UGE Announces Initial Closing of C$1.42m Private Placement of Green Bonds (2024)

Toronto, Ontario--(Newsfile Corp. - March 30, 2023) - UGE International Ltd. (TSXV: UGE) (OTCQB: UGEIF) (the "Company" or "UGE"), a leader in the commercial and community solar sector, is pleased to announce that it has completed a first tranche closing of the brokered private placement of green bonds of the Company ("Green Bonds"), previously announced in its March 8, 2023 press release, for aggregate gross proceeds of C$1,423,545 (the "Offering"). The Offering comprised of a brokered "best efforts" private placement led by Canaccord Genuity Corp., on behalf of a syndicate of agents including iA Private Wealth Inc. and Raymond James Ltd. (collectively, the "Agents") in accordance with the terms and conditions of an agency agreement (the "Agency Agreement") entered into on March 30, 2023 (the "Closing Date") by the Company and the Agents, for gross proceeds of C$604,095 and a concurrent issuer-direct offering for aggregate proceeds of US$607,000. The aggregate gross proceeds in Canadian funds were calculated based on an exchange rate of $1.35 Canadian dollars for every U.S. dollar raised in the Offering. A second tranche is expected to close by the end of April 2023.

The Green Bonds were issued in a Canadian dollar denominated series, each having a face value of C$1,000 and a subscription price of C$977.50, and a U.S. dollar denominated series, each having a face value of US$1,000 and a subscription price of US$977.50. The Green Bonds mature on June 30, 2027 (the "Maturity Date"), and bear interest at a rate of 9% per annum, payable semi-annually in arrears calculated on the last calendar day of June and December, with the first interest payment to be made on December 31, 2023. At the Maturity Date, the Company will repay the Green Bonds in full, including any accrued and unpaid interest. Commencing on July 1, 2026 and ending on the Maturity Date, the Company will have the option, in its sole discretion, to repay all or any portion of the outstanding principal and accrued interest on the Green Bonds at the end of each calendar month by paying one additional months' interest to the holder.

The Green Bonds are issued pursuant to a fourth supplemental trust indenture (the "Supplemental Indenture") entered on the Closing Date with Computershare Trust Company of Canada ("Computershare"), as trustee and collateral agent ("Collateral Agent") thereunder, supplementing the debenture indenture entered into on July 28, 2022, between the Company and the Computershare.

The Green Bonds are secured against a pool of the Company's solar and energy storage development projects (the "Pledged Projects"), which are indirectly held by UGE Capital LLC ("UGE Capital"), a wholly-owned subsidiary of UGE USA Inc., a wholly-owned subsidiary of the Company, through its membership interests in special purpose companies (each, a "Project Subsidiary") that are the owners of the assets comprising the Pledged Projects. As security for the Green Bonds, Computershare, in its capacity as Collateral Agent, entered into a pledge agreement on the Closing Date with UGE Capital, pursuant to which UGE Capital pledged its equity interests in the applicable Project Subsidiaries to the Collateral Agent for the benefit of the holders of Green Bonds. UGE Capital also guarantees the obligations of the Company pursuant to the Green Bonds.

The Company also entered into a deposit account control agreement with the Collateral Agent on March 23, 2023 covering one or more deposit accounts (the "Blocked Account"), pursuant to which the Collateral Agent has perfected a security interest in cash held in such accounts. UGE has covenanted to maintain a minimum coverage ratio of the value of the Secured Projects and any cash in the Blocked Account equal to 150% of the aggregate amount of obligations outstanding under the Green Bonds.

Net proceeds from the Offering (the "Proceeds") will be utilized for the development of solar and energy storage projects of UGE and its subsidiaries. The Green Bonds will be subject to a four month hold period from their date of issuance. The Company intends to seek to list the Green Bonds for trading on the TSX Venture Exchange (the "Exchange") after the four month hold period expires, on a best efforts basis.

In consideration for the Agents' services under the Agency Agreement, the Company paid to the Agents on the Closing Date a fee equal to 7% of the principal amount issued from the sale of the Canadian dollar denominated Green Bonds and 14,067 common share purchase warrants of the Company (each, an "Agents' Warrant"), with each Agents' Warrant entitling the holder thereof to purchase one Common Share at an exercise price of $1.5031 (subject to adjustment in certain circ*mstances) for a period of 24 months from the Closing Date. The Company also reimbursed the Agents on the Closing Date for their reasonable expenses in connection with the Offering.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction, nor shall there be any offer or sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities being offered have not been approved or disapproved by any regulatory authority nor has any such authority passed upon the accuracy or adequacy of the short form base shelf prospectus or the prospectus supplement. The offer and sale of the securities has not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold in the United States or to United States persons absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws.

ABOUT UGE

UGE develops, owns, and operates commercial and community solar projects in the US and strategic markets abroad. Our distributed energy solutions deliver cheaper, cleaner energy to businesses and consumers with no upfront cost. With over 500MW of global experience, we work daily to power a more sustainable world. Visit us at www.ugei.com. For more information, contact UGE at: [email protected] or +1 917 720 5685.

Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this news release.

Forward-Looking Statements

Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties, certain of which are beyond the control of the Company. Forward-looking statements are frequently characterized by words such as "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed" and other similar words, or statements that certain events or conditions "may" or "will" occur. These statements are only predictions. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Forward-looking statements include, but are not limited to, the expectation that a second tranche of the Offering will close by the end of April 2023; the expectation that the Company will repay the Green Bonds in full, including any accrued and unpaid interest, at the Maturity Date; the expectation that, commencing on the date that is two years following their issuance date, and ending on the Maturity Date, the Company will have the option to repay all or any portion of the outstanding principal and accrued interest on the Green Bonds at the end of each calendar month by paying one additional months' interest to the holder; the expectation that the Company will maintain a minimum coverage ratio of the value of the Secured Projects equal to 150% of the aggregate amount of obligations outstanding under the Green Bonds; the expectation that the Proceeds will be utilized for the development of solar and energy storage projects of UGE and its subsidiaries; the expectation that the Green Bonds will be subject to a four month hold period from their date of issuance; and the Company's intention to seek to list the Green Bonds for trading on the Exchange after the four month hold period expires, on a best efforts basis.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circ*mstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the ability of the Company to close a second tranche of the Offering by the end of April 2023; the ability of the Company to repay the Green Bonds in full, including any accrued and unpaid interest, at the Maturity Date or earlier; the ability of the Company will maintain a minimum coverage ratio of the value of the Secured Projects equal to 150% of the aggregate amount of obligations outstanding under the Green Bonds; the ability of the Company to use the Proceeds as stated; and the Company's ability to list the Green Bonds for trading on the Exchange after the four month hold period expires.

Any forward-looking statement made by us in this news release is based only on information currently available to us and speaks only as of the date on which it is made. Except as required by applicable securities laws, we undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

Contact Information

Visit us at www.ugei.com. For more information, contact UGE at: [email protected] or +1 917 720 5685.

Nick Blitterswyk
Chief Executive Officer
1 (917) 720-5683
[email protected]

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