Subjects: CORPORATE OFFICERS, MERGERS AND ACQUISITIONS (M&A)
Solar Alliance provides update on Canadian solar acquisition, extends exclusivity period as due diligence continues
TORONTO and KNOXVILLE, Tenn., July 20, 2023 (GLOBE NEWSWIRE) -- Solar Alliance Energy Inc. (?Solar Alliance' or the ?Company') (TSX-V: SOLR), a leading solar energy solutions provider focused on the commercial and industrial solar sector, is pleased to provide an update on the Letter of Intent ("LOI") the Company entered into on May 16, 2023 to acquire a growing, profitable Canadian solar company (the "Target") in a predominantly share-based transaction (the "Transaction"). The Target is a Western Canadian leader in solar for commercial and utility customers, with more than 33 MW of commercial and utility solar projects installed.
The Company is pleased to provide an update of the Target's revenue and contracted project backlog. At the time of the signing of the LOI on May 16, 2023 (the "LOI Execution Date"), the Target reported year-to-date unaudited 2023 fiscal year (July 31, 2023 year-end) revenue of $5,801,023. The Target's current year-to-date unaudited 2023 fiscal year (July 31, 2023 year-end) revenue is $6,977,528.
At the time of the LOI Execution Date, the Target had a backlog of contracted projects totaling more than $5.6 million. The Target's updated backlog of contracted projects is now $5.2 million.
The Company and the Target have entered into an amendment agreement dated July 19, 2023 (the "Amendment") to amend the LOI by extending the exclusivity period for an additional 30 days. The exclusivity period is now 120 days from the LOI Execution Date. In consideration of the increased unaudited revenue reported by the Target, the Amendment also adjusts the number of warrants issuable upon closing of the Transaction. One common share purchase warrant (a "Warrant") will now be issued for each common share of the Company (a "Common Share") issued. Each Warrant will entitle the Target to purchase one Common Share at an exercise price equal to the lesser of $0.20 or the exercise price of warrants of the Company to be issued in any financing undertaken by Solar Alliance in connection with the Transaction.
The total consideration of $6,000,000, represented by; (a) a cash payment of $500,000, (b) an unsecured convertible debenture of $700,000, and (c) the issuance of units of the Company (each, a "Unit") valued at $4,800,000, with each Unit comprised of one Common Share and one Warrant, all remain unchanged except as described above. Further details on the LOI are described in the Company's news release dated May 18, 2023.
"Extending the exclusivity period for this letter of intent is a reflection of the progress we are making as we continue due diligence," said CEO Myke Clark. "The updated financial results from the Target are encouraging and only strengthen our desire to enter into a binding definitive agreement. The Amendment represents a reasonable adjustment to the total consideration while still providing for a highly accretive acquisition opportunity."
Closing of the Transaction remains subject to a number of conditions, including satisfactory completion of due diligence, the execution of a binding definitive agreement, shareholder approval and the approval of the TSX Venture Exchange.
Myke Clark, CEO
For more information: |
Investor Relations Myke Clark, CEO 416-848-7744 [email protected] |
About Solar Alliance Energy Inc. (www.solaralliance.com)
Solar Alliance is an energy solutions provider focused on the commercial, utility and community solar sectors. Our experienced team of solar professionals reduces or eliminates customers' vulnerability to rising energy costs, offers an environmentally friendly source of electricity generation, and provides affordable, turnkey clean energy solutions. Solar Alliance's strategy is to build, own and operate our own solar assets while also generating stable revenue through the sale and installation of solar projects to commercial and utility customers. The Company currently owns a 33% interest in two operating solar projects in New York and actively pursuing opportunities to grow its ownership pipeline. The technical and operational synergies from this combined business model supports sustained growth across the solar project value chain from design, engineering, installation, ownership and operations/maintenance.
Statements in this news release, other than purely historical information, including statements relating to the Company's future plans and objectives or expected results, constitute Forward-looking statements. The words "would", "will", "expected" and "estimated" or other similar words and phrases are intended to identify forward-looking information. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the Company's actual results, level of activity, performance or achievements to be materially different than those expressed or implied by such forward-looking information. Such factors include but are not limited to: satisfactory due diligence of the Target, the ability to settle the definitive agreement with the Target, obtaining the approval of the TSX Venture Exchange for the Transaction and completion of the Transaction on the terms as announced or at all; the ability to complete the Company's solar projects on the anticipated timelines, the ability to pursue new solar projects uncertainties related to the ability to raise sufficient capital, changes in economic conditions or financial markets, litigation, legislative or other judicial, regulatory, legislative and political competitive developments, technological or operational difficulties, the ability to maintain revenue growth, the ability to execute on the Company's strategies, the ability to complete the Company's current and backlog of solar projects and convert such projects into revenue and the ability to grow the Company's market share. Consequently, actual results may vary materially from those described in the forward-looking statements.
"Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release."
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