Exhibit 99.1

 

FINANCIAL STATEMENTS

Condensed consolidated interim unaudited financial statements

For the three and nine-month periods ended September 30, 2022 and 2021

(Expressed in thousands of Canadian dollars, except where otherwise indicated)

 

 

TABLE OF CONTENTS

Consolidated statements of financial position	1
Consolidated statements of loss and comprehensive loss	2
Consolidated statements of changes in equity	3
Consolidated statements of cash flows	4
Notes to the condensed consolidated interim financial statements	5

	NOUVEAU MONDE GRAPHITE INC.
	Consolidated statements of financial position
	(Amounts expressed in thousands of Canadian dollars - unaudited)

Consolidated statements of financial position

	Notes		As at September 30, 2022			As at December 31, 2021
ASSETS
CURRENT
Cash				14,034			62,355
Grants receivable and other current assets				3,388			3,096
Sales taxes receivable				1,574			2,002
Tax credits receivable				3,400			3,958
Prepaid expenses				4,299			2,768
Total current assets				26,695			74,179
NON-CURRENT
Tax credits receivable				5,990			5,509
Investment – Listed shares		5		1,500			-
Property, plant and equipment		6		58,486			42,103
Intangible assets				257			481
Right-of-use assets				2,802			2,254
Restricted cash and deposits				1,616			1,823
Total non-current assets				70,651			52,170
Total assets				97,346			126,349
LIABILITIES
CURRENT
Accounts payable and accrued liabilities				16,764			15,193
Current portion of lease liabilities				432			329
Current portion of borrowings				220			208
Total current liabilities				17,416			15,730
NON-CURRENT
Asset retirement obligation				995			1,009
Borrowings				1,804			1,921
Lease liabilities				2,504			1,994
Total non-current liabilities				5,303			4,924
Total liabilities				22,719			20,654
EQUITY
Share capital		7.1		210,683			206,483
Contributed surplus				23,712			16,102
Deficit				(159,768	)		(116,890	)
Total equity				74,627			105,695
Total liabilities and equity				97,346			126,349
Going Concern		1
Commitments		15
Subsequent Events		16

APPROVED BY THE BOARD OF DIRECTORS
(s) Eric Desaulniers – “Director”
(s) Daniel Buron – “Director”
The accompanying notes are an integral part of the condensed consolidated interim financial statements.

1

	NOUVEAU MONDE GRAPHITE INC.
	Consolidated statements of loss and comprehensive loss
	(Amounts expressed in thousands of Canadian dollars - unaudited)

Consolidated statements of loss and comprehensive loss

		For the three-month periods ended				For the nine-month periods ended
	Notes	September 30, 2022 $		September 30, 2021 $		September 30, 2022 $		September 30, 2021 $
EXPENSES
Exploration and evaluation expenses	8		1,519		2,130		5,724		7,137
Battery Material Plant project expenses	9		3,760		1,014		14,637		2,205
General and administrative expenses	10		6,666		5,692		21,984		19,074
Other income			-		-		-		(56	)
Operating loss			11.945		8,836		42,345		28,360
Net financial costs	11		520		109		233		907
Loss before tax			12,465		8,945		42,578		29,267
Income tax			300		-		300		-
Net loss and comprehensive loss			12,765		8,945		42,878		29,267
Basic and diluted loss per share			0.23		0.19		0.77		0.74
Weighted average number of shares outstanding	7.1		55,788,953		46,576,710		55,510,849		39,411,021

The accompanying notes are an integral part of the condensed consolidated interim financial statements.

2

	NOUVEAU MONDE GRAPHITE INC.
	Consolidated statements of changes in equity
	(Amounts expressed in thousands of Canadian dollars, except per share amounts - unaudited)

Consolidated statements of changes in equity

					For the nine-month period ended September 30, 2022
	Notes		Number		Share capital $			Contributed surplus and warrants $			Deficit $			Total equity $
Balance as at January 1, 2022				55,118,316		206,483			16,102			(116,890	)		105,695
Shares issued from offering		7.1		502,082		3,987			-						3,987
Options exercised		7.2		237,500		1,042			(373	)		-			669
Share-based compensation				-		-			7,983			-			7,983
Share issue costs				-		(829	)		-			-			(829	)
Net loss and comprehensive loss				-		-			-			(42,878	)		(42,878	)
Balance as at September 30, 2022				55,857,898		210,683			23,712			(159,768	)		74,627

