Eddy Smart Home Solutions Ltd. (formerly Aumento Capital VIII Corp.) Announces Q2/2022 results

Mark Silver, Executive Chairman and Director, will be taking on the role of Chief Executive Officer

Q2/2022 HIGHLIGHTS

• Changes to senior management highlighted by Mark Silver assuming the role of Chief Executive Officer and the promotion of Sajid Khan to President & COO.
• Total contracted revenue (backlog) increases 97% to $32.6 million during the six months ended June 30, 2022.
• Revenue growth of 54% during Q2/2022 over the comparable quarter.
• Revenue growth of 29% during YTD Q2/2022 over the comparable period.

TORONTO, Aug. 25, 2022 /CNW/ - Eddy Smart Home Solutions Ltd. (formerly Aumento Capital VIII Corp.) ("Eddy" or the "Company") (TSXV: EDY) released its unaudited financial statements for the three and six months ended June 30, 2022.

SENIOR MANAGEMENT CHANGES
The current Executive Chairman and Director, Mark Silver, will be taking on the role of Chief Executive Officer, as a result of the resignation by Travis Allan as both CEO and Director. Mark Silver has over 36 years of experience in business, real estate and building services. As a focused and successful entrepreneur, he previously co-founded Direct Energy and grew revenues to more than $1.3 billion before selling in 2000. He subsequently launched Universal Energy (purchased by Just Energy for $425 million) and National Home Services (purchased by Reliance Comfort for $505 million). Mr. Silver launched Eddy in 2014 with a goal to extend smart home service offerings to water protection and expand into other markets – such as building and commercial verticals. The board of directors wishes to thank Travis for all of his services.

Sajid Khan has been appointed as President & Chief Operating Officer. Mr. Khan has served in the role of Chief Operating Officer of Eddy since inception. His experience includes more than 20 years of leadership and operational experience in the home services sector. Mr. Khan has held various roles including Chief Operating Officer of Eco Energy Service, Vice President of Operations at both National Home Services and Universal Energy, as well as management positions in Direct Energy. He has extensive experience building and leading installation networks and teams and other operational departments such as call centres, billing, processing, and change management.

The change in roles strengthens the overall senior management team and will position the Company for continued growth and maximize value creation from its rapidly expanding backlog of contracted revenue.

REVENUE
Revenue for the three months ended June 30, 2022, increased to $507,185 as compared with $328,908 reported for the comparable period in 2021. Revenue for the six months ended June 30, 2022, increased to $888,851 as compared with to $688,330 reported for the comparable six-month period in 2021.

NET LOSS
Net loss for the three months ended June 30, 2022, was ($2,615,166), as compared to ($1,663,557) reported for the comparable period in 2021.

Net loss for the six months ended June 30, 2022, was ($5,756,238), excluding the non-recurring, non-cash reverse takeover listing expense which amounted to $858,118, the adjusted net loss for the six-months ended June 30, 2022, was ($4,898,120), as compared to ($2,867,746) reported for the comparable six-month period.

BASIC AND DILUTED LOSS PER SHARE 
Basic and diluted loss per share for the three months ended June 30, 2022 was ($0.03), as compared to ($0.03) reported for the comparable period.

Basic and diluted loss per share for the six months ended June 30, 2022 was ($0.08), as compared to ($0.05) reported in the comparable six-month period.

GROWTH IN CONTRACTED REVENUE  
Contracted revenue is the primary measure of traction we are gaining in the market for our leak protection services. As a result of the building development cycle, in most cases, business garnered during the quarter will not translate into revenue generation until the building is constructed in the future (ranging from a few quarters to approximately two years). As a result, a key operating metric of our success and the value of the business can be measured by both the existing contracted revenue and the growth of this figure. With a mission to protect property and empower people with data and control, the Company's contracted sales backlog continues to grow, and during the first half of 2022, increased by over $16.1 million and stands at over $32.6 million, which represents the future contracted revenue. The Company earns revenue over the term of its contracts on a straight-line basis which commences upon installation. The term of the contracts are typically 84 months. 

The Company's future contracted water monitoring revenue as at June 30, 2022 was $32.6 million (December 31, 2021 – $16.5 million), which is an increase of 97% and demonstrates significant sales momentum.

STRATEGIC ACQUISITION  
On May 4, 2022, the Company acquired a 100% ownership interest in Reed Controls Inc. ("Reed"). Reed develops a robust water management technology platform of hardware and cloud software to manage water related risk, converge water and accelerate Internet of Things ("IoT") adoption among global plumbing manufacturers. The primary reason of the acquisition is to allow the Company to expand the product offering with a greater focus on commercial solutions for smart water metering products and monitoring services. The total purchase price for the transaction was $4,538,420 which was paid through the issuance of 12,266,000 common shares ("Share Consideration").

The Share Consideration is subject to a twenty-four (24) month lock-up period, provided that the Share Consideration will be released from the lock-up requirements on the first business day following each of the four, six, nine, twelve, fifteen, eighteen and twenty-one month anniversaries of the closing date. Upon the closing of the transaction, Reed's founders joined the Company's leadership team. Reed has also been granted a right to nominate a director to serve on the Company's board of directors (the "Board"), and a Board observer.

UPDATE ON THE RESTATEMENT OF THE FINANCIAL STATEMENTS
On August 19, 2022, the Company announced the intentions to restate its financial statements and MD&A, related to the 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"), which upon further analysis the estimate amount has been revised.

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 $944K (initially estimated at $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.

This restatement has no impact on cash flows and business operations.

The Company intends to file its restated financial statements and the corresponding management discussion and analysis on or about September 30, 2022.

ABOUT EDDY
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.

For further information on the financial results of the Company, please review the Company's unaudited condensed consolidated interim financial statements and management's discussion and analysis of the financial condition and results of operations for the three and six months ended June 30, 2022, available on Eddy's SEDAR website at www.sedar.com. In addition, supplemental information is available on the Eddy's website at www.eddysolutions.com/investors.

FORWARD-LOOKING INFORMATION AND STATEMENTS
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 additional future contracted revenue, the Company's leadership position in intelligent water management and leak protection and the expectation of future sales momentum. 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.

Mark Silver, Executive Chairman and Chief Executive Officer, Tel: [phone], Email: [email protected]