Hypercharge Issues Clarifying News Release and Announces Amended and Restated MD&A
Vancouver, British Columbia--(Newsfile Corp. - May 12, 2023) - Hypercharge Networks Corp. (NEO: HC) (OTCQB: HCNWF) (FSE: PB7) (the "Company" or "Hypercharge"), a leading, smart electric vehicle (EV) charging solutions provider, announces that, as a result of a review by the British Columbia Securities Commission, and in furtherance of the Company's ongoing commitment to good corporate governance, the Company wishes to clarify certain disclosure and recent statements made by or on behalf of the Company.
The Company would like to clarify its disclosure and retract certain statements that were contained in the Company's investor presentation (the "Presentation"), available on its website at www.hypercharge.com/investors, and that were included in certain investor relations materials published for and on behalf of the Company between April 1, 2023 and April 10, 2023 (together with the Presentation, the "Disclosure Materials").
In particular, the Disclosure Materials included the following statements (the "Statements"):
a statement that the Company anticipates an annual growth trajectory of
200% in charging ports sold in calendar year 2023; anda statement that the Company anticipates an annual growth trajectory of
300% in total revenue in calendar year 2023.
In some of the Disclosure Materials, the Statements may have been presented as a "financial outlook", as defined in National Instrument 51-102 - Continuous Disclosure Obligations ("NI 51-102"), whereas the Company intended such growth trajectories to only represent the Company's goals for 2023. Further, the Disclosure Materials did not include a discussion of the material factors and assumptions used to develop the Statements, as required by NI 51-102.
The Company hereby retracts the Statements contained in the Disclosure Materials and advises that the Statements should not be relied upon by any member of the public for any purpose. The Company has requested the removal of all investor relations materials published for and on behalf of the Company since April 1, 2023. The Company has also published a revised Presentation on its website which no longer includes the Statements.
In light of the above, the Company wishes to provide an update on its operations and to clarify certain of its goals for calendar year 2023.
- Increasing Sales Orders: In calendar year 2022, the Company signed sales contracts for 1,491 charging ports, and in the second, third and fourth quarters, quarter-over-quarter growth in the number of charging port sales orders was
192% ,145% and374% , respectively. The Company is aiming to continue this growth in 2023. To that end, the Company is focused on expanding its presence in Canada, where it has sold charging stations in eight provinces, and the U.S., where it has signed sales contracts for charging stations in six states. These initiatives are also supported by45% growth in the Company's headcount since December 2022 and the Company's intention to add another nine full-time hires in 2023, which will include sales, marketing and operations personnel to expand in Canada and open new markets in the U.S.
- Increasing Revenues: In accordance with International Financial Reporting Standard (IFRS) 15, the Company recognizes revenue from sales contracts with customers upon delivery of charging ports, at which point the Company's performance obligation is satisfied. The Company intends to increase its revenues in 2023 by (i) increasing the number of charging port sales orders (as discussed above), and (ii) improving its fulfillment rate with respect to such sales orders. In 2022, of the 1,491 ports ordered by its customers under sales contracts, the Company delivered 500, generating total revenues of
$1.7M (unaudited). This represented a fulfillment rate of34% on the total number of ports ordered in 2022 and average unit revenue of approximately$3,450 per port, based on the Company's historical product mix. In 2023, the Company hopes to increase its average quarterly fulfilment rate on charging ports ordered through support from new personnel, reduced supply chain disruptions and by drawing on operational efficiencies the Company has achieved since 2022.
The discussion above is intended to provide readers with a better understanding of the Company's growth ambitions; however, the statements are inherently uncertain and actual results may differ materially from those discussed above due to numerous known and unknown risks, and such statements should therefore not be construed as guidance. The Company's ability to achieve its goals discussed above is subject to, among other things, the Company securing new contracts with new and/or existing customers, the Company increasing the number of customers and/or the size of the Company's contracts with its customers, the continued availability to the Company's customers of government incentives for the installation of EV infrastructure, and the Company being able to identify and hire qualified new team members, including sales personnel in the U.S. and Canada, none of which can be guaranteed. Please see "Cautionary Statement Concerning Forward-Looking Statements" below.
In addition to the preceding, the Company would also like to clarify certain of its recent disclosures with respect to its contracts with PCI Developments (748 charging ports) and the Lark Group of Companies (128 charging ports), which were announced by the Company on March 29 and March 31, 2023, respectively. The Company expects to begin phased delivery to PCI Developments' King George Hub development in Spring 2024, with completion estimated in November 2024 and to recognize the associated revenues from that agreement over that time. The Company expects to deliver all charging stations under its agreement with Lark Group in February 2024 and to recognize the associated revenue at that time. The Company's contracts with PCI Developments and the Lark Group are illustrative of the lag between the date on which the Company enters into a sales contract with its customers and the time the chargers are delivered and revenue recognized, which can range from immediate fulfilment up to a year or more, depending on the specific project.
Amended and Restated MD&A
The Company also announces that it has amended and re-filed its interim Management Discussion and Analysis (the "Amended MD&A") for the four months ended December 31, 2022. A summary of the material changes is included below.