				For the nine-month period ended September 30, 2021
	Notes	Number		Share capital $			Contributed surplus and warrants $			Equity component of convertible bond $		Deficit $			Total equity $
Balance as at January 1, 2021			27,299,332		60,537			10,761			364		(77,000	)		(5,338	)
Shares issued from offerings			11,479,977		114,242			-			-		-			114,242
Warrants exercised			7,821,700		17,825			(198	)		-		-			17,627
Options exercised			406,201		1,970			(693	)		-		-			1,277
Shares issued for interest payment			76,635		797			-			-		-			797
Share-based compensation			-		-			6,404			-		-			6,404
Share issue costs			-		(7,171	)		-			-		-			(7,171	)
Net loss and comprehensive loss			-		-			-			-		(29,267	)		(29,267	)
Balance as at September 30, 2021			47,083,845		188,200			16,274			364		(106,267	)		98,571

The accompanying notes are an integral part of the condensed consolidated interim financial statements.

3

	NOUVEAU MONDE GRAPHITE INC.
	Consolidated statements of cash flow
	(Amounts expressed in thousands of Canadian dollars, except per share amounts - unaudited)

Consolidated statements of cash flows

			For the nine-month periods ended
	Notes		September 30, 2022 $			September 30, 2021 $
OPERATING ACTIVITIES
Net loss				(42,878	)		(29,267	)
Depreciation and amortization		6		3,372			828
Change in fair value – listed shares		5		1,000			-
Unrealized foreign exchange gain				(688	)		(1,102	)
Share-based compensation		7.2		7,272			6,404
Accretion included within financial costs				62			1,955
Net change in working capital		12		(3,939	)		(6,876	)
Cash flows used in operating activities				(35,799	)		(28,058	)
INVESTING ACTIVITIES
Additions to property, plant, and equipment		6 – 12		(17,749	)		(22,358	)
Increase in investments in listed shares		5		(2,500	)		-
Restricted cash and deposits				207			(1,074	)
Grants received				3,405			2,141
Cash flows used in investing activities				(16,637	)		(21,291	)
FINANCING ACTIVITIES
Proceeds from offering				3,987			114,242
Proceeds from borrowings, net of issue costs				-			1,025
Repayment of borrowings and lease liabilities				(442	)		(2,257	)
Proceeds from the exercise of warrants				-			17,627
Proceeds from the exercise of stock options		7.2		669			1,277
Deferred expenses				(30	)		-
Share issue costs				(812	)		(6,913	)
Cash flows from financing activities				3,372			125,001
Effect of exchange rate changes on cash				743			1,117
Net change in cash				(48,321	)		76,769
Cash at the beginning of the period				62,355			4,520
Cash at the end of the period				14,034			81,289
Additional information		12

The accompanying notes are an integral part of the condensed consolidated interim financial statement

4

	NOUVEAU MONDE GRAPHITE INC.
	Notes to the condensed consolidated interim financial statements
	(Amounts expressed in thousands of Canadian dollars, except per share amounts - unaudited)

Notes to the condensed consolidated interim financial statements

1. NATURE OF OPERATIONS AND GOING CONCERN

Nouveau Monde Graphite Inc. (the “Company”) was established on December 31, 2012, under the Canada Business Corporations Act. The Company specializes in exploration, evaluation and development of mineral properties located in Québec and is developing a natural graphite-based anode material that would qualify as battery-grade material to supply the lithium-ion industry.

The Company’s shares are listed under the symbol NMG on the New York Stock Exchange, NOU on the TSX Venture Exchange (“TSXV”), and NM9A on the Frankfurt Stock Exchange. The Company’s registered office is located at 481 Brassard Street, Saint-Michel-des-Saints, Québec, Canada, J0K 3B0.

The Company’s condensed consolidated interim financial statements have been prepared using accounting principles applicable to a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business as they come due. In assessing whether the going concern assumption is appropriate, management considers all available information about the future, which is at least, but not limited to, the next twelve months.

