Exro (EXROF) 40FR12BInitial registration of securities (Canada)

This Annual Information Form contains certain forward-looking statements within the meaning of Canadian securities laws. These statements relate to future events or future performance and reflect management’s expectations regarding the Company’s growth, results of operations, performance and business prospects and opportunities. Such forward-looking statements reflect management’s current beliefs and are based on information currently available to management. In some cases, forward-looking statements can be identified by terminology such as “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “continue”, “target” or the negative of these terms or other comparable terminology.

Forward-looking statements are necessarily based on estimates and assumptions made by management in light of management’s experience and perception of historical trends, current conditions and expected future developments, as well as factors that management believe are appropriate. Forward-looking statements in this Annual Information Form include, but are not limited to:

These forward-looking statements are based on the beliefs of the management of Exro as well as on assumptions which such management believes to be reasonable, based on information currently available at the time such statements were made. However, there can be no assurance that forward-looking statements will prove to be accurate. Such assumptions and factors include, among other things: demand for the technology of the Company; ability to maintain existing partners and attract new partners; the impact of competition; the ability to obtain and maintain existing financing on acceptable terms; the ability to retain skilled management and staff; currency, exchange and interest rates; the availability of financing opportunities, risks associated with economic conditions, dependence on management and conflicts of interest and market competition; the ability to commercialize the Company’s technology; and operating in an environment that is subject to regulation.

The preceding list is not exhaustive of all possible factors. Although the Company believes that the assumptions underlying these statements are reasonable, they may prove to be incorrect, and the Company cannot assure that actual results will be consistent with these forward-looking statements. Given these risks, uncertainties and assumptions, any investors or users of this document should not place undue reliance on these forward-looking statements. Whether actual results, performance or achievements will conform to the Company’s expectations and predictions is subject to a number of known and unknown risks, uncertainties, assumptions and other factors that are discussed elsewhere in this Annual Information Form, including but not limited to:

Readers should not place undue reliance on the Company’s forward-looking statements, as the Company’s actual results, performance or achievements may differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements if known or unknown risks, uncertainties or other factors affect the Company’s business, or if the Company’s estimates or assumptions prove inaccurate. Therefore, the Company cannot provide any assurance that such forward-looking statements will materialize. The Company does not undertake to update any forward-looking information, except as, and to the extent required by, applicable securities laws.

The Company’s full corporate name is “Exro Technologies Inc.”. The Company’s head office is at 12–21 Highfield Circle S.E., Calgary, Alberta, T2G 5N6, relocated from 2820-200 Granville Street, Vancouver, British Columbia, V6C 1S4 and its registered and records office is at 1700 – 666 Burrard Street, Vancouver, BC V6C 2X8.

On July 26, 2017, BioDE and its wholly owned subsidiary 10889001 BC Ltd. completed a transaction with Exro Technologies Inc. (a predecessor entity to the Company) whereby, pursuant to an amalgamation agreement, 10889001 BC Ltd. amalgamated with Exro Technologies Inc. and became the legal subsidiary of BioDE with holders of Exro Technologies Inc. holding approximately 86% of BioDE immediately after the amalgamation. The transaction was accounted for as an acquisition of BioDE by Exro. In completion of the transaction, the Company changed its name to Exro Technologies Inc.

The Company’s shares are listed on the TSX Venture Exchange (“TSXV”) and trades under the symbol “XRO”, and the OTCQB under the symbol “EXROF”.

The Company has two wholly owned subsidiaries, DPM Technologies Inc., incorporated under the laws of British Columbia, and Exro Technologies USA, Inc., incorporated under the laws of Delaware, USA. The following diagram illustrates the organizational structure of the Company, including DPM Technologies Inc. and Exro Europe AS. Other than as indicated below, each subsidiary is wholly owned by the Company.

On September 22, 2020, the Company was listed on the TSXV and the Common Shares began trading under the symbol "EXRO".

On October 20, 2020, the Company opened the doors to the Company's EIC. The EIC has been designed to allow in-house design, testing, and assembly of manufactured products to enhance the performance of electric motors and powertrains. The Company is proposing to feature small and large test bays to demonstrate the Company's patented technology in relevant environments and accelerate prototypes in operating applications. The Company believes the EIC will expand the potential for more strategic partnerships while also creating a platform for proof of concepts in new research and development projects. Exro will continue to be focused on its mission to deliver intelligent innovations in electrification with minimum energy and maximum results.

On December 14, 2020, the Company completed a short form prospectus offering of 12,915,384 shares at a price of $3.25 including the over-allotment option which was exercised by the agents for total gross proceeds of $41,974,998. In connection with the offering, share issuance costs were $284,990 and the Company issued 839,500 warrants exercisable at $3.25 per common shares for a period of 24 months from the date of issuance and the Company issued 645,769 corporate finance shares.

On March 22, 2019, the Company completed a private placement of 8,180,500 shares at a price of $0.25 per share for proceeds of $2,045,125. The Company paid finders fees of $143,159 and issued 572,635 broker warrants with an exercise price of $0.35 per share with a twelve-month expiry.

On September 13, 2019, Exro announced that it had granted incentive stock options to directors, officers and consultants to purchase an aggregate of 3,225,000 shares in the capital of the Company at a price of

$0.25 per share, pursuant to the terms of its stock option plan. All of the options are subject to vesting provisions, and any shares issued upon exercise of an option will be subject to a hold period of four months and one day from the date of grant.

On October 21, 2019, the Completed a private placement of 6,023,110 shares at a price of $0.27 per share for proceeds of $1,626,240. The Company paid finders fees of $67,559 issued 250,368 broker warrants with an exercise price of $0.40 per share with a twelve-month expiry. The fair value of the broker warrants was estimated to be $55,458.

On November 5, 2019, Exro announced the appointment of Darryl Wilson as Chairman of Business Advisory Board. Mr. Wilson’s 26-year career with GE took him around the world. He was President and CEO of GE Consumer and Industrial in Budapest, Hungary then President and CEO of Consumer and Industrial Asia Pacific in Shanghai, China. Returning to the United States in 2008, Mr. Wilson took on the role of President and CEO of GE Aero Energy in Houston, Texas amongst other roles before retiring as Vice President of Commercial GE Power in 2018.

On November 5, 2019, the Company completed a private placement of 700,000 shares at a price of $0.27 per share for proceeds of $198,000.

On November 12, 2019, Exro announced that Josh Sobil joined the Company in the role of Chief Commercial Officer and will be responsible for leading Exro’s sales and marketing strategies globally. Mr. Sobil will manage all commercial partnerships and opportunities as Exro expands its product offerings targeting increased efficiencies and better performance in the electric motor industry as well as power conversion in various aspects of the electrification evolution.

On December 18, 2019, the Company announced that it had delivered the first Exro-powered e-Bike to Motorino Electric. Exro demonstrated significant gains in performance when the Exro system is integrated into an e-Bike’s existing electric drivetrain. By expanding the operating parameters of the motor, Exro’s engineered technology provided a torque increase of greater than 25 per cent for the Motorino e-bike resulting in a corresponding increase in acceleration of greater than 25 per cent.

On July 24, 2018, the Company announced that it had initiated a non-brokered private placement of 6,000,000 common shares at a price of $0.25 per share for proceed of up to $1,500,000.

On July 26, 2018, the Company subsequently announced the closing of its previously announced private placement raising gross proceeds of $1,842,500. The Company issued 7,370,000 common shares at a price of $0.25 per share, representing an oversubscription of 1,370,000 common shares.

