London, United Kingdom--(Newsfile Corp. - January 13, 2025) - Gorilla Technology Group Inc. (NASDAQ: GRRR) ("Gorilla" or the "Company") CEO Jay Chandan responded to recent market concerns raised by shareholders following the stock's recent fluctuation and reiterated the Company's strong financial position and strategic priorities. The Company remains focused on delivering sustainable growth, building its robust pipeline and creating long-term value for shareholders.
A Message to Our Valued Investors
We appreciate the dedication and resilience of our shareholders who have supported Gorilla during both favourable times and challenging periods. We understand the frustration and concerns many of you may feel during this period of market volatility and assure you that your trust in us is well placed. Gorilla remains firmly committed to delivering results that reinforce the value of your investment and to maintaining transparent communication as we move forward.
Update on Buyback Programme and Management Intention to Purchase Shares
Over the weekend, we convened a meeting of the Company's board of directors to address the recent market activity. The board formally approved an increase to the programme from $6 million to $10 million, demonstrating our collective view that the Company's share price fails to reflect our intrinsic value and long-term potential and is undervalued compared to other companies in the market.
As previously disclosed, $3.8 million of our previously announced allocation has been used to repurchase shares in privately negotiated transactions. We also previously announced that members of our board and management team intended to purchase shares in the Company so long as the disconnect between its share price and our business performance remains. The limitation we have experienced to date in negotiating private repurchases and a lack of announced insider share purchases are due to securities law restrictions applicable due to our possession of material non-public information regarding the Company. While we are continuing discussions with shareholders on private share repurchases, it is our intent to expand the buyback program to open-market purchases following our 2024 fiscal earnings release, when we hope to be able to disclose to the market all material information, including the status of project wins and bids. Likewise, our board and management team are looking forward to being able to purchase shares or enter into purchase plans when permitted by securities laws, and our commitment to moving to quarterly reporting in 2025 will facilitate both of these activities.
Addressing Market Misinterpretations and Misrepresentations
In light of the recent volatility, I believe it is crucial to address and clarify a few key misconceptions in the market:
Preferred Share Conversions and Warrant Exercises: On January 6, 2025, we announced the Company's updated share count of 18,464,651 shares outstanding following the conversion of all of our preferred shares and proceeds from exercises of a majority of the related warrants. These share conversions and warrant exercises relate to securities issued as part of financing arrangements in September 2023 and February and June 2024 and do not reflect any new equity issuance by the Company. These securities were already disclosed and known to the market and no additional dilution has occurred. These conversions happened solely at the discretion of the holders of the instruments and the Company had no control over them. The funds raised by the warrant exercises further bolstered our cash position to the current $47 million, and will help us finance new projects without requiring any dilutive transactions
Reliance on a Single Contract: We have observed claims that Gorilla is largely or wholly dependent on a single client. Such claims are entirely false. Our entry into our MENA contract was a defining moment for the Company, but we have since dramatically grown our pipeline and secured multiple additional contracts. Our transformative MENA project has helped underpin our ability to manage large-scale projects and, as previously disclosed, we are in active discussions on many additional opportunities and working with many leading partners. Our pipeline, which spans multiple sectors and regions, continues to grow and is designed to support sustained revenue growth throughout 2025 and well into 2026.
Gorilla's Cash Flow Conversion: We were alerted to an article released on Seeking Alpha regarding the Company's cash flow conversion. The article is based on incomplete information and misrepresents Gorilla's actual performance in this metric. The article cited data from our financials for the first half of 2024 and fails to reflect the inflow of cash received in July related to our MENA project (as noted in our August 26 press release and as will be better reflected in our audited financial statements for 2024). We have been continuing to meet and in some cases even exceed the timetables for our projects and expect to recognize revenue and receive cash payments on timing consistent with our internal projections. At present, we have over $30 million of invoices outstanding to government customers and expect to receive over $50 million in payments by the end of the first quarter of 2025.
We remain committed to combating any market activity that we believe crosses the line into illegal market manipulation. Despite our repeated attempts to engage with the SEC, we have not observed meaningful progress in the SEC's investigation. We will continue to present the SEC with evidence, that we believe indicates that our stock is being manipulated and will continue to press regulators to investigate actions that are harming our shareholders.
Showcasing Our Winning Strategy
To our shareholders, rest assured that our dedicated team is working tirelessly to ensure the company's success and long-term value creation. We are resolute in our commitment to transparency, justice, and defending our company against those who seek to undermine its potential. We are laser-focused on executing our contracts, delivering on our commitments and building an even stronger foundation for the future.