Management believes that without additional funding, the Company does not have sufficient liquidity to pursue its planned expenditures over the next twelve months. These circumstances indicate the existence of material uncertainties that cast substantial doubt upon the Company’s ability to continue as a going concern and accordingly, the appropriateness of the use of IFRS applicable to a going concern.

The Company's ability to continue future operations and fund its development and acquisition activities is dependent on management's ability to secure additional financing in the future, which may be completed in a number of ways including, but not limited to, the issuance of debt or equity instruments, expenditure reductions, or a combination of strategic partnerships, joint venture arrangements, project debt finance, offtake financing, royalty financing and other capital markets alternatives. While management has been successful in securing financing in the past, there can be no assurance it will be able to do so in the future or that these sources of funding or initiatives will be available for the Company or that they will be available on terms which are acceptable to the Company. On October 19, 2022, the Company entered into unsecured convertible note subscription agreements with Mitsui & Co, Pallinghurst, and Investissement Québec, for aggregate gross proceeds of US$50 million. For more detail, refer to the subsequent events (note 16).

These consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities, expenses and financial position classifications that would be necessary if the going concern assumption was not appropriate. These adjustments could be significant.

2. BASIS OF PREPARATION AND STATEMENT OF COMPLIANCE

The Company’s condensed consolidated interim financial statements have been prepared in accordance with the International Financial Reporting Standards (“IFRS”) as published by the International Accounting Standards Board (“IASB”) applicable to the preparation of interim financial statements, including IAS 34 Interim Financial Reporting, and also using the same accounting policies and procedures as those used for the Company’s audited consolidated financial statements as at December 31, 2021, taking into consideration the new policies described in Note 4. These condensed consolidated interim financial statements do not include all the disclosures and notes required for annual consolidated financial statements and should therefore be read with the Company’s audited consolidated financial statements as at December 31, 2021, which have been prepared in accordance with IFRS.

The condensed consolidated interim financial statements for the three and nine-month periods ended September 30, 2022 (including comparative statements) were approved and authorized for publication by the Board of Directors on November 11, 2022.

5

	NOUVEAU MONDE GRAPHITE INC.
	Notes to the condensed consolidated interim financial statements
	(Amounts expressed in thousands of Canadian dollars, except per share amounts - unaudited)

3. ESTIMATES, JUDGEMENTS AND ASSUMPTIONS

In preparing its consolidated financial statements, management makes several judgements, estimates and assumptions about the recognition and measurement of assets, liabilities, revenues, and expenses.

Information about the significant estimates and assumptions that have the greatest impact on the recognition and measurement of assets, liabilities, revenues, and expenses can be found in note 5 of the Consolidated audited annual financial statements. Actual results may differ significantly.

4. SIGNIFICANT ACCOUNTING POLICIES

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are recognized at cost less accumulated depreciation and accumulated impairment losses. The assets are capitalized and amortized on a straight-line basis in the consolidated statement of loss and comprehensive loss. Generally, the depreciation rates are as follows:

Buildings	10-25 years
Equipment	2-15 years

The residual value, depreciation method and the useful life of each asset are reviewed at least at each financial year-end. Gains or losses arising on the disposal of property and equipment are determined as the difference between the disposal proceeds and the carrying amount of the assets and are recognized in the statement of loss and comprehensive loss.

AMENDMENTS TO IAS 16, PROPERTY, PLANT AND EQUIPMENT

The IASB has made amendments to IAS 16 Property, plant and equipment, effective for financial years beginning on or after January 1, 2022. Proceeds from selling items before the related item of Property, plant and equipment is available for use should be recognized in profit or loss, together with the costs of producing those items. The Company therefore needs to distinguish between the costs associated with producing and selling items before the item of Property, plant and equipment (pre-production revenue) is available for use and the costs associated with making the item of Property, plant and equipment available for its intended use. For the sale of items that are not part of a company’s ordinary activities, the amendments require the Company to disclose separately the sales proceeds and related production cost recognized in profit or loss and specify the line items in which such proceeds and costs are included in the statement of loss and comprehensive loss. These amendments have currently no impact on the Company’s consolidated financial statements. While these amendments did not have retrospective effects upon adoption, any future sales of products and related costs of sales occurring before commercial production is achieved will be recorded in the statement of loss and comprehensive loss.

