Mr. Nick Blitterswyk reports

UGE REPORTS FISCAL Q3 2023 FINANCIAL RESULTS

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

In third quarter 2023, UGE International continued to expand its full life cycle development business, achieving notice to proceed on 1.5 megawatts of projects in the quarter, adding to the 12.8 megawatts of projects that reached NTP in the first half of the year, while continuing to refine the platform for additional growth.

To summarize, key business highlights in Q3 2023 included the following:

• Achieved NTP on 1.5 megawatts of projects as the company begins to consistently move projects from its backlog into construction;
• Project backlog was 343 megawatts as compared with 229 megawatts on Sept. 30, 2022, as the overall market continues to be robust, but down slightly from 356 megawatts on June 30, 2023, as the company has been completing a full review of its backlog to firm up its project completion process and timelines;
• Closed $5.9-million green bond offering on Aug. 24, 2023;
• Completed the sale of the last Filipino project as it focuses project development and ownership efforts on the robust U.S. market.

Key financial results in Q3 2023 included:

• Ended Q3 2023 with 3.8 megawatts of operating assets that contributed $110,700 and $401,500 of energy generation revenue with 90-per-cent and 91-per-cent gross margins, respectively, for the three- and nine-month periods ended Sept. 30; this represents an increase of 50 per cent year to date in recurring revenue over the prior year while Q3 comparatives to 2022 declined 22 per cent due in part to an outage associated with one of the larger facilities and also in part to a true-up of accruals after one utility began regularly settling its account; UGE International 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 $247,600 and $1,066,800, representing declines of 86 per cent and 61 per cent for the three- and nine-month periods, respectively, as compared with the same periods in 2022; this decline is associated with both the runoff of the company's legacy third party EPC contracts and its shift away from providing external engineering services; total gross margins were 79.4 per cent and 62.0 per cent compared with 35.3 per cent and 42.5 per cent in 2022;
• The net loss and adjusted net loss for the quarter were $3.3-million, compared with $1.5-million for the same quarter of 2022, as a result of continued investment in developing UGE International's project portfolio; UGE International 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; the increase was driven by increased head count, development and financing expenses as the company develops its growing portfolio;
• Cash used in operations in the first nine months of the year was $12.3-million, and the cash balance at Sept. 30, 2023, was $3.5-million.

"In Q3 2023, we increased our focus on operational improvements to build the flywheel that will see us reach and exceed our medium-term goal of 100 megawatts of operating assets," said UGE International's chief executive officer, Nick Blitterswyk. "Our industry continues to be robust and full of opportunity, and while 2023 is already a record year for UGE in terms of projects reaching NTP and COD, we are even more excited about the work we are doing to bring our pipeline and future opportunities to fruition in the coming years."

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, chief operating officer Brandon McNeil 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.

Date:  Thursday, Nov. 30, 2023

Time:  11 a.m. EDT

About UGE International Ltd.

UGE International 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, it works daily to power a more sustainable world.

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