Vision Marine Technologies Inc. (Form: 6-K, Received: 01/13/2022 17:01:14)

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 2022

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 x Form 40-F ¨

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

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

Attached as Exhibit 99.1 is the registrant’s unaudited condensed interim consolidated financial statements for the three month periods ended November 30, 2021 and November 30, 2020, and attached as Exhibit 99.2 is the registrant’s Management’s Discussion and Analysis for the three months ended November 30, 2021.

Exhibits

Exhibit No.		Exhibit
99.1		Unaudited condensed interim consolidated financial statements for the three month periods ended November 30, 2021 and November 30, 2020
99.2		Management’s Discussion and Analysis for the three months ended November 30, 2021
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 13, 2022	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, 2021 and November 30, 2020

(Unaudited)

Vision Marine Technologies Inc.

Consolidated statements of financial position
(Unaudited)

	As at November 30, 2021			As at August 31, 2021
	$			$
Assets
Current
Cash		14,535,283			18,147,821
Trade and other receivables [note 3]		501,366			319,740
Inventories [note 4]		2,774,165			1,976,084
Prepaid expenses		1,036,134			544,843
Grants and investment tax credits receivable		492,815			108,302
Share subscription receivable [note 14]		39,200			39,200
Advances to related parties [note 14]		16,372			185,407
Total current assets		19,395,335			21,321,397
Debentures [note 5]		2,780,000			2,850,000
Right-of-use assets [note 6]		2,842,178			2,905,199
Property and equipment [note 7]		1,480,258			1,414,509
Intangibles [note 8]		1,202,497			1,225,722
Deferred income taxes		17,547			17,547
Goodwill [note 8]		9,149,509			9,033,638
Other financial assets		117,574			33,280
Total assets		36,984,898			38,801,292

Liabilities and shareholders’ equity
Current
Trade and other payables [notes 10 & 14]		819,263			848,054
Income tax payable		185,930			138,308
Contract liabilities [note 11]		826,235			898,713
Current portion of lease liabilities [note 12]		591,030			562,136
Current portion of long-term debt [note 13]		10,179			10,179
Other financial liabilities		225,139			237,444
Total current liabilities		2,657,776			2,694,834
Lease liabilities [note 12]		2,339,698			2,404,680
Long-term debt [note 13]		51,853			53,936
Deferred income taxes		127,712			122,655
Total liabilities		5,177,039			5,276,105

Shareholders’ equity
Capital stock [note 15]		42,834,982			42,834,982
Contributed surplus [note 16]		9,455,702			7,861,405
Accumulated other comprehensive income		504,518			388,566
Deficit		(20,987,343	)		(17,559,766	)
Total shareholders’ equity		31,807,859			33,525,187
		36,984,898			38,801,292

See accompanying notes

Vision Marine Technologies Inc.

Consolidated statements of changes in equity (deficit)

(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, 2020		4,585,001		2,497,813		739,961		(2,445,859	)		—		791,915
Total comprehensive loss [restated* [note2]]*		—		—		—		(1,882,713	)		—		(1,882,713	)
Share issuance, net of transactions costs of nil		592,648		2,192,799		—		—			—		2,192,799
Initial Public Offering, net of transactions costs of $3,328,687		2,760,000		33,158,513		—		—			—		33,158,513
Share-based compensation [note 16]		—		—		386,247		—			—		386,247
Shareholders’ equity as at November 30, 2020 [restated [note 2]]		7,937,649		37,849,125		1,126,208		(4,328,572	)		—		34,646,761

Shareholders’ equity as at August 31, 2021		8,324,861		42,834,982		7,861,405		(17,559,766	)		388,566		33,525,187
Total comprehensive loss		—		—		—		(3,427,577	)		115,952		(3,311,625	)
Share-based compensation [note 16]		—		—		1,594,297		—			—		1,594,297
Shareholders’ equity as at November 30, 2021		8,324,861		42,834,982		9,455,702		(20,987,343	)		504,518		31,807,859

See accompanying notes

Vision Marine Technologies Inc.

Consolidated statements of comprehensive loss

(Unaudited)
For the three months ended November 30,

	2021			2020
	$			$
					Restated [note 2]
Revenues [note 17 ]		1,206,851			273,836
Cost of sales [note 4]		684,310			249,798
Gross profit		522,541			24,038

Expenses
Research and development [note 18]		(81,136	)		58,000
Office salaries and benefits		687,521			95,120
Selling and marketing expenses		558,717			63,461
Professional fees		847,280			394,067
Office and general		430,098			271,169
Share-based compensation [note 16]		1,594,297			386,247
Depreciation		61,873			9,849
Net finance (income) expense [note 19]		(157,544	)		628,838
Other income		(26,460	)		—
		3,914,646			1,906,751

Loss before tax		(3,392,105	)		(1,882,713	)
Income taxes
Current tax expense		34,780			—
Deferred tax expense		692			—
		35,472			—
Net loss for the period		(3,427,577	)		(1,882,713	)

Items of comprehensive income that will be
subsequently reclassified to earnings:
Foreign currency translation differences for foreign
operations, net of tax		115,952			—
Other comprehensive income, net of tax		115,952			—
Total comprehensive loss for the period, net of tax		(3,311,625	)		(1,882,713	)

Weighted average shares outstanding		8,324,832			5,284,480
Basic and diluted loss per share		(0.41	)		(0.36	)

See accompanying notes

Vision Marine Technologies Inc.