On July 30, 2018, the Company announced the closing of a second tranche of the private placement in the amount of $235,000 to accommodate additional investor demand. In aggregate the Company issued 8,310,000 common shares at a price of $0.25 per share, for gross proceeds of $2,077,500.

Under the terms of the purchase agreement, Adaptive become a wholly owned subsidiary of the Company, with Kent Thoresen, Adaptive's CEO, joining Exro's management team to lead European business development and technology research from Oslo, Norway. The Company issued Adaptive Shareholders 50,000 common shares upon closing of the agreement, and a further 200,000 shares will be issued upon commercialization of the technology by the Company. 750,000 additional Shares will be issued to Adaptive Shareholders upon realization of certain commercial milestones. The Company will further pay a two per cent royalty on net commercial sale. On September 25, 2018, Exro announced the closing the acquisition of Adaptive.

Exro is a clean technology company pioneering intelligent control solutions in power electronics to help solve the most challenging problems in electrification. Exro’s patented control technology expands the capabilities of electric motors, generators, and batteries. Exro seeks to accelerate the global transition to clean energy by providing products and services for manufacturers to optimize the cost, performance, and efficiency of energy systems and powertrains.

The technology can optimize a wide range of electric mobility applications, from electric scooters to electric buses and larger. Most variable torque applications with the need for increased torque and speed will be a suitable partner for Exro’s technology, especially in traction mobility and renewable energy industries. Given that Exro’s technology improves performance and reduces energy consumption in powertrains, it is attractive to the mobility and renewable energy sectors as a technology that will return incremental dollars to a user’s bottom line and is also attractive for the corresponding environmental benefits it offers. Many electric motors are powered by energy sources that create greenhouse gases, and by helping electric motors consume less energy, Exro is also going to significantly help reduce greenhouse gases, which will benefit the planet and our ecosystems.

Exro offers a new power electronics solution for system optimization through implementation of its technology which increases drive cycle efficiency, reduces system volume, reduces weight, and expands torque and speed capabilities. Our power electronics technology provides a new brain via enhanced control for motors and batteries.

Exro’s advanced motor control technology, the Coil Driver, expands the capabilities of powertrains by enabling two separate torque profiles within a given motor. A major advancement in the sector, dynamic motor configuration that is done electronically, enables efficiency optimization for each operating mode

resulting in reduction of energy consumption. The controller automatically selects the appropriate configuration in real time so that power and efficiency are intelligently optimized. The Coil Driver is similar to an electric gearbox for an internal combustion engine, and enables intelligent coil switching which allows a motor to switch coil configurations while in operation. This product has utility in many traction applications, particularly in transportation and mobility sectors.

Exro’s business model is to develop strategic partnerships with companies that are established in their respective markets, specifically those that welcome potentially disruptive innovation in their product lines and have adequate internal engineering capacity, growing sales and an existing customer base. These include companies that manufacture automotive equipment such as electric bikes, electric cars, and electric commercial vehicles. Manufacturers of electric motors, generators, batteries, e-axles or power electronics also make ideal partners, since Exro’s patented technology and engineering capabilities act as the “intelligence” to enhance performance characteristics of overall power systems.

The Coil Driver technology is a controller that integrates the configuration of the rotating machine coils into the power electronics. This gives the power electronics control of the machine coil wiring configuration in real time, providing a range of options, as opposed to a fixed machine configuration.

The control system will select the optimal configuration for any given operating condition using a motor application with a specific machine control algorithm. Exro’s approach to powertrains is to control, optimize and improve performance across highly variable input and output motor applications. Traditionally, electric motor coils have been wired in a single configuration and the designer had to select the configuration that was the best compromise over the range of operating conditions. Exro’s technology senses input energy and load, and seamlessly switches coil configuration in any combination from full parallel to full series modes. The technology is intended to make electric motors and generators used in variable settings “intelligent”, leading to more efficient operation.

The technology provides voltage control with multiple performance curves corresponding to the coil configurations in the electric machine. Exro’s technology is designed and built into our partner’s electric machine and power electronics for the application. Exro’s technology can be fully integrated with the power electronics design and can be provided under a licensing agreement or as a hardware/software solution.

The Coil Driver enables two separate torque profiles within a given motor. The first is calibrated for low speed and high torque, while the second provides expanded operation at high speed. The ability to change configuration allows efficiency optimization for each operating mode, resulting in overall reductions in energy consumption. The controller automatically and seamlessly selects the appropriate configuration in real time so that torque demand and efficiency are optimized. By way of contrast, in a standard motor, each pair of poles has a coil grouping, and when that pair is energized, the magnetic field pulls the rotor.

The Coil Driver takes each coil and breaks it into two or more coils. The switching circuitry puts the coils in series, parallel, or a combination, depending on load and speed demands at that moment. When the coils are in series, the motor generates high torque at low speeds. In parallel, the lower inductance reduces the reactance and the stator impedance, and with less voltage dropped across the stator, more voltage is available to drive the machine faster at a higher torque, as seen in the torque profile above. The Coil Driver is applied to new motor designs as the base motor needs to be connected in a required way. However, it does not alter the fundamental design of the motor.

With the innovative foundation of the Coil Driver’s topology and advanced algorithms, the Company has been able to develop the BCS. The Company is optimistic the BCS can become a market leader in second- life battery energy storage solutions. The upfront cost for batteries is one of the major roadblocks to mass- market electric vehicle and electric technology adoption. In short, “second life” use consists of reusing a battery which no longer meets the requirements of one application but can still be used for a less-demanding application. Exro's BCS technology applies the principle of managing "energy" as it converts at the individual cell level to lithium-ion batteries. Its topology of the system and intelligent algorithms control the battery cells at an individual level to extend life. For example, the new BCS when fully commercialized, will allow for constant monitoring and manipulation of energy inflows and outflows, at rates of up to 100,000 manipulations per second. By utilizing the Company's technology to manage the charge and discharge of energy at the individual cell level of a lithium-ion battery, Exro aims to improve battery performance and efficiencies, which could result in longer usage and a second life battery application.

Exro has built an intellectual property base and intends to protect and commercialize new innovations. It is Exro’s intent to either manufacture its inverters when the quantity can be supported by its low volume manufacturing facility capacity or license its technology where applicable for high volume manufacturing. It will also consider outsourcing and engaging in manufacturing partnerships to accelerate supply to customers where necessary. Exro believes this business model is scalable, requiring much lower capital investment than building a full high-volume manufacturing business. This approach offers the opportunity to address several market segments concurrently, incrementally and in rapid succession by building on earlier success. Exro will work closely with development partners and customers to integrate its technology into their products and develop new intellectual property for Exro.

Exro’s technology and intellectual property is wholly owned in five patent families providing or seeking global protection in strategically important countries. There are 25 issued patents as well as 5 published and 9 pending applications. Exro also uses trade secrets to protect proprietary software and algorithms.

Exro’s goal is to become profitable as quickly as possible without stunting growth. This will take place primarily through revenue generated from strategic partnerships which may manufacture the coil drivers through a rapid assembly line in the short-term and mid-term, and then licensing or utilizing manufacturing partners for the Company’s technology in the long-term.

Exro’s future will be focused on securing and processing strategic partnership arrangements. It is the Company’s long-term goal to evolve every collaboration into a commercial licensing arrangement. The central purpose of a collaboration will be to determine the economic benefits when the Company’s technology is integrated into an electric motor and/or a generator or battery for a particular application. This process will become more systematized as third-party commercial case studies demonstrate efficiencies in target applications.

