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Smart Wires Technology Ltd Issues Q3 2022 Interim Report and Updates Order Guidance

Smart Wires Technology Ltd Issues Q3 2022 Interim Report and Updates Order Guidance

Nov 17, 2022

“There is no doubt that we have faced many challenges in 2022. We’re not through the year yet and still have plans to reframe and deliver better output, but supply chain delays have impacted production – in terms of new product cut-in, ramping, and volume – which has prevented backlog execution, deliveries, and milestone payment collections. We have continued to develop and position the business, but the delays reached a point in Q3, where we were left with no choice on dropping revenue and margin guidance, lowering new orders expectations, and announcing the need to address near-term liquidity challenges, up to and including the possible sale of the business.

Our hypothesis that lighthouse customers will drive our growth remains unchanged. We know that these accounts will drive core growth, and a broader ripple effect on the regions and countries where these customers operate.

What has changed is that we will focus our investment, product development, and resource allocation on these customers and markets. We are not dropping the broader marketplace (which remains large and full of potential) but rather than chasing, we will wait for these markets to come to us. This allows us to be far more focused, with a lower cost structure, while positioned to react and respond as opportunities evolve.

Finally, we recently announced the issuance of Preferred Shares that will provide new capital up to $20 million with $5 million already funded and an additional $5 million to be funded by December 1, 2022. In addition, we also announced our plans to apply for delisting from the NASDAQ First North Growth Market.

Peter Wells

CEO of Smart Wires

The Company’s Key Business Highlights for Q3 2022:

  • Company announced it’s closed on $5 million in funding under a $20 million aggregate investment
  • Company announced plans to apply for delisting of the Company’s Swedish Depository Receipts, currently traded on the NASDAQ First North Growth Market
  • Announcement that Company is exploring strategic alternatives including without limitation additional financing, a business combination, and a sale of the Company
  • Initiation of a restructuring to further focus the business on core markets and improve its cost structure, including a reduction in force affecting 35% of employees
  • Given continued supply chain challenges, revenue guidance was suspended
  • Current order backlog at $67 million slated for Q4 2022 to Q2 2023 delivery
  • Order guidance was lowered from $80 million to $100 million to $50 million to $60 million
  • Q3 Revenue of $4.5 million, -23% vs. Q3 2021
  • Q3 Net loss of $23.2 million, -50% vs. Q3 2021
  • Q3 non-GAAP adjusted EBITDA loss of $20.8 million, -41% vs. Q3 2021
  • Successful delivery of first project in Canada
  • Completion of large-scale VNI upgrade project with Transgrid in Australia

The full Smart Wires Technology Ltd Q3 2022 Interim Report is attached to this release, and can be found at: https://www.smartwires.com/investors/financial-reports-presentations/.

Important notice about forward-looking information

This interim report contains certain forward-looking information and statements that reflect the Company’s current views on future events as well as financial and operational developments. Words such as “refer”, “assess”, “expect”, “can”, “plan”, “estimate”, “calculate”, “could” and other expressions that indicate indications or assessments regarding future developments or trends, and which does not relate to historical facts, constitutes forward-looking information. Forward-looking information is inherently associated with both known and unknown risks and uncertainties because it is dependent on future events and circumstances. Forward-looking information does not constitute a guarantee regarding future results or development and the actual outcome may differ materially from what is stated in forward-looking information. Neither the Company nor anyone else make any representations about publishing updates or revisions of forward-looking information as a result of new information, future events or similar circumstances other than as provided by applicable mandatory rules and regulations.

CONTACTS

Julie Andrews, CFO

E-mail: julie.andrews@smartwires.com

Tel: +1 901 687 8314

Smart Wires’ Certified Adviser is Erik Penser Bank AB, Apelbergsgatan 27, Box 7405, SE-103 91 Stockholm, E-mail: certifiedadviser@penser.se, Tel: 08-463 83 00, www.penser.se.

This information is information that Smart Wires Technology Ltd is obliged to make public

pursuant to the EU Market Abuse Regulation. The information was submitted for publication,

through the agency of the contact persons set out above, at 2022-11-17, 07:30 CET

ABOUT SMART WIRES TECHNOLOGY LTD.

