Mr. Ray de Ocampo reports

ONENERGY INC. ANNOUNCES FILING OF CREDITOR PROPOSAL

ONEnergy Inc. has filed a Division I proposal pursuant to the Bankruptcy and Insolvency Act (Canada). B. Riley Farber Inc. has been appointed as proposal trustee, with the intent of settling the company's outstanding creditor liabilities.

After careful consideration of the company's cash position and all available alternatives, and through consultation with its legal and financial advisers, the board of directors of the company determined that it is in the best interests of the company to file a proposal under the BIA.

The company's proposal to its unsecured creditors, if approved, would settle the company's unsecured outstanding liabilities in exchange for the issuance of common shares of the company, valued at no more than 100 per cent of the company's current market capitalization. An approval of the proposal requires a majority of the unsecured creditors with proven claims to vote in favour, which must also represent at least two-thirds of the value of the proven claims voting. This will result in unsecured creditors owning up to 84 per cent of the company, depending on the conversion ratio of liabilities to common shares. The proposed share issuance is subject to approval by the TSX Venture Exchange.

If the proposal is not approved, the result would be a deemed bankruptcy. A bankruptcy would require a forced liquidation of the company's assets.

The proposal provides a better recovery for affected creditors, and the successful approval and implementation of the proposal will enable the company to survive without filing for bankruptcy. It is the intention of management and the board to pursue opportunities to complete a transaction, which may include completing a reverse takeover or other potential business acquisitions. There can be no guarantees or assurances that a transaction will take place.

A virtual meeting of the company's unsecured creditors is scheduled to take place on Thursday, June 22, 2023, at 11 a.m. EDT. If the proposal receives the requisite support at the creditor meeting, the company will file an application to the Ontario Superior Court of Justice to seek court approval of the proposal.

The secured grid promissory note

The company has secured a commitment from Stephen J.J. Letwin, a director, shareholder and creditor of the company, for a secured grid promissory note, subject to certain conditions, including obtaining approval from the court under the BIA.

The note has a borrowing limit of $450,000, permits repayments and additional drawdowns, will have a maturity date of Dec. 31, 2023, and will carry an interest rate of 10 per cent per annum. The note will be secured by a first-ranking security over all assets of ONEnergy.

Funds advanced under the note will be used to finance the proposal trustee fees, legal fees of the proposal proceedings, and the company's working capital requirements during proposal proceedings and after the company's exit from the proposal proceedings.

Board update

As of the time of this release, the board is currently composed of three members. There have not been any resignations on the board in connection with the filing of the proposal; however, there are no assurances that the board, as currently in place, will remain as such pending the outcome of the foregoing.

About ONEnergy Inc.

ONEnergy common shares are listed on the NEX board of the TSX Venture Exchange under the symbol OEG.H.

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