Solar Alliance Signs Letter of Intent for Acquisition of U.S. Solar Assets

 Solar Alliance Energy,  is pleased to announce it has signed a Letter of Intent ( "LOI" ) for the acquisition of certain assets of a U.S. solar company ( "Seller" ). Pursuant to the LOI, Solar Alliance will acquire the Seller's team of employees and acquire the Seller's pipeline of in-process residential solar projects. In 2016, the team that the Company is acquiring sold more than 7 MW of residential solar systems, generating US$34,305,000 (unaudited) in revenue. The Company anticipates that this acquisition will materially increase revenues and net income at Solar Alliance.

"This proposed acquisition aligns perfectly with our expansion plans in the U.S. solar market," said Chairman and CEO Jason Bak. "Our San Diego operation has shown strong progress over the last few months and adding this sales and marketing team will accelerate our growth. Combined with the project pipeline that is being acquired, this transaction will immediately drive significiant value for Solar Alliance shareholders."

In consideration for the assets, Solar Alliance will pay up to US$2,000,000 in contingent payments, subject to the following payment waterfall, and grant certain securities:

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Prior to any payment to the Seller, Solar Alliance will be repaid any working capital injected by Solar Alliance, plus an agreed upon return on that capital.

Once the working capital and working capital return have been paid to Solar Alliance, Solar Alliance will then receive all profit from the Seller up to a 6% net profit threshold.

For profit in excess of the 6% net profit threshold, 50% will be paid to the Seller until such time as the US$2,000,000 contingent payment is fulfilled. 50% of profits above the 6% net profit threshold will be paid to Solar Alliance.

There is also a provision for an additional US$2,000,000 contingent payment to the Seller, subject to the same waterfall described above, if revenue from the Seller exceeds US$50,000,000 in any fiscal year.

Solar Alliance will issue 6.5 million warrants to secured creditors of the Seller with an exercise price of $0.25/share and a term of three years.

Further details regarding the acquisition will be announced when a definitive Transaction Agreement is reached with the Seller. The Company expects to sign the Transaction Agreement by April 14, 2017; however, there can be no assurance that the definitive Transaction Agreement will be entered into. Completion of the proposed Transaction Agreement remains subject to the satisfaction of a number of conditions precedent, including further due diligence and required TSX Venture Exchange approval.

Source: Solar Alliance Energy, Inc.
Date: Apr 4, 2017