Smart Wires conducts grid technology business that helps utilize, modernize, optimize, and monetize grid capacity to meet the demands and opportunities of the energy transition. The Company operates in the global transmission grid technology market and is a leader in modular power flow control technology. Power flow control technology controls and directs power flow on high voltage electric transmission systems. Smart Wires serves transmission owners, primarily electric utilities. Transmission owners use power flow controllers to eliminate line overloads by redirecting power to other lines, to reduce transmission congestion, and to enable renewable energy connection and dispatch. Currently, Smart Wires’ main projects are located in Europe, the United States and Australia with upcoming projects in South America and Canada. The Company has a large customer base comprised of utilities globally. Smart Wires Technology Ltd is listed on the Nasdaq First North Growth Market. For more information, please visit www.smartwires.com.

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Smart Wires Technology Ltd. Announces a Financing of USD $5 Million and its Intention to Apply For Delisting of its SDRs From Nasdaq First North Growth Market

Smart Wires Technology Ltd. Announces a Financing of USD $5 Million and its Intention to Apply For Delisting of its SDRs From Nasdaq First North Growth Market

Nov 16, 2022

Smart Wires Technology Ltd (the “Company”) today announced that it has closed on USD $5 million in funding under a facility that allows for up to USD $20 million of aggregate investment, and plans to apply for delisting of the Company’s Swedish Depositary Receipts (SDRs), currently traded on Nasdaq First North Growth Market. The Company expects to formally apply for delisting of the SDRs from Nasdaq First North Growth Market not earlier than three months from today.  

The Company has entered into a Preferred Shares Subscription Agreement with two existing Members of the Company, FW Smart Wires Investors, LLC and two funds affiliated with 3X5 Partners, LLC, which provides for an immediate investment of USD $5 million in exchange for 5,000 Preferred Shares at a purchase price of USD $1,000 per share, a second investment of USD $5 million in exchange for an additional 5,000 Preferred Shares at a purchase price of USD $1,000 per share on or around December 1, 2022, and additional funding of up to USD $10 million for up to 10,000 Preferred Shares at a purchase price of USD $1,000 per share, subject to the terms and conditions outlined in the Amended and Restated Memorandum and Articles of Association (the “AR M&A”). The AR M&A were filed with the appropriate corporate authorities on November 14, 2022, and are posted on the website of the Company.  The Preferred Shares, which are not listed on the Nasdaq First North Growth Market and are considered restricted securities, provide for preferential rights in favor of the new investors, including with respect to, among other rights, dividends, distributions and liquidation preferences, and the right to convert into the equity securities in the next equity financing of the Company at a price of 85% of the lowest cash price paid for such equity securities, as further outlined in the AR M&A.  In addition to the issuance of Preferred Shares in connection with such investment, the new investors will enter into a Warrant Agreement with the Company whereby each new investor will have an option to purchase additional Ordinary Shares of the Company at USD $0.01 per share of Ordinary Share. The investors will receive warrants to purchase 2,558,456.4 Ordinary Shares for every USD $1,000,000 of Preferred Shares purchased, for an aggregate of up to 51,169,128 Ordinary Shares. The warrants expire upon the earlier of ten years from the date of issuance, a sale of the Company or an initial public offering of the Company’s equity securities.

In addition to the noted investment, the Board of Directors of the Company has determined it is in the best interests of the Company and the Members to delist the SDRs, taking into consideration the evolution of trading since the Company listed their SDRs on Nasdaq First North Growth Market in May of 2021 and noting the trading volumes of and market prices for the SDRs that the Board of Directors believes may not be reflective of the Company’s value proposition. The Company has also considered the additional costs related to maintaining the listing of the SDRs on the Nasdaq First North Growth Market weighed against its benefits, as well as the administrative burden of complying with the listing rules as it considers future strategic transactions.

Notice of termination of the SDR Program is expected to be sent to the holders of SDRs in the near future by Pareto Securities AB, the SDR Custodian.  Holders of SDRs will be able to remain Members of the Company and be registered in the Company’s register of Members by following the process described in that communication.

Further information about the delisting will be provided once the formal delisting process has been initiated with Nasdaq First North Growth Market.

CONTACTS

Julie Andrews, CFO

E-mail: investors@smartwires.com

Tel: +1 (901) 687-8314

Smart Wires’ Certified Adviser is Erik Penser Bank AB, Apelbergsgatan 27, Box 7405, SE-103 91 Stockholm, E-mail: certifiedadviser@penser.se, Tel: +46 8 463 83 00, www.penser.se.