Consolidated statements of cash flows

(Unaudited)
Three months ended November 30,

	2021			2020
	$			$
					Restated [note 2]
Operating activities
Net loss		(3,427,577	)		(1,882,713	)
Depreciation		234,998			69,039
Accretion on long-term debt and lease liability		37,379			11,863
Share-based compensation – options		1,594,297			386,247
Shares issued for services		—			109,069
Loss on debentures		70,000			—
Income tax expense		35,472			—
Income tax recovered		10,664			—
Gain on lease termination		(187	)		—
Effect of exchange rate fluctuation		(5,253	)		—
		(1,450,207	)		(1,306,495	)
Net change in non-cash working capital items
Trade and other receivables		(181,626	)		(35,911	)
Inventories		(798,081	)		(238,110	)
Grants and investment tax credits receivable		(384,513	)		(43,460	)
Other financial assets		(84,294	)		—
Prepaid expenses		(491,291	)		(611,970	)
Trade and other payables		(28,791	)		155,917
Contract liabilities		(72,478	)		55,678
Other financial liabilities		(15,156	)		—
Cash used in operating activities		(3,506,437	)		(2,024,351	)

Investing activities
Additions to property and equipment		(131,836	)		(18,106	)
Proceeds from the disposal of property and equipment		42,552			—
Additions to intangible assets		(16,748	)		—
Cash used in investing activities		(106,032	)		(18,106	)

Financing activities
Change in bank indebtedness		—			80,000
Repayment of long-term debt		(2,545	)		(31,605	)
Advances to related parties		176,771			—
Initial public offering, net of transaction costs paid		—			33,430,239
Issuance of shares		—			2,025,000
Repayment of lease liabilities		(174,295	)		(37,274	)
Cash (used in) provided by financing activities		(69	)		35,466,360

Net (decrease) increase in cash during the period		(3,612,538	)		33,423,903
Cash, beginning of period		18,147,821			1,296,821
Cash, end of period		14,535,283			34,720,724

See accompanying notes

Vision Marine Technologies Inc.

Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2021

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. On November 27, 2020, the Company completed its initial public offering of an aggregate of 2,760,000 Voting Common Shares of the Company at a price of U.S.$10.00 ($13.22) per share for gross proceeds of U.S.$27,600,000 ($36,487,200). 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 fluctuates 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

Compliance with IFRS

These condensed interim consolidated financial statements are for the three-month period ended November 30, 2021 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, 2021.

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, 2021.

The condensed interim consolidated financial statements were authorized for issuance by the Board of Directors on January 12, 2022.

Vision Marine Technologies Inc.

Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2021

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.

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%

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 currencies of 7858078 Canada Inc. and EB Rental Ltd. are the Canadian dollar and the US dollar, respectively.

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

November 30,
2021

August 31, 2021

June 3,
2021

Three months ended
November 30, 2021

US dollar

1.2792

1.2630

1.2103

1.2559

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 2021 annual financial statements.

Vision Marine Technologies Inc.

Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2021

Correction of an error

During 2022, the Company noted that deferred tax expense had been erroneously calculated in its interim financial statements for the three months ended November 30, 2020, with no impact on the consolidated financial statements as at August 31, 2021 and 2020 and the years then ended. As a consequence, deferred tax liability and expense as at November 30, 2020 and for the three months then ended have been overstated. The error has been corrected by restating each of the affected financial statement line items for the prior period, as follows:

	Three months ended November 30, 2020
	$
Impact on consolidated statements of comprehensive loss    (decrease/(increase) in loss)
Deferred tax expense		420,528
Net impact on loss for the period		420,528
Impact on basic and diluted loss per share    (decrease/(increase) in loss per share)
Basic and diluted loss per share		0.08

The change did not have an impact on other comprehensive income or the Company’s operating, investing and financing cash flows for the three months ended November 30, 2020.

3. Trade and other receivables

	As at November 30, 2021		As at August 31, 2021
	$		$
Trade receivables		285		27,388
Sales taxes receivable		275,042		166,749
Interest and other receivables		226,039		125,603
		501,366		319,740

Trade receivable 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, 2021, trade receivables of $285 [August 31, 2021 – $27,388] were past due but not impaired. They relate to customers with no default history. The aging analysis of these receivables is as follows:

Vision Marine Technologies Inc.

Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2021

	As at November 30, 2021		As at August 31, 2021
	$		$
0 – 30		285		—
31 – 60		—		2,008
61 – 90		—		25,380
91 and over		—		—
		285		27,388

There were no movements in the allowance for expected credit losses for the three months ended November 30, 2021 and the year ended August 31, 2021.

4. Inventories

	As at November 30, 2021		As at August 31, 2021
	$		$
Raw materials		2,002,379		1,549,125
Work-in-process		377,765		327,757
Finished goods		394,021		99,202
		2,774,165		1,976,084

For the three months ended November 30, 2021, inventories recognized as an expense amounted to $629,029 [2020 – $249,798].

For the three months ended November 30, 2021, cost of sales includes depreciation of $173,125 [2020 – $59,190].

5. Debentures

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.

Vision Marine Technologies Inc.

     Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2021

The Debentures bear interest at a rate of 10% per annum, payable annually in arrears, and have a 36-month term [the “Term”]. The Debentures are 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 may notify 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 Debentures are carried at fair value through profit and loss and are considered as Level 2 financial instruments in the fair value hierarchy. For the three months ended November 30, 2021, the Company recorded a loss of $70,000 [2020 – Nil] in net finance (income) expense for change in the fair value of the Debentures [note 19].

