Eguana Provides a Business and Financial Update

Source: 11/23/2023, Location: North America

Eguana Technologies Inc. a leading developer and manufacturer of high-performance energy storage systems, is pleased to provide a business update and announce its intention to complete a non-brokered private placement offering.

Business Update
The Company continues its positive progress pursuing utility and distributed energy resource management ("DERs") partnerships, bringing the Company's participation in VPPs to seven across North America and Australia. The Eguana solution is positioned to work with distributed energy resource provider platforms that are fully integrated with the Eguana Cloud Platform, and Eguana's existing product line of energy storage solutions ("ESS"). The Eguana energy storage platform has been developed to support all grid related VPP functions.

The Company believes the near-term outlook for the energy storage industry is positive, as utility engagement continues to increase within the electricity sector, with a drive for utilities to roll out VPPs in support of grid modernization. To take the next step in the VPP sector, the Company has announced a multi-year Virtual Power Plant (VPP) Referral and Promotion partnership with a long-time major utility partner in Australia, which will be driven through direct and multi-media marketing. Further, the Company anticipates additional VPP announcements in the coming quarters.

Alongside VPP partnerships, Eguana's installer training, through Eguana university, continues to exceed expectations, with over 1,200 enrollments year to date, representing more than 200 installation companies. Trained installers are key to the consumer interface and experience, through both distribution and VPP channels.

"Partnerships, which include signed agreements, provide rapid access to sales channels, where the utility or finance companies already have existing customer bases and are in position to finance or incentivize energy storage solutions for their base," commented Justin Holland, Eguana CEO. "A perfect example is our recently announced FinanzDesk partnership in Europe where initial ESS units will be offered to current customers, under lease agreements, starting in December. By removing the upfront cost for the consumer, the sales process becomes simplified within the channel."

Private Placement
The Company intends to complete a non-brokered private placement offering of up to 50,000,000 units of the Company (the "Units" or "Unit") at a price of $0.04 per Unit, for aggregate gross proceeds of up to $2.0 million. The Company has the option, in its sole discretion, to increase the size of the offering to up to $2.5 million (the "Offering").

Each Unit shall be comprised of one common share (each a "Common Share" and collectively, the "Common Shares") and one common share purchase warrant (the "Warrant"). Each Warrant will entitle the holder thereof to purchase one additional Common Share at a price of $0.06 per Common Share for a period of 24 months following the closing date of the Offering.

The Company anticipates using the net proceeds of the Offering to fund operations and working capital. In connection with the Offering, the Company may pay a finder's fee in cash or securities or a combination of both, as permitted by the policies of the TSXV. Closing of the Offering is expected to occur in one or more tranches, with the first tranche expected to close on or about November 30, 2023.

The Units and any securities issuable upon conversion thereof will be subject to a statutory hold period of four months and one day from the date of issuance of the Units. The Offering is subject to final approval by the TSXV.

The Units will be offered and sold by private placement in Canada pursuant to exemptions from the prospectus requirements under National Instrument 45-106 Prospectus Exemptions, and in certain other jurisdictions on a basis which does not require the qualification or registration of the securities issued pursuant to the Offering.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended (the "1933 Act") and may not be offered or sold to, or for the account or benefit of, persons in the United States or "U.S. persons" (as such term is defined in Regulation S under the 1933 Act) absent registration or an applicable exemption from the registration requirements of the 1933 Act any application state securities laws.

Financial Update
Overall negative macro-economic factors continue to constrain the renewable energy industry, and consumer spending remains soft, due to inflation and high-interest rates. As a result, in October 2023, the Company proceeded with a staff rationalization, across all geographies, and reduced headcount by approximately 22 percent to realign with market expectations. With restructuring of functional areas and focus on near-term priorities, management believes this reduction will not affect near or medium-term operations or objectives. As reported in the Company's financial statements for the period ended June 30, 2023, accounts receivable collection delays continue to create short-term liquidity constraints. Management continues to work closely with the key customer and multiple payments are now being received monthly. However, as the whole industry struggles with lagging sell-through, the customer's accounts receivable balance remains high. Until the industry recovers, consumer spending rebounds and/or solar energy incentives increase, management believes the slower than usual collection on account receivable will continue to constrain Eguana's financial position. Management believes the closing of the Offering, as contemplated herein, assuming approximately $2.0 million is raised, will ease the current cash flow constraints of the Company. Furthermore, management anticipates that the Closing of the Offering, along with the Company successfully collecting historical receivables from our partners and creating additional liquidity from the Company's current assets, will continue to fund the cash flow needs of the business.

The Company will file its third quarter financial report and will host an investor call on Wednesday November 29, 2023.

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