6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

 

FORM 6-K

 

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

SECURITIES EXCHANGE ACT OF 1934

 

For the month of August, 2022

 

 

001-41208

 

 

(Commission File Number)

 

 

NOVONIX LIMITED

(Translation of registrant’s name into English)

 

Level 38

71 Eagle Street

Brisbane, QLD 4000 Australia

(Address of principal executive office)

 

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

Form 20-F Form 40-F

 

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):

 

 


EXHIBIT INDEX

 

Exhibit No. Description

 

Exhibit 99.1 NOVONIX Limited Annual Report 2022

 

SIGNATURES

 

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

 

NOVONIX LIMITED

 

 

By: ____________________

      Dr. John Christopher Burns

       Chief Executive Officer

 

 

 

 

Date: August 31, 2022

 

 


EX-99.1

 

Exhibit 99.1

 

 

 

 

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NOVONIX LIMITED

ABN 54 157 690 830

ANNUAL REPORT – 30 JUNE 2022

CONTENTS

CORPORATE DIRECTORY

1

REVIEW OF OPERATIONS AND ACTIVITIES

2

DIRECTORS’ REPORT

11

DIRECTORS AND COMPANY SECRETARY

11

PRINCIPAL ACTIVITIES

11

DIVIDENDS

11

COVID 19 IMPACT

11

REVIEW OF OPERATIONS

11

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

12

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

12

EVENTS SINCE THE END OF THE FINANCIAL YEAR

12

ENVIRONMENTAL REGULATION

12

INFORMATION ON DIRECTORS

13

MEETINGS OF DIRECTORS

17

REMUNERATION REPORT

18

INSURANCE OF OFFICERS AND INDEMNITIES

35

PROCEEDINGS ON BEHALF OF THE COMPANY

35

AUDIT AND NON-AUDIT SERVICES

35

AUDITOR’S INDEPENDENCE DECLARATION

36

AUDITOR’S INDEPENDENCE DECLARATION

37

CORPORATE GOVERNANCE STATEMENT

38

ANNUAL FINANCIAL REPORT – 30 JUNE 2022

39

DIRECTORS’ DECLARATION

104

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS

105

SHAREHOLDER INFORMATION

111

 

 

 


ANNUAL FINANCIAL REPORT - 30 JUNE 2022

CORPORATE DIRECTORY

 

Directors

Admiral R J Natter, US Navy (Ret.)

A Bellas B. Econ, DipEd, MBA, FAICD, FCPA, FGS

Andrew N. Liveris AO, BE (Hons) Doctor of Science

(honoris causa)

R Cooper BE (Mining), MEngSc, MAusIMM, MAICD

Z Golodryga MEng (Mech)

J Oelwang BS (Hons)

 

Secretary

S M Yeates CA, B.Bus

 

 

Registered office in Australia

McCullough Robertson

Level 11, Central Plaza Two

66 Eagle Street

Brisbane QLD 4000

 

Principal place of business

 

Level 38, 71 Eagle Street

Brisbane QLD 4000

 

Share register

Link Market Services Limited

Level 21, 10 Eagle Street

Brisbane QLD 4000

www.linkmarketservices.com.au

 

Auditor

PricewaterhouseCoopers

480 Queen Street

Brisbane QLD 4000

www.pwc.com.au

 

Solicitors

Allens Linklaters

Level 26

480 Queen Street

Brisbane QLD 4000

 

Bankers

Commonwealth Bank of Australia

 

Stock exchange listing

NOVONIX Limited ordinary shares are listed on the Australian Securities Exchange (ASX) and American Depositary Receipts (ADR’s) are listed on The Nasdaq Stock Market.

 

Website address

www.novonixgroup.com

 

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ANNUAL FINANCIAL REPORT - 30 JUNE 2022

REVIEW OF OPERATIONS AND ACTIVITIES

 

NET ASSETS
as of 30 June 2022

 

$364,343,319

 

 

2021: $184,395,802
 

 

 

 

CASH & CASH EQUIVALENTS
as of 30 June 2022

 

$207,083,935

 

 

2021: $136,663,976


 

 

 

 

 

 

 

 

STATUTORY AFTER-TAX LOSS
year ended 30 June 2022

 

$71,441,024

 

 

2021: $18,076,077
 

 

NOVONIX Limited (“NOVONIX” or the “Company” and, together with its consolidated subsidiaries, the “Group”) is a leading battery technology company with operations in both Canada and the United States. NOVONIX provides advanced, high-performance materials, equipment, and services for the global lithium-ion battery industry with sales in more than 10 countries in North America, Europe and Asia. We develop materials and technologies to support longer-life and lower-cost batteries that are powering us towards a cleaner energy future and, we are a leading US-based supplier of synthetic graphite anode material with plans to scale to significant volumes.

NOVONIX’s Battery Technology Solutions division (“BTS”) focuses on innovative battery research and development, along with providing advanced battery testing equipment and services on a global scale. BTS provides front-line access across the battery value chain and allows the Group to continue to be an industry leader, delivering materials and technologies to support high-performance and cost-effective battery development. Our NOVONIX Anode Materials division (“NAM”), located in Chattanooga, Tennessee, USA, manufactures high-performance synthetic graphite anode materials used to make lithium-ion batteries that power electric vehicles, personal electronics, medical devices, and energy storage units. Our mission is underpinned by an increasing emphasis on environmentally conscious battery technologies and is key to a sustainable future with prolific adoption of electric vehicles and grid energy storage systems. We are focused on the development of materials and technologies that support key ESG criteria in the field of battery materials and technologies, including: longer life batteries, higher energy efficiency, reduced chemical usage, reduced waste generation, and cleaner power inputs. Our vision is to accelerate adoption of battery technologies for a cleaner energy future. This is demonstrated by our values, which include integrity, respect, and collaboration that support social impact and embody NOVONIX’s approach to corporate responsibility.

Throughout fiscal year 2022, NOVONIX continued to focus on the execution of its business strategy and growth initiatives. NOVONIX had net assets of $364,343,319, including $207,083,935 in cash and cash equivalents at 30 June 2022. The Company reported a statutory after-tax loss for the year ended 30 June 2022 of $71,441,024. These financial results are in line with management expectations. The performances of the Battery Technology Solutions and Anode Materials divisions are discussed further below.

 

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ANNUAL FINANCIAL REPORT - 30 JUNE 2022

HIGHLIGHTS OF FISCAL YEAR 2022

Fiscal Year 2022 was a pivotal year for NOVONIX. The Company continued to execute against its long-term strategic and operational roadmap, announced key strategic partnerships and supply agreements, and explored additional avenues to create value for shareholders. Key highlights include:

July 2021

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Dr. Jeff Dahn joined the Company as its Chief Scientific Advisor, bringing decades of battery materials expertise.

 

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NAM expansion continued with the acquisition of Riverside, an approximately 400,000 square foot facility in Chattanooga, TN, to increase production capacity of anode materials to 10,000 tonnes per annum.

 

September 2021

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Phillips 66 (NYSE: PSX) acquired a 16% stake in NOVONIX for $150 million.

 

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S&P Dow Jones Indices announced that NOVONIX has been added to the constituents of the S&P/ASX 300 Index.

 

October 2021

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Zhanna Golodryga, Senior Vice President, Digital and Administrative Officer for Phillips 66, joined the Board of Directors.

 

November 2021

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Riverside grand opening was marked by hosting U.S. Secretary of Energy Jennifer M. Granholm, along with federal, state, and local officials.

 

December 2021

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Received grant from Next Generation Manufacturing Canada (NGen), the industry-led organisation behind Canada's Advanced Manufacturing Supercluster.

 

January 2022

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Entered into a technology development agreement with Phillips 66 to advance the production and commercialisation of anode materials.

 

February 2022

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Trading of ADRs commenced on The Nasdaq Stock Market ("Nasdaq").

 

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NOVONIX entered into long-term supply agreement and investment agreement with KORE Power.