6. Right-of-use assets

	Premises		Computer equipment			Rolling stock			Boat rental fleet		Total
	$		$			$			$		$
Cost
Balance at August 31, 2020		737,066		11,333			38,699			—		787,098
Business acquisition		1,281,308		3,646			39,924			326,868		1,651,746
Additions		672,731		—			179,736			—		852,467
Disposals		—		—			(57,475	)		—		(57,475	)
Transfer to intangible assets		—		(11,333	)		—			—		(11,333	)
Currency translation		55,013		—			1,652			—		56,665
Balance at August 31, 2021		2,746,118		3,646			202,536			326,868		3,279,168
Additions		71,465		—			30,683			—		102,148
Disposals		—		—			(23,030	)		—		(23,030	)
Currency translation		15,339		—			842			—		16,181
Balance at November 30, 2021		2,832,922		3,646			211,031			326,868		3,374,467

Accumulated depreciation
Balance at August 31, 2020		117,806		4,231			12,094			—		134,131
Depreciation		216,551		1,697			30,527			24,087		272,862
Disposal		—		—			(27,672	)		—		(27,672	)
Transfer to intangible assets		—		(5,352	)		—			—		(5,352	)
Balance at August 31, 2021		334,357		576			14,949			24,087		373,969
Depreciation		118,242		576			21,172			24,087		164,077
Disposal		—		—			(5,757	)		—		(5,757	)
Balance at November 30, 2021		452,599		1,152			30,364			48,174		532,289

Net carrying amount
As at August 31, 2021		2,411,761		3,070			187,587			302,781		2,905,199
As at November 30, 2021		2,380,323		2,494			180,667			278,694		2,842,178

During the period ended August 31, 2021, the Company paid in full a lease liability related with a computer software that was previously included in the right-of-use assets. As a result, the Company transferred the asset to intangible assets at its net book value of $5,981 [note 8].

Vision Marine Technologies Inc.

     Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2021

7. Property and equipment

	Machinery and equipment		Rolling stock			Computer equipment		Moulds			Leasehold improvements		Boat rental fleet			Total
	$		$			$		$			$		$			$
Cost
Balance at August 31, 2020		187,850		32,175			8,436		506,172			34,818		—			769,451
Business acquisition		—		—			—		—			—		417,554			417,554
Additions		115,088		—			6,211		214,833			96,415		111,807			544,354
Disposals		—		—			—		(30,000	)		—		(34,101	)		(64,101	)
Currency translation		—		—			—		—			—		18,057			18,057
Balance at August 31, 2021		302,938		32,175			14,647		691,005			131,233		513,317			1,667,258
Additions		28,199		16,686			7,100		36,647			11,701		31,503			131,836
Disposals		—		(5,800	)		—		—			—		(40,934	)		(46,734	)
Currency translation		—		—			—		—			—		6,334			6,334
Balance at November 30, 2021		331,137		43,061			21,747		727,652			142,934		510,220			1,776,751

Accumulated depreciation
Balance at August 31, 2020		148,156		21,014			4,556		57,660			—		—			231,386
Depreciation		19,448		3,348			3,842		22,760			11,579		8,443			69,420
Disposal		—		—			—		(30,000	)		—		—			(30,000	)
Balance at August 31, 2021		167,604		24,362			8,398		50,420			11,579		8,443			270,806
Depreciation		7,472		994			1,347		5,652			6,306		8,098			29,869
Disposal		—		(3,500	)		—		—			—		(682	)		(4,182	)
Balance at November 30, 2021		175,076		21,856			9,745		56,072			17,885		15,859			296,493

Net carrying amount
As at August 31, 2021		135,334		7,813			6,249		640,585			119,654		504,874			1,414,509
As at November 30, 2021		156,061		21,205			12,002		671,580			125,049		494,361			1,480,258

As at November 30, 2021, moulds of $162,480 [August 31, 2021 – $125,833] are not depreciated because they are not ready for use.

Vision Marine Technologies Inc.

     Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2021

8. Intangible assets and goodwill

	Intellectual property		Software		Trade name		Backlog		Website		Total
	$		$		$		$		$		$
Cost
Balance at August 31, 2020		—		—		—		—		—		—
Business acquisition		—		—		90,000		76,000		18,000		184,000
Transfer from right-of-use assets [note 6]		—		5,981		—		—		—		5,981
Additions		1,035,070		67,592		—		—		—		1,102,662
Currency translation		—		—		3,856		3,220		771		7,847
Balance at August 31, 2021		1,035,070		73,573		93,856		79,220		18,771		1,300,490
Additions		—		12,748		4,000		—		—		16,748
Currency translation		—		—		58		810		211		1,079
Balance at November 30, 2021		1,035,070		86,321		97,914		80,030		18,982		1,318,317

Accumulated depreciation
Balance at August 31, 2020		—		—		—		—		—		—
Depreciation		55,581		7,107		4,633		6,520		927		74,768
Balance at August 31, 2021		55,581		7,107		4,633		6,520		927		74,768
Depreciation		25,877		2,950		4,719		6,572		934		41,052
Balance at November 30, 2021		81,458		10,057		9,352		13,092		1,861		115,820

Net carrying amount
As at August 31, 2021		979,489		66,466		89,223		72,700		17,844		1,225,722
As at November 30, 2021		953,612		76,264		88,562		66,938		17,121		1,202,497

On February 16, 2021, the Company acquired intellectual property in exchange for cash consideration of EUR 300,000 ($461,134) and the issuance of 30,000 shares of the Company at a price of U.S.$15.07 [approximately $19.13] for total consideration of $1,035,070.

As at November 30, 2021, software of Nil [August 31, 2021 - $42,677] are not depreciated because they are not ready for use.