This information is information that Smart Wires Technology Ltd is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above on November 16, 2022 , at 20:55 CET

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Smart Wires Technology Ltd Board Approves Revisions to Amended & Restated Memorandum and Articles

Smart Wires Technology Ltd Board Approves Revisions to Amended & Restated Memorandum and Articles

Nov 14, 2022

Smart Wires Technology LTD (Smart Wires or the Company) today announced that its Board of Directors  and Members holding at least a majority of the outstanding Ordinary Shares in the Company approved revisions to its Amended and Restated Memorandum and Articles of Association (the AR M&A) to increase authorized share capital, to change the par value of the Ordinary Shares from $0.01 USD per Ordinary Share to no par value,  and to create a new class of Preferred Shares with various preferential rights, which are generally described below.

The revisions include an increase in the authorized number of equity securities of the Company to the total of 1,500,020,000, which reflects an increase of 20,000 of Preferred Shares in connection with the creation of a new class of Preferred Shares, alongside the existing Ordinary Shares. The Ordinary Shares and Preferred Shares each have no par value. The Preferred Shares have, among others, the right to optional conversion, at the election of the holder thereof, into the equity securities in certain future equity financings of the Company at a price equal to 85% of the lowest cash price paid for such equity securities. In addition, there is priority of payment over Ordinary Shares in any distribution or dividend by the Company, and a liquidation preference of three times the original issue price of $1,000 per share, subject to increases of up to five times the original issue price upon certain triggering events. The liquidation preference applies in the event of a sale of the Company, or certain similar transactions, or upon a liquidation of the Company.

For so long as at least fifty percent of the Preferred Shares if and when issued to members remain outstanding the Company cannot undertake, among others, the following activities without the written consent of the holders of a majority of the Preferred Shares:

  • Make certain changes in the authorized share capital of the Company.
  • Redeem any outstanding shares of the Company, other than in connection with customary exceptions.
  • Declare distributions.
  • Incur additional indebtedness in excess of $500,000.
  • Sell or dispose of assets have a value in excess of $500,000.
  • Enter into related party transactions, subject to reasonable exceptions.
  • Change the number of directors constituting the Board of Directors.
  • Liquidate, dissolve or effectuate a sale of the Company.

The AR M&A reflects that Members holding at least 5,000 shares of Preferred Shares (when and if issued) have a right of first refusal with respect to new issuances of equity of the Company, subject to customary exceptions. Upon the occurrence of certain events, such as the Company not obtaining minimum funding from an equity financing by July 1, 2023, the holders of a majority of the Preferred Shares can require the Company to redeem the outstanding Preferred Shares at a price per share equal to the Liquidation Preference. If the Company does not satisfy payment for the redemption of the Preferred Shares, the holders of the Preferred Shares will have the right to appoint a majority of the Board of Directors.  Members holding at least 5,000 shares of Preferred Shares maintain certain information rights, such as rights to receive annual and quarterly financial statements and such other information as they may reasonably request. The rights of the Preferred Shares cannot be altered or amended without the written consent of the holders of a majority of the Preferred Shares.

The Company anticipates that approval of the revisions of the Company’s AR M&A will assist the Company in obtaining financing as mentioned in prior releases. 

The Company’s AR M&A are located at https://smartwires.com/governance/.

About Smart Wires Technology LTD

Smart Wires conducts grid technology business that helps utilize, modernize, optimize and monetize grid capacity to meet the demands and opportunities of the energy transition. The Company operates in the global transmission grid technology market and is a leader in modular power flow control technology. Power flow control technology controls and directs power flow on high voltage electric transmission systems. Smart Wires serves transmission owners, primarily electric utilities. Transmission owners use power flow controllers to eliminate line overloads by redirecting power to other lines, to reduce transmission congestion, and to enable renewable energy connection and dispatch. Currently, Smart Wires’ main projects are located in Europe, the United States and Australia with upcoming projects in South America and Canada. The Company has a large customer base comprised of utilities globally. Smart Wires Technology Ltd is listed on the Nasdaq First North Growth Market. For more information, please visit www.smartwires.com.

CONTACTS

Julie Andrews, Chief Financial Officer

Email: julie.andrews@smartwires.com

Tel: + 1 901-687-8314

Smart Wires’ Certified Adviser is Erik Penser Bank AB, Apelbergsgatan 27, Box 7405, SE-103 91 Stockholm, E-mail: certifiedadviser@penser.se, Tel: 08-463 83 00, www.penser.se.

This information is information that Smart Wires Technology Ltd is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 2022-11-14, 19:15 CET.

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Smart Wires Delivers First Digital Power Flow Control Technology Project in Canada

Smart Wires Delivers First Digital Power Flow Control Technology Project in Canada

Nov 10, 2022

Smart Wires today announced the successful delivery of a first project in Canada, a significant step towards the adoption of digital power flow control technology in the country.