Exro has nine ongoing key projects:

It is cautioned that not all aforementioned projects will turn in to orders and generating revenue. These nine key partnerships are to demonstrate the scalability and versatility of Exro’s technology. Once the technology is proven by Exro and validated by a partner as per requirements, active discussions around

commercial viability begins. Then the partner can determine to place purchase orders. Revenue is generated once the finished products are shipped to the partner. Exro continues discussions with several potential commercial customers to explore a variety of mobility applications. The Company continues to evaluate customer provided data, which helps us to determine the optimal fit for Exro and our partners.

Exro competes with other manufacturers of electric motors and battery management companies globally to innovate and improve electric motor efficiency, reliability and output and battery management systems. Exro’s technology offers a unique advantage in the drive for ever-higher efficiency in the rotating electric machine and power electronics space. Real-time coil switching improves machine efficiency at the source and delivers a higher quality signal to the power electronics resulting in benefits as described above. The multiplicity of existing and often innovative machine and power electronics offerings work around the limitation of a single configuration in electric machines.

Coil switching in response to operating conditions has been made practical by faster, cheaper semiconductor switches and processors, combined with novel circuit architecture and switching algorithms. Exro has strong intellectual property protection to exploit this technology.

Critically, Exro’s technology is a unique improvement to electric machine system performance that will enhance most of the high efficiency products available today and add new benefits in fault tolerance, eliminate additional components, and reduce complexity and costs. We are therefore in a position to view potential competitors as potential licensee partners.

As is typical for a development-stage technology company, Exro relies on self-developed patents as a major component of our intellectual property portfolio. Exro’s future will be focused on securing and processing strategic partnership arrangements and licensing agreements. It is the Company’s goal to evolve every collaboration into a commercial licensing arrangement.

As Exro’s technologies become integrated into third-party products, protection of Exro’s intellectual technology will be key. Exro’s technology and intellectual property is wholly-owned in six patent families providing protection in strategically important countries. There are 25 granted patents, 9 pending and 5 published applications. The following table provides the particulars of Exro’s issued patents.

While the current labour market in the industry is highly competitive, the Company expects to continue to be able to attract and maintain appropriately qualified employees for the remainder of fiscal 2019 and into fiscal 2020.

An investment in our common shares involves a high degree of risk. You should carefully consider the following factors and other information in this prospectus before deciding to invest in our company. If any of the following risks actually occur, our business, financial condition, results of operations and prospects for growth would likely suffer. As a result, you could lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may materially and adversely affect our business, financial condition and results of operations. See also “Cautionary Statement Regarding Forward-Looking Statements.”

The outbreak of the coronavirus ("COVID-19") pandemic has negatively impacted, and may continue to negatively impact, our plans and activities. We may face disruption to operations, supply chain delays, travel and trade restrictions and impact on economic activity in affected countries or regions can be expected and can be difficult to quantify. The pandemic represents a serious threat to maintaining a skilled workforce industry and could be a health-care challenge for us. There can be no assurance that our personnel or the personnel of our collaborating partners and suppliers will not be impacted by the COVID- 19 disease and ultimately that the we would see our workforce productivity reduced or incur increased medical costs/insurance premiums as a result of these health risks. Additional cybersecurity risks exist due to personnel working remotely. In addition, the COVID-19 pandemic has created a dramatic slowdown in the global economy. The duration of the COVID-19 outbreak and the resultant travel restrictions, social distancing, government response actions, business closures and business disruptions, can all have an impact on our operations and access to capital. There can be no assurance that we will not be impacted by adverse consequences that may be brought about by the COVID-19 pandemic on global financial markets, which may include reductions in share prices and financial liquidity that could in turn severely limit the financing capital available.

We are an early-stage business venture focused on electric motor power electronics and battery control technology, and we are currently pre-revenue. We are therefore subject to many of the risks common to early-stage enterprises, including under-capitalization, cash shortages, limitations with respect to personnel, financial, and other resources, a history of losses, and lack of revenues or profits. There is no assurance that we will be successful in achieving a return on your investment, and the likelihood of success must be considered in light of our early stage of operations.

Since inception, we have accumulated net losses. We incurred net losses of $10,969,454, $4,665,031 and $3,127,345 in the fiscal years ended December 31, 2020, 2019 and 2018, respectively. Management expects to continue to incur substantial operating losses unless and until such time as product sales generate sufficient revenues to fund continuing operations.

Operating results for future periods are subject to numerous uncertainties, and it cannot be assured that we will achieve or sustain profitability. Our prospects must be considered in light of the risks encountered by companies in the early stage of development, particularly companies in new and rapidly evolving markets. Future operating results will depend upon many factors, including, but not limited to, success in attracting necessary financing and in establishing credit or operating facilities, ability to develop and commercialize existing and new products, ability to successfully market our products and attract repeat customers, ability to control operational costs, and ability to retain motivated and qualified personnel. It cannot be assured that we will successfully address any of these risks.

If the future revenue from sales of our power electronic, coil driver and battery control products (or licensing thereof), if any, is not sufficient to cover our cash requirements, we will need to raise additional funds through the sale of equity or other securities, or the issuance of debt. Financing may not be available at terms that are acceptable to us, if at all.

Our ability to obtain the necessary financing for our business is subject to a number of factors, including general market conditions and investor acceptance of our business plan. These factors may make the timing, amount, terms and conditions of such financing unattractive or unavailable to us. If we are unable to raise sufficient funds, we will have to significantly reduce our spending, delay or cancel our planned activities, or substantially change our current operations and plans in order to reduce our cost structure.

Our competitors, many of which have raised or who have access to significant capital, may be able to compete more effectively in our markets given their access to capital, if our access to capital does not improve or is further limited. We might not be able to obtain any funding, and we might not have sufficient resources to conduct our business as projected, both of which could mean that we would be forced to curtail or discontinue our operations.

We are still in the early stages of developing our marketing and sales capabilities. For any products we intend to introduce into the market, we will be required, at least initially, to enter into collaborations with customers and partners to perform these services. There can be no assurance that we will be able to enter into such arrangements on acceptable terms or at all. Any revenue we receive will depend upon the efforts of our customers and/or partners and there can be no assurance that our customers and/or partners will establish adequate sales and distribution capabilities or be successful in gaining market acceptance of any product. If we are not successful in commercializing any products in the future, either on our own or with our customers and/or partners, our business, financial condition and results of operations could be materially adversely affected.

We, on our own or in collaboration with partners, are involved in various projects to commercialize our technology. There is inherent risk in project execution due to the structure of the project, which involves several parties undertaking specific work in different geographic locations and having to coordinate in real time.

Our business depends on collaborating partners. Currently, our main collaborating partners include: Land Electric Motorcycles, SEA Electric, Aurora Powertrains, Zero Motorcycles, Heinzmann, Potencia Industrial and Clean Seed Capital Group. We anticipate that the collaborating partners will perform and deliver on development targets as agreed and planned, although there is a risk that they won’t, and we operate under the constraint that the partner is not under our control.

With the technology currently in the commercialization phase, there is a risk that the technology will not work as expected, particularly in vehicle reliability testing, and therefore will never be successfully commercialized, meaning that we may never receive revenues or a return on our technology development.

Technical risks are inherent in the development and commercialization process. An immature technology could present unexpected challenges that exceed the planned time or financial resources to overcome. There can be no guarantee that we will be able to overcome the technical risks associated with the development of our technology.