 

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ANNUAL FINANCIAL REPORT - 30 JUNE 2022

March 2022

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Jean Oelwang, President and Founding CEO of Virgin Unite, joined the Board of Directors.

 

June 2022

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Announced the delivery of a first-of-its-kind, custom-designed microgrid battery prototype, developed by NOVONIX to support Emera Technologies Limited, a subsidiary of Emera Inc. (TSX: EMA), residential microgrid system.

 

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Announced a life cycle assessment demonstrating an approximate 60% and 30% decrease in global warming potential relative to the conventional anode grade synthetic graphite produced from Inner Mongolia and China.

 

NOVONIX OUTLOOK

NOVONIX is well-positioned to be an industry leader at the forefront of product innovation and intellectual property development in the battery materials and technology industry with a focus on supporting the onshoring of the battery supply chain. The Company has built a team of top talent with the experience to drive innovation company-wide and believes it has the next generation technology needed to support the rapidly growing electric vehicle and ESS markets in North America. NOVONIX is focused on scaling its production capacity of synthetic graphite to meet the growing demands of its customers, through increasing production capabilities at its facility in Chattanooga, Tennessee and future expansions. Additionally, NOVONIX continues to focus on developing improved and sustainable technologies, pursuing strategic partnerships with leading international battery companies, and growing an intellectual property pipeline that will position the Company at the forefront of next-generation battery technology.

GROWTH STRATEGIES FOR FY23 AND BEYOND:

NOVONIX’s leadership is focused on the successful execution of its operational strategic roadmap with the objective of maximizing shareholder value through the generation of strong cash flow and the pursuit of profitable, high-growth opportunities. The Company’s key strategies include:
 

Maintain technology leadership throughout the EV battery and energy storage supply chain. NOVONIX is committed to continuing to leverage its competitive advantage to expand its offerings and technological know-how into other advanced offerings including lithium-metal and beyond lithium-ion technology with a focus on localization of key elements of the supply chain.

Execute on development of synthetic graphite production capacity with plan to expand to 150,000 tonnes per annum by 2030. The Company is on track to reaching annual production capacity of 10,000 tonnes per annum (tpa) of synthetic graphite in 2023, with further plans to expand annual production capacity to 40,000 tpa in 2025 and 150,000 tpa in 2030.

Commercialize our proprietary pipeline of advanced battery technologies. We are currently expanding opportunities to work with partners globally to commercialize our proprietary and patent pending cathode production process. Our broader battery technology pipeline contains a number of innovative materials and processes in advanced anodes, cathodes and electrolytes, as well as advanced capabilities and solutions for energy storage applications

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ANNUAL FINANCIAL REPORT - 30 JUNE 2022

through our partnership with Emera Technologies Limited, that we continue to develop and believe will be critical to the growth of the clean energy economy.

Invest in talent. NOVONIX continues to invest in its personnel through recruitment, training and development to ensure it attracts and retains the best talent in the industry which is critical to the growth of our business.

NOVONIX Enterprise Overview

OPERATIONAL STRUCTURE AT A GLANCE

NOVONIX’s synergistic operating structure, as depicted below, is integral to the company’s current business development and future strategy.

NOVONIX continues to invest in intellectual property for key materials technologies, including anode and cathode materials, that we believe will enhance the performance of long-life EV and ESS applications. Our NOVONIX Battery Technology Solutions (BTS) division, based in Halifax, Nova Scotia, Canada, has a full cell pilot line and extensive cell testing capabilities, and works with tier-one customers across the battery value chain.

As part of our investment in intellectual property, we continue our collaboration with the group led by Dr. Mark Obrovac, a leading battery materials innovator, at Dalhousie University. Pursuant to the terms of the collaborative research agreement with Dalhousie University, NOVONIX exclusively owns all intellectual property developed within the group without any ongoing obligations to Dalhousie University.

Further enhancing the Company’s R&D talent, on July 1, 2021, Dr. Jeff Dahn, a renowned researcher in battery materials and processes, officially joined the NOVONIX team as Chief Scientific Advisor. Dr. Dahn has been active in the lithium-battery sector since the late 1970s and in 1996 was appointed as the NSERC/3M Canada Industrial Research Chair in Materials for Advanced Batteries at Dalhousie University, a position that he held until 2016. In 2016, Dahn began a research partnership with Tesla as the NSERC/Tesla Canada Industrial Research Chair. This partnership was recently renewed until 2026.

Dr. Dahn is a co-author on more than 750 peer reviewed papers and is an inventor on over 70 patents (issued and pending). His research has been recognized by numerous awards including a Governor General’s Innovation Award (2016) and the Gerhard Herzberg Gold Medal in Science and

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ANNUAL FINANCIAL REPORT - 30 JUNE 2022

Engineering (2017), Canada’s top science prize. Dr. Dahn is a Fellow of the Royal Society of Canada and an Officer of the Order of Canada.

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Our NOVONIX Anode Materials (NAM) division, located in Chattanooga, Tennessee, USA, manufactures high-performance synthetic graphite anode materials used to make lithium-ion batteries that power electric vehicles, personal electronics, medical devices, and energy storage units. The global demand for synthetic graphite for use in electric vehicles and energy storage systems is growing rapidly this decade, and NAM is focused on developing North American production capacity to address the significant control currently held by China over this key battery material. The Company plans to reach synthetic graphite production capacities of 10,000 tpa by 2023, with further targets of 40,000 tpa by 2025 and 150,000 tpa by 2030.

In September 2021, Phillips 66 made a USD$150 million investment in NOVONIX for approximately 16% of the Company. In January 2022, Phillips 66 and NOVONIX entered into a technology development agreement leveraging both parties’ expertise to collaborate on development and optimisation of feedstock and anode processing with the goal of higher performance and lower carbon intensity materials. This partnership has been transformational in strengthening the Company’s balance sheet while enhancing the Company’s industry network across the value chain.

NOVONIX BATTERY TECHNOLOGY SOLUTIONS (BTS) DIVISION

NOVONIX BTS, based in Halifax, Nova Scotia, Canada, provides battery R&D services and manufactures what we believe to be the most accurate lithium-ion battery cell test equipment in the world. This equipment is now used by leading battery makers, researchers, and equipment manufacturers including Panasonic, CATL, LG Chemical, Samsung SDI, and SK Innovation and numerous consumer electronics and automotive OEMs. The BTS division significantly expanded R&D

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ANNUAL FINANCIAL REPORT - 30 JUNE 2022

capabilities through direct investment in and through a long-term partnership agreement with Dalhousie University.

In fiscal year 2022, NOVONIX BTS continued strong revenue growth each quarter with expansion of hardware sales and R&D service offerings by adding and expanding key strategic accounts.

In August 2021, NOVONIX completed the expansion of its existing Halifax facility to approximately 22,000 square feet (from approximately 13,500 square feet). The Company also acquired a second, 35,000 square foot facility, in May 2021 which was renovated and moved into in January 2022 for use in its BTS division. This additional space will enable growth in revenue-based activities and, more importantly, cathode commercialisation and new internal development work.

NOVONIX BTS has increased its investment in the intellectual property developed around cathode synthesis technology, which the Company believes could enable a substantial reduction in the cost of producing high energy density (high nickel-based) cathode materials. NOVONIX BTS has established a small-scale pilot line for the development of the technology and has filed two patent applications relating to this technology. Additionally, it expects to leverage NOVONIX BTS’ battery cell pilot line and cell testing capabilities to further expand the dedicated cathode development team and install larger-scale pilot synthesis capabilities to demonstrate the manufacturability of the technology along with the performance in industrial format lithium-ion cells.

