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Independent Reviews for Venture Investors

GRID: Uniquely positioned.

Updated: Apr 19


Tantalus Systems (GRID.TO) transforms aging one-way grids into multi-directional grids that improve the efficiency, reliability and sustainability of public power and electric cooperative utilities and the communities they serve.


Source: Tantalus Systems Inc.


GRID's revenue sources are from hardware, software and services.


Investment Thesis


- Modernization of the grid to support "Electrification" and "Decarbonization" Trends

- USD $175B in funding to help utilities upgrade grid and enhance broadband


- FY 2022 Guidance for revenue increase of 20-25%

- Expectation of USD $27M backlog in FY 2022.


News Releases


Mar. 15 - Publication of Thought Leadership Article: "Weathering the Storm: Lessons Learned from Texas"


Mar. 18 - Announces Next-Generation Fiber-Connected Metering Solution:


i) Address the digital divide by expanding access to broadband services as well as generate a new revenue stream;


ii) Access to granular power quality and consumption data in real time to make their grid more resilient;


iii) The foundation for being able to access and control DERs deployed at premises, including smart appliances such as hot water heaters, rooftop solar panels, battery walls, storage devices and electric vehicles;


iv) An upgradable, fiber-connected edge computing platform with metering capabilities that facilitate incremental services and revenue streams so they can be prepared for the grid of the future.


Mar. 24 - Launches Data Analytics Solution at the APPA Engineering and Operations Virtual Conference: TUNet® Grid Reliability Analytics, the company's first data-analytics solution purpose-built for community-owned utilities.


It leverages data from Tantalus' advanced metering infrastructure (AMI) to provide utilities with visibility into power quality issues that lead to outages and premature failure of devices deployed across the distribution grid. TUNet Grid Reliability Analytics utilizes algorithms to continuously monitor power-quality data accessed by TRUEdge®-enabled meters on Tantalus' TUNet smart grid platform. By detecting anomalies, the tool identifies symptoms of failing transformers, corroded meter sockets and splices, cracked insulators and other latent equipment problems.


Apr. 13 - Announces Option Grant: In connection with its consulting agreement with Adelaide Capital ("Adelaide") to provide investor relations consulting services to the Company as previously announced on March 11, 2021, it has granted stock options to Adelaide to purchase up to 100,000 common shares at an exercise price of CND$2.17.


Apr. 21 - Reports Strong Fourth Quarter & 2020 Year-End Results

Apr. 27 - Tantalus TRUEdge Intelligent Endpoint Module Receives Measurement Canada Certification with Landis+Gyr FOCUS AXe Residential Meter. The integrated meter and module are available to the Canadian electric utility market.


TRUEdge modules deliver meter interoperability and exceptional value to help utilities improve the efficiency, reliability and sustainability of their distribution grids. With the this certification, Tantalus is positioned to deliver an integrated FOCUS AXe meter to Canadian utilities which can benefit from Tantalus' multi-commodity solutions, including advanced metering infrastructure (AMI), power quality analytics and grid-edge solutions.


May 10 - Graduates to the Toronto Stock Exchange: Tantalus' shares will commence trading on the TSX at the opening on Monday, May 10, 2021 and will continue to trade under the Company's current stock ticker symbol, "GRID".


May 17 - Reports Strong Financial Results for Q1 2021


Jul. 7 - Enters into License Agreement with Neptune Technology Group: Whereby the radio frequency protocol of Neptune's R900® System water endpoint will be integrated onto the Tantalus Utility Network (TUNet®). Tantalus and Neptune further agreed that Tantalus may now offer Neptune R900 water meter data collection and presentment of consumption data to multi-commodity utilities supporting electricity and water throughout North America


Aug. 3 - Announces Overnight Marketed Public Offering.


Aug. 4 - Announces Pricing and Terms of Overnight Marketed Public Offering: Pursuant to the Offering, the Company intends to issue Common Shares at a price of C$2.25 per Common Share for gross proceeds of up to C$10 million.


Aug. 12 - Closes C$10.6M Overnight Marketed Financing: Issuing 4,710,110 common shares at C$2.25 per share.

