In a news release, Eguana Technologies Inc. (EGT:TSX.V; EGTYF:OTCQB) announced that ITOCHU Corp. invested $5 million in Eguana in unsecured convertible debentures, expanding the existing relationship between the two companies.
Japan-based ITOCHU trades various products domestically and globally, such as machinery, metals, minerals, energy, chemicals, food and more.
According to Eguana, "Itochu's investment is expected to expand on the Company's existing relationship with Itochu, which currently includes the integration of Moxia Energy Holding's AI software "Gridshare Client" with the Eguana Evolve platform to be exclusive to resale by Itochu. . .The new product will come certified with a complete suite of virtual power plant ("VPP") features designed for fleet aggregation and residential applications."
According to the financing terms, Eguana and ITOCHU will amend their existing marketing agreement. As part of that arrangement, ITOCHU will supply Eguana with the lithium batteries it uses for manufacturing its products.
Eguana will use the financing proceeds for working capital and general corporate expenses.
"This partnership will open up additional sales channels and opportunities within fleet management and value payable posts globally while strengthening our battery module supply availability and cost profile," Eguana CEO Justin Holland said in the release.
"Itochu has a deep understanding of the entire renewables sector with diversified interests throughout the lithium battery supply chain," said Brent Harris, EVP at Eguana. "Their supply chain expertise will stabilize our battery supply chain and increase module availability in support of our growth trajectory in major markets. We are looking forward to opening new growth opportunities and expanding our supply partnerships, keeping Eguana at the leading edge of industry technology."
In a separate news release, Eguana announced results for its Q1 FY20, ended Dec. 31, 2019, including record quarterly revenue.
Revenue was $2,802,161, 228% higher than in Q1 FY19, when it was $854,647. Energy storage system sales contributed $2,384,799 to that total and was up 179% quarter over quarter. Gross margin from sales was $34,394 versus $97,018 in Q1 FY19, but it "was hampered by nonrecurring expediting charges associated with ramping our supply chain to meet growing demand," the release explained.
Eguana's quarterly operating loss was $1,099,751, which reflected a $704,200 QOQ improvement.
Regarding Q1 FY20 operational highlights, in addition to Eguana partnering with ITOCHU to integrate Moxia Energy Holdings' AI software, Gridshare Client, into its Evolve platform, for resale by ITOCHU, the company added sales and technical sales coverage in California, growing the dealer network and order book there to $1.5 million. In addition, Eguana received $1.8 million in recurring orders from Hawaii, and the company finalized the transition for Enduro to contract manufacturing.
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