:$1.00. An appreciation of the Canadian dollar against the U.S. dollar could increase the relative cost of our products outside of Canada, which could lead to decreased sales. Conversely, to the extent that we are required to pay for goods or services in U.S. dollars, the depreciation of the Canadian dollar against the U.S. dollar would increase the cost of such goods and services.

We do not hedge our currency exposure and, therefore, we incur currency transaction risk whenever we enter into either a purchase or sale transaction using a currency other than the Canadian dollar. Given the volatility of exchange rates, we might not be able to effectively manage our currency transaction risks, and volatility in currency exchange rates might have a material adverse effect on our business, financial condition or results of operations.

If we experience material weaknesses or otherwise fail to maintain an effective system of internal controls over financial reporting, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect investor confidence in us and, as a result, the value of our common shares.

As a result of the year-end assessment process for the year ended August 31, 2023, we identified that we did not maintain effective processes and controls over the accounting for and reporting of complex and non-routine transactions due to a material weakness. Specifically, we determined that there was a lack of sufficient accounting and finance personnel to enable appropriate level of internal controls within the financial statement close process, including performing in-depth analysis and review of complex accounting matters and non-routine transactions within the timeframes set by us for filing our consolidated financial statements. Because of this deficiency, we concluded there was a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis at August 31, 2023. As at November 30, 2023, we are working on remediating the identified material weakness.

If we fail to identify or remediate any current or future material weaknesses in our internal controls over financial reporting, we are unable to conclude that our internal controls over financial reporting are effective or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal controls over financial reporting when we are no longer an emerging growth company, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common shares could be negatively affected. As a result of such failures, we could also become subject to investigations by Nasdaq, the SEC or other regulatory authorities, and become subject to litigation from investors and shareholders, which could harm our reputation and financial condition or divert financial and management resources from our regular business activities.

Our financial statements have been prepared on a going concern basis and our financial status creates a substantial doubt whether we will continue as a going concern.

Our financial statements have been prepared on a going concern basis under which an entity is considered to be able to realize its assets and satisfy its liabilities in the ordinary course of business. Our future operations are dependent upon the identification and successful completion of equity or debt financing and the achievement of profitable operations at an indeterminate time in the future. There can be no assurances that we will be successful in completing an equity or debt financing or in achieving or maintaining profitability. The financial statements do not give effect to any adjustments relating to the carrying values and classification of assets and liabilities that would be necessary should we be unable to continue as a going concern.

1.2 Overall Performance

Description of Business

The Company was incorporated on August 29, 2012, under the laws of the province of Quebec, Canada, and its principal activity is the design, development and manufacturing of electric outboard powertrain systems and electric boats.

The head office and principal address of the Company are located at 730 Boulevard du Cure-Boivin, Boisbriand, Quebec, Canada, V7G 2A7.

Additional information related to the Company is available on SEDAR at www.sedar.com.

Performance Summary

The following is a summary of significant events and transactions that occurred during and subsequent to the three months ended November 30, 2023:

On September 11, 2023 The Company announced the appointment of Dr. Philippe Couillard as an Independent Director to the Board of Directors, effective immediately. Dr. Couillard brings a wealth of knowledge and a diverse range of experiences to his new role, and he will be instrumental in guiding Vision Marine through its next phase of growth and innovation.

On September 18, 2023 the Company announced that it has entered into subscription agreements with investors to purchase an aggregate of 372,870 units, at a purchase price of US$4.05 per unit. The gross proceeds to the Company from the private placement are expected to be approximately US$1.5 million before deducting the placement agent's fees and other estimated offering expenses. Each of the units issued pursuant to the private placement is comprised of one common share and one common share purchase warrant. Each full warrant will be exercisable six months from the date of issuance and entitle its holder to acquire one additional common share at a price of US$4.05 per common share, subject to adjustments as set forth therein, and will expire three years from the date of issuance.