We currently carry insurance to protect our assets, operations and employees. While we believe insurance coverage can adequately address many of the material risks to which our business may be exposed and is adequate and customary in our current state of operations, such insurance is subject to coverage limits and exclusions and may not be available for all risks and hazards to which we may become exposed. In addition, no assurance can be given that such insurance will be adequate to cover our liabilities or will be generally available in the future or, if available, that premiums will be commercially justifiable. If we were to incur substantial liability and such damages were not covered by insurance or were in excess of policy limits, or if we were to incur such liability at a time when we are not able to obtain liability insurance, our business, results of operations and financial condition could be materially adversely affected.

Even if our product development proves to be successful, our ability to generate significant revenue and profits will depend on the acceptance of our products by our customers and end users of the products, such as companies or individuals purchasing vehicles incorporating our technology. The market acceptance of any product depends on a number of factors, including but not limited to awareness of a product’s availability and benefits, the price and cost-effectiveness of the product relative to competing products, general competition, and the effectiveness of marketing and distribution efforts. Any factors preventing or limiting the market acceptance of our technology could have a material adverse effect on our business, results of operations and financial condition.

In the event of a failure of a future product incorporating our technology, such as a recreational vehicle or truck, we may be subject to potential product liability lawsuits. Under certain circumstances, our customers may be required to recall or withdraw the products incorporating our technology. Even if a situation does not necessitate a recall or market withdrawal, product liability claims may be asserted against us. Even if a product liability claim is unsuccessful, the negative publicity surrounding any assertion that the products caused illness or physical harm could adversely affect our reputation and brand equity.

Our business prospects and results of operations could be adversely affected by general conditions in the global economy and in the global financial markets. A severe or prolonged economic downturn, such as the recent global financial crisis, could result in a variety of risks to our business, including weaker demand for our product candidates and impairment of our ability to raise additional capital when needed on acceptable terms, if at all. A weak or declining economy could also strain our suppliers, possibly resulting in supply disruption, or cause our customers to delay making payments for our services. Any of the foregoing could harm our business, and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business.

Anticipated growth in our business will place a significant strain on our managerial, operational and technical resources. We expect operating expenses and staffing levels to continue to increase in the

future. To manage such growth, we must expand our operational and technical capabilities and manage our employee base while effectively administering multiple relationships with various third parties. There can be no assurance that we will be able to manage our expanding operations effectively. Any failure to properly manage our expansion, implement cohesive management and operating systems, and add resources on a cost-effective basis could have a material adverse effect on our business and results of operations. Risks that we face in undertaking this expansion include:

Unexpected challenges during product development are inherent in new technology, in that an early stage technology could present unexpected challenges that exceed the allocated resources. We will seek to reduce the probability of this occurrence by careful project management.

We expect our operating expenses to increase as we implement initiatives to continue to grow our business. If we do not achieve revenues to offset these expected operating expenses, we will never be profitable, which would limit our ability to grow.

We intend to continue to hire a number of additional talents, including a variety of engineering specialties. There is significant competition for individuals with experience manufacturing and servicing electric vehicles, and we may not be able to attract, assimilate, train or retain additional highly qualified personnel in the future. The failure to attract, integrate, train, motivate and retain these additional employees could seriously harm our business and prospects.

The technology industry is characterized by rapid technological developments and a high degree of competition. Access to patents and other protection for technology and products, the ability to commercialize technological developments, access to necessary capital, access to market channels and the ability to obtain necessary approvals for testing, manufacturing and commercialization will impact our potential success.

We will be competing with other technology firms in the clean technology space or with other companies with similar technologies. These companies, as well as academic institutions, government agencies and private research organizations, also compete with us in research and development, product development, and market and brand development. Additionally, these companies all compete for highly qualified scientific personnel and consultants, and capital from investors.

Timing of the market introduction of our technology or of competitors' technologies or products may be an important competitive factor. Accordingly, the relative speed with which we can complete project development, conduct appropriate safety testing and manufacture, will also be determining factors in our ability to compete successfully in the markets we enter.

Significant developments in alternative technologies, such as advanced diesel, ethanol, fuel cells or compressed natural gas, or improvements in the fuel economy of the internal combustion engine, may materially and adversely affect our business and prospects in ways we do not currently anticipate. For example, fuel which is abundant and relatively inexpensive in North America, such as compressed natural gas, may emerge as consumers' preferred alternative to petroleum-based propulsion. Any failure by us to develop new or enhanced technologies or processes, or to react to changes in existing technologies, could materially delay our development and introduction of new and enhanced power electronics products, which could result in the loss of competitiveness of our coil driver, decreased revenue and a loss of market share to competitors.

Our products contain numerous purchased parts which we source globally directly from suppliers, many of which are single-source suppliers, although we attempt to qualify and obtain components from multiple sources whenever feasible. Any significant increases in our production may require us to procure additional components in a short amount of time, and in the past we have also replaced certain suppliers because of their failure to provide components that met our quality control standards or our timing requirements. Many of our suppliers have either temporarily suspended their operations or scaled back their operations in order to comply with government and regulatory orders and to protect the health of their employees due to the COVID-19 global pandemic. At this point the ultimate timing, and whether our suppliers’ business and output will return to normal levels is unknown and uncertain. There is no assurance that we will be able to secure additional or alternate sources of supply for our components or develop our own replacements in a timely manner, if at all. If we encounter unexpected difficulties with key suppliers, and if we are unable to fill these needs from other suppliers, we could experience production delays and potential loss of access to important technology and parts for producing, servicing and supporting our products.

This limited, and in many cases single source, supply chain exposes us to multiple potential sources of delivery failure or component shortages for production of our products. Furthermore, unexpected changes in business conditions, materials pricing, labor issues, wars, governmental changes, and natural disasters could also affect our suppliers' ability to deliver components to us on a timely basis. For example, there is currently a global shortage of semiconductor chip products. Many suppliers are not able to fulfill orders on short notice resulting in long lead times for ordering these components, often at higher price points. The loss of any single or limited source supplier or the disruption in the supply of components from these suppliers could lead to product design changes and delays in product deliveries to our customers, which could hurt our relationships with our customers and result in negative publicity, damage to our brand and a material and adverse effect on our business, prospects, financial condition and operating results.

Changes in our supply chain may lead to an increased cost for our products. We have also experienced cost increases from certain of our suppliers in order to meet our quality targets and timelines as well as due to our design changes, and we may experience similar cost increases in the future. Certain suppliers have sought to renegotiate the terms of supply arrangements. Additionally, we are negotiating with existing suppliers for cost reductions and are seeking new and less expensive suppliers for certain parts. If we are unsuccessful in our efforts to control and reduce supplier costs, our operating results will suffer.

There is no assurance that our suppliers will be able to sustainably and timely meet our cost, quality and volume needs. Furthermore, if the scale of our vehicle production increases, we will need to accurately forecast, purchase, warehouse and transport to our manufacturing facilities components at much higher volumes. If we are unable to accurately match the timing and quantities of component purchases to our actual needs, or successfully manage our inventory to accommodate the increased complexity in our supply chain, we may incur unexpected production disruption, storage, transportation and write-off costs, which could have a material adverse effect on our financial condition and operating results.

We may be unable to forecast and respond to advances in electric powertrain and battery technologies and, as a result, may suffer a decline in our competitive position. Any failure to forecast and respond to advances in electric power train technology would result in a decline in our competitive position which would materially and adversely affect our business, prospects, operating results and financial condition. Our research and development efforts may not be sufficient to adapt to changes in electric power train technology. As technologies change, we plan to upgrade or adapt our technology to continue to provide our customers with the latest in electric power train technology. However, our coil driver and related power electronics technology may not compete effectively with alternatives if we are not able to source and integrate the latest technology into our customer products at a competitive price. For example, we do not manufacture battery cells or drive motors so we may be required to adapt our coil driver technology to keep up with the introduction of new motors or batteries.