INVESTMENT - LISTED SHARES

Listed shares are initially recognized and subsequently measured at fair value. Gains or losses arising from variations in fair value are recorded in the consolidated statement of loss and comprehensive loss. Dividend income on those investments, if any, will be recognized in the consolidated statement of loss and comprehensive loss.

6

	NOUVEAU MONDE GRAPHITE INC.
	Notes to the condensed consolidated interim financial statements
	(Amounts expressed in thousands of Canadian dollars, except per share amounts - unaudited)

5. INVESTMENTS

As at September 30, 2022, investments are composed of an equity-investment in Mason Graphite inc. (“Mason”). On July 20, 2022, the Company subscribed for 5 million common shares of Mason for a total of $2,500. The price paid to acquire the Mason shares was $0.50 per share, equivalent to the Volume-Weighted Average Price (“VWAP”) of Mason shares on the TSXV for a period of twenty trading days prior to May 15, 2022. As at September 30, 2022, Mason's stock value is $0.30 per share, resulting in a decrease in fair value of $1,000 which is presented under the net financial costs in the consolidated statement of loss and comprehensive loss.

7

	NOUVEAU MONDE GRAPHITE INC.
	Notes to the condensed consolidated interim financial statements
	(Amounts expressed in thousands of Canadian dollars, except per share amounts - unaudited)

6. PROPERTY, PLANT AND EQUIPMENT

														For the nine-month period ended September 30, 2022
	Land $		Buildings $		Equipment $		Computers $		Furniture $		Rolling stock $			Mine under construction   $		Battery Material Demonstration Plant under construction $			Total $
COST
Balance as at January 1, 2022		2,412		2,791		163		141		25		53			18,032		18,886			42,503
Additions		43		15		153		-		-		-			13,239		5,712			19,162
Transfers		-		461		9,402		-		93		26			-		(9,982	)		-
Write-Off/Disposals		-		-		-		-		-		(1	)		-		-			(1	)
Balance as at September 30, 2022		2,455		3,267		9,718		141		118		78			31,271		14,616			61,664
ACCUMULATED DEPRECIATION
Balance as at January 1, 2022		-		330		19		25		11		15			-		-			400
Depreciation		-		165		2,552		35		10		17			-		-			2,779
Write-Off/Disposals		-		-		-		-		-		(1	)		-		-			(1	)
Balance as at September 30, 2022		-		495		2,571		60		21		31			-		-			3,178
Net book value as at September 30, 2022		2,455		2,772		7,147		81		97		47			31,271		14,616			58,486

															For the year ended December 31, 2021
	Land $		Buildings $		Equipment $		Computers $			Furniture $			Rolling stock $		Mine under construction $		Battery Material Demonstration Plant under construction $		Total $
COST
Balance as at January 1, 2021		507		2,642		-		56			70			24		-		1,206		4,505
Additions		1,905		149		163		132			-			29		18,032		17,680		38,090
Write-Off/Disposals		-		-		-		(47	)		(45	)		-		-		-		(92	)
Balance as at December 31, 2021		2,412		2,791		163		141			25			53		18,032		18,886		42,503
ACCUMULATED DEPRECIATION
Balance as at January 1, 2021		-		219		-		39			32			8		-		-		298
Depreciation		-		111		19		30			22			7		-		-		189
Write-Off/Disposals		-		-		-		(44	)		(43	)		-		-		-		(87	)
Balance as at December 31, 2021		-		330		19		25			11			15		-		-		400
Net book value as at December 31, 2021		2,412		2,461		144		116			14			38		18,032		18,886		42,103

The acquisition for the Battery Material Demonstration Plant under construction are presented net of grants of $2,981 for the nine-month periods ended September 30, 2022 (nine-month periods ended September 30, 2021: $4,780).

8

	NOUVEAU MONDE GRAPHITE INC.
	Notes to the condensed consolidated interim financial statements
	(Amounts expressed in thousands of Canadian dollars, except per share amounts - unaudited)

7. EQUITY

7.1 SHARE CAPITAL

Authorized share capital

Unlimited number of common shares voting and participating, with no par value.

