Exro Technologies Inc. (EXRO-X)

The company saw a big pop in 2021 on EV hype for the Coil Drivers it sells. It has never really had significant revenues or positive free cash flows. If EV demand booms the stock could do better, but overall we are not too interested here. EV's are integrated enough today that we would hope demand were higher. While it has displayed some growth, it is too small and not profitable. Additionally, the declining trends in EV demand have made it look less attractive contributing to the decline.
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He's owned this before and is watching it now. This year is pivotal: he wants to see their production ramp up and hit targets, and more contracts with bigger manufacturers.

EVs and power storage. Technology allows one system to increase both power and torque at reduced cost. Moved into the small commercial space, due to expand, so should see significant revenue ramp up. Partnership with LNR on e-axle for trucks.

Excellent management team that has been consistent.
Growth in electric tech for vehicles and battery storage. 
Deal announcement with Linamar.
Growth in business has been strong.
Expecting ramp up in production going forward. 

EXRO makes self-optimizing motors and generators, and the stock is up 55% in the past year, bringing market cap to $381M. But it has minimal sales ($11M expected this year), not much cash (net debt $6M) losses and negative cash flow (-$32M in the last 12 months). It is going to need more capital. Insiders own 3%. Still, the tech is interesting and has potential. The partnerships look good. It has some patents filed. We do note it recently paid a bond interest payment in shares, which highlights its relatively tight financial structure. We also note the share count has more than doubled in the past three years. Overall, there is a lot of risk here, and with market cap near $400M investors have VERY high expectations already. It is the type of stock that will trade on news, and could do well in a risk-on market. But in a market correction it might get hit hard. No doubt there is potential here, but also a lot of risk. We would prefer a bit more solid of a financial foundation before buying. 
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EPS of ($0.065) matched expectations and revenues of $1.81M doubled expectations of $0.9M. 
For the full-year the company generated sales of $2.2M, indicating its significant ramp up in revenues into the latter half of the year. Its revenue jump is attributable to the execution of engineering services agreements, however, its operating costs increased as a result of a higher headcount. The revenue jump is encouraging, however, its net less grew from ($24.6M) in the prior year to ($40.0M) in the most recent year. 
The company's balance sheet is OK and it continues to operate at a loss and with negative free cash flows. 
We would like to see the company accelerate its revenues faster than operating costs, and while its revenue growth and momentum look good, we would consider it to be a higher risk name at this point. 
We would be OK with this name as a high-risk name, while being mindful of its small-cap risks, significant unprofitability, and position sizing. 
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