UGE Reports Second Quarter 2016 Financial Results; Announces Promotions within Senior Leadership Team


New York, New York – August 26, 2016 - UGE International Ltd. (the “Company” or “UGE”) (TSX VENTURE: UGE, OTCQB: UGEIF), a leader in renewable energy solutions for the commercial and industrial sector, reported its financial results for the three and six months ended June 30, 2016.  UGE reports all amounts in US dollars.

Second Quarter 2016 Highlights

Revenue increased 19% (and 28% for the first six months of 2016); gross margins strengthened to 17%, versus 11% for the same period of the prior year.

UGE substantially completed the integration of Endura Energy Project Corp (“Endura”), which was acquired on February 22, 2016.  Cost synergies were identified that resulted in roughly flat expense levels from the same quarter of the prior year, despite the acquisition, excluding a non-cash increase in share-based compensation; management expects cost synergies from the acquisition to be fully realized within the third quarter.

On May 2, 2016, UGE announced it had won a contract to build 6.3 MW of solar projects in Ontario; at over $14 million (CAD$18 million) it is the largest contract ever secured by UGE.

 On June 24, 2016, UGE closed a short form prospectus offering of 6,133,600 units with gross proceeds of approximately $1.8 million (CAD$2.3 million).

 Subsequent to June 30, 2016, UGE announced plans to divest its wind-focused subsidiaries, pending approval by disinterested investors at its Annual General Meeting on August 30, 2016.  If approved, the sale would result in an improvement in net assets which includes a reduction of debt of approximately $2.1 million, as well as a further reduction in expenses.


Selected Financial Information

Analysis of Financial Results

Revenue for the three months ended June 30, 2016 increased 19% to $1,690,252, as UGE continues to exhibit strong growth within the commercial solar sector.

The gross profit margin for the second quarter was 17%, compared with 11% in the same period of the prior year.  Higher margins were a result of both project mix and revenue recognition policy. Regarding revenue recognition policy, prior to the Endura acquisition UGE recognized revenue as expenses were incurred, recognizing the project profit margin upon project completion. This had the effect of depressing margins during periods where a larger number of projects were under construction, causing larger fluctuations in margins.  After the Endura acquisition, UGE has begun to recognize revenue on a percent completion method for all new projects (and existing projects underway for Endura).

In the second quarter, sales, general and administrative (“SG&A”) expenses increased 11%, which was largely attributable to an increase in share based compensation of $169,293.  Excluding the increase in share based compensation, expenses were roughly flat despite the sizeable acquisition of Endura, as cost synergies were identified and realized throughout the quarter. The proposed sale of our wind subsidiaries would further decrease SG&A expenses from the date of the sale onward.

There was a loss from operations for the three months ended June 30, 2016 of $1,457,382, compared with a loss of $1,359,347 in the prior year. The increase is largely attributable to the increase of $169,293 of share based compensation; excluding this non-cash expense, there was a reduction in loss from operations in the second quarter as compared with the prior year.


“UGE is continuing to make rapid strides towards being a larger, more focused, and profitable company” stated Nick Blitterswyk, CEO of UGE. “Our focus remains on increasing revenue by deploying and adding to our large backlog of contracted projects, while strengthening margins and rationalizing expenses, to reach profitability in the near future.”

 Full financial results and Management's Discussion and Analysis are posted to SEDAR ( and are available through the Company's website.


Leadership Promotions

Today UGE also announces a series of leadership changes.

Demetrios (“Jimmy”) Vaiopoulos, who has been serving as the Chief Financial Officer of several of UGE’s subsidiaries, has been promoted to Chief Financial Officer of UGE. Before joining UGE, Jimmy worked at KPMG in both audit and advisory practices, with a focus on energy and infrastructure markets, having experience in audit, project finance, and mergers and acquisitions. His international experience spans the United States, Canada, and South America. Jimmy holds an Honours Business Administration and a Bachelor of Engineering Science from Western University and is a member of the British Columbia Institute of Chartered Accountants. UGE’s current CFO, Michael Barnsley, will transition to a part-time advisory role with the Company. 

Scott Matthews, who has been serving as Global Director, Projects at UGE, has been promoted to Vice President, Projects, as well as President of UGE’s Canadian subsidiary, Endura. Prior to joining Endura (since acquired by UGE), Scott was Director of Construction at solar developer Recurrent Energy, now part of Canadian Solar Inc. Scott has over 20 years of project and construction management experience, including over 1GW of solar development experience, worldwide.

Cameron Steinman, Chief Strategy Officer of UGE and former President of Endura, will transition from his role as an employee and officer of the Company to focus on his position on the Company’s Board of Directors.  As per an agreement between UGE and 2376457 Ontario Inc. (“457”), a holding company owned by Cameron and Alison Steinman, 4,444,444 shares in UGE, acquired by 457 in the sale of Endura to UGE, will be cancelled and returned to treasury.

 "On behalf of the Board of Directors and the entirety of UGE, I want to congratulate both Jimmy and Scott on their new positions,” stated Nick Blitterswyk, Chief Executive Officer of UGE. “I’d also like to thank both Mike and Cameron for all of their contributions to the Company thus far, and look forward to continuing to work closely with them in their new roles.”

 Exercise of Special Warrants

UGE is also announcing, pursuant to National Instrument 62-103, the exercise of 5,100,000 special warrants (the “Special Warrants”) by insiders Nicolas Blitterswyk, Yun Liu, and Xiangrong Xie (the “Founders”).  The Founders acquired the Special Warrants in connection with UGE’s Qualifying Transaction (as such term is defined in the policies of the TSX Venture Exchange) on July 28, 2014.  Each Special Warrant is exercisable for one common share for no additional compensation, provided certain preconditions are met with respect to the size of UGE’s public float.  The total number of Special Warrants exercised, and the number of shares owned and controlled by the Founders after the exercise, is listed below:



(1)   Based on 36,082,244 shares issued and outstanding, which accounts for the reduction of 4,444,444 shares forfeited by Cameron Steinman and Alison Steinman, and the addition of 5,100,000 Special Warrants exercised by Nicolas Blitterswyk, Yun Liu, and Xiangrong Xie.


The Founders have each filed an early warning report as required under National Instrument 62-103, which contains certain changes regarding the total class and percentage of securities from the last early warning reports filed by the Founders on September 18, 2015. These filings contain additional information with respect to the foregoing matters, and are available on the Company’s SEDAR profile at


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


 This press release and the Company’s Management Discussion and Analysis for the three and six months ended June 30, 2016 (the “MD&A”) contain forward-looking information that involves material assumptions and known and unknown risks and uncertainties, certain of which are beyond the Company’s control. Such assumptions, risks and uncertainties include, without limitation, those associated with, loss of markets, expected sales, future revenue recognition, currency fluctuations, the effect of global and regional economic conditions, industry conditions, changes in laws and regulations, and changes in how they are interpreted and enforced, the lack of qualified personnel or management, fluctuations in foreign exchange or interest rates, demand for the Company’s products, and availability of funding. The Company’s performance could differ materially from those expressed in, or implied by, this forward-looking information and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if they do so, what benefits the Company will derive there from. The forward-looking information is made as of the date of this press release or the MD&A, as applicable, and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking information, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws. Actual events or results could differ materially from the Company’s expectations and projections.