	For the nine-month period ended September 30, 2022		For the year ended December 31, 2021
Shares issued at the start of the period		55,118,316		27,299,332
Shares issued from offering		502,082		11,479,977
Warrants exercised		-		7,821,700
Options exercised		237,500		720,201
Shares issued for conversion of debt (convertible bond)		-		7,500,000
Shares issued for interest payment		-		297,106
Shares issued at the end of period		55,857,898		55,118,316

On January 21, 2022, the Company filed a prospectus supplement establishing a new at-the-market equity offering (“ATM Offering”). The ATM Offering allows the Company to offer for sale and issue up to US$75 million (or the equivalent in Canadian dollars) of common shares of the Company from time to time, at the Company’s discretion. During the nine-month period ended September 30, 2022, the Company issued 502,082 common shares at an average price of $7.97 for gross proceeds of $3,987, commissions of $100, and total net proceeds of $3,887. During the three-month period ended September 30, 2022, no common shares were issued in connection with the ATM Offering.

9

	NOUVEAU MONDE GRAPHITE INC.
	Notes to the condensed consolidated interim financial statements
	(Amounts expressed in thousands of Canadian dollars, except per share amounts - unaudited)

7.2 SHARE-BASED PAYMENTS

The Board of Directors determines the price per common share and the number of common shares which may be allocated to each director, officer, employee and consultant and all other terms and conditions of the option, subject to the rules of the TSXV. The plan has a policy that caps the maximum of total options that can be granted to 10% of the total outstanding shares of the Company.

All share-based payments will be settled in equity. The Company has no legal or contractual obligation to repurchase or settle the options in cash.

The Company’s share options are as follows:

	For the nine-month period ended September 30, 2022					For the year ended December 31, 2021
	Number			Weighted average exercise price $		Number			Weighted average exercise price $
Opening balance		2,352,250			7.07		2,400,000			3.20
Granted		2,027,804			8.29		735,000			15.95
Exercised		(237,500	)		2.82		(720,200	)		3.06
Expired		(385,000	)		12,21		(51,300	)		7.00
Forfeited		(21,250	)		9,47		(1,250	)		16.84
Cancelled		-			-		(10,000	)		16.84
Ending balance		3,736,304			7.46		2,352,250			7.07
Options that can be exercised		2,616,500			7.18		2,058,500			7.30

For the nine-month period ended September 30, 2022, the Company granted 247,500 options to directors, 525,000 to officers, 490,500 to employees, and 764,804 to consultants. The vesting period on options granted varies from vesting immediately up to four semi-annual tranches.

The weighted average fair value of the share options granted in the nine-month period ended September 30, 2022, was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions:

● Stock price when granted: $8.29

● Expected life: 4.02 years

● Expected volatility: 82%

● Risk-free rate: 2.24%

● Expected dividend: nil

● Fair value per option granted: $4.86

During the nine-month period ended September 30, 2022, the weighted average share price at the date of exercise was $8.02.

10

	NOUVEAU MONDE GRAPHITE INC.
	Notes to the condensed consolidated interim financial statements
	(Amounts expressed in thousands of Canadian dollars, except per share amounts - unaudited)

8. EXPLORATION AND EVALUATION EXPENSES

	For the three-month periods ended						For the nine-month periods ended
	September 30, 2022 $			September 30, 2021 $			September 30, 2022 $			September 30, 2021 $
Wages and benefits		708			974			2,543			2,563
Share-based compensation		218			172			731			376
Engineering		78			32			213			1,834
Professional fees		116			3			482			130
Materials, consumables, and supplies		246			401			640			880
Maintenance & Subcontracting		181			493			1,039			1,134
Geology and drilling		4			21			28			135
Utilities		81			139			315			311
Depreciation and amortization		75			57			210			164
Other		(58	)		55			31			131
Grants		(10	)		-			(28	)		(36	)
Tax credits		(120	)		(217	)		(480	)		(485	)
Exploration and evaluation expenses		1,519			2,130			5,724			7,137