The Amended MD&A (i) includes a more comprehensive discussion of the Company's acquisition of CoSource Information Technology Services Inc. ("CoSource") and a description of CoSource's "plug and charge" proprietary software; (ii) includes a description of the goodwill impairment of approximately
This enhanced disclosure in the Amended MD&A is aimed to provide the reader with a broader understanding of the Company's business and highlights its ongoing commitment to good corporate governance, accountability, and transparency to its customers and shareholders, and is representative of the Company's core values of trust, commitment, innovation and collaboration.
-##-
About Hypercharge
Hypercharge Networks Corp. (NEO: HC) (OTCQB: HCNWF) (FSE: PB7) is a leading provider of smart electric vehicle (EV) charging solutions that offers turnkey technology to multi-unit residential and commercial buildings, fleet operations, and other rapidly growing sectors. Driven by its mission to accelerate EV adoption and enable the shift towards a carbon neutral economy, Hypercharge is committed to providing seamless, simple charging solutions by offering industry-leading equipment and a robust network of public and private charging stations. Learn more: https://hypercharge.com/.
On behalf of the company,
Hypercharge Networks Corp.
David Bibby, President & CEO
Investor Relations:
Kelsey Letham | Head of Investor Relations
invest@hypercharge.com
604-881-1730
Media Contact:
Kyle Green | Senior Marketing Manager
kyle.green@hypercharge.com
Cautionary Statement Concerning Forward-Looking Statements
This news release contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable securities laws. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "could", "anticipate", "will", "estimates", "believes", "intends", "expects" and similar expressions which are intended to identify forward-looking statements. More particularly and without limitation, this news release contains forward-looking statements concerning (i) the Company's goal of increasing the number of sales orders and total revenues in 2023; (ii) the Company's continued expansion in Canada and the U.S.; (iii) the Company's hiring plans for 2023; (iv) the Company's goal of increasing its quarterly fulfilment rate on charging ports ordered; and (v) the anticipated timing of the Company's delivery of the EV charging ports and revenue recognition under its agreements with PCI Developments and Lark Group of Companies.
Forward-looking statements are inherently uncertain, and the Company's actual performance may be affected by a number of material factors, assumptions and expectations, many of which are beyond the control of the Company. The Company believes that the forward-looking statements disclosed in this news release are based on assumptions that are reasonable in the circumstances including, without limitation, (i) the Company's ability to generate revenue while controlling costs and expenses; (ii) the Company's ability to keep pace with increasing competition; (iii) the absence of material changes in the industry or regulatory regimes in which the Company operates; (iv) the Company's ability to attract and retain key personnel; (v) the Company's ability to manage growth effectively; (vi) the Company's ability to keep pace with technological developments; (vii) the Company's ability to obtain additional financing on satisfactory terms or at all; (viii) the Company being able to fulfil its obligations under its agreements with its customers; (ix) the Company being able to execute on its opportunity pipeline; (x) year-over-year quarterly charging port sales following the historical growth trajectory; (xi) the Company being able to identify and hire qualified new team members; (xii) the Company continuing to secure additional preferred partners in the United States; (xiii) the Company's expansion in Canada and the U.S. continuing to gain traction; (xv) the product mix remaining consistent with the Company's historical product mix; (xvi) the Company increasing the number of charging port sales orders in 2023; (xvii) the Company increasing its average quarterly fulfilment rate; and (xviii) the average revenue received by the Company per charging port delivered remaining consistent with historical figures. Readers are cautioned that assumptions used in the preparation of any forward-looking statements may prove to be incorrect.
Events or circumstances may cause actual results to differ materially from those predicted as a result of numerous known and unknown risks, uncertainties and other factors, many of which are beyond the control of the Company. Such risks, uncertainties and other factors may include, without limitation, (i) the Company's limited history of operations; (ii) the Company's reliance on consumer adoption of electric vehicles; (iii) the Company's reliance on third-party manufacturers and suppliers; (iv) the significant competition in the Company's industry; (v) a decrease in demand for electric vehicles; (vi) the Company's reliance on key members of management and other personnel; (vii) the Company's reliance on additional financing to successfully develop its business; (viii) changes to government regulation affecting the Company's industry, including changes to the availability of rebates, tax credits and other financial incentives related to electric vehicles, and (ix) the other factors disclosed under "Risk Factors" in the Company's final long form prospectus dated September 23, 2022 available under the Company's profile at www.sedar.com.
Readers are further cautioned not to place undue reliance on any forward-looking statements, as such information, although considered reasonable by management of the Company at the time of preparation, may prove to be inaccurate or incorrect and actual results may differ materially from those anticipated. The forward-looking statements contained in this news release are made as of the date of this news release, and are expressly qualified by the foregoing cautionary statement. Except as expressly required by securities law, the Company undertakes no obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise.
Neither the NEO Exchange nor its Market Regulator (as that term is defined in policies of the NEO Exchange) accepts responsibility for the adequacy or accuracy of this news release.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/165953
