Riddle Me ThisSIMPLICIT1, you introduce a very salient point. Why this financing, and why now? As you mentioned, the latest financials didn't lead a shareholder to believe our balance sheet was in any sort of jeopardy. So, what's up with the capital requirement? Obviously, there's more to the story and we can only speculate about their reasoning.
As far as the Definitive agreement is concerned, my initial reaction was very similar to yours. The exclusivity, the lack of a Linamar financial commitment etc. but upon further consideration I have concluded that the exclusivity is rather narrow in scope since it is only for integrated "beam axle" equipment on certain classes of vehicle which doesn't include passenger vehicles if my research is correct.
They do go on to say in the press release that it doesn't include direct drive trains which still leaves open a large swath of the market. Essentially Exro is comitted to Linamar only for integrated beam axle configurations in certain classes of vehicles.
In any deal you have to give to get. So, a constructive conversation should be about that, IMHO. What I see initially is Linimar getting their exclusivity to enable them to invest (probably a very large sum of money) in tooling to produce the e-axle and EXRO receiving Linimar support getting in to series production and perhaps the conincidental financing is to finish filling the clean room with the equipment required to accomplish that feat and if that is the case many of those dollars could come back to EXRO in tax credits. Also, the timing of the financing may have been perceived opportune by the executive team with some knowledge about there being a market for all the shares they knew would be churned in the wake of the announcement.
I'm just spit balling here folks but both the Linimar deal and the financing is somewhat perplexing. If you have faith in our executive team you have to believe they have good reasons for their actions.
finest regards
the fourth
I'm just spit balling here