9. BATTERY MATERIAL PLANT PROJECT EXPENSES

	For the three-month periods ended						For the nine-month periods ended
	September 30, 2022 $			September 30, 2021 $			September 30, 2022 $			September 30, 2021 $
Wages and benefits		833			191			2,089			503
Share-based compensation		147			-			434			-
Engineering		1,116			1,069			7,017			1,627
Professional fees		209			255			671			677
Materials, consumables, and supplies		171			117			582			418
Maintenance & Subcontracting		245			52			899			141
Utilities		74			-			355			-
Depreciation and amortization		1,047			42			2,979			127
Other		33			7			106			23
Grants		(115	)		(719	)		(495	)		(1,311	)
Battery Material Plant project expenses		3,760			1,014			14,637			2,205

11

	NOUVEAU MONDE GRAPHITE INC.
	Notes to the condensed consolidated interim financial statements
	(Amounts expressed in thousands of Canadian dollars, except per share amounts - unaudited)

10. GENERAL AND ADMINISTRATIVE EXPENSES

	For the three-month periods ended				For the nine-month periods ended
	September 30, 2022 $		September 30, 2021 $		September 30, 2022 $		September 30, 2021 $
Wages and benefits		1,654		1,137		5,315		3,330
Share-based compensation		1,291		293		6,106		6,028
Professional fees		325		144		1,043		2,348
Consulting fees		710		461		1,748		896
Travelling, representation and convention		171		206		412		411
Office and administration		2,217		3,201		6,688		4,669
Stock exchange, authorities, and communication		149		71		390		831
Depreciation and amortization		64		170		183		535
Other financial fees		85		9		99		26
General and administrative expenses		6,666		5,692		21,984		19,074

11. NET FINANCIAL COSTS

	For the three-month periods ended						For the nine-month periods ended
	September 30, 2022 $			September 30, 2021 $			September 30, 2022 $			September 30, 2021 $
Foreign exchange gain		(430	)		(490	)		(607	)		(1,011	)
Interest income		(93	)		(117	)		(289	)		(214	)
Interest expense on lease liabilities		5			28			13			86
Change in fair value - listed shares		1,000			-			1,000			-
Accretion and interest on borrowings and bond		38			688			116			2,046
Net financial costs		520			109			233			907

12. ADDITIONAL CASH FLOW INFORMATION

	For the nine-month period ended September 30, 2022 $			For the nine-month period ended September 30, 2021 $
Grants receivable and other current assets		(314	)		(635	)
Deferred grants		-			(1,511	)
Mining tax credits		77			(485	)
Sales taxes receivable		428			(892	)
Prepaid expenses		(1,531	)		(4,400	)
Accounts payable and accrued liabilities		(2,599	)		1,047
Total net change in working capital		(3,939	)		(6,876	)
Items not affecting cash
Property, plant and equipment included in accounts payable and accrued liabilities		8,778			6,263
Share issue costs included in accounts payable and accrued liabilities		66			258
Deferred expenses included in accounts payable and accrued liabilities		372			-
Shares issued for interest payment		-			797

12

	NOUVEAU MONDE GRAPHITE INC.
	Notes to the condensed consolidated interim financial statements
	(Amounts expressed in thousands of Canadian dollars, except per share amounts - unaudited)

13. RELATED PARTY TRANSACTIONS

During the three and nine-month periods ended September 30, 2022, share-based compensation for officers totalled $217 and $2,310, respectively ($123 and $3,335 for the three and nine-month periods ended September 30, 2021, respectively) and for directors, nil for the three-month period ended September 30, 2022 and $1,247 for the nine-month period ended September 30, 2022 (nil for the three-month period ended September 30, 2021 and $2,333 for the nine-month period ended September 30, 2021).

14. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

FAIR VALUE

The carrying value of cash, accounts payable, and accrued liabilities are considered to be a reasonable approximation of their fair value because of the short-term maturity and contractual terms of these instruments.

Fair value estimates are made at the consolidated statement of financial position date, based on relevant market information and other information about financial instruments.

The fair value of the listed shares is established using the closing price on the active market for this instrument that is readily available to the Company and, as such, are classified as Level 1 in the fair value hierarchy.

FINANCIAL RISKS

The Company is exposed to various financial risks resulting from its operations. The Company does not enter into derivative financial instruments for speculative purposes.

The main financial risks to which the Company is exposed as well as its policies for managing such risk are detailed below:

Liquidity risk

Liquidity risk is the risk that the Company encounters difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.