The project involves evaluating Smart Wires’ core technology – SmartValve™ – in a mobile deployment to increase system capacity and improve reliability.

The SmartValves were deployed at a substation in southern Alberta to reduce network congestion by actively balancing power flows across the surrounding circuits. This unlocked increased capacity on the existing network for generation, resolving a short-term network need in the area.

Smart Wires partners with customers across the world to transform the grid and sees huge potential for digital power flow control to support the huge growth in new generation connecting to the grid and increasing electrification of society across Canada.

“This is the first of what we expect to be many projects for Smart Wires in Canada, where electric transmission system owners are working hard to connect consumers with affordable, renewable energy,” said Jessica Joyce, Smart Wires Chief Sales Officer. “We are proud to collaborate with companies who are embracing the potential of technologies like ours to create a digital, secure and accessible grid.”

SmartValve is a modular Static Synchronous Series Compensator (SSSC) that quickly unlocks network capacity by pushing power off overloaded lines or pulling power onto underutilized lines. Its modular design enables flexible and scalable deployments that provide long-term network planning solutions to integrate renewables and demand, increase interregional power transfer, lower costs, improve grid resiliency and multiple other applications. It can also be used to address urgent or short-term needs and support outage management due to its easily movable design. SmartValve also provides dynamic services such as improving transient stability and voltage stability.

The mobile deployment option enables companies to install and commission SmartValves within days, and without the need for costly substation site modifications. This project was commissioned in September 2022.

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Transgrid delivers $45 million Victoria-NSW Interconnector upgrade, releasing flow of renewable energy between states

Transgrid delivers $45 million Victoria-NSW Interconnector upgrade, releasing flow of renewable energy between states

Nov 3, 2022

More renewable energy will now flow between Victoria, NSW and the ACT with the successful delivery of Transgrid’s upgrade of the Victoria-NSW Interconnector (VNI).

The $45 million VNI upgrade has unlocked 170 megawatts of additional energy, enough to power more than 30,000 homes.

Transgrid CEO Brett Redman said the project was delivered on budget and features world-leading SmartValve technology from US-based grid enhancing technology company, Smart Wires.

“Transgrid is building the energy superhighways that will benefit millions of Australians and this project is a key example of how we are enabling more efficient sharing of renewable energy between the states.

“The speed at which the energy transition is accelerating means we must embrace new technology and innovate and SmartValve is a perfect example of how Transgrid is doing just that.

“This clever technology benefits both customers and the environment and will allow renewable energy from Victoria to flow into NSW and the ACT when demand is greatest,” Mr Redman said.

Transgrid is the first large scale user of SmartValve technology in Australia. It detects congestion on the transmission network and redirects power off overloaded lines onto transmission lines with spare capacity and enables substations to be upgraded using existing infrastructure.

Nine SmartValve units were installed at Transgrid’s Stockdill substation in the ACT to unlock 120 MW of additional energy, while six units at Yass substation will provide another 50 MW.

“By using power flow controller technology we can unlock additional energy without needing to build new lines or upgrade existing transmission lines, which minimises environmental and community impact,” he said.

Smart Wires CEO Peter Wells applauded Transgrid’s adoption of grid enhancing technology, which he believes will be critical to Australia’s long-term energy future.

“Transgrid is one of the world’s leading utilities in this space, and through VNI and other projects, is proving its commitment to the energy transition, the environment and its customers.

“The VNI project has been an incredibly successful collaboration which has increased transfer capacity and enabled the connection of significantly more renewables.

“We are very proud to partner with Transgrid and support the evolution of Australia’s grid into a digital, secure and accessible platform capable of delivering net zero, economic growth, innovation, jobs and prosperity,” Mr Wells said.

The project was the preferred option identified to increase transfer capacity between NSW and Victoria in the 2020 Project Assessment Conclusion Report (PACR) by the Australian Market Energy Operator (AMEO) and Transgrid.

The PACR found the VNI upgrade is expected to deliver net benefits of up to $268 million to electricity customers.
The VNI upgrade will help reduce electricity bills through more efficient sharing of generation resources between the states and enable more energy from renewable sources to enter the grid.

It will also support the development of new renewable generation in the state’s energy zones.

The completion of VNI follows Transgrid’s successful delivery in July of the $236 million upgrade of the Queensland-NSW Interconnector (QNI) which allows 460MW more power to be transferred into Queensland and 190MW more into NSW and the ACT when needed.