The balance of goodwill is at $9,149,509 at November 30, 2021 [August 31, 2021 – $9,033,638], 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 and $100,000 letter of guarantee facility, 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, 2021, the Company has drawn an amount of Nil [August 31, 2021 – Nil] on the line of credit.

Vision Marine Technologies Inc.

     Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2021

10. Trade and other payables

	As at November 30, 2021		As at August 31, 2021
	$		$
Trade payable		619,245		560,870
Sales taxes payable		21,588		34,076
Government remittances		18,843		46,030
Salaries and vacation payable		159,587		207,078
		819,263		848,054

11. Contract liabilities

	As at November 30, 2021			As at August 31, 2021
	$			$
Opening balance		898,713			20,443
Business acquisition		—			482,173
Payments received in advance		228,706			1,199,958
Payments reimbursed		—			(37,842	)
Transferred to revenues		(308,026	)		(766,019	)
Currency translation		6,842			—
Closing balance		826,235			898,713

12. Lease liabilities

	As at November 30, 2021			As at August 31, 2021
	$			$
Opening balance		2,966,816			672,988
Business acquisition		—			1,651,746
Additions		102,148			852,467
Repayment		(174,295	)		(295,316	)
Interest on lease liability		36,917			65,115
Lease termination		(17,460	)		(37,033	)
Currency translation		16,602			56,849
Closing balance		2,930,728			2,966,816

Current		591,030			562,136
Non-current		2,339,698			2,404,680
		2,930,728			2,966,816

Vision Marine Technologies Inc.

     Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2021

Future undiscounted lease payments as at November 30, 2021 are as follows:

	$
Less than one year		738,332
One to five years		2,488,533
Over five years		87,849
		3,314,714

13. Long-term debt

	As at November 30, 2021		As at August 31, 2021
	$		$
The government assistance loan is non-interest bearing until December 31, 2022 at which time the loan bears interest at 5% per annum. The loan must be repaid by December 31, 2025.		37,434		36,972

Term loan bearing interest at a rate of 5.80% per annum payable in monthly installments of $848 until April 2024.		24,598		27,143

		62,032		64,115
Current portion of long-term debt		10,179		10,179
		51,853		53,936

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]

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

Vision Marine Technologies Inc.

     Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 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.

Founder shareholders

Gestion Toyma Inc.

Entreprises Claude Beaulac Inc. [former shareholder]

Gestion Moka Inc. [former shareholder]

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

	Three months ended November 30, 2021		Three months ended November 30, 2020
	$		$
Revenues
Sale of parts and boat maintenance
EB Rental Ltd. [prior to June 3, 2021]		—		13,000

Expenses
Cost of sales
EB Rental Ltd. [prior to June 3, 2021]		—		5,000

Research and Development
Mac Engineering, SASU		191,967		—

The Company leases its Boisbriand premises from California Electric Boat Company Inc. As at November 30, 2021, right-of-use assets and lease liabilities related to those leases amount to $1,071,884 and $1,128,277 respectively [August 31, 2021 – $1,132,556 and $1,177,867 respectively] [notes 6 and 12].

Vision Marine Technologies Inc.

     Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2021

Remuneration of directors and key management of the Company

	Three months ended November 30, 2021		Three months ended November 30, 2020
	$		$
Wages		605,974		95,000
Share-based payments – stock options		1,243,319		206,000
		1,849,293		301,000

Vision Marine Technologies Inc.

     Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2021

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

	As at November 30, 2021		As at August 31, 2021
	$		$
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		16,372		185,407

Amounts due to related parties included in trade and other payable
Alexandre Mongeon		26,615		74,157
Patrick Bobby		17,143		11,092
Kulwant Sandher		19,507		7,054
Xavier Montagne		2,767		—
Mac Engineering, SASU		—		29,957
		66,032		122,260

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

15. Capital stock

Authorized

Voting Common Shares, voting and participating

Issued

As at

November 30,

2021

As at

August 31,

2021

8,324,861 voting common shares [August 31, 2021 – 8,324,861]

42,834,982

Vision Marine Technologies Inc.

     Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2021

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 a total of 1,714,526 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, 2021 amounts to $1,594,297 [2020 – $386,247]. The table below lists the assumptions used to determine the fair value of these option grants. Volatility is based on public companies with characteristics similar to the Company.

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
February 23, 2021		15.75		15.05		103		0.6		5
May 14, 2021		8.98		9.06		105		0.8		5
July 14, 2021		9.25		9.01		105		0.7		5
September 21, 2021		8.85		8.58		106		0.9		5

The following tables summarize information regarding the option grants outstanding as at November 30, 2021:

	Number of options			Weighted average exercise price
	#			$
Balance at August 31, 2020		516,216			3.41
Granted		1,148,310			12.86
Forfeited		(5,405	)		3.70
Balance at August 31, 2021		1,659,121			9.95
Granted		50,000			8.85
Balance at November 30, 2021		1,709,121			9.92

Vision Marine Technologies Inc.

     Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2021

Exercise price	Number of options outstanding		Weighted average grant date fair value		Weighted average remaining contractual life		Exercisable options
$	#		$		[years]
3.70		348,649		2.42		3.50		315,710
2.78		162,162		2.59		3.50		162,162
3.70		10,810		2.69		3.75		6,869
16.29		440,000		9.33		9.00		440,000
15.75		190,000		11.28		4.25		—
8.98		500,000		6.91		4.50		250,000
9.25		7,500		6.85		9.75		7,500
8.85		50,000		6.55		10.00		19,444

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).

