2022-08-26 | TSXV:EGT | Press release
CALGARY, Alta., August 26, 2022 /CNW/ – Eguana Technologies Inc. (“Eguana“or the”Company“) (TSXV: EGT) (OTCQB: EGTYF) is pleased to announce a strategic investment by ITOCHU Corporation (“ITOCHU“) of 33 million Canadian dollars in the form of an unsecured convertible debenture (the “Debenture“) of the Company convertible into ordinary shares of the Company (the “Ordinary actions“) at a conversion price of CA$0.50 per share according to the conditions 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 meet the company’s global growth objectives.
“ITOCHU, a key partner of Eguana for many years, remains at the global forefront of the renewable energy transition with expertise and access to the entire renewable energy supply chain” commented the CEO of ‘Eguana justin holland. “Growth capital of this magnitude will allow us to accelerate key inventory investments across all product lines and accelerate the development of Eguana Cloud and the Battery Module/Battery Management System.”
The use of the financing proceeds will be used to finance the working capital and general expenses of the Company. The financing is subject to other customary conditions and applicable regulatory approvals, including the approval of the TSX Venture Exchange (the “TSXV“). Funding is expected to close to or around August 31, 2022 (there “Closing DateAll securities issued under the financing will be subject to a hold period of four months and one day in accordance with applicable Canadian securities laws.
In addition, further to the Company’s press release dated April 4, 2022the Company has chosen to carry out its drawdown of the second tranche with its lending partner Western Technology Investment (“WTI“), under 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. (with Venture Lending & Leasing IX, Inc., the “Lenders“) date April 1, 2022as amended (the “Loan agreement“). Eguana expects WTI to do the rest $5 million as part of the second tranche available to the Company on or about the Closing Date (collectively, the “ReadyIn connection with the loan, the lenders have waived 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 adoption of storage and microinverters should accelerate our growth and will be supported by additional capital from WTI. This additional capital will immediately increase the supply of microinverters and strengthen our inventory position in North America,” added Holland.
Fort Capital Partners acted as sole financial advisor to the 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 acted as legal counsel to ITOCHU in connection with the financing.
About the offer
The Debenture will mature and be repayable on the date that is three (3) years after the Closing Date. The debenture will bear interest at the rate of 7% per annum, compounded semi-annually and payable semi-annually or on an earlier date on which the debenture is converted in accordance with its terms. The Company may satisfy its obligation to pay interest due, in whole or in part, by issuing to ITOCHU a number of common shares equal to the aggregate amount of interest due divided by the volume-weighted average trading price over 5 days 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 after the date that is four months plus one day after the closing date, ITOCHU shall have the right (the “Conversion right“) to convert all or part of the principal amount outstanding under the debenture into common shares at a price of CA$0.50 per common share, upon (i) the mutual agreement of the parties (acting reasonably) on and after the date the Company files a financial statement for any three-month period that shows stable positive net income or , (ii) written notice from ITOCHU within 90 days of the Company’s filing of a financial statement for any three-month period that shows positive stable net income, and if in the case (ii ), ITOCHU will have the right of conversion from the date such 90-day period has elapsed since the filing of the Company’s financial statements. Assuming 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.
On or after the date that is four months plus one day after the Closing Date, subject to mutual agreement between the Company and ITOCHU, the Company may require ITOCHU to convert the Debenture into Common Shares upon written notice of at least 30 days. if: (i) the daily volume-weighted average trading price of the Common Shares is greater than CA$1.00 for 20 consecutive trading days; and (ii) the Company has filed financial statements for a three-month period which show stable positive net income during that three-month period.
In addition, as a condition to the closing of the financing, ITOCHU will provide an undertaking to the TSXV not to acquire any common shares (including through the exercise of the debenture), which would allow it to own 20% or more of the shares shares outstanding, unless the Company has obtained the necessary regulatory and shareholder approval in accordance with the policies of the TSXV.
No finder’s fee will be paid in connection with the financing.
The history of ITOCHU Corporation dates back to 1858 when the company’s founder, Chubei Itoh, started linen trading operations. Since then, ITOCHU has evolved and grown for 150 years. With approximately 110 bases in 63 countries, ITOCHU, one of the leading sogo shosha, engages in domestic trade, import/export and overseas trade of various products such as textiles, machinery, metals, minerals, energy, chemicals, food, general trade. products, real estate, information and communications technology and finance, as well as business investment in Japan and abroad.
About Western Technology Investment
Founded in 1980, Western Technology Investment (WTI) pioneered the concept of venture debt. The company provides minimally diluted, truly usable capital to high-growth, public and private, technology and life sciences companies. For more information, visit westerntech.com.
About Eguana Technologies Inc.
Situated at Calgary, AlbertaCanada, Eguana Technologies Inc. (TSXV: EGT) (OTCQB: EGTYF) designs and manufactures high-performance residential and commercial energy storage systems. Eguana has two decades of experience supplying grid edge power electronics for fuel cell, photovoltaic and battery applications, and provides proven, durable and high quality solutions from its manufacturing facilities. large capacity to Europe, Australia and North America.
With thousands of its proprietary energy storage inverters deployed in the European and North American markets, Eguana is a leading supplier of power controls for solar self-consumption, grid services and off-grid charging applications. demand at the network edge.
To learn more, visit www.eguanatech.com or follow us on Twitter @EguanaTech
Forward Searching for information
Readers are cautioned that some of the information contained in this document may constitute forward-looking statements and forward-looking information (together, “forward-looking statements”) within the meaning of National Instrument 51-102 Continuous Disclosure and Disclosure Obligations. other relevant securities laws. . In particular, we include, among other things: statements relating to opportunities resulting from the partnership with ITOCHU, the anticipated stabilization of the Company’s supply chain, the anticipated sourcing and supply of lithium batteries by ITOCHU, opportunities for expected growth and synergies between the Company and ITOCHU following the financing, the Company’s ability to sustain innovation within its industry, the effects of the financing and the Loan, the use of proceeds, the closing of the financing, the ability of the Company to successfully draw down the Loan, the ability of the Company to comply with the terms of the debenture and the loan agreement, including, but not limited to, interest payments and principal payments, the Company’s ability to complete the loan and the Company’s ability to obtain necessary TSXV approvals in connection with the financing, and the effects of interest and adoption of storage and microinverters.
Forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties. Many factors could cause the actual results, performance or achievements of the Company, or future events or developments, to differ materially from those expressed or implied by the forward-looking information. These factors include, but are not limited to, risks relating to: the closing of the financing; failure to draw the loan; failure to obtain necessary regulatory or other third party consents and approvals to complete financing; non-realization of financing; the ability to make interest payments on the loan and debenture; Eguana’s ability to continue its growth; Eguana’s ability to secure additional inventory; general economic, market and business conditions; industry capacity; the operations of Eguana’s assets, the competitive action of other companies and other factors set forth in the section “Risk Factors” the Company’s most recent annual MD&A for the three and six months ended March 31, 2022 which can be viewed on its website or on sedar.com. 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 unforeseen events, except as required by securities laws applicable so require.
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.
SOURCEEguana Technologies Inc.
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