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"). Each
Unit will consist of $1,000 principal amount senior secured
convertible debenture (a "
Debenture") and 416
common share purchase warrants of the Company (a
"
Warrant"), each having the terms described below.
Exro has granted the Underwriters an option,
exercisable in whole or in part at any time up to 48 hours prior
to the closing of the Placement, to purchase up to an additional
2,250 Units (being 15% of the number of Units offered in 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 Company’s power
electronic technology, and for working capital and general
corporate purposes.
The Debentures
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 Company's option,
the Interest may be paid in common shares of the Company at a price
equal to the volume weighted average price of the Company's 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 Company's present and
after-acquired personal property, an assignment of all present and
after-acquired intellectual property and a pledge of the
securities of the Company’s 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.
The Warrants
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.
Additional Information
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. Accordingly, the Units may not be offered or sold within the
United States, its territories or possessions, any state of the
United States or the District of Columbia (collectively, the
"United States") except in transactions exempt
from the registration requirements of the U.S. Securities Act and
applicable state securities laws. This press release does not
constitute an offer to sell or a solicitation of an offer to buy
any Units within the United States.
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.
CONTACT INFORMATION
Investor inquiries: ir@exro.com
Canada investors: Jake Bouma at 604-317-3936
United States investors: Vic Allgeier at 646-841-4220
Media inquiries: media@exro.com
Cautionary Statement Regarding Forward Looking
Information
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". These
forward-looking statements include, but are not limited to,
statements relating to the timing and completion of the Placement,
the satisfaction and timing of the receipt of required stock
exchange approvals and other conditions to closing of the
Placement and the intended use of the net proceeds of the
Placement. 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, 2021 and the six month period
ended June 30, 2022, and financial statements and related MD&A
for the financial year ended December 31, 2021 and the six month
period ended June 30, 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 TSX, nor the Investment Industry
Regulatory Organization of Canada accepts responsibility for the
adequacy or accuracy of this press release.
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