Grant date

Exercise price

Number of warrants outstanding

Weighted average remaining contractual life

[years]

November 23, 2020

16.53

151,800

4.00

17. Revenues

	Three months ended November 30, 2021		Three months ended November 30, 2020
	$		$

Sales of boats		259,804		241,681
Sales of parts and boat maintenance		13,207		28,383
Boat rental and boat club membership revenue		933,840		—
Other		—		3,772
		1,206,851		273,836

Vision Marine Technologies Inc.

     Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2021

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

					Three months ended November 30, 2021		Three months ended November 30, 2020
	Sale of electric boats		Rental of electric boats		Total		Total
	$		$		$		$
Canada		129,593		—		129,593		4,010
USA		143,418		933,840		1,077,258		228,191
Other		—		—		—		41,635
		273,011		933,840		1,206,851		273,836

18. Grants and investment tax credits

During the three months ended November 30, 2021, the Company recognized grants and investment tax credits amounting to $522,876 [2020 – $94,990], of which $511,416 is presented against research and development expenses [2020 – $37,449], $8,535 against cost of sales [2020 –$46,326] and $2,252 as a reduction of intangible assets. Office salaries and benefits are presented net of $673 [2020 – $11,215] of grants.

19. Net finance (income) expense

	Three months ended November 30, 2021			Three months ended November 30, 2020
	$			$
Interest and bank charges		32,931			28,678
Interest income		(89,850	)		—
Foreign currency exchange (gain) loss		(170,625	)		600,160
Loss on Debentures [note 5]		70,000			—
		(157,544	)		628,838

20. 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].

Vision Marine Technologies Inc.

     Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2021

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.

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 is 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 is based on actual trading data, difference in volatility since initial issuance of the instrument and similar instruments on the market, and credit spread, which is based on corporate bond yield spreads in the market and credit spread data for similar public companies. The model includes a fair value adjustment based on an initial calibration exercise.

Below is a sensitivity analysis based on variations in the key assumptions used in the model. The table presents the fair value of the debentures would have been as at November 30, 2021 had the key assumptions varied as indicated:

	Volatility			Credit spread
		+5%	-5%		+2%	-2%
		$	$		$	$
Fair value of debentures		2,840,000	2,715,000		2,715,000	2,850,000

21. 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 boat – 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, 2021

	Three months ended November 30, 2021											Three months ended November 30, 2020
	Sale of electric boats			Rental of electric boats		Inter-segment eliminations			Total			Sale of electric boats
	$			$		$			$			$
Revenue from external customers		273,011			933,840		—			1,206,851			273,836
Revenue from other segments		45,659			27,701		(73,360	)		—			—
Segment revenues		318,670			961,541		(73,360	)		1,206,851			273,836
Segment gross profit		(6,549	)		548,618		(19,528	)		522,541			24,038
Segment (loss) profit before tax		(3,537,906	)		150,419		(4,618	)		(3,392,105	)		(1,882,713	)
Research and development		(81,136	)		—		—			(81,136	)		58,000
Office salaries and benefits		500,804			186,717		—			687,521			95,120

As at November 30, 2021

Sale of

electric boats

Rental of
electric boats

Inter-segment eliminations

Total

Segment assets

33,100,611

13,052,621

(9,168,334

)

36,984,898

Cash

13.305,485

1,229,798

—

14,535,283

Additions to property and equipment

100,333

40,934

(9,431

)

131,836

Additions to intangible assets

16,748

—

16,748

Segment liabilities

2,269,450

3,021,600

(114,011

)

5,177,039

	As at August 31, 2021
	Sale of electric boats		Rental of electric boats		Inter-segment eliminations			Total
		$		$		$			$
Segment assets		35,175,599		12,734,296		(9,108,603	)		38,801,292
Cash		17,210,266		937,555		—			18,147,821
Additions to property and equipment		432,547		145,275		(33,468	)		544,354
Additions to intangible assets		1,102,662		—		—			1,102,662
Segment liabilities		2,400,829		2,938,746		(63,470	)		5,276,105

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

Vision Marine Technologies Inc.

Notes to the condensed interim consolidated financial statements

(Unaudited)

November 30, 2021

22. Impact of Coronavirus outbreak

The novel coronavirus (“COVID-19”) global pandemic continues throughout the world. This pandemic has caused supply-chain issues for the Company and as a result the Company has not been able to realize on orders received in a timely manner. The full extent of the impact of COVID-19 on the Company’s business, operations and financial results will depend on evolving factors that the Company cannot accurately predict.

23. Additional cash flows information

Financing and investing activities not involving cash:

	Three months ended November 30, 2021		Three months ended November 30, 2020
	$		$
Additions to right-of-use assets		102,148		—
Lease termination		17,460		—
Transaction costs for share issuance transferred from prepaid		—		212,997

24. 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:

	$
2022		2,406,000
2023		3,729,000
2024		1,351,000

In October 2021, EB Rental Ltd. has entered into a 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, 2021. 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. The Company’s undiscounted lease commitments related to this lease are as follows as at November 30, 2021:

	$
2022		—
2023		102,000
2024		156,000
2025		159,000
2026 and thereafter		382,000

Exhibit 99.2

VISION MARINE TECHNOLOGIES INC.

Form 51-102F1 Management's Discussion & Analysis

For the Three months ended November 30, 2021

1.1 Date January 12, 2021

Introduction

The following management's discussion and analysis, prepared as of November 30, 2021, 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, 2021 and the audited consolidated financial statements for the years ended August 31, 2021 and 2020 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 we first filed a draft of the registration statement of which this prospectus forms a part. We only have three years of audited financial statements.