Aug. 16 - Reports Financial Results for Q2 2021 Delivers 18th Consecutive Quarter of Positive Adjusted EBITDA


Sep. 7 - Integration of Tantalus' TRUEdge Endpoint with Aclara's kV2c Gen 5 Electric Meter Receives Measurement Canada Certification: and is now available across the Canadian electric utility market.


With this certification, utilities across Canada will be able to improve power quality and meter-to-cash functionality to commercial and industrial customers by deploying the Aclara kV2c Gen 5 meter on Tantalus' smart grid platform.


The integration between Tantalus and Aclara delivers a powerful grid sensor that provides additional control for utilities and further enhances Tantalus' leading solutions to improve the resiliency of the Canadian electric grid.

The Aclara kV2c meter is among the most widely accepted American National Standards Institute ("ANSI") compliant commercial and industrial meters. Tantalus' TRUEdge module's expanded processing power and memory allow future upgrades and new applications without having to replace the meter.


The integration of the TRUEdge module into the Aclara kV2c Gen 5 meter is another example of Tantalus' ability to deliver meter interoperability to utilities, while expanding utilities' options with respect to metering assets.

Sep. 14 - User Community Grows to 200 Utilities: Welcomed the multi-commodity utility servicing the City of Escanaba, MI to its user community, bringing the total number of utilities leveraging its solutions to 200.


Sep. 24 - Announces Voting Results for Annual General Meeting


Sep. 29 - Crow Wing Power Completes Tantalus Smart Grid Deployment: The cooperative electric utility replaced more than 60,000 aging meters connected through a one-way power line carrier (PLC) communications system with Tantalus TUNet smart grid platform for advanced metering infrastructure (AMI) and load management applications.


Nov. 2 - Deploys Data Analytics to Public Power and Electric Cooperative Utilities: Six members of its growing user community have subscribed to the TUNet® Grid Reliability Analytics (TGRA) solution in the first month since commercially launching these capabilities in September of this year.

TGRA is a data analytics tool that leverages power quality data accessed through Tantalus' advanced metering infrastructure (AMI) to help utilities identify failing assets deployed throughout an electric distribution grid.


The analytics solution detects anomalies in power quality data, such as loss of voltage at the premise, blink count, aggregate blink count, maximum voltage, minimum voltage, current readings and power factor, from the edge of a utility's distribution grid. By accessing and analyzing such data from residences, commercial buildings and other end customers, TGRA enables utilities to identify symptoms of failing transformers, corroded meter sockets and splices, cracked insulators and other latent equipment problems that can lead to premature failure of critical assets.


Nov. 15 - Reports Financial Results for Q3, 2021


Dec. 2 - Partners with Irby Utilities to Roll Out a Next-Generation Fiber Solution: To provides full scope fiber network solutions through its Technology and Communications business group. By harnessing Irby Utilities' national reseller capabilities, the partnership offers forward-thinking utilities cutting-edge command and control of distributed energy resources over their fiber networks via TRUSense™ Fiber Gateway.


TRUSense, which will be generally available in 2022, creates a secure, utility-grade communications path that supports a variety of IP standards to monitor, control and analyze behind-the-meter devices including solar panel inverters and electric vehicle charging stations that end-customers are increasingly demanding from their utilities.


TRUSense also enhances grid resilience by providing advanced, sub-cycle consumption and power quality measurements that support highly granular interval data, real-time phase identification and voltage waveform.


Feb. 1 - Acquires Congruitive to Accelerate the Digitization of the Electric Grid: Acquisition of DLC Systems, Inc. d/b/a Congruitive for a purchase price that includes US$8 million of closing consideration and up to US$5 million through a two-year earn-out. Congruitive will become a wholly owned subsidiary of Tantalus' US operating subsidiary.


The purchase price was comprised of US$8 million of closing consideration in the form of approximately US$3.5 million in cash, 869,565 common shares of Tantalus based on a share price of CDN$1.76 (US$1.38).


Congruitive is leveraging multi-decade relationships with utilities through its substation automation expertise to deliver its software solution, Congruence.IQ™ ("C.IQ™"), a platform that enables the interoperability of a wide range of devices through an emerging Institute of Electrical and Electronics Engineers ("IEEE") standard.