Our operations and performance depend significantly on economic conditions. The COVID-19 global pandemic and resulting government health regulations have resulted in significant reductions in global economic output and have negatively impacted global economic conditions. The ultimate impact and duration of current negative global economic conditions are highly uncertain. Uncertainty about global economic conditions could result in customers postponing purchases of our products and services in response to tighter credit, unemployment, negative financial news and/or declines in income or asset values and other macroeconomic factors, which could have a material negative effect on demand for our products and services and, accordingly, on our business, results of operations or financial condition.

Climate change or natural disasters may exacerbate certain of the risks inherent in our manufacturing operations and supply chain. Climate change could result in increasing frequency and severity of weather- related events, resource shortages, changes in rainfall and storm patterns and intensities, water shortages and changing temperatures that may result in physical damage to our manufacturing facility or those of our suppliers and customers.

Such damage may result in disrupted operations, and it may be difficult for us to continue business for a substantial period of time, which could materially adversely impact our business, financial condition or operating results and could cause the market value of our Common Shares to decline. Furthermore, severe weather incidences may cause us to incur substantial extraordinary costs, including: costs to respond during the vent, to recover from the event and to possible modify existing or future infrastructure requirements to prevent recurrence. Climate changes could also disrupt our operations by impacting the availability and costs of materials needed for production and could increase insurance and other operating costs.

We believe that much of the present and projected demand for commercial zero-emission electric vehicles results from concerns about volatility in the cost of petroleum-based fuel, the dependency of the United States on oil from unstable or hostile countries, government regulations and economic incentives promoting fuel efficiency and alternative forms of energy, as well as the belief that poor air quality and climate change results in part from the burning of fossil fuels. If the cost of petroleum-based fuel decreased significantly, or the long-term supply of oil in the United States improved, the government may eliminate or modify its regulations or economic incentives related to fuel efficiency and alternative forms of energy. If there is a change in the perception that the burning of fossil fuels does not negatively impact the environment, the demand for commercial zero-emission electric vehicles could be reduced, and our business and revenue may be harmed. Diesel and other petroleum-based fuel prices have been extremely volatile, and we believe this continuing volatility will persist. Lower diesel or other petroleum-based fuel prices over extended periods of time may lower the current perception in government and the private sector that cheaper, more readily available energy alternatives should be developed and produced. If diesel or other petroleum-based fuel prices remain at deflated levels for extended periods of time, the demand for commercial electric vehicles may decrease, which could have an adverse effect on our business, prospects, financial condition and operating results.

We rely upon information technology systems and networks, some of which are managed by third-parties, to process, transmit and store electronic information, and to manage or support a variety of business processes and activities, including supply chain management, manufacturing, invoicing and collection of payments from our customers. Additionally, we collect and store sensitive data, including intellectual property, proprietary business information, the proprietary business information of our suppliers, as well as personally identifiable information of our employees, in data centers and on information technology systems. The secure operation of these information technology systems, and the processing and maintenance of this information, is critical to our business operations and strategy. Despite security measures and business continuity plans, our information technology systems and networks may be vulnerable to damage, disruptions or shutdowns due to attacks by hackers or breaches due to errors or malfeasance by employees, contractors and others who have access to our networks and systems, or other disruptions during the process of upgrading or replacing computer software or hardware, hardware failures, software errors, third-party service provider outages, power outages, computer viruses, telecommunication or utility failures or natural disasters or other catastrophic events. The occurrence of any of these events could compromise our systems and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability or regulatory penalties under laws protecting the privacy of personal information, disrupt operations and reduce the competitive advantage we hope to derive from our investment in technology. Our insurance coverage may not be available or adequate to cover all the costs related to significant security attacks or disruptions resulting from such attacks.

Any product recall by our customers using our coil driver or battery control technology in the future may result in adverse publicity, damage to our brand and may adversely affect our business, prospects, operating results and financial condition. We may at various times, voluntarily or involuntarily, initiate a recall if any of our electric vehicle components prove to be defective. Such recalls, voluntary or involuntary, involve significant expense and diversion of management attention and other resources,

which would adversely affect our brand image in our target markets and could adversely affect our business, prospects, financial condition and results of operations.

We may become subject to product liability or warranty claims, which could harm our business, prospects, operating results and financial condition. For example, the automobile industry experiences significant product liability claims and we face inherent risk of exposure to claims in the event our coil driver and other power electronic products do not perform as expected or malfunction resulting in personal injury or death. Our risks in this area are particularly pronounced as our coil driver products use technologically complex software algorithms to operate. A successful product liability claim against us could require us to pay a substantial monetary award. Moreover, a product liability claim could generate substantial negative publicity about our vehicles and business which would have a material adverse effect on our brand, business, prospects and operating results.

Our business and prospects heavily depend on our ability to develop, maintain and strengthen the Exro brand. Any failure to develop, maintain and strengthen our brand may materially and adversely affect our ability to sell our planned products and technology. If we are not able to establish, maintain and strengthen our brand, we may lose the opportunity to expand our customer base. Promoting and positioning our brand will depend significantly on the ability of our technology and products to meet or exceed partner and customer expectations. In addition, we expect that our ability to develop, maintain and strengthen the Exro brand will also depend heavily on the success of our marketing efforts. To date we have limited experience with marketing activities as we have relied primarily on the internet, word of mouth and attendance at industry trade shows to promote our brand. To further promote our brand, we may be required to change our marketing practices, which could result in substantially increased advertising expenses. We operate in a competitive industry, and we may not be successful in building, maintaining and strengthening our brand. Many potential competitors, particularly automobile motor and/or manufacturers headquartered in the United States, Japan and the European Union have greater name recognition, broader customer relationships and substantially greater marketing resources than we do. If we do not develop and maintain a strong brand, our business, prospects, financial condition and operating results will be materially and adversely impacted.

We directly and indirectly depend upon other companies with unionized work forces, such as parts suppliers and trucking and freight companies, and work stoppages or strikes organized by such unions could have a material adverse impact on our business, financial condition or operating results. If a work stoppage occurs within our business, or in one of our key suppliers, it could delay the manufacture and sale of our coil driver and battery control products and have a material adverse effect on our business, prospects, operating results and financial condition.

All coil driver, battery and power electronics products sold must comply with federal, state and provincial motor vehicle safety standards. In both Canada and the United States vehicles that meet or exceed all federally mandated safety standards are certified under the federal regulations. In this regard, Canadian and U.S. motor vehicle safety standards are substantially the same. Rigorous testing and the use of

approved materials and equipment are among the requirements for achieving federal certification. Failure by us to have our current or future products satisfy motor vehicle standards would have a material adverse effect on our business and operating results.

Products derived from our coil driver or battery control technology may contain defects in design and manufacture that may cause them not to perform as expected or that may require repair. For example, our coil driver products use technologically complex software algorithms to operate. Given the inherent complexity of this software, it may contain defects and errors which would adversely impact the operation of customers’ vehicles and related mobility products. While we have performed extensive testing of our coil driver technology, we currently have a limited frame of reference to evaluate the performance of vehicles in the hands of our customers under a range of operating conditions.