On December 14, 2023, the Company announced that it has entered into definitive securities purchase agreements with several institutional and accredited investors (the "Investors") for the sale of its preferred shares and warrants. Vision Marine sold an aggregate of 2,900 shares of its non-dividend bearing Series A Preferred Shares, with a stated value of US$1,000 per share, and Warrants to purchase up to 2,761,904 of its common shares for aggregate gross proceeds of US$3.0 million, before deducting placement agent fees and other offering expenses. Investors were also granted an option to purchase up to an additional 2,900 shares of Series A Preferred Shares and up to an additional 2,761,904 Warrants for a period of six (6) months from the execution of the definitive securities purchase agreements. The shares of Series A Preferred Shares are initially convertible into an aggregate of 2,857,142 common shares of the Company at a conversion price of US$1.05 per share, as may be adjusted, for a period of twelve (12) months, at which time the Series A Preferred Shares becomes mandatorily convertible, subject to a potential price adjustment at maturity. The Warrants have an exercise price of US$1.05 per share and will expire five (5) years from the date of issuance. Simultaneously with the execution of the definitive securities purchase agreement, the Company has agreed to reduce the exercise price of 2,922,935 of its previously issued warrants from US$4.05 and US$4.21 to US$1.05, which includes certain participating Investors, who have entered into warrant amendment agreements with the Company. Joseph Gunnar & Co., LLC is acting as the exclusive placement agent for the offering. The offering closed on December 14, 2023.

Financings

During the three months ended November 30, 2023, the Company issued the following shares:

On September 20, 2023 the Company announced that it has entered into subscription agreements with investors to purchase an aggregate of 372,870 units, at a purchase price of US$4.05 per unit. The gross proceeds to the Company from the private placement are expected to be approximately US$1.5 million before deducting the placement agent's fees and other estimated offering expenses. Each of the units issued pursuant to the private placement is comprised of one common share and one common share purchase warrant. Each full warrant will be exercisable six months from the date of issuance and entitle its holder to acquire one additional common share at a price of US$4.05 per common share, subject to adjustments as set forth therein, and will expire three years from the date of issuance.

During the months of September, October and November 2023, the Company issued a total of 103,650 Voting Common Shares to third parties in exchange of sub-contracting services provided to the Company related to investor relations and marketing services.

Incentive Stock Options

During the three months ended November 30, 2023, the Company did not grant any stock options.

1.3 Selected Annual Financial Information

	Year Ended August 31, 2023			Year Ended August 31, 2022			Year Ended August 31, 2021
	$			$			$
Revenue		5,651,502			7,350,946			3,513,788
Gross Profit		1,536,426			3,285,565			1,604,182

Expenses		(22,694,487	)		(16,139,007	)		(16,612,499	)

Income/(Loss) before Tax		(21,158,061	)		(12,853,442	)		(15,008,317	)

Income Taxes		280,875			(258,343	)		(105,590	)

Total comprehensive income/(loss)		(20,542,229	)		(12,802,680	)		(14,725,341	)
Basic & Diluted Earnings/(Loss) per Share		(2.25	)		(1.58	)		(2.04	)

Balance Sheet
Working Capital Surplus/(Deficit) ⁽¹⁾		3,676,936			8,727,011			18,626,563
Total Assets		24,046,512			29,100,209			38,801,292
Total Long-Term Liabilities		7,671,898			2,197,684			2,581,271

⁽¹⁾Working capital surplus (deficit) is calculated using current assets less current liabilities

Selected Quarterly financial information

Quarter end	Revenues		Total comprehensive income (loss)			Loss per Share
November 30, 2023²		986,392		1,053,649			0.09
August 31, 2023		2,120,447		(4,354,706	)		(0.41	)
May 31, 2023		1,300,100		(3,056,639	)		(0.32	)
February 28, 2023		831,195		(6,700,505	)		(0.77	)
November 30, 2022		1,399,760		(6,430,379	)		(0.81	)
August 31, 2022		3,375,806		(3,740,535	)		(0.48	)
May 31, 2022		2,014,769		(1,980,083	)		(0.24	)
February 28, 2022¹		753,520		(3,770,436	)		(0.45	)
November 30, 2021		1,206,851		(3,311,625	)		(0.41	)

¹ The Company restated its financial results for three months ending February 28, 2022.

² The Company had a net finance income related to its derivative liabilities of $5,411,168.

