Mr. Nick Blitterswyk reports

UGE REPORTS FISCAL Q2 2023 FINANCIAL RESULTS

UGE International Ltd. has released its financial results for the three and six months ended June 30, 2023. UGE reports all amounts in U.S. dollars.

In Q2 2023, UGE continued to grow its business of developing, building, financing and operating commercial and community solar facilities, achieving notice to proceed (NTP) on 2.7 megawatts of projects in the quarter, adding to the 10.1 megawatts of projects that reached NTP in the first quarter and moving a further 0.5 megawatt into construction.

Key business highlights in Q2 2023 included:

• Achieved NTP on 2.7 megawatts of projects, as the company begins to consistently move projects from its backlog into construction;
• Grew the project backlog to 356 megawatts, compared with 187 megawatts on June 30, 2022;
• Completed the sale of the company's remaining operational Philippine projects, with the last sale closing after June 30, as the company focuses project development and ownership efforts on the robust U.S. market.

Key financial results for the six months ended June 30, 2023, included:

• Ended Q2 2023 with 3.8 megawatts of operating assets that contributed $183,600 and $290,900 of energy generation revenue with gross margins of 93 per cent and 91 per cent for the three- and six-month periods ended June 30. This represents an increase of 126 per cent and 132 per cent, respectively, in recurring revenue over the prior year. UGE had also completed a one-megawatt project and was waiting for the utility to connect the system at the end of the quarter. UGE is in the early stages of scaling its operational portfolio, which over time will see recurring revenue become the company's dominant source of revenue;
• Realized total revenue of $297,500 and $819,200, representing declines of 49 per cent and 13 per cent for the three- and six-month periods, respectively, as compared with the same periods in 2022. This decline is associated with the run-off of the company's legacy third party EPC (engineering, procurement and construction) and engineering contracts. Total gross margins were 84 per cent and 57 per cent, compared with 45 per cent and 43 per cent in 2022, as higher margin recurring revenue becomes a bigger share of overall revenues;
• The net loss and adjusted net loss for the quarter was $4.0-million, compared with $1.4-million for the same quarter of 2022, as a result of continued investment in developing UGE's project portfolio. The increase was driven by increased headcount, development and financing expenses as the company develops its growing portfolio. UGE is currently developing a significant volume of projects and expects that losses will continue until a greater share of the company's portfolio has reached commercial operation;
• Cash used in operations was $5.5-million, cash provided by financing activities was $21.9-million and cash used in investing activities was $15.6-million. The cash balance at June 30, 2023, was $3.0-million.

"In Q2 2023, we focused on taking further strides towards our medium-term goal of 100 megawatts of operating assets," said UGE's chief executive officer, Nick Blitterswyk. "We exceeded our backlog growth target for the second quarter and are nearly at our annual goal. More significantly, we now have 12.8 megawatts of projects that have moved into NTP this year, with the addition of 2.7 megawatts in the three months ended June 30, with more expected in the second half of the year. These projects are evidence of the company's drive towards building and holding a portfolio of operational assets."

Full financial results and management's discussion and analysis are posted to SEDAR as well as on the company's website.

On-line webinar details

Mr. Blitterswyk and chief financial officer Stephanie Bird will be hosting a webinar to provide further analysis of the financial results and to answer your questions following the presentation. You can register for the webinar on-line.

Date:  Friday, Aug. 25, 2023

Time:  11 a.m. EDT

About UGE International Ltd.

UGE develops, owns and operates commercial and community solar projects in the United States and strategic markets abroad. Its distributed energy solutions deliver cheaper, cleaner energy to businesses and consumers with no upfront cost. With over 500 megawatts of global experience, UGE works daily to power a more sustainable world.

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