We currently have minimally positive net income, and if we are unable to maintain and grow our 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 loss of $3,427,577 and total comprehensive loss of $3,311,625 in the three months ended November 30, 2021 as compared to a net loss and total comprehensive loss of $1,882,713 in the three months ended November 30, 2020. Net income may fail to grow or even decline in certain circumstances, many of which are beyond our control. Our revenues might not significantly exceed our expenses or could be less than our expenses. It may take us longer to increase our net income to do so than we anticipate, if at all, or we may only do so at a much lower rate than we anticipate. Failure to increase our net income would mean that we would have to curtail our planned growth in operations or resort to financings to fund such growth.

Our plan of operations entails promoting a product candidate that 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 sell to OEMs of boats. We expect the electric powertrain systems to represent the majority of our revenue in the future accounting periods. We have built prototypes of our electric powertrain but have not shared this prototype with potential OEMs or the performance specifications of our powertrain with them. 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 customers for our electric powertrains. Even if we do develop such relationships, we might not be able to maintain them or grow them as anticipated. If we are not successful in commercializing our product candidate 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 the funds on hand and revenue from our business are not sufficient to cover our cash requirements, we will need to raise additional funds through the sale of our equity securities, in either private placements or additional registered offerings, and through shareholder loans. 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 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 stock financing in the future. Your rights and the value of your investment in our securities could be reduced. Interest on debt securities could increase costs and negatively impacts operating results. Preferred stock could be issued in series from time to time with such designation, rights, preferences, and limitations as needed to raise capital. The terms of preferred stock 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. Common shares which we sell could be sold into any market which develops, which could adversely affect the market price.

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.

The influence of 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 over inboard motors.

We envision the majority of our growth deriving from the sale of one of our product candidates, an electric powertrain for an outboard motor. If consumer preferences led to a decline in outboard motors, the OEMs we intend to sell to may produce less 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.

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 as a result of the COVID-19 pandemic 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 would 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.

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 1000 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 suffer a decline in our competitive position.

We may be unable to keep up with changes in electric powerboats technology, particularly developments with powertrains. As a result, we may suffer a decline in our competitive position. Any failure to keep up with advances in electric powerboat technology would result in a decline in 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 candidate. 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 either or lead or lithium battery cells which makes us depend upon suppliers of battery cell technology for our battery packs.

Demand in the powerboat industry is highly volatile.

Volatility of demand in the powerboat industry, especially for recreational powerboats and electric powerboats, may materially and adversely affect our business, prospects, operating results and financial condition. The markets in which we will be competing 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 region, especially during the peak boating season. 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. 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.

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 18% of our sales in our 2021 fiscal year were derived from our network of independent dealers. We have agreements with the 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 as 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 the manufacturer provides to the 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. We might not be able to maintain or improve our relationship with our 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 projected financial condition and results of operations and cause to alter our business plan.

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:

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

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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 policy, 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 90% of our sales 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 will particularly be affected by the Agreement Between the United States of America, the United Mexican States, and Canada (commonly known as USMCA), if ratified by all participants, the effects of which are not certain. Such changes have 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 meaningfully rise because higher rates increase the borrowing costs and, accordingly, 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 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 sufficiently 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, Xavier Montague, our Chief Operating Officer, and Kulwant Sandher, our Chief Financial Officer. A number of these key employees and consultants have significant experience in the recreational boating and manufacturing industry. A loss of service from any one of these individuals may adversely affect our operations, and we may have difficulty 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 and 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 and 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 would 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 would 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 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, 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.

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. 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 unable to successfully address their service requirements, the reputation of our brand will suffer and business and prospects could be materially and adversely affected.

We may not succeed in establishing, maintaining and strengthening the Vision Marine Technologies Inc. brand, which would 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 Technologies 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 Technologies brand will also depend heavily on the success of our marketing efforts. We intend to use proceeds from this offering for marketing of our products, but we might be successful in such expanded marketing. 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 usage 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 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, 2021, the Company recognized grants and investment tax credits amounting to $522,876 (2020 – $94,990), of which $511,416 is presented against research and development expenses (2020 – $37,449). We intend to continue applying for such grants and receiving such tax credits. Without such grants and tax credits, our net income in each of the past two fiscal years would have been a net loss. 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 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 Québec 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 within our business, that of 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’ scarce 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 for 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 judgment or settlement for personal injury or wrongful death claims could be more than our assets and, even if not justified, could 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.

We have not yet protected our intellectual property rights through patents or formal copyright 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.

Our patent applications 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.

Although we currently don’t have patents, we intend to file patent applications in the future in connection with our electric outboard powertrain systems. The registration and enforcement of patents involves complex legal and factual questions and the breadth and effectiveness of patented claims is uncertain. We cannot be certain that we will be first to file patent applications on this 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 U.S.

We do not have trademarks for our products and trade names.

Although we use our logo as a trademark and have applied for its registration at the Canadian Intellectual Property Office, we have other trademarks for our brand names and logos in the United States or elsewhere. Any trademark applications that we file with a relevant governmental authority for brand names/logos might not be approved. Failure to obtain such approval could limit our ability to use the brand names/logos in those territories or lead our products 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.

We 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 Québec, a substantial portion of our assets are in Canada and some of our directors reside outside the United States

We are constituted under the laws of the Business Corporations Act (Québec) (the “Business Corporation Act”) and our executive offices are located outside of the United States in Boisbriand, Québec. All of our officers, and directors, as well as our auditor 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, officers and the expert named in this prospectus 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 Québec 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 a significant recent market reaction to the novel coronavirus (COVID-19), resulting in a significant reduction in many major market indices. Uncertainty about global economic conditions could result in:

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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

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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 outbreak of the novel coronavirus (COVID-19) may cause disruptions to 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 2022.