1.4 Results of Operations

Three months ended November 30, 2023

Revenue for the three months ended November 30, 2023 was $986,392 (2022: $1,399,760); the decrease of 30% resulted from a decrease in the revenue generated by the Company’s rental operations and the sale of electric boats. The Company’s gross profit increased to $435,528 (2022: $104,276) due to the reduction in costs related to the sale of boats and the onerous provision of $220,000 due to the expected loss on sales of E-Motion during the corresponding period. The following provides an analysis of the sale of electric boats and revenue from rental operations:

	Three months ended November 30, 2023		Three months ended November 30, 2022		Increase/(Decrease)
Sale of Electric Boats		118,590		248,121		(52	%)
Rental of electric boats		867,802		1,151,639		(25	%)
	$	986,392	$	1,399,760		(30	%)

During the three months ended November 30, 2023, the Company generated a net income of $1,025,129 compared to a net loss of $(6,786,441) for the corresponding prior period. The increase in net income was due to decrease in revenue which was offset by a decrease in expenses for the three months ended November 30, 2023, decreasing to $(532,742) (2022: $6,880,717). The largest expense items that are included in expenses for the three months ended November 30, 2023 were:

Research and development for the three months ended November 30, 2023 was $984,505 (2022: $3,687,197); the decrease was due to the Company moving towards the production of E-Motion, thus reducing research and development costs during the period which was partially offset by the fitting of the Company’s E-Motion powertrains to third party prototypes for testing purposes.

Office salaries and benefits for three months ended November 30, 2023 increased to $860,454 compared to $839,731 for the three months ended November 30, 2022. The Company has initiated a review of staffing which should have an impact in following quarters.

Selling and marketing expenses for the three months ended November 30, 2023 increased to $789,332 (2022: $642,078) due to an increase in attendance at boat shows and an increase in marketing of the Company’s E-Motion powertrains.

Professional fees for the three months ended November 30, 2023 increased to $1,092,852 (2022: $860,585) due to an increase in legal fees due to the Company’s public offerings and an increase in accounting and audit fees due to general increase in costs.

Office and general expenses for the three months ended November 30, 2023, increased to $752,995 (2022: $710,415) due to an increase in leasing of motor vehicles.

Share-based compensation for the three months ended November 30, 2023 decreased to $74,333 (2022: $312,878). The costs include past grants of stock options which are recognised when the stock options are vested. The Company recognises compensation expense for option grants based on the fair value at the date of grant using the Black-Scholes valuation model.

Net finance (income)/expenses for the three months ended November 30, 2023 realised a gain of $5,224,179 (2022: $145,660). This was caused by an increase in interest and bank charges, net of interest income, of $37,517 (2022: $(255,327) gain), and a gain on the remeasurement of a derivative liability of $5,411,168 (2022: $nil), related to the issuance of warrants with an exercise price in US dollars while the Company’s functional currency is in Canadian dollars.

1.6 Liquidity and Capital Resources

The Company’s operations consist of the designing, developing and manufacturing of electric outboard powertrain systems, rental of electric boats and electric boats sales. The Company’s financial success is dependent upon its ability to market and sell its outboard powertrain systems and electric boats; and to raise sufficient working capital to enable the Company to execute its business plan. The Company’s historical capital needs have been met by internally generated cashflow from operations and the support of its shareholders. During the year ended August 31, 2021, the Company raised gross proceeds of US$27,600,000 from its initial public offering onto the Nasdaq and during the year ended August 31, 2023, the Company raised $12,437,523. In addition, during the three months ended November 30, 2023, the Company raised $1,781,194. However, should the Company need further funding, there is no assurance that equity funding will be possible at the times required by the Company. If no funds can be raised and sales of its outboard powertrain systems and electric boats does not produce sufficient net cash flow, then the Company may require a significant curtailing of operations to ensure its survival.

The interim condensed consolidated financial statements have been prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company generated net income before tax of $968,270 and net income of $1,025,129 during the three months ended November 30, 2023 and has a cash balance and a working capital surplus of $841,988 and $1,501,851, respectively, as at November 30, 2023. The Company’s ability to meet its obligations as they fall due and to continue to operate as a going concern is dependent on the continued financial support of the creditors and the shareholders. In the past, the Company has relied on the support of its shareholders to meet its cash requirements. There can be no assurance that funding from this or other sources will be sufficient in the future to continue its operations. Even if the Company is able to obtain new financing, it may not be on commercially reasonable terms or terms that are acceptable to it. Failure to obtain such financing on a timely basis could cause the Company to reduce or terminate its operations.

The Company is evaluating several different strategies and is actively pursuing actions that are expected to increase its liquidity position, including, but not limited to, pursuing additional cost savings initiatives and seeking additional financing from both the public and private markets through the issuance of equity securities. However, the Company's management cannot provide assurances that the Company will be successful in accomplishing any of its proposed financing plans. These matters, when considered in aggregate, indicate the existence of a material uncertainty that raises substantial doubt about the Company’s ability to continue as a going concern for at least 12 months from the issuance of the interim condensed consolidated financial statements for the three months ended November 30, 2023.

