Exro generated revenue of $2,443,292 for the three months ended June 30, 2023 and $2,768,061 for the six months ended June 30, 2023
On May 15th Exro announced the signing of a definitive commercialization agreement with strategic partner, and global tier-1 automotive supplier, Linamar Corporation
On May 23rd Exro announced closing of a common share bought deal financing for aggregate gross proceeds to the Company of $34,931,250
On June 30th Exro announced the election of three new Directors, Aleksandra Miziolek, Anita Ganti, and Frank Simpkins and the appointment of Rod Copes to Chairman of the Board.
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Calgary, Alberta (August 10, 2023) – Exro Technologies Inc. (TSX: EXRO, OTCQB: EXROF) (the “Company” or “Exro”), a leading clean technology company which has developed a new generation power control electronics that expand the capabilities of electric motors and batteries, announced today its financial results for the quarter ended June 30, 2023.
“The second quarter of 2023 demonstrated continued progress towards commercialization of our next generation technologies for electric vehicles and stationary energy storage”, said Exro CEO Sue Ozdemir. “We finished the quarter in a strong financial position, significantly expanded the expertise of our Board of Directors, and are in final preparations to start our production before the end of Q3. We have customers proceeding towards additional purchase orders and are digging in with our new leading global automaker partner on our power train innovation project – evidence that we are capitalizing on the efforts we have put in over the last three years.”
2023 score card check-in
In January, Exro kicked-off its launch year with a Q1 Letter to Shareholders which outlined its strategic objectives for 2023. The purpose in setting these objectives was to continue transparency to investors while aligning with what management believes are demonstrable value drivers for the Company’s shareholders. A status update on these objectives is included below:
Signing additional Coil Driver™ strategic partners that amplify its market presence. In Q1 2023, Exro announced signing a partnership with a global European-based tier-1 OEM automotive supplier. Currently under a non-disclosure agreement (“NDA”), Exro and partner remain on track for partner motor-Exro Coil Driver™ inverter integration and testing in Q3 2023. Following successful testing it is anticipated the identity of the 25,000+ employee partner will be announced along with commercialization plans. In Q2 2023, Exro announced signing the world’s third largest motor manufacturer, Wolong Electric Group, as a strategic partner. The companies are collaborating on various motor-inverter combinations for integration and testing in Q4 2023 across a variety of low voltage and high voltage applications. Additionally, in early Q3 2023, Exro announced an innovation agreement with a Major Global Automaker, to mutually explore powertrain innovations in the Company’s electric passenger vehicles utilizing Exro’s advanced power electronics technology. The Parties anticipate completion of the proof-of-concept Coil Driver™ plus optimized motor design system by the end of Q4 2023 that demonstrate improved continuous torque and performance, followed by delivery of functional prototypes to the OEM by the end of Q4 2024.
Delivery of low-voltage and high-voltage design-for-manufacture (DFM) samples for customer validation. On March 25, 2023, Exro delivered an initial batch of low-voltage DFM samples to Italian OEM supplier and partner HB4. These samples have been integrated into vehicles (a truck and passenger car) and showcased in recent European trade shows. Exro has recently shipped an initial batch of DFM high-voltage samples to an NDA customer in Brazil and is readying for DFM sample integrations with both SEA Electric and Vicinity Motors in September 2023.
Delivery of 48V hybrid-diesel samples to our European off-highway NDA-partner in Q1. Of note, this project includes two NDA’s under one umbrella partnership – one is a large European OEM which supplies vehicles for off-highway applications, the second is a large European-based motor supplier. As previously announced, NDA partner timing bumped sample delivery into Q2 2023. Integration of the partner motor-Exro inverter solution for the OEM’s hybrid-diesel platform was completed in Q2 with on-site commissioning of the combined solution scheduled in Europe in late August. On successful customer validation, the development agreement is anticipated to transition to a series production agreement for 8,000-10,000+ Coil Driver™ units annually.
