Eguana Enters Into Short Term Financing Agreements Securing Additional Working Capital

CALGARY, Alberta, Jan. 06, 2020 (GLOBE NEWSWIRE) -- Eguana Technologies Inc. (the "Company" or "Eguana") (TSX-V:EGT) (OTCQB:EGTYF), is pleased to announce that it has entered into two agreements to increase the Company’s short term working capital amid increasing demand ahead of final transition to contract manufacturing. 

First, the Company entered into an amendment dated December 31, 2019 to the loan agreement (and related loan documents) dated December 20, 2017 (the "WTI Loan") with an affiliate of Western Technology Investment (the "Lender") pursuant to which the Lender has agreed to accept reduced monthly payments comprised of interest only for four months commencing November 1, 2019 through February 1, 2020, subject to certain conditions being met to the Lender's satisfaction. The WTI Loan will continue to bear interest at a rate of 12.5% per annum and under the Loan Amendment, will be repaid February 1, 2022. 

In addition to the Loan Amendment, the Company closed a short-term bridge loan financing (the "Bridge Financing") in the principal amount of $280,000 with certain accredited investors, including the Company's Chief Executive Officer. The principal amount of the Bridge Financing, together with interest accrued thereon, will become due and payable on May 29, 2020 (the "Maturity Date"). Interest shall accrue on the principal amount at a rate of 1% per month. In the event the principal amount and interest accrued thereon is not repaid on or before the Maturity Date, the applicable interest rate would increase to 2% per month. The lenders will receive an administrative fee, paid in cash, equal to 10% of the initial principal amount of the loan.

"We have had a very positive response in California with respect to the rebate program with new orders already approaching $1M specific to the state. The additional funds will allow the Company to execute the new orders over the next 90-120 days," stated Justin Holland, CEO of Eguana. "The amendment and bridge also provide a cushion to execute the North American and Australian inverter manufacturing transition to our contract manufacturer, which is scheduled to take place during the second fiscal quarter, and further reduce upfront working capital requirements for the Company."