As of January 5, 2024, the Company had 11,654,754 issued and outstanding shares and 21,246,034 on a fully diluted basis.

The Company had $1,501,851, of working capital surplus as at November 30, 2023 compared to $3,636,936 working capital surplus as at August 31, 2023. The decrease in working capital surplus during the three months ended November 30, 2023 resulted from the cash used in operations of $4,104,665 (2022: $3,950,689); cash generated from investing activities of $11,326 (2022: $143,202 used in investing activities) resulting from the additions to property and equipment of $39,196 (2022: $343,786); which was offset by proceeds from disposal of equipment of $50,522(2022: $200,584); financing activities provided cash of $1,576,070 (2022: $(75,927)), caused by the issuance of shares and warrants of $1,781,194 (2022: $18,711); increase in the Company’s credit facility of $55,000 (2022: $110,000) which was offset by the repayment of lease liabilities of $194,818 (2022: $182,523) and the repayment of long term debt of $65,306 (2022: $22,115).

1.7 Capital Resources

As at November 30, 2023, the Company had cash of $841,988 (August 31, 2023: $3,359,257).

As of the date of this MD&A, the Company has no outstanding commitments, other than rent and lease commitments and purchase commitments as disclosed in Note 12, 22 and 23 of the Company’s interim condensed consolidated financial statements for the three months ended November 30, 2023. The Company has pledged its future accounts receivable and inventory as security for its credit facility.

1.8 Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements.

1.9 Transactions with Related Parties

Related party balances and transactions

The following table summarizes the Company’s related party transactions for the period:

	Three months ended November 30, 2023		Three months ended November 30, 2022
	$		$
Office salaries and benefits
Montana Strategies Inc.		-		19,519

Research and Development
Mac Engineering, SASU		791,906		49,964

Remuneration of directors and key management of the Company

	Three months ended November 30, 2023		Three months ended November 30, 2022
	$		$
Wages		502,015		621,863
Share-based payments – capital stock		66,588		-
Share-based payments – stock options		21,554		64,291
		590,157		686,154

The amounts due to and from related parties are as follows:

	As at November 30, 2023		As at August 31, 2023
	$		$
Share subscription receivable
9335-1427 Quebec Inc.		25,000		25,000
Alexandre Mongeon		14,200		14,200
		39,200		39,200

Current advances to related party
Alexandre Mongeon		17,384		20,135

Amounts due to related parties included in trade and other payable
Alexandre Mongeon		10,769		19,384
Patrick Bobby		7,693		19,384
Kulwant Sandher		4,808		8,654
Xavier Montagne		5,808		10,454
Mac Engineering, SASU		200,405		9,935
		229,483		62,274

Advances from related parties are non-interest bearing and have no specified terms of repayment.

1.10 Critical Accounting Estimates

The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and judgments are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual outcomes can differ from these estimates. There were no material changes in estimates in the Company’s interim condensed consolidated financial statements for the three months ended November 30, 2023.

1.11 Changes in Accounting Policies including Initial Adoption

See Note 2 of the Company's consolidated financial statements for the three months ended November 30, 2023. The accounting policies adopted in the preparation of the consolidated financial statements are consistent with those followed in the preparation of the Company’s annual consolidated financial statements for the year ended August 31, 2023.

1.12 Controls and procedures

Disclosure controls and procedures

The CEO and the CFO have designed disclosure controls and procedures, or have caused them to be designed under their supervision, in order to provide reasonable assurance that:

material information relating to the Company has been made known to them; and

information required to be disclosed in the Company’s filings is recorded, processed, summarized and reported within the time periods specified in securities legislation.

An evaluation was carried out, under the supervision of the CEO and the CFO, of the design and effectiveness of our disclosure controls and procedures. Based on this evaluation, the CEO and the CFO concluded that the disclosure controls and procedures at November 30, 2023 were not effective to provide reasonable assurance that material information required to be disclosed by us in the reports that we file with, or submit to, the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in by the SEC’s rules and regulations, solely due to the presence of a material weakness in internal controls over financial reporting as described below, which management is in the process of remediating.

Internal controls over financial reporting

The CEO and the CFO have also designed internal controls over financial reporting or have caused them to be designed under their supervision, in order to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS.

An evaluation was carried out, under the supervision of the CEO and the CFO, of the design and effectiveness of our internal controls over financial reporting, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) on Internal Control – Integrated Framework (2013 Framework).

