Exro and Linamar Corporation sign definitive agreement to
serially produce and commercialize the parties' integrated electric
beam axle product for Class 3-6 vehicles:
- The agreement is set for an initial five-year term and
follows successful continued testing and validation by Linamar of
the Exro Coil DriverTM product samples delivered in Q4
2022
- In accordance with the agreement, by Q4 2023 the parties
intend to build a product demonstration vehicle to be utilized as a
joint marketing asset for the medium duty commercial vehicle
market
- The agreement contemplates the start of series production by
Q4 2024 and includes annual commercial volume targets that build to
25,000 units per annum by 2027
- Linamar is granted exclusivity to Exro's Coil
DriverTM product for use in medium duty Class 3-6
electric beam axle applications
- To meet the capex and working capital requirements
associated with the definitive agreement, Exro has entered into a
bought deal financing agreement for gross proceeds of C$30 million
CALGARY,
AB, May 15, 2023 /CNW/ - Exro Technologies
Inc. (TSX: EXRO) (OTCQB: EXROF) (the "Company" or "Exro"), a
leading clean-technology company that develops new generation
power-control electronics that expand the capabilities of electric
motors and batteries, is pleased to announce the signing of a
definitive commercialization agreement ("DCA", or "agreement") with
strategic partner, and global tier-1 automotive supplier, Linamar
Corporation (TSX: LNR) ("the Parties"). The agreement follows
successful testing and validation by Linamar of the Parties'
co-developed integrated electric axle ("eAxle") utilizing Exro's
Coil DriverTM traction inverter and signals a commitment
by the Parties to commercialize the product for multi-year series
production. Concurrently, to meet the capital expenditure and
working capital requirements associated with the DCA, Exro
announces that the Company has entered into an agreement with a
syndicate of underwriters co-led by Canaccord Genuity Corp., Stifel
Nicolaus Canada Inc., and Eight Capital on behalf of a syndicate of
underwriters (collectively, the "Underwriters"), pursuant to which
the Underwriters have agreed to purchase, on a bought deal basis,
13,500,000 common shares in the capital of the Company (the "Common
Shares") at a price of C$2.25 per
Common Share for gross proceeds to the Company of C$30,375,000 (the "Offering").
Definitive Commercial Agreement
Approximately two years ago, Exro and Linamar established a goal
to co-develop a next-generation eAxle utilizing Coil Driver™
technology. In a traditional powertrain, the motor and inverter are
in separate housings on the vehicle chassis. An eAxle combines an
electric vehicle's motor, gears, and inverter into the drive axle
of the vehicle, providing fleets an opportunity to reduce
maintenance requirements and energy consumption, while also
reducing costs and complexity. In Q4 2022, Exro supplied 800V Coil
Driver™ inverter samples designed for integration into Linamar's
eAxle 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 eAxle into series production.
"Having worked closely for the last two years, we've witnessed
the progressive evolution of Exro's technology", said Kevin Ledford, Global Vice President of
Electrification (eLIN) at Linamar. "By integrating Exro's
technology into Linamar's full eAxle system, we aim to offer a
cost-effective 4-in-1 eAxle which will reduce the integration
complexity to our customers as well as offer superior performance
to the medium duty truck market beginning in late 2024."
"We are thrilled to achieve this next major milestone with
Linamar", said Exro CEO Sue Ozdemir.
"The signing of the definitive agreement demonstrates steady
progress with a leading tier-1 OEM supplier, further validates the
potential of our technology, and signals to shareholders an
opportunity for a material increase in production volume in the
years ahead. Linamar has been a great partner and we look forward
to advancing this combined product to commercialization."
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 eAxle product to be
utilized as a joint marketing asset for commercial vehicle
customers. The Parties have committed to investing in their various
areas of responsibility in accordance with the agreement, with the
intention of beginning series production of the eAxle product to
support customer deliveries beginning in late 2024. To this end,
Exro will be investing in finalizing its printed circuit board
(PCB) manufacturing and beginning the capital expenditures for a
final assembly line. Linamar has been granted exclusivity on Exro's
Coil DriverTM inverter for use in medium duty Class 3-6
electric beam axle applications. Exro maintains the ability to
supply its technology for eAxle products in the Class 1-2 passenger
vehicle market, as well as the Class 7-8 heavy duty vehicle market.