 

NOVONIX continues to invest in the ESS market through its partnership with Emera Technologies, under which we are designing battery pack systems to support microgrids that will provide solar power directly to homes in North America. On June 6, 2022, NOVONIX and Emera Technologies announced the delivery of their first-of-its-kind, custom-designed microgrid battery prototype. The prototype was developed by NOVONIX to support Emera Technologies’ residential microgrid system, BlockEnergy™, which is operating in a residential pilot project south of Tampa, Florida. Emera Technologies is a Florida-based subsidiary of Emera Inc., which is a Nova Scotia-based power utility Company. This opportunity highlights the value of BTS in working with companies and industries across the battery value chain.

NOVONIX leverages patent pending Dry Particle Microgranulation (DPMG) to eliminate wastewater and use simpler metal inputs to reduce cathode manufacturing costs or improve yield in cathode manufacturing. NOVONIX’s cathode synthesis technology is well-positioned to become a part of supporting the expected significant growth in the cathode market for the lithium-ion battery industry. These single-crystal materials offer enhanced energy density and long life. NOVONIX’s synthesis technology could further improve the cost, performance, and sustainability of these materials, which would be targeted for use in electric vehicles and energy storage applications.

In March 2022, the Honourable Ginette Petitpas Taylor, Minister responsible of ACOA (Atlantic Canada Opportunities Agency), announced a repayable contribution of C$1 million to BTS to purchase specialized equipment for its new 35,000 square foot Halifax facility, where NOVONIX will pilot its cost-effective and environmentally friendly method of cathode material production. The equipment is on track to hit our 10 tonnes per annum production milestone by the first quarter of fiscal

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ANNUAL FINANCIAL REPORT - 30 JUNE 2022

2023.

The capabilities of our commissioned, on-site analytical lab, coupled with the access to BTS’ pilot line and cell testing resources, allow the NOVONIX R&D team to efficiently work on the synthesis and analysis of new materials. The team has also opened engagement with multiple current commercial precursor and cathode suppliers to discuss the Company’s technology and current state of demonstration capability in terms of synthesizing capability and performance. In fiscal year 2022, NOVONIX also engaged with multiple established and potential lithium suppliers in material evaluation programs which build on the Company’s initiatives in cathode precursor as well as final cathode synthesis technology.

NOVONIX partnered with Next Generation Manufacturing Canada (NGen) in December 2021, announcing CAD$1.675 million in grant funding towards a nearly CAD$18 million investment in facilities, equipment and people. This facility and expanded capabilities are helping to build out a Canadian battery materials supply chain, limit the dependence on Asia for raw materials and technology, and capitalize on the growth created by increasing demand for electric vehicles and grid energy storage.

The Company is in the process of expanding the internal cathode development team and capabilities, while driving process development internally and collaboratively with Dr. Obrovac’s group at Dalhousie pursuing new intellectual property. The Company also works with multiple established lithium and metal suppliers in material evaluation programs, which build on the Company’s initiatives in cathode precursor as well as final cathode synthesis technology. NOVONIX is positioned to become a market leader in cathode synthesis technology as it pursues these development opportunities.

NOVONIX ANODE MATERIALS (NAM) DIVISION

The NOVONIX Anode Materials division advances the development and commercialisation of ultra-long-life, high-performance anode material for the lithium-ion battery market focused on electric vehicle and energy storage applications that demand long life and high performance.

In fiscal year 2022, NAM made significant progress towards expanding production capacity for battery-grade synthetic graphite material. NOVONIX closed on the purchase of a 400,000+ square-foot facility in Chattanooga, Tennessee, which we refer to as “Riverside,” the planned site for expansion to at least 10,000 tonnes per year of production capacity by 2023. In November 2021, U.S. Secretary of Energy Jennifer Granholm attended an inaugural celebration at Riverside as the keynote speaker.

Additionally, the NOVONIX Anode Materials division has initiated further expansion plans beyond Riverside. The team focused on plant design and engineering has begun to work on the 30,000 tpa (Phase 2) plant build-out, which includes site selection, plant layout, and engineering design.

NOVONIX continues to produce anode materials using the Generation 2 furnace system to support next steps in customer qualification programs. As of March 2022, NOVONIX Anode Materials completed all equipment installation for Generation 2 furnace lines and associated equipment. The Company continues to work with two of the world’s largest battery manufacturers (SAMSUNG SDI

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ANNUAL FINANCIAL REPORT - 30 JUNE 2022

and SANYO ELECTRIC, a subsidiary of PANASONIC Corporation), including providing updated information and samples to support ongoing requirements with plans to deliver mass production samples that will meet manufacturer specifications from our Generation 3 furnaces. Notably, the first two Generation 3 furnace systems were installed at Riverside and commissioning continues to progress on track to meet ongoing production targets. We continue sampling and testing engagements with other key battery and automotive manufacturers with expansion plans in North America.
 

Further advancing its mission of developing and supplying materials and technologies to support longer-life and lower-cost batteries that will enable a cleaner energy future, NOVONIX entered a Technology Development Agreement with Phillips 66 in January 2022 to cooperate on the development of new feedstocks and synthetic graphites with reduced carbon-intensive processing. Through the Company’s internal development and partnerships such as that with Phillips 66, NOVONIX is well positioned to bring a cleaner, local supply chain to meet North American demand for high-grade synthetic graphite.


On 31 January 2022, NOVONIX entered into definitive transaction agreements with KORE Power, Inc. (“KORE Power”) to advance and strengthen the domestic lithium-ion battery supply chain. Through this partnership, NOVONIX will be the exclusive supplier of graphite anode material to KORE Power through a five-year supply agreement, with deliveries ramping up from 3,000 tonnes per annum beginning 2024 to 12,000 tonnes per annum in 2027. In addition, NOVONIX acquired an approximate 5% stake in KORE Power with USD$25 million consideration paid in a combination of 50% cash and 50% NVX shares.

In June 2022, the Company released the results of a Life Cycle Assessment (“LCA”) conducted by Minviro Ltd., a London-based, globally recognized sustainability and life cycle assessment consultancy. The LCA was conducted on one of the Company’s grades of graphite materials, GX-23. The results of this assessment showed an approximate 60% decrease in global warming potential compared to commercially manufactured anode grade synthetic graphite produced in China and an approximate 30% decrease in global warming potential compared to anode grade natural graphite also produced in China. The LCA results support the Company’s position as a leader in sustainability and cleaner energy across the automotive and energy storage sectors.

The global demand for high-performance anode materials continues to increase exponentially as the world grapples with increasing energy supply and demand imbalances, as demonstrated by the growing desire for a domestic localised battery supply chain. Further, NOVONIX is opportunistically positioned to benefit from potential government funding opportunities offered through the Bipartisan Infrastructure Law, Defense Production Act, and Department of Energy Loan Program Office, all of which aim to advance the domestic processing of critical materials. Companies are seeking partnerships with dependable and qualified suppliers who can accelerate execution and scale production of high-performance anode materials quickly within their domestic markets. The NOVONIX Anode Materials division is well-positioned to capitalise on international collaboration opportunities, having shown industry excellence in material production and a demonstrated track record of

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ANNUAL FINANCIAL REPORT - 30 JUNE 2022

scalability.

MOUNT DROMEDARY

The Mount Dromedary Graphite Project is a world-class, high-grade (18%+) natural graphite deposit located in Northern Queensland, Australia.

Despite the favourable characteristics of this natural graphite deposit, exploration was put on hold given the substantially more favourable investment opportunities for the Company through the manufacturing of advanced battery anode materials and the development of new battery technologies. During fiscal year 2022, management initiated a strategic review of the graphite deposit asset. No findings have been released and there can be no assurances that the strategic review will result in further development of the asset.

The Company continues to hold the project in good standing while monitoring the market.

 

 

 

TENEMENT LIST

Tenement

Permit Holder

Grant date

NVX Rights

Expiry date

EPM 26025

Exco Resources Limited

14/12/2015

100% (Sub-Blocks Normanton 3123 D, J, N, O and S)

13/12/2025

EPM 17323

MD South Tenements Pty Ltd
(Subsidiary of NOVONIX Limited)

20/10/2010

100%

19/10/2022

EPM 17246

MD South Tenements Pty Ltd

26/10/2010

100%

25/10/2022

 

 

 

END OF REVIEW OF OPERATIONS AND ACTIVITIES

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ANNUAL FINANCIAL REPORT - 30 JUNE 2022

DIRECTORS’ REPORT

Your Directors present their report on the consolidated entity consisting of NOVONIX Limited and the entities it controlled at the end of, or during, the year ended 30 June 2022. Throughout the report, the consolidated entity is referred to as the Group.