Transgrid is also building the 700km NSW section of EnergyConnect, from Wagga Wagga to the South Australian border. EnergyConnect will enable the sharing of energy between NSW, SA and Victoria.

Transgrid is also developing HumeLink and VNI West Kerang, which together with EnergyConnect will reinforce the southern grid and support cheaper, cleaner energy.

For more information about the VNI project: https://transgrid.com.au/VNI 

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Energy Magazine: Substation upgrades unlock renewable energy flow between VIC and ACT

Smart Wires Cements Position as Grid Enhancing Technology Leader with New Dynamic Rating Offering

Aug 25, 2022

Smart Wires now has a suite of Grid Enhancing Technologies, adding the state-of-the-art SUMO™ Dynamic Rating System software to its offerings.

Smart Wires will launch the new commercial offering at CIGRE Session 2022 in Paris. Leaders from both Smart Wires and Operato, a subsidiary of the Slovenian Transmission System Operator ELES that developed SUMO, will be on hand for the announcement.

The addition of SUMO complements and strengthens Smart Wires’ existing offering to help grid operators meet the demands of renewable energy adoption and demand-side electrification with advanced data analytics, system modeling and power flow optimization.

“Operato is recognized as an industry leader in the Dynamic Ratings space in Europe and adding its software to our toolbox strengthens our commercial offerings,” said Peter Wells, Smart Wires CEO. “With the addition of SUMO, we can combine the power of modelling, analytics and power flow control with dynamic ratings, allowing us to realize our vision of reimagining the grid for a net zero world.”

There is growing industry agreement on the importance and criticality of leveraging dynamic ratings for lines and other electric system equipment to improve system safety and efficiency. Earlier this year, FERC (the national regulator for electric utilities in the US) opened a notice of inquiry on dynamic line ratings which seeks guidance on a threshold for transmission lines to qualify for a dynamic line rating requirement.

Andrej Souvent, Operato CEO, commented, “SUMO has a 10-year track record of supporting the power system operation. We have used it extensively for real-time operation and operational planning over this period and we have observed that it offers higher transmission capacities 95% of the time, with a median increase of 20% of the nominal capacities.”

In addition to SUMO, Smart Wires offers hardware and analytics services that advance the delivery of affordable, clean energy. SmartValve™, a modular power flow control device, intelligently controls the flow of power across the network. It pushes power off overloaded lines and pulls power onto underutilized lines, balancing power flows evenly across multiple circuits. SmartValve and SUMO complement each other, but the two technologies can also work alone or with other systems to support the fast, reliable delivery of electricity.

Powerful synergies exist between Smart Wires’ technologies. SmartValve maximizes the use of grid capacity by redirecting power flows to underutilized lines. SUMO uses weather data to find and quantify situations where even more additional capacity might be available. The combined application of these two technologies creates a multiplier effect which enables much more renewable energy to flow on the existing grid infrastructure.

The Department of Energy will receive $100 million to study the development of interregional electric transmission infrastructure and the integration of offshore wind energy. This study will explicitly include Grid Enhancing Technologies (GETs) — such as power flow control and dynamic line rating — as solutions to alleviate constraints that result as more renewables are incorporated onto the grid. This investment builds on years of federal research and support for GETs. These technologies have long been recognized by government, private industry and academia as indispensable for optimizing the grid.

“Signing the Inflation Reduction Act into law is a significant step forward for the future of our planet; we commend and support this significant step,” said Smart Wires CEO Peter Wells. “While not a direct investment in the grid, and the infrastructure needed to support the energy transition, this unprecedented investment into the deployment of renewable generation and the electrification of demand is very positive. Ultimately, we also need to invest in and develop a digital edge-to-edge grid… a global energy network that creates a platform capable of connecting more renewable energy, faster, and enabling demand-side electrification. This platform would empower the consumer, connect the producer, and enable a new paradigm of flexible, adaptive grid operations. The backbone of the energy transition is a digital grid — it needs to be front-and-center as we build our net zero future.”

Smart Wires offers hardware, software and analytics services that advance the delivery of affordable, clean energy. SmartValve™, a modular power flow control device, intelligently controls the flow of power across the network. It pushes power off overloaded lines and pulls power onto underutilized lines, balancing power flows evenly across multiple circuits. SUMO™ is a state-of-the-art Dynamic Rating software that provides system-wide visibility of lines, transformers and other network equipment in real-time and for future forecasts.

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