Mr. Ray de Ocampo reports

ONENERGY INC. ANNOUNCES IMPLEMENTATION OF CREDITOR PROPOSAL

ONEnergy Inc. has received the approval of the TSX Venture Exchange and will implement the proposal that was approved by the Ontario Superior Court of Justice on Jan. 23, 2024, pursuant to the Bankruptcy and Insolvency Act (Canada) (BIA).

Summary of creditor proposal

The company's proposal to its unsecured creditors will 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. The issuance of common shares by the company shall be full and final satisfaction for all of the company's unsecured claims and all unsecured claims as against the company will be forever released.

The total amount of debt to be settled upon the implementation of the proposal is $11,115,306.78. The total number of shares to be issued will be 130,768,314 at a share price of 8.5 cents. The share price is based on the share price of the company at the close of business on May 30, 2023, the day prior to the filing date, rounded to the nearest whole number. Upon implementation of the proposal, the unsecured creditors will own up to 84 per cent of the company, and Stephen J.J. Letwin will be a new control person of the company, as that term is defined in the TSX Venture Exchange Corporate Finance Policy 4.3.

Creditors' voted in favour of the proposal

On June 22, 2023, the proposal was formally accepted by the required majorities of creditors in number and value, pursuant to the BIA. There were claims submitted by 11 creditors with an aggregate claim amount of $8,163,128. The claims submitted represented a significant amount of the company's creditors, as the aggregate of claim amount reflected on the statement of affairs was $9,803,281. After deducting conflicting claims of $267,207 from related parties Mr. Letwin and Ivan Bos, 100 percent of the creditors, representing $7,895,921 in amount owed, voted in favour of accepting the proposal.

Subsequent to the meeting, there have been six additional claims, with a total aggregate amount owed of $909,705.65. Five of these creditors have voted in favour of the proposal, with only one abstaining. No one has opposed the proposal.

Related party

There are related-party transactions as a result of the proposal. Specifically, Mr. Letwin and Mr. Bos, as directors of the company, have submitted nine claims, which are described in the associated table. Not all of the claims were eligible for a vote due to a conflict.

Shareholder approval of the proposal not required

Shareholder approval was not required for this debt-equity swap proposal. Section 186 of the Business Corporations Act (Ontario) provides that a shareholder is not entitled to dissent for an order made under the BIA, such as the court order approving the proposal. Consistent with the provisions in the proposal, as the company is insolvent, there would be no recovery for shareholders in a bankruptcy scenario. Existing shareholders therefore have no economic interest in the reorganization, and shareholders are not entitled to a vote on the proposal or to dissent. The proposal did not require shareholder approval, and instead required a majority of creditors to vote in favour, followed by court approval.

The proposal falls within the exemption provisions set out in sections 5.7(1)(d) and 5.5(f)(i) to (iii) of the Multilateral Instrument 61-101 policy, which provides an exemption for a court order approving a proposal of this nature.

The company will apply to the exchange for reinstatement of trading on the NEX.

About ONEnergy Inc.

ONEnergy common shares are listed on the NEX board of the TSX Venture Exchange under the symbol OEG.H. Material information pertaining to ONEnergy may be found on SEDAR+ under the company's issuer profile.

We seek Safe Harbor.