Calgary-based Eguana Technologies Inc. (EGT-X), a developer and manufacturer of energy storage systems for commercial and residential buildings, reports it is struggling to receive payment from customers and anticipates it will default on a loan.

A slowdown in the renewable energy sector has impacted the company, Eguana said in a release, leading to a U.S. customer delaying its payments that would have supported Eguana’s short-term liquidity needs. Also impacted was the run rate of sales with BC Hydro for a pilot project, Equana says, which slowed invoicing and cash receipts.

Due to its liquidity problems, Eguana has delayed an amortization payment to a senior lender scheduled for Jan. 15, and the loan is expected to fall into technical default. Eguana is discussing the opportunity for the lender to help the company shift to utility sales and reach an agreement for relief on loan payments.

"Slow collections from a key customer, and the high debt service, compelled us to take prudent action to further adapt to market conditions, and to help ensure Eguana moves forward to execute operational objectives," Justin Holland, CEO of Eguana, said in a release.

Eguana’s main energy storage product is Evolve, a battery system that can operate on solar energy. The company also develops software to manage its products and link Eguana’s energy storage systems to form virtual power plants — a mix of small, often renewable energy and battery assets that work as a single electricity-generating facility.

Eguana’s chief technology officer Daljit Ghotra has also announced his resignation, effective Jan. 31. He will remain a “key external hardware resource”, Holland said. 

Eguana’s earlier financial troubles 

Many of the snags Eguana referenced in the release were previewed in its Q3 2024 financial results.

Citing economic factors such as inflation and high interest rates that hurt consumer demand in the renewable energy industry, Eguana reported revenue of $300,000 in the quarter, significantly lower than Q2 2024 ($700,000) and Q3 2023 ($2.6 million).

It operated at a net loss of just under $3 million in Q3 2024, which was an improvement from the $5.8 million net loss it reported in Q3 2023. Eguana’s cuts to product development, sales, marketing and business development, plus an expected credit loss turning to a gain, were responsible for the difference, the company said.

Eguana said it was owed approximately $6.3 million from a customer in the Q3 2024 financial statement. The payments were delayed, but progress payments were received throughout the quarter, it added.

The constrained liquidity hurt its ability to make payments on time to its unnamed senior lender.

In November 2024, Eguana said it was negotiating a formal loan amendment with its senior long-term debt lender for a balance of US$6.5 million, which had moved into default the month prior. Eguana said the loan amortization was extended to May 15, 2026 as of Dec. 15, 2024. In exchange, Eguana would issue three million bonus shares from its treasury.

Along with BC Hydro, Eguana was selected to supply a pilot project involving 200 customers with the goal of installing a megawatt’s worth of its Evolve systems by the spring of 2025. Though it was hit by the delayed invoicing and cash receipts, Eguana said shipments are expected to start this week, with “steady weekly run rates” expected.

The company also closed its Australian subsidiary Eguana Pty Ltd. in November to focus on North American utilities.

Eguana’s upcoming developments

While the latest announcement conveyed turbulence ahead, Eguana has also made progress on its products and deliveries, as stated in its Q3 2024 report.

It highlighted a sale of evaluation systems to a major smart meter manufacturer and a large California investor-owned utility collaborating to develop a fully integrated smart meter with battery storage for utilities.

It also integrated one of its software products with EnergyHub, a U.S. distributed energy resources management system provider that operates virtual power plants in New England and California.

On the technology side, Eguana said it added a battery with higher energy density and lower cost to Evolve, and completed product development to enable multiple installations of Evolve per site.

"We remain focused on advancing key relationships in utility and virtual power plant channels while delivering on our mission to connect homeowners and utilities, for a seamless experience through the distributed grid transition," Holland said.