Exro Shareholders File Class Action Alleging Misrepresentation of Revenue Projections

A group of shareholders is taking legal action against Exro Technologies, a Calgary-based electric vehicle (EV) tech firm, claiming that the company misrepresented revenue projections following its acquisition of SEA Electric earlier this year. The lawsuit, filed on Nov. 27, 2024, alleges that Exro made overly optimistic revenue forecasts in January, only to report a $225-million CAD net loss in Q3 2024. The plaintiffs, led by Ontario resident Allan Crosier, argue that there was no justification for the revenue projections made at the time.

The lawsuit names Exro, CEO Sue Ozdemir, chairman Rodney Copes, and the underwriters of Exro’s $55 million in financings this year as defendants. The plaintiffs claim that the merger with SEA Electric, which was announced in January, was not likely to generate the projected $200 million CAD in revenue for the year.

Exro has since revised its 2024 revenue projection to $28 million, just 14 percent of its original forecast in January. However, these allegations have not been proven in court. In response to the lawsuit, Exro released a statement disputing the claims and stating its intent to vigorously defend the suit.

Exro, founded in 2014, has developed an adaptive EV traction inverter and is listed on the Toronto Stock Exchange under the ticker EXRO. The company had previously claimed that its merger with SEA Electric would lead to profitability within 12 months of closing the transaction. However, financial filings obtained by BetaKit show that Exro suffered a significant net loss in Q3 2024, attributed to slower-than-expected EV market adoption and high operating costs.

As of the latest data, Exro’s stock has dropped to 16 cents per share on the TSX, down almost 90 percent from its 2024 peak of $1.33 CAD in January. The company has not responded to requests for comment from BetaKit.

Please note that the allegations in the lawsuit have not been confirmed in court. Stay tuned for updates on this developing story.