Signing additional multi-year commercial agreements that build our Coil Driver™ order backlog. With the continued roll out of low-voltage and high-voltage DFM samples through Q3 2023, Exro has been engaged in commercial agreement discussions with numerous parties. Following customer vehicle integration and in-field validation, it is anticipated discussions will translate into supply agreements in the near term and into 2024.
Work through phase-2 validation and towards commercialization agreement with Linamar. In May, Exro announced the signing of a definitive commercialization agreement following the successful validation by Linamar of the parties’ co-developed integrated e-Axle utilizing Exro’s coil Driver™ traction inverter. The agreement is set for an initial five-year term, with parties committing to milestones and commercial volume targets. In accordance with the agreement, by early 2024 the parties intend to have completed a demonstration vehicle containing the e-Axle product to be utilized as a joint marketing asset for commercial vehicle customers. Series production of the e-Axle is anticipated to begin in late 2024 to support customer deliveries.
Growing contract services for software engineering and vehicle integration through Exro Vehicle Systems. In Q2, Exro announced a contract award by its Exro Vehicle Systems valued at US$2.35 million. The contract is for design services, including a custom battery pack solution, for a light-duty on-road electric vehicle for a leading automotive Tier-1 supplier. Delivery is on track for scheduled completion in Q4 2023.
Achieve Cell Driver™ UL Certification in Q2. As previously announced, Exro’s Cell Driver™ Energy Storage System has successfully completed two of the three major certification phases. The system is on track to complete UL certification in Q3 2023, pushed back slightly due to scheduling at UL’s certification laboratories. UL certification is required prior to connecting to the grid in North America.
Signing US Cell Driver™ distribution and installer partnerships and build order backlog. In Q1 2023, Exro announced a distribution partnership with Greentech Renewables Southwest, the largest distributor of renewable energy products in the southwestern United States with more than 80 sales centers. In Q2 2023, Exro named Re:Build Manufacturing as exclusive manufacturing partner for the Company’s Cell Driver cabinets along with four new channel sales partnerships: Photovoltaics California, ProSolar, Shaw Solar, and High Point Electric which provide access to customer networks in California, Colorado, Florida, the Caribbean, and regions within Canada. Channel partners are being trained on Cell Driver™ and are currently marketing and quoting the technology with solar energy, electric vehicle charging infrastructure and energy management projects. Following UL certification, Exro anticipates technology deployment with initial customer deliveries and in-field pilots to demonstrate and collect “real-world” data.
Achieve first deliveries and revenues for Coil Driver™ and Cell Driver™ products in Q3. Exro remains on schedule to start production of its Coil Driver™ and Cell Driver™ products in Q3 2023. Low-voltage Coil Driver™ products are on schedule for deliveries in September which will be followed by the start of high-voltage products in Q4 2023. Following UL Certification for Exro’s Cell Driver™ Energy Storage System, the Company is on track to start production in Q3 2023 with initial customer deliveries and in-field pilots.
Continue to evaluate market conditions for a Nasdaq up list. The Company remains committed to an eventual up list and will do so when it deems an opportune time and in the best interest of shareholders.
Second quarter and subsequent operating highlights
On June 30, 2023, Exro announced the election of three new Directors: Aleksandra Miziolek, Anita Ganti, and Frank Simpkins. On June 7, 2023 the Company announced that Rod Copes had moved from Interim Chairman to Chairman of the Board.
On May 23, 2023, Exro announced the closing of its bought deal financing, including the exercise in full of the Underwriters' (as defined below) over-allotment option, for a total of 15,525,000 common shares (the "Common Shares") sold at a price of $2.25 per Common Share for aggregate gross proceeds to the Company of $34,931,250 (the "Offering").
On May 15, 2023, Exro announced the signing of a definitive commercialization agreement with strategic partner, and global tier-1 automotive supplier, Linamar Corporation. The agreement follows successful testing and validation by Linamar of the Parties' co-developed integrated electric axle ("e-Axle") utilizing Exro's Coil Driver™ traction inverter and signals a commitment by the Parties to commercialize the product for multi-year series production. In Q4 2022, Exro supplied 800V Coil Driver™ inverter samples designed for integration into Linamar's e-Axle program. Following successful continued testing of the samples by Linamar through the first half of 2023, the Parties have progressed to a definitive agreement intended to commercialize the co-developed e-Axle into series production. The agreement is set for an initial five-year term with the Parties committing to milestones and commercial volume targets. In accordance with the agreement, by Q4 2023, the Parties intend to build a demonstration vehicle containing the e-Axle product to be utilized as a joint marketing asset for commercial vehicle customers.
