The company took these steps to meet the demand it continues to experience before it can complete its transition to contract manufacturing.
One was an amendment to its loan agreement with an affiliate of Western Technology Investment, which lowers Eguana's required monthly payments for the four months between November 2019 and February 2020. During that period, Eguana will only pay interest. The loans, however, will continue to bear interest at the same rate, 12.5% per annum, which Eguana will repay in February 2022.
Two, Eguana closed a short-term bridge loan financing for $280,000 with certain accredited investors, including its CEO. The interest rate is 1% per month and the maturity date of the principal amount and interest is May 29, 2020. In connection with this deal, Eguana will pay the lenders an administrative fee, an amount equivalent to 10% of the initial loan amount.
"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," CEO Justin Holland said in the release. "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."
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