UGE Files Amended and Restated Quarterly Financial Statements
Company Announced it Would Refile Quarterlies April 19, 2021; Restated Quarterly Results Consistent with 2020 Year-end Filing
Toronto, Ontario--(Newsfile Corp. - May 17, 2021) - UGE International Ltd. (TSXV: UGE) (OTCQB: UGEIF) (the "Company" or "UGE"), a leader in the commercial and community solar sector, announces it has filed amended and restated unaudited condensed consolidated interim financial statements for the three and six months ended June 30, 2020 and for the three and nine months ended September 30, 2020 (the "Restated Statements") and the related management's discussions and analyses (the "Restated MD&As" and together with the Restated Statements the "Restated Documents").
As part of a review of its financial statements in connection with 2020 fiscal year-end activities, the Company determined that its originally issued interim financial statements for the above-mentioned periods contained material accounting errors. On April 19, 2021, the Company announced its intention to refile Restated Documents. On May 10, 2021, the Company reported its financial results for the year ended December 31, 2020, which included the 2020 audited consolidated financial statements and the related management discussion and analysis. The effect of the adjustments described below were fully reflected in those documents as filed on SEDAR.
The material accounting errors in the originally issued interim financial statements resulted in a net decrease in net income of $235,428 in Q3 2020 and $307,722 in Q2 2020, as well as a net increase in total assets of $488,306, a net increase in total liabilities of $887,921 and a net increase in shareholders' deficit of $399,615 at September 30, 2020.
The key adjustments to the Restated Statements include:
- revenue and cost of goods sold were inappropriately recognized due to computational errors; with revenue being overstated by $266,984 in Q3 2020 and $241,272 in Q2 2020, with cost of goods sold being understated by $52,783 in Q3 2020 and $11,597 in Q2 2020;
- other income was overstated by $57,828 in Q2 2020, due to the recognition of a government grant in other income rather than as a reduction in the solar facility carrying value;
- financing expenses was overstated by $28,377 in Q3 2020 and $34,707 in Q2 2020 for borrowing costs that were not capitalized to the solar facility carrying value;
- share based compensation was understated by $64,684 for the nine months ended September 30, 2020;
- loan forgiveness of $99,967 was not recognized in income in Q3 2020 relating to COVID-19 debt;
- a loss of $46,041 associated with conversion of debt to equity was not recognized in the nine months ended September 30, 2020;
- under accrual of general and administrative expenses of $168,103 in the nine months ended September 30, 2020;
- property, plant and equipment being overstated by $382,072 primarily due to computational errors related to the overstatement of revenue described above;
- property, plant and equipment being understated due to right-of-use assets of $1,003,634 not being recognized; largely offset by lease liabilities being understated by $1,020,449 at September 30, 2020;
- current debt was understated by $1,106,819 and non-current debt was overstated by the same amount at September 30, 2020.
In addition to the items described above, the Company also corrected the classification of certain balances and transactions to conform with IFRS and the Company's accounting policies, and updated note disclosures for both related party transactions and updated accounting policies as required.
The changes as discussed above are described in Note 16 of each of the Restated Statements, as filed on SEDAR.
UGE develops, owns, and operates commercial and community solar projects in the US and strategic markets abroad. Our distributed energy solutions deliver cheaper, cleaner energy to businesses and consumers with no upfront cost. With over 400MW of global experience, we work daily to power a more sustainable world. Visit us at www.ugei.com.
For more information, contact UGE at:
+1 917 720 5685
Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties, certain of which are beyond the control of the Company. Forward-looking statements are frequently characterized by words such as "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed" and other similar words, or statements that certain events or conditions "may" or "will" occur. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. The Company assumes no obligation to update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
Neither the TSX Venture Exchange nor its Market Regulator (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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