 

DIRECTORS AND COMPANY SECRETARY

The following persons were Directors of NOVONIX Limited during the whole of the financial year and up to the date of this report:

 

Tony Bellas

Robert Cooper

Andrew Liveris

Robert Natter

Zhanna Golodryga – appointed 20 October 2021

Jean Oelwang – appointed 2 March 2022

Greg Baynton – ceased 30 November 2021
Trevor St Baker – ceased 26 May 2022

Chris Hay (alternate for Trevor St Baker) – ceased 26 May 2022

 

The Company Secretary is Suzanne Yeates. Appointed to the position of Company Secretary on 18 September 2015, Ms. Yeates is a Chartered Accountant and Founder and Principal of Outsourced Accounting Solutions Pty Ltd. She holds similar positions with other public and private companies.

 

PRINCIPAL ACTIVITIES

During the year, the principal activities of the Group included investment in scalability efforts to increase production capacity of anode materials, commercialisation of the Company’s cathode technology and expansion of cell assembly and testing capabilities.

DIVIDENDS

The Directors do not recommend the payment of a dividend. No dividend was paid during the year.

COVID 19 IMPACT

The unprecedented conditions created by COVID 19 have affected the operations of the Company, as they have for most organisations. Operations were affected at times by restrictions imposed by authorities and international and domestic travel restrictions impacted our ability to advance some key elements of our business development agenda.

REVIEW OF OPERATIONS

Information on the operations and financial position of the Group and its business strategies and prospects are set out in the review of operations and activities on pages 2-10 of this annual report.

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ANNUAL FINANCIAL REPORT - 30 JUNE 2022

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

In August 2021, NOVONIX entered into a placement agreement with Phillips 66 for the issue of 77,962,578 ordinary shares in NOVONIX Limited for total consideration of USD$150M (AUD$208M).

On 31 January 2022, NOVONIX Limited entered a Securities Purchase Agreement with KORE Power, Inc. under which NOVONIX Limited acquired 3,333,333 shares of KORE Power Common Stock at an issue price of USD$7.50 per share, representing approximately 5% of the common equity of KORE Power. The consideration for the shares in KORE Power totalled USD$25M and was settled through a combination of 50% cash and 50% through the issue of 1,974,723 ordinary shares in NOVONIX Limited.

Also on 31 January 2022, NOVONIX Limited entered into a binding Supply Agreement with KORE Power, under which NOVONIX is the exclusive supplier to KORE Power’s US large scale battery cell manufacturing facility. NOVONIX will begin supplying graphite anode material at a rate of 3,000 tonnes per annum beginning in 2024 and ramping up to approximately 12,000 tonnes per annum in 2027, subject to customer requirements. The Supply Agreement is for an initial term of five years, with automatic renewal for a subsequent five-year term.

On 1 February 2022 NOVONIX commenced trading on the Nasdaq Stock Market (‘Nasdaq’).

There were no other significant changes in the state of affairs of the Group during the financial year.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

Comments on likely developments and expected results of operations are included in the review of operations and activities on pages 2-10.

EVENTS SINCE THE END OF THE FINANCIAL YEAR

There have been no matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the Company, the results of those operations or the state of affairs of the Company in future financial years.

ENVIRONMENTAL REGULATION

The Group is subject to environmental regulation in respect of its mining, exploration and development activities in Australia and is committed to undertaking all its operations in an environmentally responsible manner.

To the best of the Directors’ knowledge, the Group has adequate systems in place to ensure compliance with the requirements of all environmental legislation and are not aware of any breach of those requirements during the financial year and up to the date of the Directors’ report.

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ANNUAL FINANCIAL REPORT - 30 JUNE 2022

INFORMATION ON DIRECTORS

The following information is current as at the date of this report.

 

Admiral R J Natter. Chair – non-executive

Experience and expertise

 

Robert J. Natter retired from active military service with the US Navy in 2003 and now has 17 years’ experience in the private sector of the US and Australia markets.

During his Navy career, Admiral Natter served as the Commander of the US Seventh Fleet, controlling all U.S. Navy operations throughout the western Pacific and Indian Oceans. As a four-star Admiral, Natter was Commander in Chief of the U.S. Atlantic Fleet and the first Commander of U.S. Fleet Forces Command, overseeing all Continental U.S. Navy bases and the training and readiness of all Navy ships, submarines, and aircraft squadrons based there.

He is on the Board and chairs the Governance and Compensation Committee of Allied Universal Security Company with over 700,000 employees worldwide. He also serves on the Board of Intellisense (ISI), a privately held technology company based in Torrance, California.

He also serves on the U.S. Naval Academy Foundation Board and was Chairman of the Academy Alumni Association, representing over 60,000 living Academy alumni. He also served on the Navy Seal Museum and the Yellow Ribbon Fund Boards.

Other current directorships

N/A

Former listed directorships in last 3 years

Non-executive Director of Corporate Travel Management Limited (2014-2020).

Special responsibilities

Chairman

Interests in shares and options

2,225,258 ordinary shares

1,500,000 options

 

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ANNUAL FINANCIAL REPORT - 30 JUNE 2022

 

A G Bellas. Deputy Chair – non-executive

Experience and expertise

 

Mr. Bellas was the inaugural Chair of the Company on his appointment in August 2015. He brings over 35 years of experience in the public and private sectors. Mr. Bellas was previously CEO of the Seymour Group, one of Queensland’s largest private investment and development companies. Prior to joining the Seymour Group, he held the position of CEO of Ergon Energy Ltd, a Queensland Government-owned corporation involved in electricity distribution and retailing. Before that, he was CEO of CS Energy Ltd, also a Queensland Government-owned corporation and the State’s largest electricity generation company, operating over 3,500 MW of gas-fired and coal-fired plant at four locations. Mr. Bellas previously had a long career with Queensland Treasury, achieving the position of Deputy Under Treasurer.

Mr. Bellas is a director of the listed companies shown below and is also a director of Healthcare Logic Global Ltd, Loch Explorations Pty Ltd, Green and Gold Minerals Pty Ltd and Burlington Mining Pty Ltd.

Mr. Bellas was the inaugural Chair of the Company on his appointment in August 2015. He brings over 35 years of experience in the public and private sectors. Mr. Bellas was previously CEO of the Seymour Group, one of Queensland’s largest private investment and development companies. Prior to joining the Seymour Group, he held the position of CEO of Ergon Energy Ltd, a Queensland Government-owned corporation involved in electricity distribution and retailing. Before that, he was CEO of CS Energy Ltd, also a Queensland Government-owned corporation and the State’s largest electricity generation company, operating over 3,500 MW of gas-fired and coal-fired plant at four locations. Mr. Bellas previously had a long career with Queensland Treasury, achieving the position of Deputy Under Treasurer.

Mr. Bellas is a director of the listed companies shown below and is also a director of Healthcare Logic Global Ltd, Loch Explorations Pty Ltd, Green and Gold Minerals Pty Ltd and Burlington Mining Pty Ltd.

Other current directorships

Chairman of intelliHR Limited and Deputy Chairman of State Gas Limited.

Former listed directorships in last 3 years

Chairman of Corporate Travel Management Ltd (ceased 2019).

Chairman of ERM Power Ltd (ceased 2019).

Chairman of Shine Justice Limited (ceased 2020).

