CALGARY,
AB, Oct. 26, 2023 /PRNewswire/ - 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, today
provided a Q4 2023 letter to shareholders.
Dear Exro Shareholders,
The transition to an electrified world is not a matter of "if",
it's a matter of "when". Our technology is truly disruptive and
acts as an accelerator to this new world by solving the total cost
of ownership, performance, and return on investment for our
customers. At Exro, we are significantly reshaping the way the
world consumes energy, solving these key challenges slowing
adoption.
We hear your frustration with respect to the recent share price
weakness and share it as well. Since our start of production a
month ago, we have witnessed an erosion of macro environment
fundamentals contributing to this weakness. Recessionary fears,
inflation, high interest rates, and ongoing geo-political
developments, are dominating investment uncertainty in capital
markets. Sometimes with a challenging market backdrop like this, it
is difficult to see the progress being made behind closed doors. We
would like to provide an update on ongoing activities inside our
doors.
We continue to execute our strategy with customers while also
taking prudent steps to manage costs to extend our cash runway. All
customers' and projects remain on track and in good standing.
1. Initial Coil
DriverTM customer vehicle integrations
- Our project with SEA Electric is coming to the final test
stages and set to complete track testing by early December. We
anticipate using this track test data to market industry leading
efficiency and total cost of ownership to new potential clients in
the commercial vehicle space.
- In Brazil, our team of
application engineers is currently on site in Sao Palo integrating
high voltage L040 800V Coil Drivers™ (paired with an undisclosed
("NDA") partner motor) into vehicles destined for a large global
beverage company. We anticipate providing further information and
lifting the NDA partner name (Company and motor partner), in the
near future. With this partnership, we have a global tier-1 motor
manufacturer that we are also co-developing and integrating the
same motor-inverter system with additional other customers in Q4
2023.
- In September, we launched Coil Driver™ production
and have completed initial deliveries to HB4 in Italy. While low volume, this first order not
only helps to ensure operational excellence by operating our
production line but launches our 12-month manufacturing
qualification to be automotive certified. This production launch
strategically allows us to work through any inherent challenges
that arise with bringing new technology to market. We are pleased
with the initial launch and look forward to setting the standard
for quality in automotive traction inverters.
- With Vicinity Motors, earlier this month we successfully
launched our first electric bus at the APTA Show in Orlando. We are on track to deliver our first
batch of Coil Drivers to Vicinity for bus applications across
North America by the end of
November.
2. European NDA
partners
- In Q3 2023, our team successfully completed phase 1 testing of
an Exro powered hybrid-diesel engine powertrain with our NDA
partner in Europe for an
off-highway application. Pleased with the results, we are hosting
the NDA partner in Calgary in the
coming weeks for an audit and discussions on next steps in the
partnership.
- Regarding our European NDA motor partner, we received the
motors at Exro last week and are set for testing in Q4. This puts
us on track to transition to a definitive agreement discussion
through the end of this year.
We understand the challenges with "NDA" partners, and that you
want to know names. Believe me, we want nothing more than to
disclose names of these major industry players. We continue to
progress through milestones that lead to removing NDA's in the near
term, just as we have done with others previously (Linamar and HB4
to name a few).
3. Linamar
progress
- The next milestone is a demonstration vehicle that includes our
next generation e-beam axle equipped with high-voltage Coil
Driver™. Integration is underway at Exro Vehicle Systems
in Detroit with the vehicle
intended to be co-marketed to potential customers in early
2024.
4. Leading global
automotive OEM innovation project
- We kicked off the innovation project with our OEM partner in Q3
2023 and continue to progress as planned with regular collaboration
meetings between our teams. We remain on-track to complete system
design with high-voltage Coil Driver™ plus optimized OEM
motor design system by the end of Q4 2023.
5. Wolong Electric
motor pairing
- Last week, we received the initial batch of motors for pairing
with Exro Coil Drivers™ and testing in Q4 2023. We
remain on track with dynamometer testing scheduled to begin next
month. We anticipate results to be provided in Q4 2023.
6. Cell
Driver™ progress
- UL certification continues to progress with energy management
system (EMS) software that is integral in the communication to the
grid. Next steps include continued testing that keeps us on track
for UL completion by end of December. We recently installed our
first unit on Exro's Calgary
manufacturing center, connected to a grid simulator to begin early
data collection prior to UL. As we are commercially evaluating
first pilots, we anticipate providing information in the weeks
ahead.
Outlook
While there will be challenges ahead, we are determined to
separate the signal from the noise and remain focused on building
the most sustainable, and valuable, company possible on your
behalf. We have the right technology, and the right team already
scaled and in place to deliver. Our new generation of products are
now in the market building on-road miles and set to capture market
share in 2024 and beyond. We are actively marketing the Exro story
to new investors in Canada, the
US, and Europe having attended
multiple investor conferences over the last several months. In
November, we look forward to presenting at Deutsche Bank's 2023
AutoTech Conference on November
9th and National Banks 4th Annual
Clean Tech Conference on November
22nd.
I end by referencing the 2023 Strategic Objectives outlined in
our January Letter to Shareholders (LINK). While a few items are
still progressing, year-to-date we have achieved the majority of
our commitments and are determined to finish the year strong! Thank
you for your ongoing support.
January 2023 newsletter
objectives, and updates:
- Signing additional strategic partners that amplify our
market presence – European NDA motor partner
(February), Global leading automotive OEM (July).
- Delivery of low-voltage and high-voltage DFM samples for
customer validation – September shipments to HB4 and
Vicinity Motors.
- Delivery of 48V hybrid-diesel samples to our European
off-highway NDA-partner in Q1 – Delivered in Q3
followed by successful testing.
- Signing additional multi-year commercial agreements that
build our Coil Driver™ order back-log – The industry
is transitioning to electric, albeit at a slower pace than we would
all like. HB4, Vicinity, and SEA Electric launched our backlog and
supported additional pilots. Orders are building, and more
importantly initial samples are progressing successfully in the
field and building interest across these market segments.
- Work through phase-2 validation and towards
commercialization agreement with Linamar – Phase-2
completed in Q2 and progressed to definitive commercial
agreement.
- Growing contract services for software engineering and
vehicle integration through Exro Vehicle Systems –
2023 continues to be a successful year for Exro Vehicle Systems,
having delivered multiple projects to customers, generating multi
millions in revenue year to date.
- Achieve Cell Driver™ UL Certification in
Q2 – As previously disclosed, UL certification was
delayed to Q4 2023. The last month has successfully through EMS
certification keeping us on track for Q4 completion.
- Signing US Cell Driver™ distribution and installer
partnerships and build order back-log – We have
expanded our distribution network to more than 10 partners across
North America, all now trained and
quoting projects for deliveries in 2024 upon receipt of UL
certification. We are optimistic we will be sharing first pilot
orders in Q4 2023.
- Achieve first deliveries and revenues for Coil Driver™
and Cell Driver™ products in Q3 – Coil
Driver™ was completed with first deliveries in Q3, and
first revenues expected in Q4 2023. Cell Driver™ first
deliveries and revenues were impacted by the previously disclosed
UL timelines however; we are backed by a strong pipeline. Current
commercial negotiations remain on-track for first half of 2024.
- Continue to evaluate market conditions for a Nasdaq
up-list – We have engaged outside counsel and continue
regular dialogue with market professionals surrounding Nasdaq.
Given the current market backdrop we will continue to evaluate
optimal timing for shareholders to complete our up-list.
Sincerely,
Darrell Bishop
Chief Investment Officer
Sue Ozdemir
Chief Executive Officer
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.
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" 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.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 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.
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SOURCE Exro Technologies Inc.