The Company manages its liquidity risk by using budgets that enable it to determine the amounts required to fund its exploration, evaluation, and development expenditure programs. The Company’s liquidity and operating results may be adversely affected if the Company’s access to the capital markets or other alternative forms of financing is hindered, whether because of a downturn in stock market conditions generally or related to matters specific to the Company. The Company has historically generated cash flow primarily from its financing activities.

Management believes that without additional funding, the Company does not have sufficient liquidity to pursue its planned expenditures over the next twelve months. These circumstances indicate the existence of material uncertainties that cast substantial doubt upon the Company’s ability to continue as a going concern and accordingly, the appropriateness of the use of IFRS applicable to a going concern (see note 1).

As at September 30, 2022, all of the Company’s short-term liabilities totalled $17,416 ($15,730 as at December 31, 2021), have contractual maturities of less than one year and are subject to normal trade terms. The Company regularly evaluates its cash position to ensure preservation and security of capital as well as maintenance of liquidity.

							As at September 30, 2022
	Carrying amount		Contractual cash flows		Remainder of the year		Year 2023		Year 2024		2025 and Onward
Accounts payable and accrued liabilities		16,764		16,764		16,764		-		-		-
Lease liabilities		2,936		3,579		138		572		648		2,221
Borrowings		2,024		2,399		69		352		577		1,401

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	NOUVEAU MONDE GRAPHITE INC.
	Notes to the condensed consolidated interim financial statements
	(Amounts expressed in thousands of Canadian dollars, except per share amounts - unaudited)

Credit risk

Credit risk results from the possibility that a loss may occur from the failure of another party to perform according to the terms of the contract. The Company’s credit risk is primarily related to receivables and cash. The receivables consist mainly of the refund of the goods and services tax receivable from the governments of Canada and Quebec, as well as tax credits receivable from the Government of Quebec. The Company mitigates credit risk by maintaining cash with Canadian chartered banks.

Currency risk

Foreign currency risk is the risk that the Company’s financial performance could be affected by fluctuations in the exchange rates between currencies. Some of the Company’s expenditures are denominated in U.S dollars and the Company holds balances in cash denominated in U.S dollars. As such, the Company is exposed to gains or losses on foreign exchange.

Currently, the Company has no hedging contracts in place and therefore has exposure to the foreign exchange rate fluctuations. The strengthening of the U.S. dollar would positively impact the Company’s net income and cash flows while the strengthening of the Canadian dollar would reduce its net income and cash flows.

The balances of cash in currencies are as follows as at September 30, 2022 and December 31, 2021.

	As at September 30, 2022 $		As at December 31, 2021 $
Cash in US dollars		5,688		11,435
Canadian dollar equivalents		7,796		14,497
Accounts payable in US dollars		621		1,044
Canadian dollar equivalents		853		1,322

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate as a result of changes in market interest rates.

The Company’s interest rate risk on financial assets is primarily related to cash, which bear interest at variable rates. However, as these investments come to maturity within a short period of time, the impact would likely not be significant.

Financial liabilities are not exposed to interest rate risk since they are non-interest-bearing liabilities or bear interest at a fixed rate.

15. COMMITMENTS

In the normal course of business, the Company enters into contracts that give rise to commitments. As at September 30, 2022, the Company had issued $3,508 of purchase orders for the acquisition of property, plant and equipment and $3,080 in relation to the operations.

16. SUBSEQUENT EVENTS

On October 19, 2022, the Company entered into unsecured convertible note subscription agreements with Mitsui, Pallinghurst, and Investissement Québec pursuant to which NMG has agreed to issue to each holder an unsecured convertible note: Mitsui subscribed for US$25 million, while Pallinghurst and Investissement Québec each subscribed for US$12.5 million, for aggregate gross proceeds of US$50 million. The convertible notes will mature 36 months from the date of issuance and shall bear interest at the higher of 6% per annum and the 90-day average term SOFR (secured overnight financing rate) plus 4% per annum. Interest will be payable either quarterly in cash on the last business day of each quarter commencing on December 31, 2022, or the Company may elect to capitalize interest and settle in common shares. The convertible notes are subject to a hold period of four months and one day in accordance with relevant regulatory and stock exchange policies. On November 8, 2022, the Company closed the previously announced private placement of unsecured convertible note.

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