Of note, the Linamar partnership is Exro's only contemplated eAxle
platform for Class 3-6 vehicles. Exro maintains non-exclusivity
across all its direct drive Coil DriverTM partnership
applications. The direct drive partnerships include customers such
as SEA Electric, Vicinity, and others where the powertrain utilizes
a motor and inverter direct drive system versus an eAxle. The
agreement does not place exclusivity restrictions on Linamar, which
will continue to work with other vendors and suppliers to meet its
customers' application-specific requirements.
Bought Deal Financing
Exro has entered into an agreement with a syndicate of
underwriters co-led by Canaccord Genuity Corp., Stifel Nicolaus
Canada Inc., and Eight Capital on behalf of a syndicate of
underwriters. The Underwriters have agreed to purchase, on a bought
deal basis, 13,500,000 common shares in the capital of the Company
at a price of C$2.25 per Common Share
for gross proceeds to the Company of C$30,375,000.
The Company has granted the Underwriters an option to purchase
up to an additional 2,025,000 Common Shares (the "Over-Allotment
Option Common Shares" and together with the Common Shares, the
"Offered Securities") to cover over-allotments, if any, and for
market stabilization purposes at a price of $2.25 per Over-Allotment Option Common Share for
additional gross proceeds of up to C$4,556,250 (the "Over-Allotment Option"),
exercisable in whole or in part, at any time on or prior to the
date that is 30 days following the closing date.
The Company intends to use the net proceeds from the Offering to
meet the capital expenditure and working capital obligations
associated with the DCA with Linamar Corporation and for general
working capital purposes.
The Common Shares will be issued by way of a prospectus
supplement that will be filed in all provinces of Canada, other than Quebec, under the Company's base shelf
prospectus dated May 8, 2023. The
Common Shares may also be sold in the
United States on a private placement basis pursuant to an
exemption from the registration requirements of the United States
Securities Act of 1933, as amended (the "U.S. Securities Act"), and
other jurisdictions outside of Canada provided that no prospectus filing or
comparable obligation arises.
The Offering is scheduled to close on or about May 23, 2023, and is subject to certain
conditions including, but not limited to, the receipt of all
necessary regulatory and other approvals including the approval of
the Toronto Stock Exchange and the securities regulatory
authorities.
The securities offered in the Offering have not been, and will
not be, registered under the U.S. Securities Act or any U.S. state
securities laws, and may not be offered or sold in the United States or to, or for the account or
benefit of, United States persons
absent registration or any applicable exemption from the
registration requirements of the U.S. Securities Act and applicable
U.S. state securities laws. This news release shall not constitute
an offer to sell or the solicitation of an offer to buy securities
in the United States, nor shall
there be any sale of these securities in any jurisdiction in which
such offer, solicitation, or sale would be unlawful.
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 DriverTM) and stationary energy storage (Cell
DriverTM), 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 Corporate Presentation visit us at
www.exro.com/investors
Visit us on social media @exrotech.
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
involve risks, uncertainties, and other factors disclosed under the
heading "Risk Factors" in the Company's 2022 Annual Information
Form (available at www.sedar.com) and elsewhere in 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.
Specific risks associated with the DCA include, but are not limited
to: order volumes under the DCA do not materialize as planned; the
Company experiencing a significant delay in sourcing the required
capital equipment to support the DCA; and the Company experiencing
difficulties in the set and commissioning of capital equipment
resulting in its inability to deliver products. In the event the
Offering is not completed, the Company may need to source
alternative forms of financing that may lead to delays in fulling
its commitments under the DCA. 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 time 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.sedar.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
that 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.
SOURCE Exro Technologies Inc.