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

Our operations are conducted in Canada, but approximately 90% of our sales occur in the United States. As a result, we are exposed to an exchange rate risk between the 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. 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.

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 the three months ended November 30, 2021:

On September 1, 2021, the Company announced its Bruce 22 electric boat powered by its 180 hp fully electric E-Motion™ outboard motor set a new category speed record at the Lake of the Ozarks Shootout, the largest unsanctioned boat race in the US, which took place August 28-29, 2021. The Company was able to achieve a speed of 49 mph 78 (kph).

On October 26, 2021 the Company announced that it has executed a Manufacture and Supply Agreement with Linamar Corporation, a global leader in manufacturing solutions and world class developer of highly engineered products. Under the terms of the agreement, McLaren Engineering, Linamar’s leading-edge technology and product development team for its advanced mobility segment, will manufacture and assemble the Company’s E-Motion™ technology through testing, parts, tooling development, and designing the union assembly for mass production of the Company’s disruptive fully electric outboard motor at Linamar’s facility in Canada.

On December 17, 2021 the Company announced that Xavier Montagne, presently the Company’s Chief Technology Officer, has been appointed to the additional role of Chief Operating Officer.

On December 20, 2021 the Company announced that its Board of Directors has authorized the repurchase of up to 10% of the Company's common shares from time to time via open market purchases or in privately negotiated transactions. The timing and amount of any shares repurchased will be determined by the Company’s management based on its evaluation of market conditions and other factors. The repurchase program may be suspended or discontinued at any time. Any repurchased shares will be available for use in connection with its stock plans and for other corporate purposes. The repurchase program will be funded using the Company’s working capital.

On January 4, 2022 the Company announced that it has partnered with Octillion Power Systems (“Octillion”) to develop a customized high voltage 35 KW high density battery exclusively for use within the recreational boating market. Under the terms of the agreement, Octillion will manufacture a new advanced electric battery system to power its E-Motion™ outboard powertrain. The configuration of the battery pack is smaller than that of a typical fuel tank, which in turn makes it easier to custom fit in virtually any boat. Multiple battery packs will be installed depending on the application and power requirements of the recreational boat.

Financings

During the three months ended November 30, 2021, the Company did not issue any shares or debt financing.

Incentive Stock Options

During the three months ended November 30, 2021, the Company granted the following stock options:

On September 21, 2021, the Company granted 50,000 options at an exercise price of $8.85 per share. The stock options will expire 5 years from the grant date.

1.3 Selected Annual Financial Information

	Year Ended August 31, 2021	Year Ended August 31, 2020	Year Ended August 31, 2019
	$	$	$
Revenue	3,513,788	2,417,173	2,869,377
Gross Profit	1,604,182	604,390	1,285,364

Expenses	(16,612,499)	(2,858,613)	(987,911)

Income/(Loss) before Tax	(15,008,317)	(2,254,223)	297,453

Income Taxes	(105,590)	(21,309)	(64,387)

Net comprehensive income/(loss)	(14,725,341)	(2,275,532)	233,066
Basic & Diluted Earnings/(Loss) per Share	(2.04)	(0.56)	0.06

Balance Sheet
Working Capital Surplus/(Deficit) ⁽¹⁾	18,626,563	533,760	(92,765)
Total Assets	38,801,292	3,631,625	1,914,562
Total Long-Term Liabilities	2,581,271	932,877	587,330

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

Selected Quarterly financial information

Quarter end	Revenues	Net comprehensive loss	Loss per Share
November 30, 2021	1,206,851	(3,427,577)	(0.41)
August 31, 2021	2,279,296	(3,160,725)	(0.38)
May 31, 2021	770,770	(4,808,061)	(0.60)
February 28, 2021	189,886	(4,453,314)	(0.56)
November 30, 2020	273,836	(2,303,241)	(0.44)
August 31, 2020	1,127,378	(1,740,826)	(0.38)
May 31, 2020	853,602	(56,909)	(0.01)
February 29, 2020	383,190	(199,610)	(0.05)

1.4 Results of Operations

Three months ended November 30, 2021

Revenue for the three months ended November 30, 2021 was $1,206,851 (2020: $273,836); the increase of 341% resulted from the acquisition of 7858078 Canada Inc. This also resulted in an increase in gross profit of $522,541 (2020: $24,038). Excluding the revenue from the acquisition, the Company’s boats sales generated revenue of $259,804 (2020: $241,681); revenue from boat sales essentially remained flat, as the Company focused on furthering its electric powertrain technology as well as global supply chain issues which resulted in longer lead times for parts.

During the three months ended November 30, 2021, the Company incurred a comprehensive loss of $(3,111,625) compared to a comprehensive loss of $(1,882,713) for the corresponding prior year period. The increase in comprehensive loss was due to expenses for the three months ended November 30, 2021, increasing to $3,914,646 (2020: $1,906,751). The largest expense items that are included in expenses for the three months ended November 30, 2021 were:

Research and development for the three months ended November 30, 2021 was $(81,136) due to the receipt of grants related to MEI and Technoclimat.

Office salaries and benefits for three months ended November 30, 2021 increased to $687,521 compared to $95,120 for the three months ended November 30, 2020. The increase was caused by increases in staff, directors’ fees, additional staff related to the acquisition of 7858078 Canada Inc., and increases in executive salaries.

Selling and marketing expenses for the three months ended November 30, 2021 increased to $558,717 (2020: $63,461) due to increased attendance at boat shows, increased marketing of the Company’s E-Motion powertrains and incurred additional costs related to the acquisition of 7858078 Canada Inc.

