Mr. Nick Blitterswyk reports

UGE REPORTS SECOND QUARTER 2016 FINANCIAL RESULTS; ANNOUNCES PROMOTIONS WITHIN SENIOR LEADERSHIP TEAM

UGE International Ltd. has released its financial results for the three and six months ended June 30, 2016. (UGE reports all amounts in U.S. dollars.)

Second quarter 2016 highlights:

• Revenue increased 19 per cent (and 28 per cent for the first six months of 2016).
• Gross margins strengthened to 17 per cent, versus 11 per cent for the same period of the prior year.
• UGE substantially completed the integration of Endura Energy Project Corp., which was acquired on Feb. 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 megawatts of solar projects in Ontario. At over $14-million ($18-million (Canadian)), 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 ($2.3-million (Canadian)).
• 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 Aug. 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

                                                      Three months ended                  Six months ended
                                                            June 30,                           June 30,
                                                     2016              2015             2016             2015

Revenue                                     $   1,690,252     $   1,418,643    $   2,655,655     $  2,076,170
Cost of sales                                  (1,405,836)       (1,261,029)      (2,230,855)      (1,703,190)
Gross margin %                                         17%               11%              16%              18%
Gross profit                                      284,416           157,614          424,800          372,980
Expenses (income)
Selling, general and administrative             1,620,033         1,460,956        2,901,448        3,024,876
Finance expense                                   133,220            59,449          257,702          113,012
Finance expense -- non-cash
related-party loan modifications                        -                 -          430,796                -
Finance income                                    (85,802)           (6,772)         (86,588)         (14,233)
Income tax expense                                 74,347             3,328           67,671            6,000
                                               ----------        ----------       ----------       ----------
                                                1,741,798         1,516,961        3,571,029        3,129,655
(Loss) for the period                       $  (1,457,382)    $  (1,359,347)   $  (3,146,229)    $ (2,756,675)
(Loss) per share -- basic and diluted       $       (0.06)    $       (0.12)   $       (0.13)    $      (0.25)

Analysis of financial results

Revenue for the three months ended June 30, 2016, increased 19 per cent 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 per cent, compared with 11 per cent 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 when 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 per-cent completion method for all new projects (and existing projects under way for Endura).

In the second quarter, sales, general and administrative expenses increased 11 per cent, 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 sizable acquisition of Endura, as cost synergies were identified and realized throughout the quarter. The proposed sale of the company's 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, chief executive officer 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, he 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. He holds an honours business administration and a bachelor of engineering science from Western University and is a member of the Chartered Professional Accountants of British Columbia. 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), he was director of construction at solar developer Recurrent Energy, now part of Canadian Solar Inc. He has over 20 years of project and construction management experience, including over one gigawatt 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 5.1 million special warrants by insiders Mr. 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 in the attached special warrants table.

                                            SPECIAL WARRANTS

                           Special warrants           Shares owned and         Per cent of issued and
                                  exercised      controlled by founder      outstanding shares of UGE

Nicolas Blitterswyk                 660,000                  2,115,326                   5.9 per cent
Yun Liu                             660,000                  2,156,956                   6.0 per cent
Xiangrong Xie                     3,780,000                  9,371,936                  26.0 per cent

Based on 36,082,244 shares issued and outstanding, which accounts for the reduction of 
4,444,444 shares to be forfeited by Cameron Steinman and Alison Steinman and the addition 
of 5.1 million 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 Sept. 18, 2015. These filings contain additional information with respect to the foregoing matters, and are available on the company's SEDAR profile.

About UGE

UGE delivers immediate savings to businesses through cleaner electricity. The company helps commercial and industrial clients become more competitive through the low cost of distributed renewable energy. With over 300 megawatts of experience globally, it works daily to power a more sustainable world.

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