By deploying C.IQ, a utility's smart grid deployment can operate as one intelligent, interoperable system, that is with the necessary scalability and flexibility. Congruitive is currently selling its C.IQ software to investor-owned utilities ("IOUs"), smart meter vendors and renewable power integrators.

Feb. 8 - Announces 2021 Business Highlights with Strong Momentum Heading into 2022:


Feb. 15 -City of High Point Selects Tantalus to Digitize the City's Electric and Water Distribution System: Consisting of 80,000 combined meters. The City's decision to upgrade the distribution grid is tied to enhancing system resiliency while laying the foundation to provide enhanced applications and services to its residents.

The utility will deploy the Tantalus Utility Network (TUNet®) over the next two years and will incorporate Tantalus' TRUScan™ communications technology. TRUScan uniquely enables utilities to access and analyze data from a diverse set of endpoints that rely on different protocols across one smart grid network.

Mar. 1 - Kansas Municipal Energy Agency Selects Tantalus to Deliver Purpose-Built Smart Grid Solutions: Kansas Municipal Energy Agency ("KMEA") to offer purpose-built smart-grid solutions to its more than 80 member utilities.


As a Joint Action Agency, KMEA will provide hosting services to assist its members in digitally transforming their distribution grids. KMEA members will be able to license, access and use Tantalus' software on KMEA's hosted server.


The partnership enables members of KMEA to deploy the cost-effective Tantalus Utility Network (TUNet®) smart grid solution in a flexible manner relative to their needs and available resources.

Mar. 23 - Reports Financial Results for Fourth Quarter and Fiscal 2021:


Revenue Guidance: The Company anticipates growing revenue year-over-year by 20% to 25% in FY 2022, targeting $38.6 to $40.2 million in 2022. This guidance includes revenue contributions from the recent acquisition of Congruitive and is based on the Company's existing backlog to be recognized in 2022 of approximately $27 million.

Stimulus Funding: GRID is actively leading efforts to support current and prospective utility customers with the submission of applications to access US federal government funding, including ARPA and BRIC programs.


Growth of Tantalus' User Community: Tantalus increased its customer base to over 210 utilities with the addition of 7 new utilities during Q4, 2021 and a total of 25 new utilities for the twelve months of 2021. GRID surpassed 2.8 million endpoints shipped, collecting more than 30 billion data points related to energy consumption and power quality.


Apr. 5 -To Secure Projects Bringing a Commercial-Grade Microgrid Solution to Market with partner Energy Toolbase: To provides a suite of project modeling, energy storage control and asset monitoring products for solar and storage microgrid deployments. Congruitive, and ETB are jointly supporting the deployment of a microgrid that includes solar panels and battery storage for the headquarters of a major construction company in Riverdale, California.

Designed to address the broader global microgrid market, which is expected to grow by nearly 18% annually to US$26B by 2026, the combined solution will enable the construction company to manage demand charges, perform load shifting and take advantage of other economic optimizations while being connected to the electric distribution grid, as well as providing resiliency to maintain operations in the event of power outage from their local utility.



Summary


Product Launches

March 2021, TRUSense™ Fiber Gateway (FTTH) solution. TRUSense™ access granular data power quality and consumption in real time, a foundation control; Distributed Energy Resources (DERs) deployed on premises including smart appliances (i,e,hot water heaters), rooftop solar pannels, battery walls storage devices and electric vehicles.


Also in March 2021, TUNet® Grid Reliability Analytics (TGRA) was launched. TGRA leverages data from GRID's advanced Metering Infrastructure (AMI) to provide utilities with visibility into power quality issues that lead to outages and premature failure of devices deployed across the distribution grid.


Acquisitions

DLC Systems, Inc. d/b/a Congruitive was acquired for $8.0M ($3.5M in cash + 0.86M in shares at $1.76) and up to $5M in two years of earn out. Its software solution; Congruence.IQ™ ("C.IQ™") expertise is in substation automation.


The C.IQ™ platform is versatile as it allows interoperability of diverse devices and is sold to utilies, smart meter vendors and renewable power integrator.


Licenses & Partnerships

Four major initiatives were reported by Tantalus Systems in the past year.


July 2021, a License Agreement with Neptune Technology Group for the Integration of Neptune's R900® System water endpoint with Tantalus Utility Network (TUNet®).


