Exro Announces US$30 Million Credit Facility, Plan to Seek Debentureholder Consent, and Strategic Review Process

Rhea-AI Summary

Exro Technologies (EXROF) has secured a US$30 million senior secured loan facility from a long-term institutional shareholder. The facility will be disbursed in milestone-based tranches, with an initial US$2 million expected on May 20, 2025. The company will issue warrants for up to 75 million common shares at a nominal price. Exro is seeking consent from holders of C$15 million in Convertible Debentures to postpone their security position, or alternatively may redeem the debentures for shares. The company has also initiated a strategic review process with an independent advisor to evaluate partnerships, restructuring, and M&A opportunities. Additionally, Exro announced the wind-down of its Australian subsidiary to focus on core markets and improve capital efficiency.

Positive

• Secured US$30 million credit facility providing immediate working capital
• Initial US$2 million tranche expected by May 20, 2025
• Strategic review process initiated to explore partnerships and M&A opportunities
• Cost reduction through wind-down of Australian subsidiary

Negative

• Company requires significant restructuring of existing C$15 million convertible debentures
• Potential significant shareholder dilution through warrant issuance and possible debenture conversion
• Strict milestone-based funding conditions may limit access to full facility amount
• Wind-down of APAC operations indicates business contraction

CALGARY, AB, May 16, 2025 /PRNewswire/ - Exro Technologies Inc. (TSX: EXRO) ("Exro" or the "Company"), a leading clean technology company specializing in power control solutions for electric vehicles and energy storage, is pleased to announce a funding commitment from a long-term institutional shareholder (the "Lender") to provide up to US$30 million  pursuant to a senior secured loan facility (the "Facility").

The proceeds of the Facility will enable Exro to maintain operations and execute its business plan while advancing a strategic review process supported by an independent strategic advisor (the "Strategic Advisor") who has been retained by the Company. The review is intended to evaluate a range of outcomes including strategic partnerships, capital restructuring, M&A opportunities, and other corporate transactions.

The Facility

The Facility is a secured, non-revolving, multiple-draw credit facility. Highlights include:

• Facility Size: Up to US$30 million
• Disbursements: Funds will be advanced in milestone-based tranches, with the initial tranche of US$2 million expected to be advanced on May 20, 2025.  Milestones are set out below.
• Convertible Debenture Condition: A condition of the second milestone-based tranche is that the Company shall have either (1) obtained a postponement of security from a requisite majority of debentures issued pursuant to an indenture dated December 30, 2022 (the "Convertible Debentures"), or (2) issued a redemption notice pursuant to which the Convertible Debentures would be redeemed in exchange for shares.
• Use of Proceeds: Working capital, implementation of the strategic plan, and retention of advisors and legal support.
• Non-Convertible: The facility is not convertible into equity. 
• Warrants: Subject to receipt of TSX approval, the Lender will be issued warrants to purchase up to 75 million common shares at a nominal price.

Milestones

The milestones for advances under the Facility are as follows;

Milestones 1 – funds to be advanced no earlier than June 6, 2024
May 20, 2025	Establish initial operating plan for the Company acceptable to the Lender
	Establish initial 13 week Cash Flow acceptable to the Lender
May 30, 2025	Engagement Letter(s) executed by Exro with such external advisors recommended by the Strategic Advisor and acceptable to the Lender
June 3, 2025	Holders of the Convertible Debentures consent to the postponement of security in favour of the Interim Lender or notices of redemption issued in respect of the Convertible Debentures
Milestones 2 – funds to be advanced no earlier than July 15, 2025
June 15, 2025	Execution of operating plan by Exro acceptable to the Lender
July 1, 2025	If not otherwise postponed to the Interim Lender per the terms of the Facility, conclusion of the redemption of the Convertible Debentures and issuance of common shares in the capital of Exro in payment thereof.
July 15, 2025	Evidence of active engagement with at least three (3) credible strategic partners in accordance with operating plan, as assessed by the Strategic Advisor
Milestone 3 – funds to be advanced no earlier than September 30, 2025
July 15, 2025	Execution of operating plan by Exro in a manner acceptable to the Lender
Sept 1, 2025	Execution of definitive contract(s) with credible strategic partners in accordance with operating plan, as assessed by the Strategic Advisor

Debentureholder Consent

Exro has C$15 million of senior secured Convertible Debentures outstanding, with a first lien over substantially all of the Company's assets.  Exro also has senior secured notes (the "Notes") outstanding, secured by substantially all of the Company's assets but subordinate to the Convertible Debentures.

The Company intends to solicit a postponement of security from a requisite majority of the Convertible Debentures.  The postponement of security, if obtained, would result in:

• the Facility and the Notes being secured by a first lien; and
• the Convertible Debentures being secured by a second lien.

In the alternative, the Company has the contractual right (subject to TSX approval) to redeem the Convertible Debentures for shares.  Pursuant to the Indenture, the redemption price is equal to 105% of par value plus 100% of accrued interest, with consideration being common shares issued at a share price based on the 5-day volume weighted average price of the shares for the five business days preceeding issuance of the redemption notice.

Strategic Wind-Down of APAC Subsidiary

As part of its focus on core markets and capital efficiency, Exro has initiated an orderly wind-down of its Australia-based subsidiary. Legal counsel has been retained, and the Company is working to resolve all lease, employment, and regulatory matters. This strategic decision supports the Company's ongoing focus on cost reductions and reallocation of resources to high-impact markets with stronger commercial traction and more efficient capital deployment.

Looking Ahead

Exro is entering a pivotal phase with the financial flexibility and strategic lens to evaluate a range of opportunities that align with its core technology and market focus. The ongoing strategic process is designed to unlock value—whether through partnerships, transactions, or focused execution on high-impact initiatives. With strengthened capital backing and a clear mandate, Exro remains committed to pursuing the best path forward for its shareholders.

ABOUT EXRO TECHNOLOGIES INC.

Exro Technologies Inc., now expanded through the strategic acquisition of SEA Electric, is a leading clean technology company that has developed new-generation power control electronics. Its innovative suite of solutions, including Coil Driver™, Cell Driver™, and SEA-Drive®, expand the capabilities of electric motors and batteries and offer OEMs a comprehensive e-propulsion solution with unmatched performance and efficiency. Exro is reshaping global energy consumption, accelerating 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 using 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, 2024, and financial statements and related MD&A for the financial year ended December 31, 2024, 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 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.

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SOURCE Exro Technologies Inc.

FAQ

What is the size of Exro Technologies' (EXROF) new credit facility?

Exro Technologies has secured a US$30 million senior secured loan facility, with an initial tranche of US$2 million expected on May 20, 2025.

How will Exro Technologies handle its existing convertible debentures?

Exro will either seek consent from debenture holders to postpone their security position or redeem the C$15 million convertible debentures for shares at 105% of par value plus accrued interest.

What warrants are being issued as part of Exro's new credit facility?

Subject to TSX approval, the lender will receive warrants to purchase up to 75 million common shares at a nominal price.

Why is Exro Technologies closing its Australian subsidiary?

Exro is winding down its Australian subsidiary to focus on core markets, improve capital efficiency, and reallocate resources to high-impact markets with stronger commercial traction.

What are the key milestones for Exro's credit facility disbursement?

The facility will be disbursed in three tranches based on milestones including operating plan execution, debenture holder consent, and securing strategic partnerships, with disbursements scheduled between May 2025 and September 2025.