Exro Announces Closing of $30 Million Bought Deal Financing of Subscription Receipts

February 16, 2024

At a Glance

Exro Announces Closing of $30 Million Bought Deal Financing of Subscription Receipts

CALGARY, Alberta (February 16, 2024) - Exro Technologies Inc. (TSX: EXRO, OTCQB: EXROF) (the "Company" or "Exro") is pleased to announce the closing of its previously announced bought deal private placement offering (the "Offering") of subscription receipts ("Subscription Receipts"). Pursuant to the Offering, Exro issued a total of 31,600,000 Subscription Receipts at an offering price of $0.95 per Subscription Receipt for total gross proceeds of approximately $30 million.

The Offering was launched and successfully completed in connection with the Company's announcement on January 30, 2024 that it had entered into a merger agreement with SEA Electric Inc. ("SEA" or "SEA Electric") providing for the acquisition of SEA by Exro (the "Transaction"). The Transaction is expected to strengthen Exro's technology offerings while accelerating revenue growth and Exro's path to profitability. Following completion of the Transaction, the combined company (the "Combined Company") will continue to operate under the name Exro Technologies Inc. and continue to be listed and trade on the Toronto Stock Exchange (the "TSX") under the ticker symbol "EXRO".

Sue Ozdemir, the Company's Chief Executive Officer and a member of the board of directors, participated in the Offering. "We are very pleased to complete this first phase of our merger with SEA Electric, securing the capital support from new and existing investors that funds the immediate ramp up of deployment of our proprietary propulsion technology to blue chip OEM customers", said Ms. Ozdemir. "The merger with SEA is a proactive move that strongly positions Exro in the electric vehicle technology space with the creation of an industry leading technology platform for commercial electric vehicles which combines Exro's award winning Coil-DriverTM motor control with SEA's OEM validated proprietary vehicle control unit (VCU) software/hardware technology. We are very excited about the outlook for our Company and committed to success on behalf of our shareholders".    

Upon satisfaction of certain conditions set out in the subscription receipt agreement entered into between the Company, Canaccord Genuity Corp. ("Canaccord") and Odyssey Trust Company, as subscription receipt agent (the "Subscription Receipt Agreement"), each Subscription Receipt will entitle the holder thereof to receive, without payment of additional consideration and without further action, one common share of the Company (each, a "Common Share"), plus an amount per Common Share, if any, equal to the amount per Common Share of any cash dividends declared by the board of directors of the Company on the Common Shares to holders of record on a date during the period from, and including, from today's date to, but excluding, the date of the closing of the Transaction, net of any applicable withholding taxes. A copy of the Subscription Receipt Agreement will be made available under the Company's profile on www.sedarplus.com.

The net proceeds from the Offering will be held in escrow pursuant to the terms of the Subscription Receipt Agreement to be released on closing of the Transaction and are intended to be used by Exro to support the business plan of the Combined Company, including but not limited to production, capital expenditures, working capital requirements, and normal course corporate and operating needs. For additional information on the Transaction, see the Company's news release dated January 30, 2024. Closing of the Transaction is expected to occur late in the first quarter or early in the second quarter of 2024, subject to satisfaction of customary closing conditions and receipt of all necessary regulatory and stock exchange approvals.

All securities issued in connection with the Offering are subject to a four-month and one day hold period in Canada, during which time the securities may not be traded.

The Offering was made through a syndicate of underwriters co-led by Canaccord and Eight Capital.

Ms. Ozdemir is considered a "related party" of the Company and the purchase of Subscription Receipts by a related party means that the Offering is considered a "related party transaction" as such terms are defined in Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company relied on exemptions from the formal valuation and minority shareholder approval requirements provided under sections 5.5(a) and 5.7(1)(a) of MI 61-101 on the basis that participation in the Offering by Ms. Ozdemir does not exceed 25% of the fair market value of the Company's market capitalization.

The Subscription Receipts issued pursuant to the Offering have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any applicable securities laws of any state of the United States and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. Persons (as such term is defined in Rule 902 of Regulation S under the U.S. Securities Act) absent such registration or applicable exemption from such registration requirements. This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein.

About Exro Technologies

Exro Technologies Inc. is a leading clean technology company that has developed new generation power control electronics that change how the world optimizes energy by expanding the capabilities of electric motors and batteries. The company's innovative technologies serve to bridge the performance-cost gap in e-mobility (Coil Driver™) and stationary energy storage (Cell Driver™), and act to accelerate adoption towards a circular electrified economy by delivering more with less – minimum energy for maximum results.  

For more information visit our website at www.exro.com.

To view our Investor Presentation visit us at www.exro.com/investors.

Visit us on social media @Exrotech.

Contact Information

Investor inquiries: investors@exro.com

Media inquiries: media@exro.com

Cautionary Statement Regarding Forward Looking Statements

This news release contains forward-looking statements and forward-looking information (together, "forward-looking statements") within the meaning of applicable securities laws. All statements, other than statements of historical facts, are forward-looking statements. Generally, forward-looking statements can be identified by the use of terminology such as "plans", "expects", "estimates", "intends", "anticipates", "believes" or variations of such words, or statements that certain actions, events or results "may", "could", "would", "might", "will be taken", "occur" or "be achieved". Forward looking statements are necessarily based on estimates and assumptions made by management in light of management's experience and perception of historical trends, current conditions and expected future developments, as well as factors management believe are appropriate, and involve risks, uncertainties and other factors disclosed in the Company's filings with Canadian securities regulators, that could cause actual results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements may include but are not limited to statements respecting: the completion of the Transaction or the realization of the benefits thereof by the Combined Company; the receipt of all required regulatory and shareholder approvals of the Transaction and the Offering; and the Company's (and following the Transaction, the Combined Company's) ability to commercialize its technology.

These forward-looking statements are based on the beliefs of the management of Exro and on assumptions which such management believes to be reasonable, based on information available at the time such statements were made. However, there can be no assurance that forward-looking statements will prove to be accurate. Such assumptions and factors include, among other things: demand for the technology of the Company (and following the Transaction, the Combined Company); the Company's (and following the Transaction, the Combined Company's) ability to maintain existing partners and attract new partners; the impact of competition; the Company's (and following the Transaction, the Combined Company's) ability to obtain and maintain existing financing on acceptable terms; the Company's (and following the Transaction, the Combined Company's) ability to retain skilled management and staff; currency, exchange and interest rates; the availability of financing opportunities, risks associated with economic conditions, dependence on management; volatility of stock price and market conditions; technology risks and risks associated with the commercialization of Company's (and following the Transaction, the Combined Company's) technology; regulatory risks; the Company's reliance on key personnel; the Company's limited operating history; market uncertainties; the protection of patents and intellectual property; conflicts of interest; market competition; and operating in an environment subject to regulation.

Although the Company believes that the assumptions and factors used in preparing these forward-looking statements are reasonable based upon the information currently available to management as of the date hereof, actual results and developments may differ materially from those contemplated by these statements. Readers are therefore cautioned not to place undue reliance on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed times frames or at all. Except where required by applicable law, the Company disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

This information is qualified in its entirety by cautionary statements and risk factor disclosure contained in filings made by the Company with the Canadian securities regulators, including the Company's annual information form for the financial year ended December 31, 2022, and financial statements and related MD&A for the financial year ended December 31, 2022, filed with the securities regulatory authorities in certain provinces of Canada and available at www.sedarplus.com. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. The Company does not intend, and does not assume any obligation, to update this forward-looking information except as otherwise required by applicable law.

Neither the TSX nor the Canadian Investment Regulatory Organization accepts responsibility for the adequacy or accuracy of this press release.

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