RE:New Press Release - Exro Technologies Announces Fourth Quarter and Full Year 2023 Financial Results Can we say "ouch"!!
Exro Technologies loses $50.14-million in 2023
2024-04-01 18:52 ET - News Release
Ms. Sue Ozdemir reports
EXRO TECHNOLOGIES ANNOUNCES FOURTH QUARTER AND FULL YEAR 2023 FINANCIAL RESULTS
Exro Technologies Inc. has released its financial results for the quarter ended Dec. 31, 2023.
"Our Company continued operational momentum through Q4 2023, closing out the year with several important milestones achieved", said Exro Chief Executive Officer, Sue Ozdemir. "2023 already feels like a distant memory with Exro entering into transformational merger with electric vehicle technology company SEA Electric in Q1 2024, setting the stage for accelerated revenue growth, technology deployments, and path to profitability. We look forward to closing the transaction and delivering on commitments to our major commercial and passenger vehicle OEM partners in 2024 and beyond."
Exro and Sea Electric merger
Subsequent to year end Exro entered into a Merger Agreement ("the Transaction") with SEA Electric Inc. ("SEA Electric"). The Transaction is expected to enhance Exro's technology offerings, accelerate revenue growth, and contribute to its path to profitability.
The Transaction is expected to provide meaningful benefits to Exro, including but not limited to:
- -- Technology Synergy: The Transaction combines Exro's Coil Driver(TM) motor control technology with SEA Electric's SEA-Drive vehicle control unit (VCU) software technology. This integration is anticipated to deliver superior performance, efficiency, and total cost of ownership advantages, embedded in a complete package electric propulsion system for the commercial vehicle space. Exro and SEA Electric have been testing the technology in partnership over the prior 3 years.
- -- Revenue Acceleration: Following the Transaction, the company is forecasting delivery of over 1,000 propulsion systems in 2024 to blue-chip original equipment manufacturers (OEMs). This strategic move is expected to drive substantial revenue growth.
- -- Multi-Year Commitments: Leading commercial vehicle OEMs have made multi-year commitments to the combined company. These commitments underscore the confidence in the merged entity's capabilities and potential.
In conjunction with the Transaction, the Company announced a bought deal private placement offering for gross proceeds of $30 million through the offering of 31,600,000 subscription receipts at a price of $0.95 per subscription receipt. The subscription receipts will be exchanged for common shares upon close of the Transaction and proceeds released to the Company. The Transaction is expected to be completed on April 5, 2024, subject to customary closing conditions, including regulatory approvals and approval by Exro shareholders.
Fourth quarter and subsequent operating highlights
In Q4 2023, Exro lifted the NDA and announced a partnership with Giaffone Electric, further expanding its strategic collaborations into South America. In Q1 2023, Exro and Giaffone integrated Coil Driver(TM) systems within commercial delivery vehicles for a global leading food and beverage company. Additional systems were ordered and deliveries continued through Q1 2024.
Exro successfully completed bench testing of 48V coil drivers for a hybrid diesel application with its off-highway NDA partner in Europe. Commercial discussions for units and systems are underway, with negotiations involving the lifting of the NDA.
Coil Driver(TM) start of production was launched in Q3 2023 with low volume production and was followed by initial deliveries of sample units in Q4 2023.
With Exro's Cell Driver(TM) energy storage, the company announced a distribution partnership with Greentech Renewables Southwest and named Re:Build Manufacturing as the exclusive manufacturing partner for the Company's Cell Driver cabinets. Exro has onboarded 40+ distribution and installation partners across North America and the Caribbean
On March 6, 2024 Exro announced that it has completed the testing program required to receive UL certification for its Cell Driver(TM) stationary energy storage system. The test results are currently being reviewed by approved UL certifier Intertek Laboratories, followed by an audit of Exro's contract manufacturer for the Cell Driver(TM), Re:Build Manufacturing. It is anticipated that final UL certification will be received in Q2 2024. Commercial sales and marketing activities continue.
The Company has disclosed additional key highlights from 2023 in the MD&A released on April 1, 2024.
Fourth quarter and year ended 2023 financial highlights
For the three months ended December 31, 2023
- -- Revenue of $935,410 (2022 - $1,807,859)
- -- Comprehensive loss of $18,201,611 (2022 - $25,301,810) -- Selling, general and administration expense decreased by $5,886 to $2,592,706 from $2,598,592
- -- Payroll and consulting fees increased by $796,058 to $4,474,702 from $3,678,644
- -- Research and development increased by $1,840,285 to $4,485,833 from $2,645,548
For the twelve months ended December 31, 2023
- -- Revenue of $5,736,140 (2022 - $2,185,448)
- -- Comprehensive loss of $50,143,198 (2022 - $39,495,905)
- -- Selling, general and administration expense decreased by $1,343,234 to $9,776,036 from $11,119,270
- -- Payroll and consulting fees increased by $2,883,319 to $16,669,923 from $13,786,604
- -- Research and development increased by $4,071,391 to $12,836,892 from $8,765,501
The Company generated revenue of $935,410 and $5,736,140, for the three and twelve months ended December 31, 2023, respectively through the execution on engineering services agreements.
Exro saw an overall increase in operating costs for the twelve months ended December 31, 2023, which was driven largely by higher payroll and research and development costs compared to the same period in 2022, offset by a reduction in selling, general and administration expenses. In addition the Company saw higher expenses related to non-cash items including a loss on investment in SEA, fair value loss on derivative assets, interest expense settled through the issuance of shares in the Company, and higher depreciation and share-based payments.
Liquidity and capital resources
As at December 31, 2023, the Company had cash and cash equivalents of $6,241,176 and accounts receivable of $4,233,672. The Company had accounts payable and accrued liabilities of $8,629,951.
Outstanding share data
As of April 1, 2024, there were 170,121,818 Common Shares issued and outstanding.
Additional information
The financial statements and Management's Discussion and Analysis for the quarter ended December 31, 2023, released April 1, 2024, can be viewed at www.exro.com/investors or on SEDAR+ under Exro Technologies Inc. at www.sedarplus.ca .
Unless otherwise indicated, all figures are in Canadian currency, Cdn.
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(TM)) and stationary energy storage (Cell Driver(TM)), and act to accelerate adoption towards a circular electrified economy by delivering more with less - minimum energy for maximum results.
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