Exro Announces $15 million Bought Deal Offering of Secured Convertible Debenture Units
Summary
CALGARY, Alberta, Dec. 05, 2022 - Exro Technologies Inc. (TSX: EXRO, OTCQB: EXROF) (the "Company" or "Exro"), a leading clean technology company that has developed a new class of power electronics for electric motors and batteries, announces that it has entered into an agreement with Eight Capital, pursuant to which Eight Capital has agreed to purchase for resale, together with a syndicate of underwriters (together with Eight Capital, the Underwriters), on a bought deal private placement basis, 15,000 units of the Company ("Units") at a price of $1,000 per Unit, for gross proceeds of $15,000,000 (the "Placement"). If the Underwriters exercises this option in full, the aggregate gross proceeds of the Placement will be $17,250,000 million.The Company intends to use the net proceeds from the Placement to fund the commercialization of the Companys power electronic technology, and for working capital and general corporate purposes.The Debentures will mature on December 31, 2027 (the "Maturity Date") and will accrue interest at the rate of 12.0% per annum, payable semi-annually in arrears beginning on June 30, 2023 (the "Interest"). Subject to applicable regulatory approvals and provided no Event of Default has occurred and is continuing, at the Companys option, the Interest may be paid in common shares of the Company at a price equal to the volume weighted average price of the Companys common shares on the Toronto Stock Exchange (the TSX) for the 5 days prior to the date such Interest is due.At the holders option, the Debentures may be converted into common shares of the Company ("Conversion Shares") at any time and from time to time, up to the earlier of the Maturity Date and the date fixed for redemption of the Debentures , at a conversion price of $2.40 per common share (the Conversion Price), subject to adjustment in certain circumstances.The Company will be entitled to redeem the Debentures at 105% of par plus accrued and unpaid interest at any time following December 31, 2024.The Debentures will be secured by a first priority floating charge over all the Companys present and after-acquired personal property, an assignment of all present and after-acquired intellectual property and a pledge of the securities of the Companys material subsidiaries, provided the Company shall be permitted to incur an operating line of credit of up to $10 million, secured by inventory and/or the accounts receivable (the Permitted Encumbrances) of the Company, which permitted indebtedness may rank equally with the Debentures.Each Warrant will be exercisable for one common share of the Company (each a "Warrant Share") for a period of five years from the date of issue, at an exercise price of $2.40 per Warrant Share, subject to adjustment in certain events.If at any time following the date that is 4 months and one day following the Closing Date, the volume-weighted average trading price (the VWAP) of the common shares of the Company (the Common Shares) on the Toronto Stock Exchange (the TSX), or such other stock exchange where the majority where the trading volume occurs, exceeds or is equal to $4.80 per share for a period of twenty consecutive trading days, the Company may, at its sole discretion, elect to accelerate the expiry date of the Warrants to the date that is 30 calendar days after the Company issues a press release announcing that it has exercised such acceleration right.The Units will be offered and sold (i) in Canada on a private placement basis to "accredited investors" within the meaning of National Instrument 45-106 respecting Prospectus Exemptions and other exempt purchasers in each province of Canada, (ii) in the United States on a private placement basis pursuant to applicable exemptions from the registration requirements of the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), and (iii) in other jurisdictions outside of Canada and the United States, in each case in accordance with applicable securities laws provided that no prospectus, registration statement or similar document is required to be filed in such jurisdictions and the Company does not thereafter become subject to continuous disclosure obligations in such jurisdictions.The Debentures, any common shares of the Company issuable thereunder, the Warrants and any Warrant Shares sold in the Placement will be subject to a four month hold period in Canada commencing on the date of closing.The Placement is expected to close on or about December 22, 2022 and is subject to customary closing conditions, including listing of the Conversion Shares and the Warrant Shares on the TSX and receipt of any required approvals of the TSX and applicable securities regulatory authorities.The Debentures and Warrants comprising the Units and any common shares of the Company issuable upon conversion or exercise thereof, as the case may be, have not been and will not be registered under the U.S. Securities Act, or any state securities laws. 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. 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 Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this press release.