TORONTO, ONTARIO -- (Marketwired) -- 09/10/13 -- Way Ventures Inc. ("Way Ventures") (TSX VENTURE: WAY.P), a Capital Pool Company, is pleased to announce that on August 16, 2013 it entered into a letter of intent with UGE Holdings Limited ("UGE"), the owner of Urban Green Energy Inc., to complete a business combination (the "Transaction") whereby all of the issued and outstanding securities of UGE will be exchanged for securities of Way Ventures. The Transaction is intended to constitute the Qualifying Transaction of Way Ventures as such term is defined in Policy 2.4 of the Corporate Finance Manual of the TSX Venture Exchange (the "Exchange").
UGE was founded in 2008 by Nick Blitterswyk, is incorporated under the laws of the Cayman Islands, and is headquartered in New York, New York. UGE is a supplier of small wind turbines with projects in 80 countries. UGE leverages its position in small wind to provide comprehensive "hybrid" wind/solar distributed renewable energy solutions that can be implemented across a wide range of challenging environments. UGE is targeting market segments for which it has a competitive advantage, namely powering remote telecom towers, outdoor lighting, and commercial projects. UGE has 12 patents either pending or granted. Customers include BMW, Hilton, Qatar Foundation and Verizon. UGE owns its own state-of-the-art manufacturing facility located in Hebei, China.
UGE was commercialized in 2010. In 2011, it had sales of approximately $3.9 million, and in 2012 it had sales of approximately $4.9 million (audited). UGE has realized an average gross margin on sales in excess of 40% over the past 2 years. As of June 30, 2013, UGE had total assets of $11.387 million, and long term liabilities of $2.627 million and current liabilities of 6.196 million (unaudited).
The controlling shareholder of UGE is Xiangrong Xie, a resident of China.
The Qualifying Transaction
Pursuant to the Transaction, Way Ventures will acquire all of the currently issued and outstanding securities of UGE by issuing 93,662,465 common shares to shareholders of UGE in exchange for all of the issued and outstanding common shares of UGE (the "UGE Shares"), being 5,000,000 UGE Shares, on the basis of 18.7325 common shares of Way Ventures for each 1 UGE Share (the "Conversion Ratio"). Prior to completion of the Transaction, UGE is seeking to complete a private placement of UGE Shares for anticipated gross proceeds of approximately $500,000 (the "Private Placement"). Proceeds from the Private Placement will be used for general working capital purposes related to fulfilling its backlog of orders and to fund the Transaction. Any UGE Shares issued pursuant to the Private Placement shall be exchanged for common shares of Way based on the same Conversion Ratio.
Concurrently with the closing of the Transaction, it is anticipated that Way Ventures will complete a private placement of common shares (the "Concurrent Financing") for gross proceeds of up to $3 million (and a minimum of $2.25 million) at a price of $0.1428 per common share. Standard fees and commissions are anticipated to be paid in connection with the Concurrent Financing and the net proceeds of this issuance will be used for adding key staff, increasing marketing, and general working capital purposes. Assuming completion of the Private Placement and the Concurrent Financing at their maximum subscriptions, and upon completion of the Transaction, the resulting issuer will have 123,7772,269 common shares issued and outstanding.
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