Our performance will be largely dependent on the talents and efforts of highly skilled individuals. The loss of one or more members of our management team or other key employees or consultants could materially harm our business, financial condition, results of operations and prospects. Our future success depends on our continuing ability to identify, hire, develop, motivate and retain highly qualified personnel for all areas of our organization. We face competition for personnel and consultants from other companies, universities, public and private research institutions, government entities and other organizations. If we do not succeed in attracting excellent personnel or in retaining or motivating them, we may be unable to grow effectively. In addition, our future success will depend in large part on our ability to retain key consultants and advisors. We cannot assure that any skilled individuals will agree to become an employee, consultant, or independent contractor of our company. Our inability to retain their services could negatively impact our business and our ability to execute our business strategy.

Our success will depend in part on our ability and that of our corporate collaborators to obtain, enforce and protect patents and maintain trade secrets in Canada, the United States and in other countries. There is a risk that we may not be able to obtain and enforce patents and maintain our trade secrets.

Patent law relating to the scope and enforceability of claims in the fields in which we operate is still evolving. There can be no assurance that patents will issue from any of the pending patent applications. In addition, there may be issued patents and pending applications owned by others directed to technologies relevant to our or our corporate collaborators’ research, development and commercialization efforts. There can be no assurance that our or any corporate collaborators’ technology can be developed and commercialized without a license to such patents or that such patent applications will not be granted priority over patent applications filed by us or one of our corporate collaborators.

Our commercial success depends significantly on our ability to operate without infringing the patents and proprietary rights of third parties, and there can be no assurance that our and our corporate collaborators’ technologies and products do not or will not infringe the patents or proprietary rights of others.

There can be no assurance that third parties will not independently develop similar or alternative technologies to ours, duplicate any of our technologies or the technologies of our corporate collaborators

or our licensors, or design around the patented technologies developed by us, our corporate collaborators or our licensors. The occurrence of any of these events would have a material adverse effect on our business, financial condition and results of operations.

Litigation may also be necessary to enforce patents issued or licensed to us or our corporate collaborators or to determine the scope and validity of a third party’s proprietary rights. We could incur substantial costs if litigation is required to defend ourselves in patent suits brought by third parties, if we participate in patent suits brought against or initiated by our corporate collaborators or if we initiate such suits, and there can be no assurance that funds or resources would be available in the event of any such litigation. An adverse outcome in litigation or an interference to determine priority or other proceeding in a court or patent office could subject us to significant liabilities, require disputed rights to be licensed from other parties or require us or our corporate collaborators to cease using certain technology or products, any of which may have a material adverse effect on our business, financial condition and results of operations.

Others, including our competitors, may hold or obtain patents, copyrights, trademarks or other proprietary rights that could prevent, limit or interfere with our ability to make, use, develop, sell or market our products and services, which could make it more difficult for us to operate our business. From time to time, the holders of such intellectual property rights may assert their rights and urge us to take licenses, and/or may bring suits alleging infringement or misappropriation of such rights. We may consider the entering into licensing agreements with respect to such rights, although no assurance can be given that such licenses can be obtained on acceptable terms or that litigation will not occur, and such licenses could significantly increase our operating expenses. In addition, if we are determined to have infringed upon a third party's intellectual property rights, we may be required to cease making, selling or incorporating certain components or intellectual property into the goods and services we offer, to pay substantial damages and/or license royalties, to redesign our products and services, and/or to establish and maintain alternative branding for our products and services. In the event that we were required to take one or more such actions, our business, prospects, operating results and financial condition could be materially adversely affected. In addition, any litigation or claims, whether or not valid, could result in substantial costs, negative publicity and diversion of resources and management attention.

We are subject to various federal, provincial and local laws and regulations affecting corporations and the trading of our securities including, but not limited to: Business Corporations Act (British Columbia), Securities Act (British Columbia) and the Income Tax Act (Canada), Income Tax Act (British Columbia), as well as various regulatory bodies such as the BC Securities Commission, the Toronto Stock Exchange, the OTCQB operated by OTC Markets Group, and upon the completion of this offering, the Listing Rules of the Nasdaq Capital Market. In the event we are unable to remain in compliance with all of the regulations applicable to our company and operations it could negatively impact our business and our ability to execute our business strategy.

Further, as our technology is commercialized, vehicles and other products using our technology may be subject to a variety of laws and regulations both domestic and international. In the event we are unable to comply with any laws and regulations affecting such products, it may have a negative material impact on our business, operations, and financial performance.

We are subject to numerous environmental and health and safety laws, including statutes, regulations, bylaws and other legal requirements. These laws relate to the generation, use, handling, storage, transportation and disposal of regulated substances, including hazardous substances (such as batteries), dangerous goods and waste, emissions or discharges into soil, water and air, including noise and odors (which could result in remediation obligations), and occupational health and safety matters, including indoor air quality. These legal requirements vary by location and can arise under federal, provincial, state or municipal laws. Any breach of such laws, regulations or requirements would have a material adverse effect on our company and its operating results.

Existing and proposed changes in the laws and regulations affecting public companies may cause us to incur increased costs as we evaluate the implications of new rules and respond to new requirements. Failure to comply with new rules and regulations could result in enforcement actions or the assessment of other penalties. New laws and regulations could make it more difficult to obtain certain types of insurance, including director’s and officer’s liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage, to the extent that such coverage remains available.

The impact of these events could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or as executive officers. We may be required to hire additional personnel and utilize additional outside legal, accounting and advisory services, all of which could cause our general and administrative costs to increase beyond what we currently have planned. Although we evaluate and monitor developments with respect to new rules and laws, we cannot predict or estimate the amount of the additional costs we may incur or the timing of such costs with respect to such evaluations and/or compliance and cannot provide assurances that such additional costs will render us compliant with such new rules and laws.

Our common shares are quoted on the OTCQB operated by OTC Markets Group and listed on the TSX Venture Exchange (“TSX Venture”). Trading of shares on the OTCQB or TSX Venture is often characterized by wide fluctuations in trading prices, due to many factors that may have little to do with our operations or business prospects. We have applied for listing of our common shares on the Toronto Stock Exchange (TSX) under the symbol "EXRO." No assurance can be given that our application will be approved.

The volume of trading in our common shares has been high and the share price has fluctuated significantly. This volatility could depress the market price of our common shares for reasons unrelated to operating performance. The market price of our common shares could decline due to the impact of any of the following factors upon the market price of our common shares:

Many of these factors are beyond our control. The stock markets in general, and the market price of common shares of companies operating within the electric mobility sector in particular, have historically experienced extreme price and volume fluctuations. These fluctuations often have been unrelated or disproportionate to the operating performance of these companies. These broad market and industry factors could reduce the market price of our common shares, regardless of our actual operating performance.

Our common shares are quoted on the OTCQB operated by OTC Markets Group and listed on the TSX Venture. Trading of shares on the OTCQB or TSX Venture is often more sporadic than the trading of securities listed on a stock exchange like the TSX. While we have applied for listing of our common shares on the TSX under the symbol "EXRO", no assurance can be given that our application will be approved. Our common shares may be "thinly-traded", meaning that the number of persons interested in purchasing our common shares at or near bid prices at any given time may be relatively small or non-existent. This situation may be attributable to a number of factors, including that we are relatively unknown to stock analysts, stockbrokers, institutional investors and others in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they may be reluctant or unwilling to follow an unproven company such as ours or purchase or recommend the purchase of our shares until such time as we have a longer operating history. As a result, there may be periods of time when trading activity in our shares is minimal or non-existent as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. A broad or active public trading market for our common shares may not develop or, if one were to develop, may not be sustained.

The trading market for our securities will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our market or our competitors. We currently have research coverage from two securities analysts in Canada. We do not have any control over these analysts, and we cannot provide any assurance that analysts will cover us or provide favorable coverage. If any of the analysts who may cover us adversely change their recommendation regarding our shares, or provide more favorable relative recommendations about our competitors, the market value of our securities would likely decline. If any analyst who may cover us were to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the price of our common shares and warrants and our trading volume to decline.