Special responsibilities

Chair of the Audit Committee

Member of the Remuneration Committee

Member of the Nomination Committee

Interests in shares and options

2,412,374 ordinary shares

 

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ANNUAL FINANCIAL REPORT - 30 JUNE 2022

 

Andrew N. Liveris. Non-Executive Director

Experience and expertise

 

A recognised global business leader with more than 40 years at the Dow Chemical Company, Mr. Liveris' career has spanned roles in manufacturing, engineering, sales, marketing, and business and general management around the world.

During more than a decade as Dow’s CEO, Mr. Liveris led the Dow’s transformation from a cyclical commodity chemicals manufacturing company into a global specialty chemical, advanced materials, agro-sciences, and plastics company.

Andrew is a director of the listed companies shown below and has also been appointed as the Chair of the Brisbane Organising Committee for the 2032 Olympic and Paralympic Games.

A recognised global business leader with more than 40 years at the Dow Chemical Company, Mr. Liveris' career has spanned roles in manufacturing, engineering, sales, marketing, and business and general management around the world.

Other current directorships

Chairman of Lucid Motors (NASDAQ: LCID)

Non-executive director of Saudi Arabian Oil Company (Saudi Aramco) and Worley Parsons Limited (ASX: WOR).

Non-executive director of International Business Machines (IBM) Corporation (NYSE: IBM).

Former listed directorships in last 3 years

Executive Chairman of DowDuPont Inc (NYSE: DWDP) (ceased 2018).

Chairman and Director of The Dow Chemical Company (NYSE: DOW) (ceased 2018).

Special responsibilities

N/A

Interests in shares and options

9,198,794 ordinary shares

9,000,000 options

 

R Cooper. Non-Executive Director

Experience and expertise

 

Mr. Cooper is a mining engineer with almost 30 years' industry experience, having held leadership roles across a diverse range of commodities, both in Australia and overseas. He has a broad foundation of operating and technical experience in both operations and project development. Mr. Cooper has previously held leadership positions with BHP Billiton as General Manager of Leinster Nickel Operations within Nickel West, and as Asset President of Ekati Diamonds in Canada. He more recently held senior positions with Discovery Metals as General Manager-Operations in Botswana and as General Manager-Development. Robert is currently the CEO of Round Oak Minerals Pty Limited, a 100% owned subsidiary of the Washington H. Soul Pattinson Group of companies.

Other current directorships

N/A

Former listed directorships in last 3 years

Non-executive Director of Verdant Minerals Limited (ceased 2019).

Non-executive Director of Syndicated Metals Limited (ceased 2019).

Special responsibilities

Chairman of the Audit Committee.

Chairman of the Remuneration Committee.

Interests in shares and options

652,612 ordinary shares

200,000 options

 

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ANNUAL FINANCIAL REPORT - 30 JUNE 2022

 

Z Golodryga. Non-executive Director

Experience and expertise

 

A recognised global business leader with more than 35 years in the Oil & Gas Energy industry, Mrs. Golodryga’s career has spanned roles in Engineering, Information Technology, Business Transformation, and general management around the world.

During more than five years as Chief Digital and Administrative Officer at Phillips 66, Golodryga led the Phillips 66’s transformation into a global Digital Energy leader in the industry. Mrs. Golodryga brings over 20 years’ experience as a senior Information Technology, Procurement, and Digital Transformation executive in the energy industry.

Other current directorships

N/A

Former listed directorships in last 3 years

N/A

Special responsibilities

Member of the Audit Committee.

Interests in shares and options

N/A

 

J Oelwang. Non-Executive Director

Experience and expertise

 

Ms. Oelwang has 18 years of experience in helping to start and lead telecommunications companies in South Africa, Colombia, Bulgaria, Singapore, Hong Kong, Australia, and the US. This included roles in marketing, customer service, sales, and as a CEO.

Over the last 17 years, she has been the CEO and President of Virgin Unite, helping lead the incubation and start-up of several global initiatives, many with a focus on sustainability, including: The Elders, The B Team, The Carbon War Room (merged with RMI), Ocean Unite, and The Caribbean Climate Smart Accelerator. Ms. Oelwang also worked with 25 Virgin businesses across 15 industries to help embed purpose in all they do and served as a Partner in the Virgin Group leading their people strategy.

She is on the Advisory Council of The Elders, is a B Team leader, is the cofounder of Plus Wonder, and the author of the book Partnering.

Other current directorships

N/A

Former listed directorships in last 3 years

N/A

Special responsibilities

Member of Remuneration Committee.

Interests in shares and options

N/A

 

 

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ANNUAL FINANCIAL REPORT - 30 JUNE 2022

MEETINGS OF DIRECTORS

The number of meetings of the Company’s Board of Directors and of each Committee held during the year ended 30 June 2022, and the number of meetings attended by each Director were:

 

Full meetings of Directors

Meetings of Audit Committee

Meeting of the Remuneration Committee

 

A

B

A

B

A

B

Admiral R J Natter

A Bellas

12

12

12

12

N/A

3

N/A

3

N/A

6

N/A

6

G A J Baynton

7

7

2

2

N/A

N/A

R Cooper

A Liveris

Z Golodryga

J Oelwang

12

12

7

3

12

12

7

3

3

N/A

1

N/A

3

N/A

1

N/A

6

6

N/A

2

6

6

N/A

2

T St Baker

8

11

N/A

N/A

N/A

N/A

C Hay

9

11

N/A

N/A

N/A

N/A

A = Number of meetings attended

B = Number of meetings held during the time the director held office, was a member of the committee during the year and was not absent from a meeting due to a conflict of interest.

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ANNUAL FINANCIAL REPORT - 30 JUNE 2022

REMUNERATION REPORT

The remuneration report has been audited as required by s308 (3C) of the Corporations Act 2001.

The Directors present the NOVONIX Limited 2022 remuneration report, outlining key aspects of our remuneration policy and framework, and remuneration awarded this year.

The report is structured as follows:

(a) Key management personnel (KMP) covered in this report

(b) Remuneration policy and link to performance

(c) Elements of remuneration

(d) Link between remuneration and performance

(e) Remuneration expenses for executive KMP

(f) Contractual arrangements for executive KMP

(g) Non-executive Director arrangements

(h) Additional statutory information

(a) Key management personnel covered in this report

Non-executive and Executive Directors (see pages 13 to 16 for details about each Director)

R Natter (Non-executive Chairman) (executive from 24 September 2020 to 30 November 2021)

A Bellas (Non-executive Director)

R Cooper (Non-executive Director)

A Liveris (Non-executive Director)

Z Golodryga (Non-executive Director) (appointed 20 October 2021)

J Oelwang (Non-executive Director) (appointed 2 March 2022)

G A J Baynton (Non-executive Director) (ceased 30 November 2021)

T St Baker (Non-executive Director) (ceased 26 May 2022)

C Hay (Alternate non-executive Director) (ceased 26 May 2022)

Other key management personnel

Name

Position

J C Burns

Group CEO

N Liveris

Group CFO

R Buttar

Senior Vice President and General Counsel.

Changes since the end of the reporting period

There have been no changes to key management personnel since the end of the reporting period.

(b) Remuneration policy and link to performance

The Remuneration Committee (“Committee”) was formed in the prior financial year and is made up of majority of independent non-executive directors. The Committee reviews and determines the remuneration policy and structure annually to ensure it remains aligned to business needs and meets our remuneration principles. From time to time, the Committee also engages external remuneration consultants to assist with this review, see page 33 for further information. In particular, the board aims to ensure that remuneration practices are:

competitive and reasonable, enabling the Company to attract and retain key talent

aligned to the Company’s strategic and business objectives and the creation of shareholder value

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ANNUAL FINANCIAL REPORT - 30 JUNE 2022

transparent and easily understood, and

align with shareholder interests and are acceptable to shareholders

REMUNERATION REPORT (CONTINUED)

Element

Purpose

Performance metrics

Potential value

Changes for FY 2022

Fixed remuneration (FR)

Provide competitive market salary including superannuation and non-monetary benefits

Nil

Positioned at market (50th percentile).

Change to market (50th percentile).