On May 8, 2023, the Company announced Re:Build Manufacturing as Exro’s exclusive manufacturing partner for its Cell Driver™. The partnership with Re:Build Manufacturing provides Exro the ability to quickly scale to capture the significant opportunity in energy storage while removing all future capital expenditure and inventory working capital requirements associated with Cell Driver™ manufacturing from Exro’s balance sheet. The Company also announced new channel sales partnerships with Photovoltaics California, ProSolar, Shaw Solar, and High Point Electric, renewable energy and energy management integrators that cover customer networks in California, Colorado, Florida, the Caribbean, and regions within Canada.
On July 13, 2023, Exro announced an innovation agreement with a leading Major Global Automaker, to mutually explore powertrain innovations in the Company’s electric passenger vehicles utilizing Exro’s advanced power electronics technology. The purpose of the collaboration is to determine the performance of Exro’s Coil Driver™ product for improving the continuous power and torque output of the powertrain in the OEM’s vehicles. Under the terms of the agreement, the Parties will work together to design a proof-of-concept Coil Driver™ plus motor system that would specifically fit into a defined electric machine housing. Under the agreement, the Parties anticipate completion of the proof-of-concept Coil Driver™ plus optimized motor design system by the end of Q4 2023, followed by delivery of functional prototypes to the OEM by the end of Q4 2024. The prototypes are then expected to enter a period of testing, including performance, durability, and reliability while determining next steps.
Second quarter 2023 financial highlights
For the three months ended June 30, 2023
Revenue of $2,443,292 (2022 – $142,078)
Comprehensive loss of $12,649,383 (2022 – $8,739,338)
Selling, general and administration expense increased by $38,348 to $3,208,175 from $3,169,827
Payroll and consulting fees increased by $1,471,670 to $4,645,443 from $3,173,773
Research and development increased by $1,208,913 to $3,212,787 from $2,003,874
For the six months ended June 30, 2023
Revenue of $2,768,061 (2022 – $246,338)
Comprehensive loss of $20,761,344 (2022 – $18,911,341)
Selling, general and administration expense decreased by $1,173,540 to $4,650,285 from $5,823,825
Payroll and consulting fees increased by $2,223,906 to $8,294,939 from $6,071,033
Research and development increased by $835,339 to $5,122,451 from $4,287,112
The Company saw revenue generated of $2,443,292 for the three months ended June 30, 2023 and $2,768,061 for the six months ended June 30, 2023, through the execution of engineering services agreements.
Exro saw an overall increase in operating costs for the six months ended June 30, 2023, which was driven largely by higher payroll and research and development costs compared to the same period in 2022, in addition to higher non-cash costs related to depreciation and share-based payments, offset by lower selling, general and administration costs. The Company continues to invest in talent to gear up for the start of production in 2023.
Liquidity and capital resources
As of June 30, 2023, the Company had cash of $34,966,644 and amounts receivable of $338,302. The Company had accounts payable and accrued liabilities of $3,544,077.
Results of operations and selected financial data
Outstanding share data
As of August 10, 2023, there were 168,656,309 Common Shares issued and outstanding, and other securities convertible into Common Shares as summarized in the following table:
The condensed consolidated interim financial statements and Management’s Discussion and Analysis for the quarter ended June 30, 2023, released August 10, 2023, can be viewed at www.exro.com/investors or on SEDAR+ under Exro Technologies Inc. at www.sedarplus.ca.
Unless otherwise noted, all figures are in Canadian currency, Cdn.
ABOUT EXRO TECHNOLOGIES INC.
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.
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 involve risks, uncertainties and other factors disclosed under the heading "Risk Factors" and elsewhere 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. 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.ca. 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 Toronto Stock Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this press release.