Eguana provides a financial update and a bi-weekly update on the filing of annual financial statements

Calgary, Alberta–(Newsfile Corp. – May 10, 2024) – Eguana Technologies Inc. (TSXV: EGT) (OTCQB: EGTYF) (“Eguana” or the “Company“), a leading developer and manufacturer of high-performance energy storage systems, provides a financial update and bi-weekly update to its press release dated April 26, 2024 (the “Standard Ad“), in relation to the Company’s delay in presenting its annual financial statements, relating to the year ended December 31, 2023 (the “Financial statements“), management’s discussion and analysis related to the Financial Statements, and the CEO and CFO certifications related to the Financial Statements (collectively, the “Annual Archives“).

The company’s annual filings were originally due by the filing deadline of April 29, 2024, as required by National Instrument 51-102 Continuous Disclosure Obligations.

The Company’s primary regulator, the Alberta Securities Commission (the “Commission“), received a business cessation order from the administration (the “MCTO“) on April 20, 2024, under National Policy 12-203 – Management Cease Orders from Traders (“NP 12-203“). Under the MCTO, the Company’s Chief Executive Officer and Chief Financial Officer will not be able to trade in the Company’s securities until the Company files the Annual Files and the Commission revokes the MCTO. The MCTO does not affect the ability of shareholders to trade their titles.

The Company continues to work diligently with its auditor to complete annual filings and expects to report a series of financial adjustments for the year ending December 31, 2023. For the fourth quarter ending December 31, 2023 and included in the year ending December 31th. , 2023, the Company’s Annual Filings will reflect several adjustments, including, but not limited to, the following:

• An additional expected credit loss of approximately $8 million, as a result of aging accounts receivable and late payments, from one of the Company’s major customers.

• An inventory charge and an inventory impairment charge of approximately US$2 million, related to obsolescence and realigned demand with current industry projections.

• Reclassification of the Company’s senior long-term debt as current liabilities, with a total balance of approximately US$8 million. The Company continues to work with its senior lender and after the end of the year received a letter of agreement confirming that no action will be taken under the loan agreement and that the parties will continue to work together to manage payments in accordance with the loan agreement.

• Disclosure of subsequent event related to a legal demand letter received from a supplier for payment of an open purchase order. The Company previously requested stock with a deposit and understood that the supplier would keep the products. The supplier demands payment of US$2.3 million. Based on a series of inaccuracies in the demand letter, the Company responded with its own legal letter outlining why there is no dispute, legal merit or amount owed. However, if successful, the dispute could also result in an inventory deposit of US$1.7 million being confiscated and therefore written off as a loss by the Company.

• A reduction in available liquidity with current cash on December 31, 2023 of US$0.8 million. In April 2024, the Company received expected cash proceeds from a return of component inventory to the original supplier totaling $2.3 million.

The story continues

Several of these larger accounting adjustments are associated with the sluggishness of the solar industry worldwide and the Company’s continued efforts to manage liquidity during this period, which was detailed previously.

Annual filings will be completed by May 31, 2024, and the Company will issue a press release announcing the completion of such filing.

Other than the additional information set forth in this announcement, there are no material changes to the information contained in the Default Announcement that would reasonably be expected to be material to an investor. In addition: (i) the Company is satisfied and confirms that it intends to continue to satisfy the provisions of the alternative information guidelines under NP 12-203 and issue biweekly delinquency status reports while the delay in filing the Annual Files continues, each of which will be issued in the form of a press release; (ii) the Company has no information at this time regarding any anticipated specified default subsequent to the failure to file the Annual Files; (iii) ​the Company is not subject to any insolvency proceedings; and (iv) there is no material information relating to the Company’s business that has not been generally disclosed.

About Eguana Technologies Inc.

Eguana’s vision is to accelerate grid modernization and resilience by providing flexible, modular and cost-effective alternatives to traditional grid upgrades. Our technology adds value to all key stakeholders – from the consumer to the electricity retailer, the distribution utility and the system operator.

Eguana Technologies connects utilities with consumers through its high-performance commercial and residential energy storage solutions. Eguana’s vertically integrated product suite was designed from the ground up with the end user and utility in mind to make the power grid transition seamless.

Manufactured in local facilities around the world to ensure compliance and quality, Eguana’s standardized platform allows flexibility to ensure each product solution is optimized for use in key network modernization markets.

To learn more, visit www.EguanaTech. with or in LinkedIn It is @EguanaTech in X.

Company inquiries

Justin Holland, CEO
Eguana Technologies Inc.
+1.416.728.7635
Justin.Holland@EguanaTech.com

Forward-looking statements

The reader is cautioned that all information contained herein, other than statements of historical fact, may constitute forward-looking statements and forward-looking information (collectively, “forward-looking statements“) within the meaning attributed by National Instrument 51-102 – Continuous Disclosure Obligations and other relevant securities legislation. In particular, forward-looking statements include, among other things, plans, goals, objectives, intentions and expectations regarding the Company’s anticipated filing of Annual Filings.

Forward-looking statements are not a guarantee of future performance and involve a number of risks and uncertainties. Many factors could cause the Company’s actual results, performance or achievements, or future events or developments, to be materially different from those expressed or implied by forward-looking information. Such factors include, but are not limited to, risks associated with: the risk that the Annual Records will be filed later than anticipated; the risk that trading in the Company’s securities may be halted by the TSX Venture Exchange (the “TSXV“) and/or temporarily cease trading by the Canadian securities commissions; the risk of late adjustments to the December 31, 2023 financial statements, reported amounts and disclosures; the outcome of any legal actions: the Company’s failure to improve flow cash flow that would have a material adverse impact on the business’s viability to continue to operate; timely collection of material receivables; in certification: the Company’s ability to implement additional utility pilot programs and demonstrations or deployment; of its long-term debt and convertible debentures, and such other factors as may be set forth in the Company’s continuous disclosure records from time to time under the Company’s profile on SEDAR+ 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 undertakes no obligation to publicly release any revisions to the forward-looking statements contained herein to reflect events or circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events, except as required by 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 press release.

To view the original version of this press release, please visit https://www.newsfilecorp.com/release/208824

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