Mr. Justin Holland reports

EGUANA ANNOUNCES FIRST QUARTER 2025 FINANCIAL RESULTS

Eguana Technologies Inc. has released its first quarter financial results for the three-month ended March 31, 2025.

First quarter 2024 summary results

Q1 2025 revenue of $1,048,180 was a significant increase from the comparative quarter in March, 2024. Q1 2025 revenues were indicative of Eguana's transition to the utility channel.

Q1 2025 gross margin was approximately $461,175, or 44 per cent, an improvement from gross margin in the comparative quarter of March, 2024. While positive sales were made in Q1 of 2024, the increase in gross margin in 2025 is primarily due to the purchase of discounted finished goods in 2024.

Q1 2025 operating loss of $565,450 a decrease from a $1,526,725 operating loss for the comparative March quarter in 2024. The improvement is largely due to lower expenses in categories in the first quarter of 2025, as the company reduced headcount, development spending and overall expenses.

Working capital at March 31, 2025, remained in a negative position, as the total long-term debt is classified as current. The liquidity position, which continues to be impacted by slow market recovery, is closely monitored and has been reported in prior news releases.

Itochu Corp., a strategic investor in the company, deferred its interest payment, in cash or shares in lieu, at March 1, 2025, to support the company's liquidity. The payment has been deferred to Aug. 31, 2025.

In March, 2025, the company reached a settlement agreement with its United States-based third party manufacturer and third party distributor. Pursuant to the terms of the settlement agreement.

• In consideration for Eguana's release of the customer's obligations, Eguana was paid a termination fee of $250,000 (U.S.) in cash.
• Customer will transfer ownership of $1.1-million (U.S.) in additional finished goods inventories.
• Customer agrees to increase the amount of manufacturing credit available to Eguana under their previous agreements by $250,000 (U.S.) to $1.45-million (U.S.).

The company was under a management cease trade order (MCTO) from the Alberta Securities Commission for late filing the audited annual consolidated financial statements. As of this release all fillings are now current and available on SEDAR+.

Business updates for the first quarter

Completed secondary demand response testing across seven-day testing period for single unit and fleet aggregated systems in preparation for bidding into California Demand Response market with DERMS partner and Community Choice Aggregator.

Continued shipments to Western Canadian utility partner in support of multiple feeder improvement projects, with a total of two megawatt-hours shipped to date.

The company is in the final stages negotiating a development agreement with a Southern Alberta utility to expand and demonstrate utility-oriented functions in Eguana Edge on a single feeder. These features will enhance the stacked value Eguana is able to offer to utilities and other stakeholders versus competitive products.

The company's energy storage products have been accepted into Connecticut's energy storage solutions program. The unique structure of Connecticut's program with the focus on performance provides an opportunity for Eguana to differentiate itself from independence-oriented energy storage products.

Successfully completed demand response testing in Vermont, making Eguana's products eligible for acceptance into utility driven ESS leasing program to rate base.

With Evolve's advanced IEEE 2030.5 implementation multiple developers are now using Eguana solutions to demonstrate their own IEEE 2030.5 control and telemetry capabilities to utilities, including smart meter and AMI (advanced metering infrastructure) networks and artificial-intelligence-driven distributed computing at the grid edge.

"With growing peak load and supply chain challenges, utilities are increasingly focusing on emerging technology solutions to maintain power grid reliability, building in needed distribution and transmission capacities, and minimizing costs to customers by getting more out of the aging infrastructure we already have," commented Eguana chief executive officer Justin Holland. "As utilities continue to see Eguana product solutions delivering the capabilities that they have always sought from distributed energy storage, along with having multiple developers utilizing our solutions for smart meter and AI-driven grid edge advancements, latent opportunities continue opening for the company across the USA and Canada in channels we are targeting."

About Eguana Technologies Inc.

Eguana's vision is to accelerate grid modernization and resilience, by delivering flexible, modular and cost-effective alternatives to traditional grid upgrades. The company's technology provides value to all key stakeholders -- from the consumer, to the electricity retailer, the distribution utility and the system operator.

Eguana Technologies connects utilities with consumers, through its high performance commercial and residential energy storage solutions. Eguana's vertically integrated product suite has been designed from the ground up, with both the end-user and the utility in mind, to transition the power grid seamlessly.

Manufactured in local facilities across the globe to ensure compliance and quality, Eguana's standardized platform allows the flexibility to ensure each product solution is optimized for use in major grid modernization markets.

We seek Safe Harbor.