STI

Reward for in-year performance

Based on Group KPIs.

Positioned at market (ranging from 50% to 100% of fixed remuneration).

Reduction from maximum award of 150% of base salary in prior year.

LTI

Alignment to long-term shareholder value

50% retention, 50% based on Group KPIs.

Positioned at market. Variable subject to share price and other inputs.

Change to 50% of LTI vesting on retention, and 50% vesting based on Group KPIs.

Balancing short-term and long-term performance

Annual incentives for FY22 were set at the 50th market percentile, referencing a peer group selected by AON, external remuneration consultant, and endorsed by the Board.

Long term incentives for FY22 were set at the 25th market percentile and are designed to promote long-term stability in shareholder returns.

Assessing performance

The board of directors is responsible for assessing performance against KPIs and determining the STI and LTI to be paid.

(c) Elements of remuneration

(i) Fixed annual remuneration (FR)

Executives receive their fixed remuneration as cash. FR is reviewed annually and is benchmarked against market data for comparable roles in companies operating in North America, in similar industries and with similar market capitalisation. The board has the flexibility to take into account capability, experience, value to the organisation and performance of the individual.

Superannuation is included in FR for executives.

In FY 2022, fixed remuneration was increased for all executives, with an average increase of 80%. This was done to align remuneration with the 50th percentile for comparative roles across a selected peer group.

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ANNUAL FINANCIAL REPORT - 30 JUNE 2022

REMUNERATION REPORT (CONTINUED)

(ii) Short term incentives

Short term incentives for all key management personnel have been in place for FY2022. KMP were eligible to receive a cash bonus of between 50% to 100% of their base salary at the end of the financial year subject to the executive achieving the KPIs set for them during the financial year.

The Company reserves the right to pay any STI cash bonus by way of an issue of fully paid ordinary shares at the sole discretion of the Board of Directors. For the purpose of calculating the number of shares to be issued to the executive, the issue price of the shares shall be based on the 10 day volume weighted average price of shares.

If an executive does not achieve each of the KPIs during the financial year, the Remuneration Committee, using its discretion, shall recommend to the Board the appropriate pro rata STI cash bonus to be received by the Executive. The Board of Directors shall make this determination for all Executives.

Structure of the short-term incentive plan

Feature

Description

Max opportunity

KMP executives: 50%-100% of fixed remuneration

Performance metrics

The STI metrics align with our strategic priorities.

Metric

Target

Weighting

Reason for selection

Plant commissioning and safety targets.

 

June 2022

45%

Focus of the Group’s growth strategy.

Cash management targets.

June 2022

15%

Focus of the Group’s growth strategy.

Execution of customer agreements, partnership agreements and pursuit of opportunities with adjacent technologies.

June 2022

40%

Focus of the Group’s growth strategy.

Delivery of STI

STI awarded in cash will be paid after the end of the financial year.

Board discretion

The Board has discretion to adjust remuneration outcomes up or down to avoid any inappropriate or anomalous reward outcomes, including reducing (down to zero, if appropriate) any deferred STI award.

(iii) Long-term incentives

Executive KMP participate in the Long-Term Incentive Program (“LTIP”) comprising grants of performance rights, with varying vesting conditions.

From FY2023, the Group is moving to an LTIP comprising annual grants of performance rights, with varying vesting conditions.

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ANNUAL FINANCIAL REPORT - 30 JUNE 2022

REMUNERATION REPORT (CONTINUED)

Performance Rights

The following performance rights were granted to KMP during the financial year:

Executive

       Grant Date

Number of rights

Vesting date

Vesting Conditions

Chris Burns

30/11/2021

200,0001

30/11/2021

None

28/01/2022

706,000

30/06/2024

Vest subject to continued employment

28/01/2022

706,000

30/06/2024

Vest subject to achievement of agreed FY24 revenue targets.

Nick Liveris

30/11/2021

200,0001

30/11/2021

None

28/01/2022

333,9152

30/06/2024

 Vest subject to continued employment

 

28/01/2022

333,9162

30/06/2024

Vest subject to achievement of agreed FY24 revenue targets.

Rashda Buttar

28/01/2022

127,619

30/06/2024

Vest subject to continued employment

28/01/2022

127,619

30/06/2024

Vest subject to achievement of agreed FY24 revenue targets.

6/10/2021

150,000

¼ 22/04/2022

¼ 22/04/2023

¼ 22/04/2024

¼ 22/04/2025

Continued employment.

Anthony Bellas

30/11/2021

200,0001

30/11/2021

None

Robert Natter

30/11/2021

200,0001

30/11/2021

None

1 The performance rights vested immediately and were exercised on 14 December 2021. The exercise of the performance rights resulted in the issue of 599,851 fully paid ordinary shares, as the exercise of some of the performance rights were settled on a net of tax basis.

2 The grant and issue of the performance rights is subject to Shareholder approval which will be sought at the 2022 Annual General Meeting of Shareholders.

Options

No options have been awarded to Directors or KMP during the financial year.

(d) Link between remuneration and performance

During the year, the Group has incurred losses from its principal activities supplying advanced battery materials, equipment and services to the global battery market. As the Company is still growing the business, the link between remuneration, corporate performance and shareholder value is difficult to define. The Company’s share price is influenced by, inter alia, fluctuations in current and expected demand for electric vehicles and ESS, technology adoption, international market prices for battery

21


ANNUAL FINANCIAL REPORT - 30 JUNE 2022

anode materials, and general market sentiment towards the battery materials and lithium-ion battery sectors, and, as such, increases or decreases in share price may occur quite independently of Executive performance or Company performance.

 

REMUNERATION REPORT (CONTINUED)

Given the nature of the Group’s activities and the consequential operating results, no dividends have been paid or proposed. There have been no returns of capital in the current or previous financial periods. The details of market price movements are as follows:

Period

Share price

Year end 30 June 2022

Year end 30 June 2021

Year end 30 June 2020

Year end 30 June 2019

Year end 30 June 2018

Year end 30 June 2017

Year end 30 June 2016

IPO price - 2 December 2015

$2.28

$2.22

$0.87

$0.44

$0.61

$0.75

$0.35

$0.20

(e) Remuneration expenses for executive KMP

The following table shows details of the remuneration expense recognised for the Group’s executive key management personnel for the current and previous financial year measured in accordance with the requirements of the accounting standards.

 

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ANNUAL FINANCIAL REPORT - 30 JUNE 2022

REMUNERATION REPORT (CONTINUED)

Name

Year

Fixed remuneration

Variable remuneration

 

 

Cash salary

Post- employment benefits

Termination payments

Non-monetary benefits3

STI4

Discretionary payment2

Performance/Share rights1

Options1

Total

 

Executive Directors

 

P M St Baker

(Ceased 23/09/2020)

2022

-

-

-

-

-

-

-

-

-

 

2021

22,951

1,536

75,000

-

-

-

-

-

99,487

 

Other key management personnel (Group)

 

Chris Burns

2022

879,884

17,598

-

2,651

938,377

-

4,152,013

303,145

6,293,668

 

2021

365,560

-

-

-

210,000

100,000

1,590,000

1,316,122

3,581,682

 

Nick Liveris

2022

552,588

65,712

-

-

580,320

-

2,653,536

106,693

3,958,849

 

2021

299,433

-

-

4,288

192,000

100,000

795,000

309,394

1,700,115

 

R Buttar

(Appointed 22/04/2021)

2022

499,374

73,499

-

-

262,232

-

681,601

-

1,516,706

 

2021

61,962

-

-

-

22,700

-

-

-

84,662

 

1Performance rights, share rights and options are expensed over the performance period, which includes the year in which the rights and options are awarded / granted and the subsequent vesting period.

2 During the prior financial year some KMP were paid discretionary payments to reflect their contribution which in the opinion of the directors is outside the scope of the ordinary duties of their roles as KMP.