September 2021; integration of TRUEdge Endpoint Grid Sensor with Aclara kV2c meter. It allows expanded processing power and memory and enables future upgrades and new applications without having to replace the meter.


December 2021, a Partnership with Irby Utilities to roll out TRUSense™ Fiber Gateway (Launched in March 2021). It is expected to be available in FY 2022. TRUSense, creates a secure communications path that supports a variety of IP standards to monitor, control and analyze behind-the-meter devices (i.e. solar inverters, EV charging stations).


April 2022, Partnered with Energy Toolbase to bring Commercial Grade MicroGrid Solution to Market. The aim is to

provides a suite of project modeling, energy storage control and asset monitoring products for solar and storage microgrid deployments. Congruitive, and ETB are jointly supporting the deployment of a microgrid that includes solar panels and battery storage for the headquarters of a major construction company in Riverdale, California


Milestone Engagements

Five major engagements were reported by Tantalus Systems in the past year.


September 2021, GRID reached the milestone of two hundread utilities. Also in the same month, GRID disclosed that Crow Wing Power Cooperative replaced more than 60,000 aging meters through one-way power line carrier (PLC) communications system with TUNet smart grid platform for AMI and load management applications.


November 2021, TUNet® Grid Reliability Analytics (TGRA) solution received six members subscription in the first month of being commercially available. TGRA was originally launched by Tantalus Systems in March 2021.


February 2022, City of High Point selected Tantalus to digitize Electric and Water Distribution System via Tantalus Utility Network (TUNet®) and TRUScan communication technology.


March 2022, The Kansas Municipal Energy Agency ("KMEA") alliance will begin providing Tantalus' software on KMEA's hosted server for its 80 plus member utilities.


Options

April 2021, 100,000 shares to Adelaide Capital ($2.17).


Financing

August 2021, $10.6M was raised by issuing 4.7M shares at $2.25.


Earnings

Overall, Tantalus has delivered consistent revenues in the last eight quarters with acceptable net losses.















Gross profit numbers are healthy and the company is well capitalized with $14.2M in cash as of December 2021.


Insiders

Recent buying activities from insiders has been noted.

Source: CEO.ca


In short

The last eighteen months have been very impressive for Tantalus Systems (GRID).


GRID had important product launches in March 2021: namely i) TRUSense™ Fiber Gateway (FTTH) and ii) TUNet® Grid Reliability Analytics (TGRA) which it has been able to commercialized in a short period of time.


Key to this success is the ability to form numerous partnerships to accelarate monetization. For instance, i) Neptune Technology Group for the integration of Tantalus Utility Network (TUNet®); July 2021, ii) Aclara KV2c meter for the integration of TRUEdge Endpoint grid sensor; September 2021, iii) Irby Utilities for the roll out of TRUSense™ Fiber Gateway; December 2021, and iv) Energy Toolbase with Congruitive (April 2022) to develop of suite of products for modeling, energy storage control and asset monitoring products for solar and storage microgrid deployments.


To date, the resuts speaks for themselves; in September 2021, Tantalus Systems already exceeded 200 client utilities. Moreover, TUNet® Grid Reliability Analytics (TGRA) which was launched in March 2021 had already six clients subscriptions within the first month it was commercially available (November 2021). Furthermore, the recent announcement with The Kansas Municipal Energy Agency (KMEA) is significant. KMEA will begin providing Tantalus' software on its hosted server for its 80 plus member utilities. This reflects a high degree of scalability.


In addition to an optimal mix in revenue streams (i.e. Software, Hardware and Services), Tantalus has multiple sales channels and is R&D driven. This has lead to organic growth in tandem with its M&A strategy. Constistent earnings in the past two years along with a recent guidance for revenue increase of 20-25% in FY 2022 bodes well. GRID also indicated the expected conversion of $27M backlog in FY 2022 which is supported by recent insider purchases.


Tantalus also reported that it is actively supporting utilities in accessing US federal government funding.

This is a strong tailwind. Particularly in an industry with high entry barrier making it uniquely positioned.


DISCLAIMER: The work included in this article is based on current events, technical charts, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The content of rally is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions - rally cannot take responsibility for your investment decisions.

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