Gorilla is entering 2025 with exceptional momentum, evidenced by several significant milestones and partnerships. Our approach to growth is built on delivering transformative solutions and fostering key collaborations. Recent highlights include:
Consortium with NC Digy, Smart Cities, and AECOM: We recently signed an MoU to transform Santa Marta into an AI-powered smart city. This project, with leading partners, underscores our leadership in leveraging AI for urban innovation and positions us at the forefront of smart city development.
Cutting Edge AI Contracts in Taiwan: At the end of 2024 we announced two contract wins in Taiwan that reflect our growing strength in AI-powered technology solutions. We are looking to continue to develop of reputation as a leader in the markets we serve.
Growing Backlog and Robust Pipeline Lead Momentum into 2025: The Company enters 2025 with a $93 million backlog (i.e., signed contracts), excluding any additional project wins that we will disclose in the future. As shared during our recent investor webinar, our pipeline now exceeds $2 billion of project opportunities spanning multiple years. Our approach of setting guidance solely based on active contracts and delivery schedules should give investors confidence in our financial projections.
The level of visibility in our business and confidence in our ability to deliver on financial projections is a testament to our operational strength and strategic planning. Moreover, we foresee a robust 2026, driven by our exciting backlog and anticipated contract wins. This positions us firmly on a sustainable growth trajectory and reinforces our commitment to delivering long-term value for our investors.
Additional Questions from Our Shareholders
We appreciate the thoughtful questions that are regularly submitted by our dedicated shareholder community. Below I have addressed some other recent inquiries:
Update on $430 Million Southeast Asia Contract: Contracts with governments require careful negotiation and time to finalise, often involving strict confidentiality agreements. While I understand the market's eagerness for information, I want to assure you that we are adhering to these necessary processes. We will provide full and transparent updates once the signing is complete and we receive final approval from our customer. Rest assured, discussions remain on track and we are committed to keeping our investors informed at the appropriate time.
Seattle Office and U.S. Contracts: The opening of our Seattle office marks a significant milestone in expanding our presence in the U.S. market, a region with immense potential for growth. While the significant contract mentioned in the December webinar is progressing well, I want to emphasize that these negotiations require careful handling and confidentiality. I remain optimistic about the outcome and assure you that we will share updates once all necessary approvals are secured. Additionally, we are actively pursuing further opportunities in this critical market to strengthen our position and deliver long-term value.
To all our shareholders:
We are working tirelessly to protect your interests and honour the belief you have placed in us. Your steadfast support reminds us of why we started this journey and motivates us to deliver on our promises with renewed vigour.
You are not just investors to us - you are partners in this mission. I give you my word that we will continue to prioritise transparency, accountability and progress as we chart a path to shared success.
About Gorilla Technology Group Inc.
Headquartered in London U.K., Gorilla is a global solution provider in Security Intelligence, Network Intelligence, Business Intelligence and IoT technology. We provide a wide range of solutions, including Smart City, Network, Video, Security Convergence and IoT, across select verticals of Government & Public Services, Manufacturing, Telecom, Retail, Transportation & Logistics, Healthcare and Education, by using AI and Deep Learning Technologies.
Our expertise lies in revolutionizing urban operations, bolstering security and enhancing resilience. We deliver pioneering products that harness the power of AI in intelligent video surveillance, facial recognition, license plate recognition, edge computing, post-event analytics and advanced cybersecurity technologies. By integrating these AI-driven technologies, we empower Smart Cities to enhance efficiency, safety and cybersecurity measures, ultimately improving the quality of life for residents.
This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Gorilla's actual results may differ from its expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as "expect," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could," "should," "believes," "predicts," "potential," "might" and "continues," and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, statements regarding our beliefs about our ability to service our customers, to finance additional projects, to attract the attention of customers and win additional projects, along with those other risks described under the heading "Risk Factors" in the Form 20-F Gorilla filed with the Securities and Exchange Commission (the "SEC") on May 15, 2024 and those that are included in any of Gorilla's future filings with the SEC. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from expected results. Most of these factors are outside of the control of Gorilla and are difficult to predict. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Gorilla undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date they were made except as required by law or applicable regulation.
Investor Relations Contact:
Dave Gentry RedChip Companies, Inc. 1-407-644-4256 GRRR@redchip.com