Sales of a substantial number of shares of our common shares in the public markets, or the perception that these sales might occur, could depress the market price of our common shares and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect

that sales may have on the prevailing market price of our common shares. Sales of shares by these shareholders could have a material adverse effect on the trading price of our common shares. We intend to register the offering, issuance, and sale of all common shares that we may issue under our equity compensation plans. Once we register these shares, they can be freely sold in the public market upon issuance, subject to volume limitations applicable to affiliates and the lock-up agreements.

A prolonged and substantial decline in the price of our common shares could result in a reduction in the liquidity of our common shares and a reduction in our ability to raise capital. Because we plan to acquire a significant portion of the funds we need in order to conduct our planned operations through the sale of equity securities, a decline in the price of our common shares could be detrimental to our liquidity and our operations because the decline may cause investors not to choose to invest in our shares. If we are unable to raise the funds we require for all our planned operations and to meet our existing and future financial obligations, we may be forced to reallocate funds from other planned uses and may suffer a significant negative effect on our business plan and operations, including our ability to develop new products and continue our current operations. This could cause our business to suffer and could jeopardize our ability to continue operations.

The market for our common shares may have, when compared to seasoned issuers, significant price volatility, and we expect that our share price may continue to be more volatile than that of a seasoned issuer for the foreseeable future. In the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. We may, in the future, be the target of similar litigation. Securities litigation could result in substantial costs and liabilities and could divert management's attention and resources away from the day to day business operations.

We intend to retain any future earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on our common shares in the near future. The declaration, payment and amount of any future dividends will be made at the discretion of our board of directors and will depend upon, among other things, the results of operations, cash flows and financial condition, operating and capital requirements, and other factors that the board of directors considers relevant. There is no assurance that future dividends will be paid, and if dividends are paid, there is no assurance with respect to the amount of any such dividend. Unless we pay dividends, our shareholders will not be able to receive a return on their shares unless they sell them.

There are no restrictions on Exro’s ability to pay dividends. The declaration of dividends on our Common Shares is within the discretion of the board of directors and will depend on the assessment of, among other factors, capital requirements, earnings, and the operating and financial condition of the Company.

On July 25, 2017, BioDE declared a dividend to distribute 450,041 common shares of BioHEP Ventures Ltd. to the shareholders of BioDE as of the record date of July 25, 2017, the day prior to the completion of the amalgamation with Exro Technologies Inc. (a predecessor entity to the Company).

The authorized share capital of the Company is an unlimited number of Common Shares without par value. As at December 31, 2020, the Company had 117,445,808 Common Shares issued and outstanding. As of the date of this Annual Information Form, the Company had 120,143,656 Common Shares issued and outstanding. All of the Common Shares are of the same class and, once issued, rank equally. The holders of Common Shares are entitled to dividends, if, as and when declared by the board of directors, to one vote per Common Share at meetings of the shareholders of the Company and, upon liquidation, to share equally in such assets of the Company as are distributable to the holders of Common Shares. There are no pre- emptive or conversion rights.

Disinterested Shareholder Approval is required where the Option Plan could result in: (a) the aggregate number of Shares reserved for issuance under options granted to Insiders exceeding 10% of the outstanding Shares; (b) any optionee is granted options exceeding 5% of the outstanding Shares in a 12 month period; (b) insiders are granted options exceeding 10% of Shares in a 12 month period; or (c) the Company reduces the exercise price of an outstanding option held by an Insider.

Options over no more than 2% of Shares in the aggregate can be granted to persons conducting ‘Investor Relations Activities’ in any 12 month period, and options over no more than 2% of Shares can be granted to any one consultant in any 12 month period.

Options will expire 90 days after the optionee ceases to provide services to the Company or an affiliate, except in the case of death or dismissal for cause. In the case of death, an optionee’s vested options will remain exercisable by the optionee’s estate until the earlier of one year after the optionee’s death and the original expiry date of the option. Where an optionee is dismissed for cause, all options, vested and un- vested, will terminate immediately on the date of dismissal without any right of exercise.

The Board has the authority in its discretion to set terms of vesting, if any (which may be time-based vesting terms or performance-based vesting terms) and the exercise price of each option, which must be no less than the Discounted Market Price (as defined in the Option Plan). Subject to the rights of holders of existing options, the Board has the discretion to amend, suspend, terminate or discontinue the Option Plan.

As at December 31, 2020, there were Options exercisable for 10,697,167 Common Shares outstanding. As of the date of this Annual Information Form, there were Options exercisable for 10,742,085 Common Shares outstanding.

On August 28, 2018, Exro issued 50,000 Warrants to Kent Thoresen pursuant to an independent consulting agreement. The Warrants issued to Mr. Thoresen have an exercise price of $0.40 per Common Share and expire August 28, 2021.

On October 29, 2018, Exro issued 100,000 Warrants to Welldunn Consulting Ltd. pursuant to a consulting agreement. The Warrants issued to Welldunn have an exercise price of $0.37 per Common Share and expire October 29, 2020.

On February 20, 2019, Exro issued 500,000 Warrants to NIG Systems Ltd., a private company controlled by Exro’s Chief Technology Officer, pursuant to an amendment to a consulting agreement. The Warrants issued to NIG have an exercise price of $0.30 per Common Share and expire June 20, 2024.

On March 22, 2019, Exro issued 572,635 Warrants as broker warrants in connection with the Company’s private placement. The Warrants issued have an exercise price of $0.35 per Common Share and expire March 22, 2020. As of the date of this Annual Information Form, 436,335 of these Warrants have been exercised.

On October 21, 2019, Exro issued 243,718 Warrants as broker warrants in connection with the first tranche of the Company’s private placement. The Warrants issued have an exercise price of $0.40 per Common Share and expire October 21, 2020. Subsequent to issuance, 12,950 of these Warrants were cancelled, leaving 230,768 outstanding as of the date of this Annual Information Form.

On October 30, 2019, Exro issued 19,600 Warrants as broker warrants in connection with the second tranche of the Company’s private placement. The Warrants issued have an exercise price of $0.40 per Common Share and expire October 30, 2020.

As at December 31, 2020, the Company had Warrants to purchase 2,900,326 Common Shares outstanding with a weighted average exercise price of $1.53. As of the date of this Annual Information Form, the Company had Warrants to purchase 1,885,561 Common Shares outstanding with a weighted average exercise price of $1.63.

The Company’s Common Shares are listed on the TSX Venture Exchange and trades under the symbol “EXRO”, and the OTCQB under the symbol “EXROF”. The following table sets out the high and low sale prices and the volume of trading of the Company’s Common Shares on the TSX Venture Exchange on a monthly basis for the Company’s fiscal year ended December 31, 2020. As of April 21, 2021, the closing price of the Company’s Common Shares was $3.94 per Common Share on the TSX Venture exchange.

The following table summarizes the issuance of Options and Warrants for the Company’s fiscal year ended December 31, 2020.

The following table provides the names, province or state and country of residence, position, and principal occupations of each executive officer and director of the Company. The term of each director expires on the date of our next annual meeting.

