Novonix : Annual Report for the six months ended 31 December 2022

ANNUAL REPORT

For the six months ended 31 December 2022

Novonix Limited has changed its financial year end to 31 December (previously 30 June)

Providing revolutionary solutions to the battery industry

NOVONIX LIMITED
ABN 54 157 690 830
ANNUAL REPORT - 31 DECEMBER 2022
CONTENTS
CORPORATE DIRECTORY	1
REVIEW OF OPERATIONS AND ACTIVITIES	2
DIRECTORS' REPORT	11
DIRECTORS AND COMPANY SECRETARY	11
PRINCIPAL ACTIVITIES	11
DIVIDENDS	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 REGULATIONS	12
INFORMATION ON DIRECTORS	13
MEETINGS OF DIRECTORS	18
REMUNERATION REPORT	19
INSURANCE OF OFFICERS AND INDEMNITIES	38
PROCEEDINGS ON BEHALF OF THE COMPANY	38
AUDIT AND NON-AUDIT SERVICES	38
AUDITOR'S INDEPENDENCE DECLARATION	39
AUDITOR'S INDEPENDENCE DECLARATION	40
CORPORATE GOVERNANCE STATEMENT	41
FINANCIAL REPORT - 31 DECEMBER 2022	42
DIRECTORS' DECLARATION	111
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS	112
SHAREHOLDER INFORMATION	118

	ANNUAL REPORT - 31 DECEMBER 2022
CORPORATE DIRECTORY
Directors	Admiral R J Natter, US Navy (Ret.)
	D Akerson BS (Eng), MSc (Economics)
	A Bellas B. Econ, DipEd, MBA, FAICD, FCPA, FGS
	R Cooper BE (Mining), MEngSc, MAusIMM, MAICD
	R Edmonds CPA, BBA (Acct)
	Z Golodryga MEng (Mech)
	Andrew N. Liveris AO, BE (Hons) Doctor of Science
	(honoris causa)
	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 REPORT - 31 DECEMBER 2022

REVIEW OF OPERATIONS AND ACTIVITIES

NOVONIX Limited ("NOVONIX" or the "Company" and, together with its consolidated subsidiaries, the "Group"), changed the Company's fiscal year end to 31 December (previously 30 June) as announced on 21 December 2022. As a consequence, the financial results released in this report are for the six- month period ended 31 December 2022.

In addition, the Company elected to change its presentation (reporting) currency from Australian to US dollars commencing with the six-month period ended 31 December 2022. The Company believes that these changes in reporting period and currency will enhance the relevance of its financial information and comparability with its industry peer Group, the majority of which report in US dollars at the end of December. Comparative financial information has been translated into US dollars using the procedures outlined in note 34 to the financial statements.

NOVONIX is a leading battery technology company revolutionizing the global lithium-ion battery industry with innovative, sustainable technologies, high-performance materials, and more efficient production methods. The company manufactures industry-leading battery cell testing equipment in Canada and is growing its high-capacity synthetic graphite anode material manufacturing operations in the United States. Through advanced R&D capabilities, proprietary technology, and strategic partnerships, NOVONIX has gained a prominent position in the EV and ESS battery industry and is powering a cleaner energy future.

Our mission is to develop innovative, sustainable technologies and high-performance materials to service the electric vehicles and grid energy storage industries. 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 provide revolutionary clean energy solutions to the battery industry. This is demonstrated by our values, which include curiosity, collaboration, and commitment that support social impact and embody NOVONIX's approach to corporate responsibility.

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.

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ANNUAL REPORT - 31 DECEMBER 2022

HIGHLIGHTS OF SIX-MONTH PERIOD ENDED 31 DECEMBER 2022

The six months ended 31 December 2022 saw continued progress for NOVONIX with several notable highlights. The Company continued to execute against its long-term strategic and operational roadmap, to pursue key strategic partnerships and supply agreements, and explore additional avenues to create value for shareholders. Key highlights and developments include:

August 2022

• The U.S. Congress passed the Inflation Reduction Act of 2022 ("IRA"), which includes an estimated $369 billion in investments related to "climate change and energy security," including tax and other incentives to promote US production of electric vehicles ("EVs"), renewable energy technologies, and critical minerals.

September 2022

• Installed initial Gen 3 furnaces undergoing commissioning and optimization at our

Riverside facility to support anode material mass production sampling and qualification.

October 2022

• NOVONIX announced the appointment of Daniel Akerson, the former Chairman and Chief Executive Officer of General Motors, and Ron Edmonds, Controller, Vice President of Controllers and Tax, and Principal Accounting Officer of Dow, to the Board of Directors ("The Board").
• The US Department of Energy ("DOE") announced that NAM was selected to enter

negotiations to receive US$150 million in grant funding to support a 30,000 tonnes per annum ("tpa") synthetic graphite U.S. manufacturing facility.

• Formal application accepted into Stage 2 of the DOE Loan Program Office ("LPO") for potential funding for the development of a greenfield production facility.

November 2022

• NOVONIX announced the launch of a pilot production facility in Halifax, Nova Scotia,

leveraging its patented all-dry cathode synthesis technology.

December 2022

 NOVONIX joined Accelerate - Canada's Zero Emission Vehicle Supply Chain Alliance.

• NOVONIX launched its Sustainability web page articulating its commitment to operating a profitable, ethical, and sustainable business and developing its ESG program.

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