CALGARY,
AB, Aug. 26, 2022 /CNW/ - Eguana Technologies
Inc. ("Eguana" or the "Company") (TSXV:
EGT) (OTCQB: EGTYF) is pleased to announce a strategic
investment by the ITOCHU Corporation ("ITOCHU") of
C$33 million in the form of an
unsecured convertible debenture (the "Debenture") of the
Company convertible into common shares of the Company (the
"Common Shares") at a conversion price of C$0.50 per share on the terms detailed below.
ITOCHU's investment is expected to expand the two companies'
long-term relationship and significantly increase Eguana's
immediate access to working capital to achieve business growth
objectives globally.
"ITOCHU, a key partner of Eguana for many years, remains at the
global forefront of the renewable energy transition with expertise
and access throughout the entire renewables supply chain" commented
Eguana CEO Justin Holland. "Growth
capital of this magnitude will allow us to accelerate key inventory
investments across all product lines and expedite Eguana Cloud and
battery module/battery management system development."
Use of proceeds from the financing will be allocated to fund
working capital and general corporate expenditures of the
Company. The financing is subject to other customary
conditions and applicable regulatory approvals, including approval
by the TSX Venture Exchange (the "TSXV"). The financing is
expected to close on or around August 31,
2022 (the "Closing Date"). All securities issued
pursuant to the financing will be subject to a four month and one
day hold period in accordance with applicable Canadian securities
laws.
In addition, further to the Company's news release dated
April 4, 2022, the Company has
elected to complete its second tranche draw with lending partner
Western Technology Investment ("WTI"), pursuant to a loan
agreement between the Company, Eguana Inc. (formerly, Sustainable
Energy Systems Inc.), EGT Markets Limited Partnership, Venture
Lending & Leasing IX, Inc. and WTI Fund X, Inc. (together with
Venture Lending & Leasing IX, Inc., the "Lenders") dated
April 1, 2022, as amended (the
"Loan Agreement"). Eguana expects WTI to make the remaining
US$5 million under the second tranche
available to the Company on or about the Closing Date
(collectively, the "Loan"). In connection with the Loan, the
Lenders have waived the financial milestones required under the
Loan Agreement. Additional details regarding the Loan can be found
on the Company's profile on SEDAR at www.sedar.com.
"The rapid interest and uptake of storage and micro inverters is
expected to accelerate our growth and will be supported by the
additional capital from WTI. This additional capital will
immediately augment procurement for micro inverters and strengthen
our inventory position in North America" Holland added.
Fort Capital Partners acted as sole financial advisor to Company
in connection with the financing, Minden Gross LLP acted as legal
counsel to Eguana in connection with the financing and the Loan,
and Blake, Cassels & Graydon LLP acted as counsel to ITOCHU in
connection with the financing.
About the Offering
The Debenture will mature and be repayable on the date that is three (3) years from the Closing
Date. The Debenture will bear interest at a rate of 7% per annum,
compounded semi-annually and payable semi-annually or on such
earlier date on which the Debenture is converted pursuant to its
terms. The Company may satisfy its obligation to pay the interest
due, in whole or in part, by issuing to ITOCHU such number of
Common Shares as is equal to the aggregate amount of interest owing
divided by the 5-day volume weighted average trading price of the
Common Shares on the TSXV immediately prior to the date on which
such interest becomes due and payable.
While the Debenture remains outstanding, at any time following
the date that is four months plus one day following the Closing
Date, ITOCHU shall have the right (the "Conversion Right")
to convert all or a portion of the principal amount outstanding
under the Debenture into Common Shares at a price of C$0.50 per Common Share, upon (i) the mutual
agreement of the parties (acting reasonably) on and after date that
the Company files a financial statement in respect of any
three-month period which reports positive stable net income or,
(ii) delivering written notice from ITOCHU within the 90 day period
after the Company files a financial statement in respect of any
three-month period which reports positive stable net income, and if
in case of (ii), ITOCHU shall have the Conversion Right on and
after the date that 90-day period has passed from such filing of
the financial statements of the Company.
Assuming the full conversion of the Debenture and all
dilutive securities held by ITOCHU, ITOCHU will acquire a 24.08%
equity interest in the Company on a partially diluted basis.
