On Thursday, March 11th, 2021 I had the pleasure of speaking with CEO Sue Ozdemir of EXRO Technologies.
I asked if being a penny stock is the reason why they even were targeted as a penny stock.
She responded that they think that the incredible run they've had this year paints you as a target for companies like that to attack. Also, from a tech perspective, the story of EXRO Technology maybe still a little difficult to understand and could be a bit complicated. This would allow for some misunderstandings and speculations along with being a penny stock. She's confident that the stock will regain its previous levels and fervor. "Tabloid and institutional support has been phenomenal" and we should see more communication coming out about EXRO within the coming weeks. "It gives us an outside look into how we can improve the story so you'll see some changes on the website in the coming weeks about how we make sure the tech is more described and the partners are more described".
(* this part somehow got left out of the original post.)
I mentioned the fact that Mark Fry the owner of Templar Electric Boats reached out to the Exro subreddit the same day as the short report attack and how we were blown away.
She was very appreciative of Mr. Fry as she did not ask him to reach out as he did. He contacted her and let her know that he was upset with the report. They've been working pretty close with Templar for some time. She said that "bad things show you who's around you" and they've had nothing but support from Raymond James, Haywood Capital, and more. "Some of the larger supporters actually bought more as they saw the opportunity to make money and buy the dip"
I mentioned my appreciation for Potencia also making a response as well as it was also very much appreciated.
She mentioned that most of the companies mentioned in the short report attack were private companies and didn't have any responsibility to make a response at all. Being that they are private companies they don't have to talk to anyone they don't choose to and if there is someone that Exro would like them to talk to, she and the team would let them know that a specified person would be contacting them. The fact that they came out to support and "wrote a great response as well is definitely very much appreciated". The next point of reference will be when they report their results of the Exro tech. (A timeframe was not discussed.)
Has Exro ever considered going the route of doing a SPAC
She said that they have considered it but it would be different because Exro is already a public company. They are not looking into doing that but if the right one came along they would consider it. They're still focusing on and have filed for uplisting to the TSX mainboard. Depending on how the revenue progresses and how the partners are doing, they are still targeting an uplist to the NASDAQ for the 2nd half of this year.
I asked her about the company strategy.
She stated that they are following her strategy from her time in General Electrics co. They believe that with the corporate team they have, they are creating a better foundation for the future by combining their strategy from GE and that of Siemens. The nature of the current partnerships is going to help with development, help with operational validation, and build from there. She feels really good about it and that it has been very successful. Their goal is to show scalability starting with the bikes and motorcycles as their initial building blocks for the technology as they continue to gain validation. In the background, they are working towards bigger opportunities and partnerships as another layer of the business. Also a part of bringing Julie and Terrence in is to be able to tap into connections they have access to, then GE down the line with industrial products when Exro gets there, she still has plenty of connections there.
I wondered whether the drone avenue was a bit more complex for the Exro's tech
She stated that the drones would need a small controller and that she doesn't think their controller would be cost-effective enough at this time. There are ways and ideas of how to go attempt it but they are more focused on larger platforms. Amazon-type drones that are involved in package delivery and things of that nature would be more compatible as they need speed and torque but it's a very niche market right now. At present, electric vehicles are the main focus. Additionally, in regards to aviation vehicles, she mentioned the complexity of aviation regulations & requirements for torque and speed. Exro hasn't been looking into it at this time.
At the time of her joining Exro in September of 2019, the focus became targeting the electrical vehicle market and to build that avenue of the business because they are seeking to develop products that have a broader customer market. "Develop one project that suits 10 other customers or 12 other customers versus a wind application that might only suit 2 or 3 other people". After solidifying themselves in the EV market, they'll look at revisiting windmills and other areas of electrical motors. They're avoiding the company possibly being stuck in a developmental phase for many years. It costs Exro quite a bit of R&D money to develop each driver and they'd like to see that have the ability to turn into revenue sooner than later.
In relation to Exro and how it affects customer products
She stated that Exro's technology may have a bit of a misnomer that it'll create the "Ultimate" best product in competition with other companies for the customer. It won't create the "ultimate of ultimates because every ... manufacturer has their own motor that they're using, their own powertrain that they're using, and the value of the upgrade is going to be very specific to them. The goal is to get more power with a cost-effective solution". The responsibility of creating a competitive overall product (bike, motorcycle, car, etc), as I understood it, still rests on the shoulders of the customer. "In some cases, we could make it the faster bike and the fastest car but it just depends on what they're starting with". In relation to current product partnerships, she is sticking with integrity as these are private companies and she'll avoid talking about any private specifics as much as possible. She mentioned how Exro tech has already been publicly praised. People usually will seek and pay more for more power, that includes Exro Technologies.
When asked about Motorino
She stated that they will have more news on the current partnership with Motorino released within the coming months. She made a mention about the bikes they've completed thus far that she is still "super excited about the bikes and has some at the facility" in Calgary, AB. "If you come to race our bikes ... for sure you're going to lose!"
