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Q. During the annual shareholder meeting, CGE reported that it was seeking additional capital. Wasn’t CGE’s prior capital raise sufficient to achieve its business plan?
A. Since 2021, CGE has received commitments for $15M in capital from various sources (plus a commitment for $10M in matching capital). Unfortunately, a few of the third-parties that made these commitments informed CGE that they would be unable to timely meet their capital commitments, primarily due to the impact market conditions were having on the internal capital requirements of their specific businesses. Therefore, while CGE has a sufficient capital runaway to allow it to execute on its near-term milestone objectives, CGE has been actively seeking replacement capital to achieve its longer-term goals.
Among other things, additional capital is necessary to support finalizing the commercialization of the Aradatum System, which involved a substantial design change from CGE’s original turbine design (WIND-e20). Specifically, during engineering of the Aradatum System, the Aradatum team spoke with numerous wireless industry professionals, vendors, government officials, and potential customers. These discussions revealed a critical need for additional resilient, three-phase, localized power generation, and greater market potential for a taller tower incorporated into the Aradatum System. Ultimately, telecom demand and power generation opportunities, together with the potential for an additional product line allowing for increased market penetration, drove an increase in scale, and thus a more significantly revised design, for the Aradatum System’s VAWT tower. This increase in System scale has understandably resulted in an increase in anticipated cost per System, requiring additional capital infusions into Aradatum. However, based on projections, the increased capital expenditure associated with this scale increase will yield a substantial multiple with regard to expected gross revenue over the life of each System.
Q. What is the difference between the current Aradatum system and WIND-e20?
A. The Aradatum System is a microgrid solution, incorporating Aradatum’s proprietary vertical axis wind turbine in addition to several other renewable energy generation technologies. The Aradatum System is designed specifically for powering wireless communication networks leasing space at the top of each System turbine. WIND-e20, on the other hand, is a distributed wind power technology that is designed for small-scale energy generation.
While many of the innovative features and ideas of the WIND-e20, such as folding blades, airfoil trim flaps, and sustainable footings, have been incorporated into the Aradatum System’s turbine tower, that turbine has been re-designed from the ground up to meet the requirements of the telecom industry and substantially enhance its power production.
Currently, CGE Energy is prioritizing the commercialization of the Aradatum System, with the standalone WIND-e20 being a potential product line for the future. Overall, the Aradatum System and WIND-e20 serve different purposes, with the former being designed for wireless communication networks and the latter being optimized for small-scale energy generation.
Q. Does CGE have any current projects, other than through Aradatum, that it is pursuing?
A. Independent of its Aradatum subsidiary, CGE is working on several large ongoing microgrid projects, and they are in active discussions with commercial businesses and local governments regarding new opportunities. While the specifics of these projects are not publicly available, these projects showcase the CGE corporate family’s expertise in the microgrid space.
Q. Can Aradatum’s System help corporations achieve their ESG commitments?
A. Aradatum’s system has the potential to help corporations achieve their ESG commitments by providing a tangible and terrestrial solution for decarbonizing high-speed communications infrastructure. Telecom providers worldwide are adopting ESG policies that include Net-Zero carbon emission commitments, such as AT&T carbon neutral target by 2035, Verizon by 2035, and T-Mobile by 2025. Aradatum’s System will enable cell carriers on Aradatum’s towers to achieve their commitments to sustainability at the physical infrastructure level. Aradatum’s solution will also be cost-effective for telecom providers compared to other decarbonization strategies, such as power purchase agreements with wind farms or buying Renewable Energy Credits. As telecom energy demands and the costs of electricity continue to grow over the next few decades, Aradatum’s system should play a critical role in helping corporations achieve their ESG commitments in a sustainable and effective way.
Q. When do you expect to have the next CGE shareholder update?
A. CGE will continue to provide shareholder updates when it has significant developments to report that are not subject to the Company’s non-disclosure obligations and that it can make publicly available without otherwise impacting any competitive market advantage. We appreciate your continued support and interest in our company.