Beginning on the date that is four months plus one day following
the Closing Date, subject to mutual agreement between the Company
and ITOCHU, the Company shall be able to require ITOCHU to convert
the Debenture into Common Shares on not less than 30 days' written
notice in the event that: (i) the daily volume weighted average
trading price of the Common Shares is greater than C$1.00 for any 20 consecutive trading days; and
(ii) the Company has filed financial statements in respect of a
three-month period which reports stable positive net income during
such three-month period.
Additionally, as a condition to closing of the financing, ITOCHU
will provide an undertaking to the TSXV to not acquire Common
Shares (including through the exercise of the Debenture) which
would result in it owning 20% or more of the Common Shares
outstanding, unless the Company has obtained necessary regulatory
and shareholder approval in accordance with the policies of
TSXV.
No finder's fees will be paid in connection with the
financing.
About ITOCHU
The history of ITOCHU Corporation dates back to 1858 when the
Company's founder Chubei Itoh commenced linen trading operations.
Since then, ITOCHU has evolved and grown over 150 years. With
approximately 110 bases in 63 countries, ITOCHU, one of the leading
sogo shosha, is engaging in domestic trading, import/export, and
overseas trading of various products such as textile, machinery,
metals, minerals, energy, chemicals, food, general products,
realty, information and communications technology, and finance, as
well as business investment in Japan and overseas.
About Western Technology
Investment
Founded in 1980, Western Technology Investment (WTI) pioneered
the concept of venture debt. The firm provides minimally-dilutive,
truly usable capital to high-growth, public and private, technology
and life science companies. For more information, please
visit westerntech.com.
About Eguana Technologies Inc.
Based in Calgary, Alberta
Canada, Eguana Technologies Inc. (TSXV:EGT) (OTCQB: EGTYF)
designs and manufactures high performance residential and
commercial energy storage systems. Eguana has 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 Europe, Australia and North
America.
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.
To learn more, visit www.eguanatech.com or follow us on Twitter
@EguanaTech
Forward
Looking Information
The reader is advised that some of the information herein may
constitute forward-looking statements and forward-looking
information (together, "forward-looking statements") within the
meaning assigned by National Instrument 51-102 – Continuous
Disclosure Obligations and other relevant securities legislation.
In particular, we include, among other things: statements
pertaining to the opportunities resulting from the partnership with
ITOCHU, the anticipated stabilization of the Company's supply
chain, the anticipated procurement and supply of lithium batteries
by ITOCHU, the expected growth opportunities and synergies between
the Company and ITOCHU as a result of the financing, the Company's
ability to maintain innovation within its industry, the effects of
the financing and the Loan, the use of proceeds, the closing of the
financing, the Company's ability to successfully draw the Loan, the
ability of the Company to comply with terms of the Debenture and
the Loan Agreement, including but not limited to the interest
payments and payments of the principal, the Company's ability to
close on the Loan and the Company's ability to obtain necessary
approvals from the TSXV in connection with the financing, and the
effects of interest and uptake of storage and micro
inverters.
Forward-looking statements are not a guarantee of future
performance and involves a number of risks and uncertainties. Many
factors could cause the Company's actual results, performance or
achievements, or future events or developments, to differ
materially from those expressed or implied by the forward-looking
information. Such factors include, but are not limited to,
risks associated with: closing of the financing; failure to draw
the Loan; failure to obtain necessary regulatory or other third
party consents and approvals required to complete the financing;
failure to complete the financing; ability to make the interest
payments on the Loan and the Debenture; Eguana's ability to
continue growing; Eguana's ability to secure additional inventory;
general economic, market and business conditions; industry
capacity; the operations of Eguana's assets, competitive action by
other companies, and other factors set out in the "Risk Factors"
section of the Company's most recent annual management's
discussion and analysis for the three and six months ended
March 31, 2022 which may be found on
its website or at sedar.com. Readers are cautioned not to place
undue reliance on forward-looking information, which speaks only as
of the date hereof. The Company does not undertake any obligation
to release publicly any revisions to forward-looking statements
contained herein to reflect events or circumstances that occur
after the date hereof or to reflect the occurrence of unanticipated
events, except as may be required under 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
release.
SOURCE Eguana Technologies Inc.