Calgary, Alberta--(Newsfile Corp. - March 11, 2025) - Eguana Technologies Inc. (TSXV: EGT) ("Eguana" or the "Company"), a leading developer and manufacturer of high-performance energy storage systems, provides various financial and corporate updates.
As outlined in the recent news release dated January 22, 2025, Eguana is managing near term liquidity and continues to pursue sales and cash collections. However, due to payment delays through January, the liquidity position of the Company remains tight. As previously noted, Eguana is working closely with its senior lender, who continues to be supportive, allowing the Company to defer the January 15 and February 15 2025 amortization payments with the lender. The Company is also pursuing options to put in place an additional forbearance agreement, for a period of time, to reduce the regular monthly amortization payment amount, more aligned with the Company's current liquidity position.
On February 21, 2025, the Company reached an agreement to defer the upcoming cash interest payment on its unsecured convertible debenture (the "Convertible Debenture"), originally due on March 1, 2025, to August 31, 2025. Interest payments on the Convertible Debenture due on March 1, 2024 and September 1, 2024, that were previously deferred as outlined in prior news releases, have also been deferred to August 31, 2025.
In February 2025, the Company closed a short-term bridge loan financing (the "Bridge Financing") in the principal amount of approximately $90,000, with certain lenders, including the Company's Chief Executive Officer and one member of the Board of Directors. A portion of the Bridge Financing was received in US dollars and a portion in Canadian dollars. The Bridge Financing is unsecured and will be used for general working capital and is intended to be a short-term gap measure to a potential future equity offering. Interest shall accrue on the principal amount at a rate of 4% per month. The principal amount of the Bridge Financing, together with interest accrued thereon, will become due and payable on May 1, 2025 (the "Maturity Date") and is intended to be converted into equity, based on similar terms of a future equity offering. If the Bridge Financing is repaid in cash, the repayments require the approval of the Company's senior lender. Any conversion to equity would be subject to the approval of the TSX Venture Exchange ("TSXV"). The lenders will not receive any other fees or commissions.
The portions of the Bridge Financing obtained from the Company's Chief Executive Officer and Board member constitute related-party transactions under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). This transaction is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 pursuant to sections 5.5(a) and 5.7(1)(a) of MI 61-101 as neither the fair market value of the transaction, nor the consideration paid to the lenders of the Bridge Financing, who are related parties of the Company, would exceed 25% of the Company's market capitalization.
On February 21, 2025, the Board of Directors granted incentive stock options to acquire up to an aggregate of 3,450,000 common shares, at a strike price of $0.05. Of the options granted, 1,650,000 have been granted to directors and executives of the Company.
The Company continues to explore potential alternatives to improve liquidity and enhance shareholder value as Eguana manages short-term liquidity. At present, there can be no assurance as to what, if any, further alternatives might be pursued by the Company, nor if the Bridge Financing will be adequate to meet all short-term obligations. The Company will disclose further details with respect to its review or actions taken if the Board of Directors has approved a transaction or the Company otherwise determines that further disclosure is warranted. The Company anticipates launching a financing in the coming weeks and will outline further details in a subsequent news release.
The Company is happy to announce the promotion of Mr. Neil D'Souza to Vice President of Engineering. Mr. D'Souza has been managing day to day development activities and processes for the past several years and will now be responsible for all development planning. Additionally, the Company is happy to announce the promotion of Mr. Adebayo Adegbola and Mr. Mohamed Safa to Directors of Engineering and Customer and Technical Service respectively. Mr. Adegbola will focus on advancing Eguana's ESS product line, including battery integration and certification updates. Mr. Safa will plan and build out Eguana's customer service team's capabilities to match utility and other partner requirements.
Lastly, Eguana's CFO, Ms. Hansine Ullberg, has resigned, effective February 19, 2025, to pursue a new opportunity. Ms. Ullberg will assist with a transition while a replacement is sought. "On behalf of the Board, I would like to thank Hansine for her strong contributions" commented Eguana CEO Justin Holland. "Hansine remains active with the team and continues to be a valuable resource to the Company. I would also like to congratulate Neil, Bayo, and Mohamed on their respective promotions. Each has driven results through their pillars and continues to deliver leadership by example throughout the Eguana team."
About Eguana Technologies Inc.
Eguana's vision is to build the grid of the future by delivering flexible, modular, and cost-effective alternatives to traditional grid upgrades. Our technology provides value to all key stakeholders - from the consumer, to the electricity retailer, the distribution utility, and the system operator.
Since 1998, Eguana Technologies has connected utilities with consumers through its high-performance commercial and residential energy storage solutions. The Eguana product suite has been designed from the ground up with both the end user and the utility in mind to transition the power grid seamlessly.
Manufactured in local facilities in North America to ensure compliance and quality, Eguana's standardized platform allows the flexibility to ensure each product solution is optimized for use in major grid modernization markets.
To learn more, visit www.EguanaTech.com or follow us on LinkedIn or @EguanaTech on X
The reader is advised that all information herein, other than statements of historical fact, may constitute forward-looking statements and forward-looking information (together, "forward-looking statements") within the meaning assigned by National Instrument 51-102 - Continuous Disclosure Obligations and other relevant securities legislation. In particular, forward-looking statements include, among other things, statements regarding, anticipated payments from a key Eguana customer, the effects of the collaboration with BC Hydro, anticipated timing of utility shipments, the run rate of invoicing and cash collections from a key Eguana customer, the Company's cash flow needs and liquidity, any anticipated market recovery, success and traction in utility channels, the status of the loan with the Company's senior lender, the Company's ability to negotiate funding and/or a forbearance from existing lenders, whether the Bridge Financing will be sufficient to meet short-term obligations, the completion of the private placement equity raise, including the timing and terms thereof, success with product development objectives, the effects of cloud features, and the Company's business operations, cash flow constraints, liquidity impacts, accounts receivable collections, personnel, and strategy. Forward-looking statements are not a guarantee of future performance and involves a number of risks and uncertainties.
Many factors could cause the Company's actual results, performance or achievements, or future events or developments, to differ materially from those expressed or implied by the forward-looking information. Such factors include, but are not limited to, risks associated with: failure by the Company to improve cash flow which would have a material adverse impact on the viability of the business to continue operating; timely collection of accounts receivable; effective implementation and deployment of Eguana solutions and building additional partnerships and developing existing partnerships; general economic, market and business conditions; competitive factors; achieving strategic objectives; unanticipated effects of the reduction to headcount; inability to or delays in sourcing materials; the Company's ability to enter and sell into utility channels and/or advance relationships in the virtual power plant space; the slower adoption of energy storage technologies than anticipated; inability to integrate with industry partners; lack of success in product development and enhancements; impacts of the departure of the CTO and/or replacement of the CTO; failure by the Company to improve liquidity, enter into financing with existing or new lenders, and obtain a forbearance from its senior lender; to raise equity capital when needed and on reasonable terms; to effectively rationalize the business and strategy or to recapitalize and/or restructure the Company and other factors set out in the "Risk Factors" section of the Company's management's discussion and analysis for the three and nine months ended September 30, 2024, dated November 30, 2024 and annual financial statements and management discussion and analysis dated May 27, 2024, which may be found on its website or at www.sedarplus.ca. Readers are cautioned not to place undue reliance on forward-looking information, which speaks only as of the date hereof. The Company does not undertake any obligation to release publicly any revisions to forward-looking statements contained herein to reflect events or circumstances that occur after the date hereof or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this news release.