I asked whether the progress being made with the Sea-Electric truck can be applied to the inevitable Electric Semi-Truck.
She said yes, that technology is completely scalable as it's a voltage rating but they might need to go slightly bigger than the 800v drive to handle a full semi-truck depending on the design. In testing for the larger trucks of this size, Exro would develop the test center with the ability to handle a larger amount of voltage when that type of customer comes along. That is something that would be targeted more towards next year and it is unclear who will be the first to contact them in that pursuit.
I wondered if they have heard of Romeo Power and how they compare
She said, "I think Romeo could potentially be a partner". She explained that Exro makes the controller for a stationary storage unit that goes on a facility to power up a building. Inside that unit "will be what's called a battery management system, it's controlling the battery cells itself and there's usually an invertor that sends the power. We've combined the invertor with the battery management system into one and we have a new type of battery management", they call it a controller and it'll be able to determine from a cell level a good battery from a bad battery. She stated that they have a large container designated for safely testing this technology.
"On the drive, it's much like you'd see in a mechanic car shop. We have a big dyno bay where we run a motor on the drive and so what will happen is as we get up to high power, the motor is spinning at high power, and if a lot of heat is generated and the drive can set fire. The goal is to not catch fire but as you're testing drives, you're testing up the capacity and in initial stages, you could have that". They call them "expected fires" and they have safety precautions in place for that as well.
She made note that they've been building the facility in stages to use the working capital to provide the most value for the shareholders. After raising $51M within her first 12 months, their goal is to keep hitting their milestones. They have a full 10k sq/ft facility, with the dyno test bay, a lab, and desks for PCB soldering & equipment build-up. They do buy all the components and build the drives themselves. They have a quality control manager on staff that has been working on the quality program for the past 6 months. They have a functional safety manager already onboard that has started this past January in preparation for the later functional safety measures that'll be required. From a facility perspective, they'll do low-volume manufacturing of about 50k units per year. The facility for that is being built now, they're working through the plans, have a facility manager, are listing needed equipment, and targeting this next phase for the 2nd half of next year. This facility has been one of the major things she's been planning for the past 6 months.
She answered my question about whether they've thought about doing a virtual facility tour
"We are, we just completed the 1st photoshoot. and it timed out well because that's the photos we used in the report (rebuttal) ... Our next goal is a video, at least on the test bench and maybe on some of the PCB benches, and to see a couple of the guys" working. There is a large team of over 30 employees and 15 more positions posted.
I asked about possibly visiting the facility
At the moment, in Calgary, they have strict Covid guidelines as they are "not even allowing by appointment right now" for general visitation, although for certain things of course they occasionally are allowing few appointments. For the most part, the Exro team needs to be in the office for the benches and to use the labs, so they are locking things down for safety. They haven't had any issues within the past 12 months and hope to open up appointments for general visitation sometime towards the summer.
She also mentioned, "there's a US facility now, the 1st one is a small sales office that is in Maryland, just there because it's close to the lobbying offices and for the battery control side". They're looking at possibly putting events together for product displays to host more in-person introductions within the US possibly in or around August of this year.
Effects of uplisting, accomplishing more of their goals will provide them with the ability of promotional product placement in movies and more
Yes, after they accomplish more of their upcoming goals they've got a list of things they'd like to pursue. Ideas such as formula E racing, e-bike races, off-road competitions like the Baja 1000, and a couple more targeted for next year. These competitions would most likely be geared more towards next year. They're are working on a couple more bikes and hope to have a dozen bikes completed by the end of the year to place at different places around North America for people "to check them out and ride them".
I asked if Exro was an acronym like (EXcellence, Reliability, & Optimization... my idea haha)
She said technically yes, the founder dubbed the name EXRO as Extreme Rotation but it could possibly change as far as what the acronym means. The history is derived from the fact it deals with the technology revolving around motor rotation.
Here's her response to my Turntide inquiry
She has heard of them and knows the CEO. Their technology has the drive built right into the motor but hasn't been seen to work with mobile applications and thus she doesn't consider them as competition. "To date, we haven't seen any models where they're utilizing switch reluctance with mobility applications". She sees them as building a completely new motor capability and will have a long time to get to the mobility market. "They have IP around noise control and control algorithms themself". To my understanding, the switch reluctance motor is not new technology but has mostly been seen with solid stated requirements as far as HVAC and such.
I inquired about Exro's institutional and possible large investors
She said they've received great support from Raymond James, Haywood Capital, and 8 Capital firms. The Handelsbanken Fund out of Sweden came in on the last fundraising round last year, is "rated as one of the top 7 cleantech funds in the world", and now owns 6.45m shares of Exro. She stated that "they look at the strength of the institutions" they look to bring in. Exro's shareholders are mostly made up of retail investors like you and me alongside a handful of institutions. I mentioned that it'd be amazing to see the likes of Ark-Invest come in and take a look at getting involved.