Brent Todd, an investment advisor with Canaccord Genuity Wealth Management in Vancouver, is following Exro Technologies Inc. (XRO:CSE; EXROF:OTCQB) closely. The small cap has developed technology that is "revolutionizing energy conversion to improve performance, efficiency and longevity in electric motors and generators." The chip and software solution uses artificial intelligence and big data to communicate with an electric motor to gain maximum efficiency.
Todd told Streetwise Reports that he was introduced to Exro when the company was first going public through some people he respects who only get involved in companies and deals that are "real and have good potential."
"Why I like Exro a lot right now is because it has started to bring in the management and talent to make commercialization happen." - Brent Todd
"Exro is a company that is trying to revolutionize electric motors," Todd said. "It has a very ambitious project, high risk, high reward. If it is successful, it would be revolutionary and worth the risk up front," Todd stated. "You don't often see that in a lot of investments."
It takes more than just having the right technology to make a company a success. "Now comes commercialization," Todd said. "This is a crucial stage for any small-cap story. I've seen so many companies that have a better mousetrap, but that is only 10% of the way there. Selling that mousetrap is really the trick."
"Why I like Exro a lot right now is because it has started to bring in the management and talent to make commercialization happen. Exro was able to attract Sue Ozdemir, the former CEO of GE's Small Industrial Motors Division, to the business; she took over as CEO in September. That was a huge vote of confidence for this technology because it showed that Exro is able to attract someone of that caliber to this project, and she firmly has a grasp on what's needed to commercialize this technology. So we think that ticks off another box in the risk category," Todd explained.
"Since then there's been other people attracted from the likes of Siemens and Schneider Electric and some of the biggest companies in the world around power generation," Todd added. "It's been a real game changer."
The technology achieved a milestone when Exro announced in December that in a partnership with electric bike manufacturer Motorino, after integrating Exro's software and electric program module (EPM) into the existing bike motor and powertrain, the bike's top speed increased 25% and the low-end torque also increased 25%.
"Exro is at an interesting inflection point. They have published results that now have positive results with the motors that they've been working with. In one case, they got 25% more speed and more torque out of an electric motor for a bike. That has captured a lot of attention; that's very significant," Todd stated.
The test with the ebike was the "first real world test, third-party validated and done in a very specific manner so that Exro can take those results forward to other entities," Todd explained.
Of the increased performance of the Motorino ebike, CEO Sue Ozdemir said, "This should be of major interest to the electric vehicle industry, which is clearly becoming vital to our global transportation networks. In fact, it should be of interest to anyone who uses electric motors."
Exro has been forging strategic partnerships. In November the company entered into a development partnership with The Templar Marine Group, which is "focused on the mass production of commuter electric boats, from water taxis to rental fleets."
"We believe Exro's technology will dramatically enhance the performance of electric motors in boats and other watercraft," said Ozdemir. "The e-Boat sector is clearly growing as people look for solutions that are sustainable and also meet regulatory requirements preventing the pollution of our lakes, rivers and oceans."
In February, Exro announced a partnership with Aurora Powertrains Oy, which released an all-electric snowmobile in 2019, to add Exro's technology to the "eSled."
Not only do snowmobile sales top $1 billion annually, but also Ozdemir noted that the partnership "takes Exro's technology overseas to Europe and forms a key partnership with one of the transportation sector's true innovators in the use of electric powertrains."
Exro's Chief Technology Officer, Ari Berger, stated, "Our partnership with Aurora further proves Exro can be applied and scaled to a wide variety of sectors."
Todd raised the point that one attractive feature of Exro's technology is that it can be easily incorporated into existing manufacturing. "Motor manufacturers throughout the world, these big OEMs that are making electric motors, be it for a bike or water taxi or a car, have billions invested in their equipment, tools and dies," he explained. "And with the Exro solution, they don't have to retool their plants. It is added to the motor at the plant, and you get this better performance."
The company is "starting with ebike manufacturers, electric scooter manufacturers, e-boats and snowmobiles and ultimately working its way up the chain to electric car manufacturers," Todd explained.
"If you think about electric motors, a generator is really an electric motor in reverse," Todd noted. "So now you're talking about revolutionizing generators, which all leads to producing energy. So if you can make a motor more efficient, you can make a generator more efficient. That's the whole energy cycle that we're in right now. And environmentally, it would obviously be a boon for the planet to boot."
Exro will present a white paper of its technology in enhancing electric motor performance to the Car Training Institute USA Symposium now scheduled for October. The symposium is the "world's leading summit on advances in automotive transmission, hybrid and electric drive technologies."
Exro recently reported that it closed the second and final tranche of a private placement at the end of February. The oversubscribed non-brokered private placement financing raised CA$4.3 million through issuing approximately 12.28 million shares at CA$0.35 per share.
The company currently has approximately 82.7 million shares outstanding and 93.5 million fully diluted.
Brent Todd is a Senior Investment Advisor at Canaccord Genuity Wealth Management. His views, including any recommendations, expressed in this article are his own only, and are not necessarily those of Canaccord Genuity Corp. Brent Todd currently owns EXRO Technologies (XRO:CSE) shares through his own portfolio and some of his clients' portfolios.
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