Eddy Smart Home Solutions Ltd. (formerly Aumento Capital VIII Corp.) Announces its Intention to Restate its Financial Statements and MD&A
NO IMPACT ON CASHFLOWS AND BUSINESS OPERATIONS
TORONTO, Aug. 19, 2022 /CNW/ - Eddy Smart Home Solutions Ltd. (formerly Aumento Capital VIII Corp.) ("Eddy" or the "Company") (TSXV: EDY) today announced that after revisiting its interpretation and application of certain technical accounting standards related to non-cash consideration provided to a developer and customer (the "Developer") through an amended exclusive supplier agreement dated December 15, 2021 (the "Addendum"), it will restate and refile its consolidated financial statements for the year ended December 31, 2021, which were originally filed on SEDAR on May 6, 2022, the condensed consolidated interim financial statements for the three months ended March 31, 2022, which were originally filed on May 30, 2022, relevant comparative periods, and the related management's discussion and analysis ("MD&A") for those periods (collectively, the "Affected Disclosures").
On December 15, 2021, the Eddy Smart Home Solutions Inc. entered the Addendum with the Developer to amend an exclusive supplier agreement originally entered into in January 2019. Pursuant to the Addendum, Eddy Smart Home Solutions Inc. was obligated to issued to the Developer 1,453,767 common shares and 1,900,000 common share purchase warrants of the Company (the "RTO Securities") contingent on the successful completion of the Company's reverse takeover transaction (the "RTO Transaction") which was achieved on January 12, 2022. In addition, the Company agreed to issue 750,000 common shares of the Company (together with the RTO Securities, the "Securities"), contingent on the Developer providing contracts to the Company for at least 12,500 units at the Developer's condominium projects.
The board of directors of Eddy has determined that the Affected Disclosures are required to be restated because of the magnitude of the expected impact. For the year ended December 31, 2021, the impact is expected to be isolated to the consolidated statement of financial position, increasing prepaid expenses and contributed surplus by approximately $1.6 million. For the three months ended March 31, 2022, the impact to prepaid expenses is expected to slightly less than the December 31, 2021 impact, with a further impact of an expected reduction to general and administrative expenses and deficit of approximately $1.55 million, along with immaterial adjustments to contributed surplus and revenue.
With the exception of potential cash flows received through the exercise of the warrants, the restatement is not expected to have an impact on the past, current or future cash flows of the Company.
Management has determined that the application of the applicable IFRS standards was done incorrectly with respect to how the Securities were measured at the date of the amendment and recognized once issued upon completion of the RTO Transaction.
Travis Allan, Chief Executive Officer and Director of Eddy, said, "We take seriously our obligation to provide accurate financial statements and we have acted accordingly in providing this information".
The Company intends to file its restated financial statements and the corresponding management discussion and analysis on or about September 30, 2022.
Eddy is a North American provider and developer of residential and commercial smart water metering products and monitoring services, helping property owners protect, control, and conserve water usage by combining water sensing devices with behavioural learning software. For more detail on the Company's products or corporate information please visit www.eddysolutions.com.
This news release contains forward-looking statements within the meaning of applicable securities laws including, among others, statements concerning our objectives, our strategies to achieve those objectives, our performance, as well as statements with respect to management's beliefs, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance, or expectations that are not historical facts. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "expect", "intent", "estimate", "anticipate", "believe", "should", "plans", or "continue", or similar expressions suggesting future outcomes or events. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. Forward looking information in this news release includes information regarding the filing of the restated financial statements and the expected changes that will be included therein. These statements are not guarantees of future performance and are based on our estimates and assumptions that are subject to risks and uncertainties, including those described under the heading "Risk Factors" in the Company's filing statement dated January 6, 2022 (a copy of which can be obtained at www.sedar.com), which could cause our actual results and performance to differ materially from the forward-looking statements contained in this news release.
All forward-looking statements in this news release are qualified by these cautionary statements. Except as required by applicable law, the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Eddy Smart Home Solutions Ltd.
Travis Allan, Chief Executive Officer and Director, Tel: 416.560.0234, Email: [email protected]
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