Professional fees for the three months ended November 30, 2021 increased to $847,280 (2020: $394,067) due to legal, accounting and consulting fees.

Office and general expenses for the three months ended November 30, 2021, increased to $430,098 (2020: $271,169) as the Company increased its operational staff, insurance costs and incurred additional costs related to the acquisition of 7858078 Canada Inc.

Share-based compensation increased to $1,594,297 (2020: $386,247), as the Company granted 50,000 stock options during the three months ended November 30, 2021, at an exercise price of $8.85 to its directors, officers, employees and consultants. The Company recognizes 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, 2021 realised an income of $157,544 (2020: a loss of $628,838). The income was generated by interest income of $89,850 (2020: $nil) from debentures and currency gains of $170,625 (2020: a loss of $600,160) as the Canadian dollar decreased its value against the US Dollar.

Correction of an error

	Three months ended November 30, 2020
	$
Impact on consolidated statements of comprehensive loss   (decrease/(increase) in loss)
Deferred tax expense		420,528
Net impact on loss for the period		420,528
Impact on basic and diluted loss per share   (decrease/(increase) in loss per share)
Basic and diluted loss per share		0.08

The change did not have an impact on other comprehensive income or the Company’s operating, investing and financing cash flows for the three-month ended November 30, 2020.

The discussion and analysis herein is based on the restated financial results for the three months ended November 30, 2020 as indicated above.

1.6 Liquidity and Capital Resources

The Company’s operations consist of the designing, developing and manufacturing of electric outboard powertrain systems and electric boats. 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. 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 are 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 incurred a net loss of $3,427,577 and total comprehensive loss of $3,311,625 during the three-months ended November 30, 2021 and has a cash balance and a working capital surplus of $14,535,283 and $16,737,559, respectively, as at November 30, 2021. 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

As of January 12, 2022, the Company had 8,324,861 issued and outstanding shares and 10,185,782 on a fully diluted basis.

The Company had $16,737,559, of working capital surplus as at November 30, 2021 compared to $18,626,563 working capital surplus as at August 31, 2021. The decrease in working capital surplus during the three months ended November 30, 2021 resulted from the cash used in operations of $3,506,437 (2020: $2,024,351); cash used in investing activities of $106,032 (2020: $18,106) resulting from the additions to property and equipment; which was offset by financing activities using cash of $69 (2020: $35,466,360 cash provided by financing activities), due to the Company’s initial public offering on to the Nasdaq during the corresponding period in the prior year, which was partially offset by an increase in the Company’s lease liabilities.

1.7 Capital Resources

As at November 30, 2021, the Company had cash and cash equivalents of $14,535,283 (August 31, 2021: $18,147,821).

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 and 24 of the Company’s interim condensed consolidated financial statements for the three months ended November 30, 2021. The Company has not pledged its assets as security for loans.

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 year:

	Three months ended November 30, 2021		Three months ended November 30, 2020
	$		$
Revenues
Sale of parts and boat maintenance
EB Rental Ltd. [prior to June 3, 2021]		—		13,000

Expenses
Cost of sales
EB Rental Ltd. [prior to June 3, 2021]		—		5,000

Research and Development
Mac Engineering, SASU		191,967		—

Remuneration of directors and key management of the Company are as follows:

	Three months ended November 30, 2021		Three months ended November 30, 2020
	$		$
Wages		605,974		95,000
Share-based payments – stock options		1,243,319		206,000
		1,849,293		301,000

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

	As at November 30, 2021		As at August 31, 2021
	$		$
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		16,372		185,407

Amounts due to related parties included in trade and other payable
Alexandre Mongeon		26,615		74,157
Patrick Bobby		17,143		11,092
Kulwant Sandher		19,507		7,054
Xavier Montagne		2,767		-
Mac Engineering, SASU		-		29,957
		66,032		122,260

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 during the three months ended November 30, 2021.

1.11 Changes in Accounting Policies including Initial Adoption

See Note 2 of the Company's interim condensed consolidated financial statements for the three months ended November 30, 2021. 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, 2021.

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 are effective at November 30, 2021.

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, 2021, we identified that we did not maintain effective processes and controls over the accounting for and reporting of complex and non-routine transactions. Specifically, we determined that there was a lack of sufficient accounting and finance personnel to perform 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, 2021.

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 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 and establishing additional review procedures over the accounting for complex and non-routine transactions. As at November 30, 2021, 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, 2021 present fairly, in all material respects, the Company’s financial position, results of operations, changes in equity and cash flows in accordance with IAS 34.

Changes in internal controls over financial reporting

No changes were made to our internal controls over financial reporting that occurred during the three months ended November 30, 2021 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 20 to the Company's interim condensed consolidated financial statements for the three-months ended November 30, 2021.

1.15 Additional Information

HEAD OFFICE	CAPITALIZATION (as at January 12, 2022) Shares Authorized: Unlimited Shares Issued: 8,324,861
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	AUDITORS Ernst & Young LLP Montreal, Quebec LEGAL COUNSEL Renno & Co LLP 400 - 3 Place Ville-Marie, Montreal, QC H3B 2E3
Alan Gaines Chairman & Director Luisa Ingargiola Director Renaud Cloutier Director Steve P. Barrenechea Director

Exhibit 99.3

Form 52-109F2
Certification of Interim Filings
Full Certificate

I, Alex 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, 2021.

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, 2021 and ended on November 30, 2021 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR.

Date: January 13, 2022

/s/ Alex Mongeon

Alex 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 13, 2022

/s/ Kulwant Sandher

Kulwant Sandher

Chief Financial Officer