Exro Technologies Inc. — Capital/Financing Update 2025

May 17, 2025

FORM 51-102F3
MATERIAL CHANGE REPORT

Item 1 Name and Address of Company
Exro Technologies Inc ("Exro")
12 21 Highfield Circle SW
Calgary, AB T2G 5N6

Item 2 Date of Material Change
May 15, 2025

Item 3 News Release
The news release was disseminated on May 16, 2025 through Stockwatch and was filed on SEDAR (www.sedar.com).

Item 4 Summary of Material Change
Exro has received a funding commitment from a long-term institutional shareholder (the "Lender") to provide up to US$30 million pursuant to a senior secured loan facility (the "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 advisor (the "Strategic Advisor") who has been retained by the Company. The review is intended to evaluate a range of outcomes including strategic partnerships, capital restructuring, M&A opportunities, and other corporate transactions.

Item 5 Full Description of Material Change
Exro has received a funding commitment from the Lender to provide the 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 the Strategic Advisor, who has been retained by the Company. The review is intended to evaluate a range of outcomes including strategic partnerships, capital restructuring, M&A opportunities, and other corporate transactions.

The Facility is a secured, non-revolving, multiple-draw credit facility up to US$30 million. Funds will be advanced in milestone-based tranches, with the initial tranche of US$2 million expected to be advanced on May 20, 2025.

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 December 30, 2022 (the "Convertible Debentures"), or (2) issued a redemption notice pursuant to which the Convertible Debentures would be redeemed in exchange for shares.

The use of proceeds is working capital, implementation of the strategic plan, and retention of advisors and legal support. The facility is not convertible into equity. Subject to receipt of TSX approval, the Lender will be issued warrants to purchase up to 75 million common shares at a nominal price.

The milestones for advances under the Facility are as follows:

Milestones 1 – funds to be advanced no earlier than June 6, 2025
May 20, 2025	Establish initial operating plan for the Company acceptable to the Lender
	Establish initial 13 week Cash Flow acceptable to the Lender

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May 30, 2025	Engagement Letter(s) executed by Exro with such external advisors recommended by the Strategic Advisor and acceptable to the Lender
June 3, 2025	Holders of the Convertible Debentures consent to the postponement of security in favour of the Interim Lender or notices of redemption issued in respect of the Convertible Debentures
Milestones 2 – funds to be advanced no earlier than July 15, 2025
June 15, 2025	Execution of operating plan by Exro acceptable to the Lender
July 1, 2025	If not otherwise postponed to the Interim Lender per the terms of the Facility, conclusion of the redemption of the Convertible Debentures and issuance of common shares in the capital of Exro in payment thereof.
July 15, 2025	Evidence of active engagement with at least three (3) credible strategic partners in accordance with operating plan, as assessed by the Strategic Advisor
Milestone 3 – funds to be advanced no earlier than September 30, 2025
July 15, 2025	Execution of operating plan by Exro in a manner acceptable to the Lender
Sept 1, 2025	Execution of definitive contract(s) with credible strategic partners in accordance with operating plan, as assessed by the Strategic Advisor

Exro has C$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 (the "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; and 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% of par value plus 100% of accrued interest, with consideration being common shares issued at a share price based on the 5-day volume weighted average price of the shares for the five business days preceding issuance of the redemption notice.

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 ongoing focus on cost reductions and reallocation of resources to high-impact markets with stronger commercial traction and more efficient capital deployment.

5.2 Disclosure for Restructuring Transactions

Not applicable.

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Item 6 Reliance on subsection 7.1(2) or (3) of National Instrument 51-102
Not applicable.

Item 7 Omitted Information
Not applicable.

Item 8 Executive Officer
For further information, contact:
Ms. Susanne Ozdemir
Chief Executive Officer
Telephone: (587) 619-1517

Item 9 Date of Report
Dated this 16th of May, 2025

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