Mr. Justin Holland reports

EGUANA PROVIDES FINANCIAL UPDATE

Eguana Technologies Inc. has provided updates on previously released financial announcements, with respect to short-term liquidity and the company's virtual power plant (VPP) strategy.

The company previously outlined various steps to manage liquidity, including the return of inventory, working with long-term debt holders, and negotiating with its major United States customer for inventory setoffs, future credits, a defined payment schedule and formal security.

With respect to the inventory return, outlined in news releases dated Feb. 7, 2024, and Feb. 14, 2024, the company received wire confirmation for the first transfer of inventory on March 29, 2024, and proceeds totalling $2.3-million (U.S.) have since been received. Additional proceeds of approximately $587,000 (U.S.), related to a follow-on shipment, are expected by the end of April, 2024.

The company continues to work closely with its senior long-term debt holder and has negotiated various near-term debt amendments, as well as an amendment with its subordinated debenture holder, which were outlined in prior news releases. The company can confirm that further negotiations with the senior long-term debt holder remain continuing. In addition to deferred payments, outlined in the news release dated Feb. 7, 2024, the company has further deferred the principal and interest payment due on April 1, 2024. As part of the negotiations, a payment in the amount of approximately $638,000 (U.S.) was made on April 2, 2024, which represented the outstanding principal amounts due for the Dec. 1, 2023, and Jan. 1, 2024, payments. The company will provide additional details as further amendments are agreed to between the parties.

"We have begun rolling out utility feeder line optimization programs, for utilities in Canada and the United States, as part of our VPP strategy, to demonstrate Eguana's hardware, software and fleet aggregation solutions. Our long-term debt partner continues to be supportive of our strategic and operational initiatives, as we navigate a slower-than-expected retail marketplace for residential solar and storage solutions," commented Justin Holland, Eguana's chief executive officer.

The company secured a short-term unsecured bridge loan financing from accredited lenders, outlined in a news release dated March 8, 2024, in the principal amount of approximately $220,000. A portion of the bridge financing was received in United States dollars and a portion in Canadian dollars, and will be repayable in the respective currencies. Interest accrues on the principal amount at a rate of 5 per cent per month. The principal amount of the bridge financing, together with interest accrued thereon, is repayable on April 30, 2024, and the company anticipates repaying the bridge financing at that time.

With respect to the company's major customer receivable and related collections, the agreed collaboration steps, including the fixed payment schedule and the security agreement, are under continual review. The company anticipated these cash receipts would support short-term liquidity, however, the customer has experienced additional delays, creating uncertainty around the timing of further collections. The company will continue to work closely with the customer on solutions, and Eguana will remain cautious in the short term about the impacts to near- and medium-term cash flows.

In an effort to accelerate the company's VPP strategy, Eguana accepted finished goods inventory from its major customer as an offset to accounts receivable, and is currently in the process of rolling out multiple VPP pilot programs with utilities in Canada and the United States. The inventory is planned for aggregation on utilities feeder lines, to maximize grid efficiency, manage end-of-line voltage control and perform demand-response functions.

"With the full team returned from furlough, we are advancing Eguana Cloud and consumer app development, to align with our utility pilot programs in the U.S. and Canada," Mr. Holland added. "Pilot programs for both end-of-line voltage control and demand response are currently rolling out in Western Canada and the U.S. Northwest, to go along with additional demand response and distressed feeder pilot programs, in Eastern Canada and targeted U.S. utility companies. We believe Eguana's fleet management software platform, fully integrated with our advanced power controls, are uniquely suited to the demanding requirements of our utility customers and are key to unlocking the full value of distributed energy storage."

About Eguana Technologies Inc.

Eguana designs and manufactures high-performance residential and commercial energy storage systems. The company also markets and sells a suite of microinverter products, which are integrated with its energy storage platform, providing consumers with full solar and storage system architecture, for residential and commercial applications. Eguana has over two decades of experience, delivering grid-edge power electronics for fuel cell, photovoltaic and battery applications, and delivers proven, durable, high-quality solutions from its high-capacity manufacturing facilities in North America, Europe and Australia.

With thousands of its proprietary energy storage inverters deployed in the European and North American markets, Eguana is one of the leading suppliers of power controls for solar self-consumption, grid services and demand charge applications at the grid edge. Focused on distributed energy storage applications located at the point of energy consumption, Eguana provides cost-effective solutions to modernize the power grid from the consumer to the electricity retailer, the distribution utility and the system operator.

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