Except as disclosed herein, no director or executive officer of Exro is, as of the date of the Annual Information Form, or has been, within the 10 years preceding the date of this Annual Information Form, a director, chief executive officer or chief financial officer of any company, including Exro, that:

With respect to Daniel McGahn, in 2011, American Superconductor Corporation (“AMSC”) was subject to a class action securities litigation related to AMSC’s securities offering in November of 2010 in the United States District Court for the District of Massachusetts. AMSC, AMSC’s officers and directors (including Mr. McGahn) and AMSC’s underwriters were named as defendants in this litigation. In 2013 this class action was settled. The settlement was approved by the court. Mr. McGahn and other defendants denied any wrongdoing. No penalties or sanctions were imposed against Mr. McGahn pursuant to the settlement. In 2011 AMSC was subject to litigation related to derivative complaints with respect to the same securities offering in Superior Court for the Commonwealth of Massachusetts, Middlesex County. AMSC and AMSC’s officers and directors (including Mr. McGahn) were named as defendants in this litigation. Mr. McGahn and other defendants denied any wrongdoing. This litigation was settled in 2014. No sanctions or penalties were imposed against Mr. McGahn pursuant to that settlement.

Mark Godsy, the Executive Chairman of the Company, may have been considered a promoter of the Company within the two most recent completed financial years as a result of their role in founding Exro Technologies Inc. (a predecessor entity to the Company) and in relation to the amalgamation between BioDE, its wholly owned subsidiary 10889001 BC Ltd. and Exro Technologies Inc.

As of the date of this Annual Information Form, Mark Godsy beneficially owned, or controlled or directed, directly or indirectly, 4,128,221 Common Shares, comprising 3.4% of the issued and outstanding Common Shares.

Jill Bodkin acquired her financial literacy through her education and work. She obtained a BA from the University of Alberta and studied public administration the University of Syracuse in New York. Ms. Bodkin was a Corporate Finance partner in Ernst & Young from 1987 to 1996. She was also Deputy Minister of Financial Institutions from 1981 to 1987 and was Founding Chair of the British Columbia Securities Commission. She also served a term on the CICA Audit Standards Oversight Committee. Over the years, she has been serving on boards of directors of various public and private companies.

Frank Borowicz acquired his financial literacy through his education and work. He has over 35 years’ experience in conflict resolution, corporate governance, regulatory compliance, and risk management. A graduate of Harvard, Dalhousie and Loyola of Montreal, Mr. Borowicz was formerly a law professor at the University of Windsor and founding faculty member of the University of Victoria Law School. Mr. Borowicz is also a graduate of the Corporate Governance College of the Institute of Corporate Directors. He in addition to being Queen’s Counsel, he is an Honorary Member of the Institute of Chartered Accountants.

Eamonn Percy acquired his financial literacy through his education and work. He has more than 25 years of leadership experience with growing companies through technology commercialization, high growth and turnaround situations, in a variety of executive, general management and technical roles. Eamonn has held multiple executive and senior leadership roles with top global companies, including Powertech Labs (BC Hydro), Ballard Power Systems, Pirelli Cables, and Ford, and across multiple industries in multiple stages of growth. He also led the successful turnaround of two large global companies in the engineering and manufacturing sectors, returning both to significant profitability and strong working capital positions. He has significant board experience in the commercial, academic and regulatory sectors. Eamonn holds a Bachelor of Engineering (Electrical) from Lakehead University, a Dip. Tech. (Power) from BCIT, an MBA from the University of Toronto and has completed the Leading and Managing Change Executive Program at Stanford University.

At no time since the commencement of the Company’s most recently completed financial year was a recommendation of the Audit Committee to nominate or compensate an external auditor not adopted by the Board of Directors.

The Audit Committee has adopted specific policies and procedures for the engagement of non-audit services as part of its audit charter. The pre-approval requirement for such engagement is waived if (i) the aggregate amount of all non-audit services provided to the Company amounts to five percent or under of

the total amount of revenues paid by the Company to its external auditors during the fiscal year in which the non-audit services are provided and (ii) the services were not recognized by the Company at the time of the engagement to be non-audit services and (iii) the services are promptly brought to the attention of the Audit Committee by the Company and approved by the Audit Committee (or one or more members of the Audit Committee to whom that authority to approve has been delegated by the Audit Committee, subject to the pre-approval being presented to the first scheduled meeting of the Audit Committee after the approval) prior to the completion of the audit.

The following table provides the particulars of the external audit fees paid by the Company for the last two fiscal years. The Company completed a business combination by way of three-cornered amalgamation in August 2017 and related to that amalgamation, subsequently changed its year end from January 31 to December 31. On April 16, 2021, the Company changed its auditors from Dale Matheson Carr-Hilton Labonte LLP to PricewaterhouseCoopers LLP.

In the ordinary course of business, the Company and its subsidiaries may become involved in various legal, administrative, regulatory and other proceedings, actions, claims and inquiries relating to our business. There are no material pending legal proceedings or regulatory actions to which the Company is or is likely to be a party or of which any of its assets are or are likely to be the subject.

Directors and officers of the Company hold Common Shares and may be granted Options in the future. Other than as described elsewhere in this Annual Information Form, none of our directors, executive officers or shareholders, owning or exercising control or direction over more 10% of the Common Shares, or any associate or affiliate of the foregoing, has had any material interest, direct or indirect, in any transaction within the three most recently completed financial years or during the current financial year prior to the date of this Annual Information Form that has materially affected us or is reasonably expected to materially affect the Company.

The transfer agent and the registrar of the Common Shares is TMX Equity Transfer Services Inc., 650 West Georgia St., Suite 2700 Vancouver, BC V6B 4N9.

On April 16, 2021, the Company changed its auditors from Dale Matheson Carr-Hilton Labonte LLP to PricewaterhouseCoopers LLP. The auditor of the Company is PricewaterhouseCoopers LLP, 111 – 5th Avenue S.W., Calgary, Alberta T2P 5L3, as of the date of this Annual Information Form.

Dale Matheson Carr- Hilton Labonte LLP have prepared an independent auditor’s report dated April 6, 2021 in respect of the consolidated financial statements of the Company for the years ended December 31, 2020 and December 31, 2019. Dale Matheson Carr- Hilton Labonte LLP has advised that they are independent with respect to the Company within the meaning of the Code of Professional Conduct of the Chartered Professional Accountants of British Columbia.

The primary function of the Audit Committee (the “Committee”) is to assist the Board of Directors in fulfilling its financial oversight responsibilities by reviewing the financial reports and other financial information provided by the Company to regulatory authorities and shareholders, the Company’s systems of internal controls regarding finance and accounting and the Company’s auditing, accounting and financial reporting processes. Consistent with this function, the Committee will encourage continuous improvement of, and should foster adherence to, the Company’s policies, procedures and practices at all levels. The Committee’s primary duties and responsibilities are to:

The Committee shall be comprised of three directors as determined by the Board of Directors, the majority of whom shall be free from any relationship that, in the opinion of the Board of Directors, would interfere with the exercise of his or her independent judgment as a member of the Committee.

At least one member of the Committee shall have accounting or related financial management expertise. All members of the Committee that are not financially literate will work towards becoming financially literate to obtain a working familiarity with basic finance and accounting practices. For the purposes of the Company’s Charter, the definition of “financially literate” is the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can presumably be expected to be raised by the Company’s financial statements.

The members of the Committee shall be elected by the Board of Directors at its first meeting following the annual shareholders’ meeting. Unless a Chair is elected by the full Board of Directors, the members of the Committee may designate a Chair by a majority vote of the full Committee membership.

The Committee shall meet at least twice annually, or more frequently as circumstances dictate. As part of its job to foster open communication, the Committee will meet at least annually with the CFO and the external auditors in separate sessions.

To fulfill its responsibilities and duties, the Committee shall: