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.
The Transaction will not be non-arm's length transaction for the purposes of the policies of the Exchange.
It is currently anticipated that the board of directors of the resulting issuer will consist of Matthew Watson and Art Aylesworth who are currently directors of Way Ventures, as well as Nick Blitterswyk, Chief Executive Officer and co-founder of UGE, and XiangRong Xie, who has been instrumental in establishing UGE's operations in China, and one more director to be named prior to closing. The current directors of Way Ventures, other than Matthew Watson and Art Aylesworth, will resign upon closing of the Transaction. Messrs Watson and Aylesworth are veterans of successful renewable energy public companies. Mr. Blitterswyk will act as Chief Executive Officer of the Resulting Issuer, while Mr. Yang will act as its Chief Financial Officer, and the Corporate Secretary shall be named prior to completion of the transaction.
Matthew Watson is the current President, Chief Executive Officer, Chief Financial Officer, Secretary and a director of Way Ventures. Mr. Watson has over two decades of business leadership experience including Chief Operating Officer of Carmanah Technologies (TSX: CMH), a provider of solar powered LED lighting products, where he led the operations from start up to world leader with over $63 million in sales and a market capitalization of $150 million. Matthew is currently an active member on several public and private company boards.
Art Aylesworth is an experienced and successful clean technology executive who was recognized as Ernst & Young's 2006 Entrepreneur of the Year, Pacific Region. Mr. Aylesworth is currently the CEO of Light-based Technologies, a private company which develops power electronics for the solid state lighting industry. Prior to Light-based, Mr. Aylesworth was the CEO of other clean technology companies including Carmanah Technologies from 2000 to 2007. Mr. Aylesworth has also been a board member of several technology association boards and other technology companies.
Nick Blitterswyk is the Chief Executive Officer and co-founder of UGE. Nick is a graduate of the University of Calgary and recent winner of its Graduate of the Last Decade award. After graduation he held positions at JPMorgan and AIG while becoming a Fellow of the Society of Actuaries. He then went on to found UGE which he has grown from inception to becoming a leader in small wind. Nick is a frequent speaker on TV and conferences on matters related to small wind, renewable energy, and international business, including working in China. Mr. Blitterswyk will act as a director and the Chief Executive Officer of the resulting issuer.
Jian Yang will act as Chief Financial Officer and Secretary of the resulting issuer. Prior to joining UGE, Jian was in Citibank's energy investment banking group where he worked on multiple transactions ranging from capital raising to mergers and acquisitions totaling $1.6 billion. Jian also worked as a strategy and operations consultant with Deloitte across multiple sectors including real estate, finance, energy, and retail. In addition, Jian has an entrepreneurial background having co-founded and worked on two startup businesses, as well as having international experience having worked in and with colleagues in India, China and Europe. Jian holds a MBA and Masters in International Relations from the University of Chicago and a B.S in Business Administration from Carnegie Mellon University.
XiangRong Xie is a successful entrepreneur who has built businesses in China in the natural resources, tourism, bio-medicine, real estate and clean energy sectors. Government related posts Ms Xie has held include Deputy Director of the Beijing Chamber of Commerce, Chair of the China Chamber of Commerce in Cambodia, Vice President of the Federation of Overseas Chinese, Deputy Director of the Overseas Chinese Federation and Deputy Director of the International Chinese Chamber of Commerce, Hebei Province, among others.
Way Ventures will be seeking a waiver from the Exchange of the requirement to obtain a Sponsor Report. If it is unable to obtain such a waiver, it will seek Sponsorship from an Exchange member firm, and will disclose such an engagement once formalized.
The Transaction is conditional upon, among other things: receiving all necessary regulatory and third party approvals and authorizations, the closing of the Concurrent Financing, completion of the Private Placement, receipt of an independent valuation of UGE if required by the Exchange, receipt and satisfaction by Way Ventures of audited annual financial statements of UGE, approval by each of the board of directors of UGE and Way Ventures, approval by the shareholders of UGE and Way Ventures, if necessary, confirmation of no material adverse change having occurred for either entity prior to close, the completion of a definitive agreement setting forth the terms and conditions for the closing of the Transaction, the completion of due diligence satisfactory to each party, obtaining any third party consents necessary, the entering into of satisfactory employment agreements with senior management personnel of the corporation resulting from the Transaction, satisfaction of Way Ventures and UGE with the terms and amounts of "key-person" life insurance policies on senior management personnel; and receipt by the Exchange of a satisfactory Sponsor Report, if required.
Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
President, Chief Executive Officer, Chief Financial Officer,
Secretary and Director
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