Mr. Justin Holland reports

EGUANA PROVIDES BUSINESS UPDATES

Eguana Technologies Inc. has provided a financial and operational update.

As a result of the overall solar and renewable energy sector's underperformance, Eguana continues to actively manage its liquidity. Decreased consumer spending related to inflation, high-interest rates and increased dealer fees continue to delay consumer market recovery within the industry. A key U.S. customer continues to experience financial recovery delays, driven from the same industry pressures impacting Eguana, which has continued to delay previously agreed-upon payment amounts and timing to Eguana. The company anticipated these cash receipts would support short-term liquidity requirements; however, the customer continues to have payment delays and has not yet reached its previously agreed payment schedule.

Additionally, the collaboration with BC Hydro, announced on Nov. 27, 2024, was also expected to support financial liquidity for the company; however, run rates of sales were delayed through December, causing delayed invoicing and cash receipts to the company. Utility shipments are expected to commence this week, with steady weekly run rates expected thereafter.

As outlined in the third quarter 2024 financial results news release, dated Nov. 28, 2024, the company completed a debt amendment with its senior lender to extend its loan amortization out to May 15, 2026, starting on Dec. 15, 2024. All previously deferred payments and accrued interest were included in the loan balance, and are amortized over the longer term of the loan. At this time, due to the liquidity items noted above, the company has delayed the Jan. 15, 2025, regular amortization payment and anticipates the loan will fall into technical default. The company has initiated discussions with its senior lender to support the company's shift to utility sales and to put in place a forbearance agreement for a period of time.

"With weak renewable energy consumer markets, Eguana drove an aggressive entry into North American utility channels, which has gained traction in recent months, as utilities begin utilizing advanced battery technology as grid assets to enhance grid capacities and efficiencies. Slow collections from a key customer and the high debt service compelled us to take prudent action to further adapt to market conditions and to help ensure Eguana moves forward to execute operational objectives," commented Justin Holland, chief executive officer. "In the meantime, we remain focused on advancing key relationships in utility and virtual power plant channels while delivering on our mission to connect homeowners and utilities for a seamless experience through the distributed grid transition."

Lastly, long-standing Eguana chief technology officer Daljit Ghotra has resigned, effective Jan. 31, 2025. Eguana's development team continues to transition its development objectives toward expanding its software platform, including artificial-intelligence-driven enhancements to its Eguana Edge, Exchange and Engage products, and intends to recruit a new technical leader more directly focused on these technologies. Cloud features that enable better visibility and control at the grid edge for operators and more advanced integration with the platforms of its industry partners are expected to accelerate utility sales and generate long-term recurring revenue, from the installed base of Eguana's utility-grade residential energy storage systems.

"Mr. Ghotra has been instrumental in driving our advanced power electronics and hardware platforms and certifications for many years delivering utility-grade VPP enhanced products with a full range of stakeholder features," added Mr. Holland. "He will remain a key external hardware resource for the team as the focus on Eguana Cloud and Eguana Edge products increases, both of which are critical to driving virtual power plant success."

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. Its technology provides value to all key stakeholders -- from the consumer, to the electricity retailer, to the distribution utility and to the system operator.

Since 1998, Eguana 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 across the globe 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.

We seek Safe Harbor.