An anonymous director reports

EXRO ANNOUNCES US$30 MILLION CREDIT FACILITY, PLAN TO SEEK DEBENTUREHOLDER CONSENT, AND STRATEGIC REVIEW PROCESS

Exro Technologies Inc. has received a financing commitment from a long-term institutional shareholder (the lender) to provide up to $30-million (U.S.) pursuant to a senior secured loan facility.

The proceeds of the facility will enable Exro to maintain operations and execute its business plan while advancing a strategic review process supported by an independent strategic adviser who has been retained by the company. The review is intended to evaluate a range of outcomes, including strategic partnerships, capital restructuring, M&A (merger and acquisition) opportunities, and other corporate transactions.

The facility

The facility is a secured, non-revolving, multiple-draw credit facility. Highlights include:

• Facility size -- up to $30-million (U.S.);
• Disbursements -- funds will be advanced in milestone-based tranches, with the initial tranche of $2-million (U.S.) expected to be advanced on May 20, 2025; milestones are set out below;
• Convertible debenture condition -- a condition of the second milestone-based tranche is that the company shall have either: (1) obtained a postponement of security from a requisite majority of debentures issued pursuant to an indenture dated Dec. 30, 2022; or (2) issued a redemption notice pursuant to which the convertible debentures would be redeemed in exchange for shares;
• Use of proceeds -- working capital, implementation of the strategic plan, and retention of advisers and legal support;
• Non-convertible -- the facility is not convertible into equity;
• Warrants -- subject to receipt of Toronto Stock Exchange approval, the lender will be issued warrants to purchase up to 75 million common shares at a nominal price.

Milestones

The milestones for advances under the facility are as follows.

Debentureholder consent

Exro has $15-million of senior secured convertible debentures outstanding, with a first lien over substantially all of the company's assets. Exro also has senior secured notes outstanding, secured by substantially all of the company's assets but subordinate to the convertible debentures.

The company intends to solicit a postponement of security from a requisite majority of the convertible debentures. The postponement of security, if obtained, would result in:

• The facility and the notes being secured by a first lien;
• The convertible debentures being secured by a second lien.

In the alternative, the company has the contractual right (subject to TSX approval) to redeem the convertible debentures for shares. Pursuant to the indenture, the redemption price is equal to 105 per cent of par value plus 100 per cent of accrued interest, with consideration being common shares issued at a share price based on the five-day volume-weighted average price of the shares for the five business days preceding issuance of the redemption notice.

Strategic wind-down of Asia-Pacific subsidiary

As part of its focus on core markets and capital efficiency, Exro has initiated an orderly wind-down of its Australia-based subsidiary. Legal counsel has been retained, and the company is working to resolve all lease, employment and regulatory matters. This strategic decision supports the company's continuing focus on cost reductions and reallocation of resources to high-impact markets with stronger commercial traction and more efficient capital deployment.

Looking ahead

Exro is entering a pivotal phase with the financial flexibility and strategic lens to evaluate a range of opportunities that align with its core technology and market focus. The continuing strategic process is designed to unlock value -- whether through partnerships, transactions or focused execution on high-impact initiatives. With strengthened capital backing and a clear mandate, Exro remains committed to pursuing the best path forward for its shareholders.

About Exro Technologies Inc.

Exro Technologies, now expanded through the strategic acquisition of SEA Electric, is a leading clean technology company that has developed new-generation power control electronics. Its innovative suite of solutions, including Coil Driver, Cell Driver and SEA-Drive, expand the capabilities of electric motors and batteries and offer OEMs (original equipment manufacturers) a comprehensive e-propulsion solution with unmatched performance and efficiency. Exro is reshaping global energy consumption and accelerating adoption toward a circular electrified economy by delivering more with less -- minimum energy for maximum results.

We seek Safe Harbor.