Energy Co. Set to Make Breakthrough in Innovation Challenge Initiative

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Eguana Technologies Inc. (EGT:TSX.V; EGTYF:OTC) announced its selection as an award recipient for the Energy Innovation Challenge initiative.

Organized by Decentralized Energy Canada and the City of Medicine Hat, the challenge aims to help small and medium-sized Canadian businesses overcome commercialization barriers and bring their decentralized energy innovations to market.

The project's goal is to expand and demonstrate utility-oriented functions within the Eguana EDGE™ Distributed Energy Resource Management System (DERMS) on a single feeder.

Eguana will install nine EVOLVE™ lithium iron-phosphate (LFP) battery energy storage systems (BESS) in the distribution systems at three City of Medicine Hat facilities, the company said. This installation will enable the city's distribution network operators to manage distribution voltage, circuit and feeder loading, balance phases, reduce losses, and enhance the resilience of Medicine Hat’s grid.

"Eguana would like to thank the City of Medicine Hat and Decentralized Energy Canada for providing such a valuable platform to develop and demonstrate these new energy technologies through the Energy Innovation Challenge," said Eguana founder and Chief Operating Officer Brent Harris.

Through this project, Eguana noted that it plans to develop an operations-specific dashboard and control panel for distribution utility operators to manage the grid using Eguana systems, develop and validate autonomous controls on the BESS that support the dashboard, introduce a commercial (three-phase) configuration of the Evolve product line, and evaluate the performance of the systems installed outdoors in a Northern Prairie environment.

"Each kilowatt we can generate and integrate through renewable or decentralized solutions makes our system more efficient, said Raymond Chokelal, senior engineer with the city's Utility Distribution Systems. "We're proud to test and refine these innovations on their way to market."

Harris added, “When people think of behind-the-meter battery energy storage systems, they often think of backup power and energy independence, but these grid-edge batteries offer the greatest value when they can be operated as a fleet to deliver grid services to distribution utilities."

Harris said the company plans to add additional features to its platform to provide utility operations teams with better insights and more control, while also demonstrating the operation of its advanced energy storage systems in new environments.

Revenues Make a Jump

Eguana provides a variety of hardware and software solutions tailored for managing power grids at the utility level, equipped with comprehensive Virtual Power Plant (VPP) capabilities. These capabilities encompass demand response, voltage and frequency regulation, backup power, fleet aggregation, spinning reserve, and real-time visibility and analytics at the grid edge. The company's Evolve hardware, combined with its Cloud and Edge software platforms, offers utilities and DERMS partners real-time management and visibility solutions at the grid edge.

Last month, the company announced its financial results for the second quarter ending June 30, including revenue of CA$0.9 million for Q2 2025, a 426% increase compared to the same period in June 2024. For the first half of 2025, revenue reached CA$1.9 million, up 407% from CA$0.5 million in the same timeframe last year.

The gross margin for Q2 2025 was approximately CA$424,934, a significant improvement from a negative CA$62,781 in the comparable quarter of June 2024, according to Eguana. For the six months ending June 30, the gross margin was CA$886,108, reflecting a 46% improvement from the previous year. This increase in gross margin is primarily due to the acquisition of discounted finished goods in 2024 from a former partner and a shift towards utility channels.

"Utility engagements continued to increase through Q2 as we have been able to point to success with current projects and pilots to demonstrate the capabilities of our ESS and Eguana Edge technologies," stated Chief Executive Officer Justin Holland. "Recent changes to investment tax credit rules in the USA have prioritized energy storage and the focus on corporate ownership of the assets recognizes that this is the best model to deliver the full value from distributed energy storage."

In Canada, "Momentum continues to build, especially in deregulated electricity markets, and Eguana will help Canada to lead in this critical new area of technology development and deployment. We have exciting projects planned and ongoing in BC, AB, ON, and NS as we utilize Canadian-made technology to build a more resilient distributed grid right here at home," he said.

Analyst: Transformation 'Will Be Huge'

*Technical Analyst Clive Maund has shared his thoughts on the company's future, noting, "The rickety traditional centralized grid structure is at or close to its limits and requires transformation. The advantages of this transformation will be huge — a massive increase in capacity, vastly more efficient utilization of power generated, decreased demand on centralized power generation, and protection of the end user, corporate or private, from power outages."

Maund expressed that he sees the stock as having an "exceptionally positive risk/reward ratio" and has given it a Strong Buy rating for all investment time frames, with price targets ranging from CA$0.20 to CA$2.

The Catalyst: New Era for Manufacturing, Energy?

In an article for U.S. Global Investors dated July 25, Frank Holmes emphasized how government policy often sets the stage for significant changes. He described the advancements in artificial intelligence (AI) within the U.S. and the energy crunch they will bring as a "full-blown industrial revolution, and it's being backed and subsidized by the federal government like few things I've seen before." 

An executive order signed by President Donald Trump could herald a new era for U.S. manufacturing and energy sectors. This order prioritizes AI data centers and their essential infrastructure — such as semiconductors, transmission lines, and power generation — by granting them national priority status. This designation facilitates faster permitting, reduces regulatory barriers, provides access to federal lands, and opens the door for potentially hundreds of billions of dollars in new investments in this sector over the next decade.

Holmes compared the current AI developments to the scale and ambition of the defense expansion during the Reagan era or the shale boom of the 2010s. The executive order issued on July 23 aims to support the construction of large-scale AI data centers that require over 100 megawatts of power, which is essential for training and operating advanced AI models, marking a significant leap in computational capabilities.

According to Grand View Research, the global data center market size was estimated at US$347.6 billion in 2024 and is projected to reach US$652.01 billion by 2030, growing at a CAGR of 11.2% from 2025 to 2030. 

"The rapid adoption of digital transformation initiatives, cloud computing, and emerging technologies such as artificial intelligence (AI), machine learning (ML), and the Internet of Things (IoT) have substantially increased data processing and storage requirements," the researchers noted.

Ownership and Share Structure

According to the company, about 0.5% is owned by management and insiders.

24.6% is held by the Japanese ITOCHU Corp., the company said.

The company's market cap of CA$3.4 million, according to Refinitiv. Its 52-week range is CA$0.05 and CA$0.20.