As a result of the year-end assessment process for the year ended August 31, 2023, we identified that we did not maintain effective processes and controls over the financial statement close process and the accounting for and reporting of complex and non-routine transactions due to a material weakness. Specifically, we determined that there was a lack of sufficient accounting and finance personnel to enable appropriate level of internal controls within the financial statement close process, including performing in-depth analysis and review of complex accounting matters and non-routine transactions within the timeframes set by us for filing our consolidated financial statements. Because of this deficiency, we concluded there was a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis at November 30, 2023.

A material weakness is defined as 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.

To remediate the identified material weaknesses, management is in the process of hiring additional personnel and designing and implementing revised controls and procedures which management believes will address the material weakness. These controls and procedures include establishing a more comprehensive schedule for management review of financial information and establishing additional review procedures over the accounting for complex and non-routine transactions. As at November 30, 2023, the Company is working on remediating the identified material weakness.

Notwithstanding the material weakness, management has concluded that the Company’s interim condensed consolidated financial statements as at and for the three months ended November 30, 2023 present fairly, in all material respects, the Company’s financial position, results of operations, changes in equity and cash flows in accordance with IFRS.

Changes in internal controls over financial reporting

Other than as described above, no changes were made to our internal controls over financial reporting that occurred during the three months ended November 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

1.14 Financial Instruments and risk management

See Note 19 to the Company's interim condensed consolidated financial statements for the three months ended November 30, 2023.

1.15 Additional Information

HEAD OFFICE

730 Boulevard du Cure-Boivin

Boisbriand, QC

J7G 2A7

Tel: (450) 951 - 7009

Email: info@electricboats.ca

OFFICERS & DIRECTORS

Alexandre Mongeon,

CEO and Director

Patrick Bobby

Director

Kulwant Sandher, CPA, CA, BSc (Eng.)

Chief Financial Officer

Carter Murray

Chairman & Director

Luisa Ingargiola

Director

Mario Saucier

Director

Steve P. Barrenechea

Director

Dr. Philippe Couillard

Director

CAPITALIZATION

(as at January 5, 2024)

Shares Authorized: Unlimited

Shares Issued: 11,654,754

AUDITORS

Ernst & Young LLP

Montreal, Quebec

LEGAL COUNSEL

Dentons US LLP

1221 Avenue of the Americas

New York, New York 10020

Exhibit 99.3

Form 52-109F2
Certification of Interim Filings
Full Certificate

I, Alexandre Mongeon, Chief Executive Officer of Vision Marine Technologies Inc., certify the following:

Review: I have reviewed the interim financial report and interim MD&A (together, the "interim filings") of Vision Marine Technologies Inc. (the "issuer") for the interim period ended November 30, 2023.

No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

Responsibility: The issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings, for the issuer.

Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer's other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a)

designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i)

material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii)

information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b)

designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer's GAAP.

5.1

Control framework: The control framework the issuer's other certifying officer(s) and I used to design the issuer's ICFR is the Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of Treadway Commission (COSO).

5.2

ICFR – material weakness relating to design: The issuer has disclosed in its interim MD&A for each material weakness relating to design existing at the end of the interim period

(a)

a description of the material weakness;

(b)

the impact of the material weakness on the issuer's financial reporting and its ICFR; and

(c)

the issuer's current plans, if any, or any actions already undertaken, for remediating the material weakness.

5.3

N/A

Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer's ICFR that occurred during the period beginning on September 1, 2023 and ended on November 30, 2023 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR.

Date: January 15, 2024

/s/ Alexandre Mongeon
Alexandre Mongeon
Chief Executive Officer

Exhibit 99.4

Form 52-109F2
Certification of Interim Filings
Full Certificate

I, Kulwant Sandher, Chief Financial Officer of Vision Marine Technologies Inc., certify the following:

Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer's other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a)

designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i)

material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii)

(b)

5.1

5.2

ICFR – material weakness relating to design: The issuer has disclosed in its interim MD&A for each material weakness relating to design existing at the end of the interim period

(a)

a description of the material weakness;

(b)

the impact of the material weakness on the issuer's financial reporting and its ICFR; and

(c)

the issuer's current plans, if any, or any actions already undertaken, for remediating the material weakness.

5.3

N/A

Date: January 15, 2024

/s/ Kulwant Sandher
Kulwant Sandher
Chief Financial Officer

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VMAR Vision Marine Technologies Inc