3 Short-term benefits as per Corporations Regulation 2M.3.03(1) Item 6, primarily health insurance.

4 C Burns and N Liveris were both entitled to an STI equivalent to 100% of their cash salary for FY2022. The amount disclosed for STI differs to the amount disclosed as cash salary due to movements in foreign currency as STI’s for FY22 have been accrued in USD and translated at the closing AUD:USD spot rate.

 

 

 

 

23


ANNUAL FINANCIAL REPORT - 30 JUNE 2022

REMUNERATION REPORT (CONTINUED)

Name

Year

Fixed remuneration

Variable remuneration

 

Cash salary

Post- employment benefits

Termination payments

Non-monetary benefits3

STI4

Discretionary payment2

Performance/Share rights1

Options1

Total

Non-executive Directors

R Natter (Exec from 24/9/2020 to 30/11/2021)

2022

171,543

-

-

-

-

-

2,390,000

56,522

2,618,065

 

2021

163,194

-

-

-

-

50,000

-

56,522

269,716

 

A Bellas

2022

170,992

17,099

-

-

-

-

3,178,700

-

3,366,791

 

2021

71,005

6,714

-

-

-

50,000

-

-

127,719

 

G A J Baynton

(Ceased 30/11/2021)

2022

31,078

3,108

-

-

-

-

328,625

-

362,811

 

2021

60,300

5,729

-

-

-

-

-

-

66,029

 

R Cooper

2022

96,368

9,637

-

-

-

-

788,700

-

894,705

 

2021

71,005

6,745

-

-

-

-

-

-

77,750

 

A Liveris

2022

71,083

7,108

-

-

-

-

788,700

508,697

1,375,588

 

2021

51,005

4,845

-

-

-

-

-

508,697

564,547

 

Z Golodryga

(Appointed 20/10/2021)

2022

59,529

-

-

-

-

-

209,711

-

269,240

 

2021

-

-

-

-

-

-

-

-

-

 

J Oelwang

(Appointed 2/3/2022)

2022

19,431

-

-

-

-

-

-

-

19,431

 

2021

-

-

-

-

-

-

-

-

-

 

T St Baker

(Appointed 24/09/2020)

2022

57,365

5,736

-

-

-

-

710,905

-

774,006

 

2021

39,245

3,728

-

-

-

-

-

-

42,973

 

Total KMP remuneration expensed

2022

2,609,235

199,497

-

2,651

1,780,929

-

15,882,491

975,057

21,449,860

 

2021

1,205,660

29,297

75,000

4,288

424,700

300,000

2,385,000

2,190,735

6,614,680

 

1Performance rights, share rights and options are expensed over the performance period, which includes the year in which the rights and options are awarded / granted and the subsequent vesting period.

24


ANNUAL FINANCIAL REPORT - 30 JUNE 2022

2 During the prior financial year some KMP were paid discretionary payments to reflect their contribution which in the opinion of the directors is outside the scope of the ordinary duties of their roles as KMP.

C Hay did not receive any remuneration in FY2021 or FY2022.

25


ANNUAL FINANCIAL REPORT - 30 JUNE 2022

REMUNERATION REPORT (CONTINUED)

(f) Contractual arrangements with executive KMP’s

Component

Chris Burns

Nick Liveris

Rashda Buttar

Fixed remuneration

CAD$808,112

USD$400,000

USD$361,500

Contract duration

Ongoing contract

Ongoing contract

Ongoing contract

Notice by the individual / company

3 months

3 months

3 months

An external remuneration consultant was engaged to benchmark executive salaries. As a result of the review, executive salaries were adjusted to be positioned at the 50th percentile of the market.

The cash salary in the Remuneration table on page 24 represents the AUD translated amount of their local currency salary.

(g) Non-executive Director arrangements

As a result of the Group’s increased focus and expansion of operations in the United States, in FY2021 the Company undertook an independent assessment of its remuneration framework for Non-executive Directors. The assessment concluded that Non-executive Director remuneration should include both a cash component and an annual grant of equity awards using a value-based approach, which the Board has adopted by issuing Share Rights to Non-Executive Directors of the Company each financial year with a fixed US dollar value of USD$110,000.

At the 2021 AGM, the Shareholders approved the issue of the FY2022 Share Rights to Directors. The number of Share Rights issued was calculated by dividing the value of the Share Rights (USD$110,000) by the closing share price of the Company’s Shares on the ASX on 30 June 2021 and the USD/AUD spot rate as at 30 June 2021. The Share Rights for FY2022 automatically vested on 30 June 2022.

It a Non-Executive Director is appointed during the financial year, the number of Share Rights to be issued comprises a pro-rata amount of the USD 110,000 value of the Share Rights, based on the date of the Non-Executive Directors appointment, as a proportion of the financial year. The number of Share Rights is then calculated by dividing the value of the Share Rights by the closing share price of the Company’s shares on the ASX and the USD/AUD spot rate on the trading day immediately prior to the Non-Executive Directors appointment.

If a Non-Executive Director ceases to hold office as a Director prior to the Vesting Date, that person's Share Rights will lapse, and they will be entitled to a pro-rata amount of Shares representing the proportion of the relevant financial year that such person was appointed as a Non-Executive Director.

26


ANNUAL FINANCIAL REPORT - 30 JUNE 2022

REMUNERATION REPORT (CONTINUED)

The table below shows the value of share rights that were granted, exercised and forfeited during FY 2022.

Non-executive Director Share Rights

2022

Number granted

Value granted

$

Value exercised

$

Number forfeited

Value forfeited

G A J Baynton

27,500

328,625

-

-

-

A Bellas

66,000

788,700

-

-

-

R Cooper

66,000

788,700

-

-

-

Z Golodryga

17,549

209,711

-

-

-

A Liveris

66,000

788,700

-

-

-

R Natter

-

-

-

-

-

J Oelwang

-

-

-

-

-

T St Baker

66,000

788,700

-

6,510

77,795

The non-executive directors received the following cash fees:

 

 

$ USD

$ AUD equivalent1

Chairman

106,000

146,248

Base non-executive Director fee

50,000

68,985

Chair of Audit Committee

20,000

27,594

Member of Audit Committee

10,000

13,797

Chair of Remuneration Committee

12,500

17,246

Member of Remuneration Committee

6,250

8,623

1 USD cash fees recommended by the Remuneration Consultant and translated at the average FX rate for FY2022.

The current base fees were reviewed with effect from 1 July 2021.

The maximum annual aggregate non-executive Directors’ fee pool limit is USD$600,000 (excluding share-based payments) and was approved by shareholders at the 2021 Annual General Meeting.

Any director who devotes special attention to the business of the Company, or who otherwise performs services which in the opinion of the directors are outside the scope of the ordinary duties of a director may be paid extra remuneration as determined by the directors, which will not form part of the aggregate fee pool limit above. Non-executive directors are not entitled to any performance-related remuneration or retirement allowances outside of statutory superannuation entitlements. However, at the 2021 AGM, to incentivise Robert Natter and Anthony Bellas to work towards the long-term growth of the Company and align their interests to Shareholders, Shareholders approved the grant of 200,000 Performance Rights to both Robert Natter and Anthony Bellas.

All Non-executive Directors enter into a service agreement with the Company in the form of a letter of appointment. The letter summarises the board policies and terms, including remuneration relevant to the office of Director.

27


ANNUAL FINANCIAL REPORT - 30 JUNE 2022

REMUNERATION REPORT (CONTINUED)

(h) Additional statutory information

(i) Performance based remuneration granted, forfeited and cancelled during the year

The table below shows for each KMP how much of their STI cash bonus was awarded and how much was forfeited. It also shows the value of performance rights that were granted, exercised, forfeited and cancelled during FY 2022. The number of performance rights and percentages vested/forfeited for each grant are disclosed in section (ii) on pages 27 to 30 below.

 

Total STI bonus

LTI performance rights

2022

Total STI opportunity

(% of base salary)

Awarded

%

Forfeited

%

Value granted

$

Value exercised

$*

G A J Baynton

-

-

-

-

-

A Bellas

-

-

-

2,390,000

1,846,000

R Cooper

-

-

-

-

-

Z Golodryga

-

-

-

-

-

A Liveris

-

-

-

-

-

R Natter

-

-

-

2,390,000

1,846,000

J Oelwang

-

-

-

-

-

T St Baker

-

-

-

-

-

C Burns

100%

100%

Nil

4,152,013

1,846,000

N Liveris

100%

100%

Nil

3,223,376^

1,846,000

R Buttar

50%

100%

Nil

681,601

153,375

 

* The value at the exercise date of options/performance rights that were granted as part of remuneration and were exercised during the year has been determined as the intrinsic value of the options at that date.

^ 667,831 of the performance rights are subject to shareholder approval which will be sought at the 2022 Annual General Meeting of Shareholders scheduled for 26 October 2022. The value granted represents an estimate of the fair value of the share-based payment as the performance rights will not be formally granted until shareholder approval is obtained at the 2022 Annual General Meeting of Shareholders scheduled for 26 October 2022.

 

(ii) Terms and conditions of the share-based payment arrangements

 

Options

The terms and conditions of each grant of options affecting remuneration in the current or a future reporting period are as follows:

 

28


ANNUAL FINANCIAL REPORT - 30 JUNE 2022

REMUNERATION REPORT (CONTINUED)

Name

Grant Date

Vesting

Date

Expiry Date

Number

Under Option

Exercise Price

Value per Option at Grant date

Performance Achieved

Vested %

R Natter

31/07/2019

01/02/2022

05/08/2024

500,000

$0.50

$0.35

100%

100%

A Liveris

31/07/2019

01/02/2022

05/08/2024

4,500,000

$0.50

$0.35

100%

100%

C Burns

24/05/2019

01/02/2022

05/08/2024

500,000

$0.50

$0.34

100%

100%

13/03/2019

28/02/2024~

Cessation of employment

850,000

$0.50

$0.54

-

-

13/03/2019

31/03/2024~

Cessation of employment

850,000

$0.50

$0.55

-

-

13/03/2019

30/04/2024~

Cessation of employment

850,000

$0.50

$0.56

-

-

13/03/2019

31/05/2024~

Cessation of employment

850,000

$0.50

$0.56

-

-

13/03/2019

30/06/2024~

Cessation of employment

850,000

$0.50

$0.57

-

-

13/03/2019

31/01/2025~

Cessation of employment

850,000

$0.50

$0.57

-

-

13/03/2019

28/02/2025~

Cessation of employment

850,000

$0.50

$0.57

-

-

13/03/2019

28/02/2025~

Cessation of employment

850,000

$0.50

$0.57

-

-

13/03/2019

31/03/2025~

Cessation of employment

850,000

$0.50

$0.58

-

-

13/03/2019

31/03/2025~

Cessation of employment

850,000

$0.50

$0.58

-

-

N Liveris

31/07/2019

01/02/2022

05/08/2024

500,000

$0.50

$0.35

100%

100%

21/11/2019

28/02/2024~

Cessation of employment

250,000

$0.50

$0.36

-

-

21/11/2019

31/03/2024~

Cessation of employment

250,000

$0.50

$0.37

-

-

21/11/2019

30/04/2024~

Cessation of employment

250,000

$0.50

$0.38

-

-

21/11/2019

31/05/2024~

Cessation of employment

250,000

$0.50

$0.38

-

-

21/11/2019

30/06/2024~

Cessation of employment

250,000

$0.50

$0.39

-

-

21/11/2019

31/01/2025~

Cessation of employment

250,000

$0.50

$0.39

-

-

21/11/2019

28/02/2025~

Cessation of employment

250,000

$0.50

$0.39

-

-

21/11/2019

28/02/2025~

Cessation of employment

250,000

$0.50

$0.39

-

-

21/11/2019

31/03/2025~

Cessation of employment

250,000

$0.50

$0.40

-

-

21/11/2019

31/03/2025~

Cessation of employment

250,000

$0.50

$0.40

-

-

~ Vesting is subject to satisfaction of performance related vesting conditions. The vesting date shown represents an estimate of when vesting conditions will be satisfied.

29


ANNUAL FINANCIAL REPORT - 30 JUNE 2022

The number of options over ordinary shares in the Company provided as remuneration to key management personnel is shown in the table below on page 31. The options carry no dividend or voting rights. When exercisable, each option is convertible into one ordinary share of NOVONIX Limited.

 

REMUNERATION REPORT (CONTINUED)

Performance rights

The terms and conditions of each grant of performance rights affecting remuneration in the current or a future reporting period are as follows:

 

Number

Grant date

Vesting date

Grant date value

R Natter

200,000

30/11/2021

30/11/2021

$11.95

A Bellas

200,000

30/11/2021

30/11/2021

$11.95

C Burns

200,000

30/11/2021

30/11/2021

$11.95

C Burns

1,412,000

28/01/2022

30/06/2024

$7.21

N Liveris

200,000

30/11/2021

30/11/2021

$11.95

N Liveris

667,831

26/10/2022^

30/06/2024

$2.28*

R Buttar

Tranche 1

Tranche 2

Tranche 3

Tranche 4

37,500

37,500

37,500

37,500

6/10/2021

6/10/2021

6/10/2021

6/10/2021

22/04/2022

22/04/2023

22/04/2024

22/04/2025

$4.92

$4.92

$4.92

$4.92

R Buttar

255,238

28/01/2022

30/06/2024

$7.21

^ Subject to shareholder approval at the Annual General Meeting of Shareholders scheduled for 26 October 2022

* The value per performance right at grant date represents an estimate of the fair value of the performance rights as they will not be formally granted until shareholder approval is obtained at the 2022 Annual General Meeting of Shareholders.

The number of performance rights over ordinary shares in the Company provided as remuneration to key management personnel is shown on page 32. The performance rights carry no dividend or voting rights.

Those rights granted on 30 November 2021 vested immediately, whilst the other rights granted are dependent on the recipient remaining in employment, or achievement of performance related vesting conditions, by the vesting date.

When exercisable, each performance right is convertible into one ordinary share of NOVONIX Limited. If an executive ceases employment before the rights vest, the rights will be forfeited, except in limited circumstances that they are approved by the board on a case-by-case basis.

30


ANNUAL FINANCIAL REPORT - 30 JUNE 2022

Share rights

The terms and conditions of each grant of share rights affecting remuneration in the current or a future reporting period are as follows:

 

 

Number

Grant date

Vesting date

Grant date value

G Baynton

27,500

30/11/2021

30/06/2022

$11.95

A Bellas

66,000

30/11/2021

30/06/2022

$11.95

R Cooper

66,000

30/11/2021

30/06/2022

$11.95

Z Golodryga

17,549

30/11/2021

30/06/2022

$11.95

A Liveris

66,000

30/11/2021

30/06/2022

$11.95

T St Baker

66,000

30/11/2021

30/06/2022

$11.95

The number of share rights over ordinary shares in the Company provided as remuneration to key management personnel is shown on page 32. The share rights carry no dividend or voting rights.

These share rights did not have any performance related vesting conditions.

When exercisable, each share right is convertible into one ordinary share of NOVONIX Limited. If a non-executive director ceases to hold office before the share rights vest, the rights will convert on a prorate basis.

 

 

31


 

REMUNERATION REPORT (CONTINUED)

(iii) Reconciliation of options, performance rights, share rights and ordinary shares held by KMP

The table below shows a reconciliation of options held by each KMP from the beginning to the end of FY2022.

Options

2022

Name & Grant dates

Balance at the start of the year

Granted as compensation

Vested

 

 

Balance at the end of the year

Unvested

Vested

Number

%

Exercised

Expired

Vested and exercisable

Unvested

R Natter

  22 Nov 2018

  31 July 2019

 

-

500,000

 

500,000

500,000

 

-

-

 

-

500,000