Valoe Corporation                                       Stock Exchange Release 20 December 2018 at 15.40 (Finnish time)


VALOE HAS AGREED ON AN EUR 2.000.000 FINANCIAL ARRANGEMENT WITH WINANCE


Background of Financial Arrangement

Valoe Oyj (“Valoe” or the “Company”) has today entered into a convertible note facility agreement with Winance concerning a funding arrangement of up to EUR 2,000,000 in convertible loan notes (the "Convertible Notes") that will be accompanied by share subscription warrants (the "Warrants") (the agreement, the Convertible Notes and the Warrants hereinafter referred to collectively as the "Arrangement").

Under the Arrangement, Valoe issues Convertible Notes to Winance. The Convertible Notes may be drawn down in maximum of 4 sequential tranches of EUR 500,000 each (the "Tranche") during a period of 24 months from the drawdown of the first Tranche provided that the preconditions for each Tranche are met. Winance has the right to convert each Tranche into the Company’s newly issued or treasury shares. In addition, Winance will receive Warrants stripped from the Convertible Notes at the drawdown of each Tranche. The Warrants entitle Winance to subscribe to additional shares of the Company with a subscription price described below in this release.

The Company has an obligation to draw down a minimum of two (2) Tranches of the Convertible Notes, i.e. a total minimum of EUR 1,000,000. The remainder of the Convertible Notes, a total of 2 Tranches i.e. EUR 1,000,000, may be drawn down by the Company at its discretion.

Purpose of Arrangement

The purpose of the Arrangement is to strengthen the Company's working capital situation during the term of the Arrangement assuming that the Arrangement will be implemented as planned.

Iikka Savisalo, CEO of Valoe, commented: "We in Valoe are pleased to start working with a global investor like Winance. We believe this arrangement will secure the working capital Valoe needs for some time. Valoe is a growth company with its technology as the competitive edge in one of the quickest growing businesses: solar electricity generation. Valoe continues to invest more to start its IBC Cell manufacturing next year. The financing agreement with Winance is the first step to that goal. Valoe appreciates Winance’s pick of the Valoe PV Module and Cell technology as an excellent investment opportunity."

Cristina Nine, Founder and CEO of Winance, declared: “Winance is very enthusiastic to announce this long-term cooperation agreement with Valoe. We are fully confident in the Company’s strategy and the management’s ability to generate sustainable growth drivers for the long-term while increasingly participating in the Finnish Renewable Portfolio Standard requirements. Based on the valuation of the Company’s renewable energy production assets and initiatives taken by the management to ensure positive externalities, we are optimistic about the future prospects of the Company.”

Commercial Terms of Arrangement

Pursuant to the Arrangement, Winance may be given in the maximum of 2,000 convertible loan notes against subscription price of EUR 1,000 per each convertible loan note. The Convertible Notes entitle their holder to subscribe to maximum of 14,000,000 shares of the Company in the aggregate.

A Tranche may be drawn down by the Company provided that all previously issued Convertible Notes within the Arrangement have been converted into the shares of the Company or that a cool down period agreed between the parties has lapsed. Winance has agreed to subscribe for the Convertible Notes issued by the Company with a conversion ratio calculated at the time the respective conversion is requested so that the conversion ratio is equal to 90 % of the lowest daily volume weighted average price observed over a period of fifteen (15) consecutive trading days prior to such conversion request.

The Convertible Notes bear a zero interest rate (except in certain default situations as specified in the terms and conditions of the Convertible Notes) and have a maturity of 12 months from the issuance of each Tranche. Each Tranche must be converted into the Company's shares upon maturity at the latest.

In connection with the drawdown of each Tranche, Winance will receive Warrants free of charge. Winance has the right, but no obligation, to subscribe for the Company’s shares based on the Warrants. In connection with the Arrangement, Winance may be given maximum of 2,800,000 Warrants in the aggregate which entitle their holder to subscribe to maximum of 2,800,000 shares of the Company in the aggregate. The number of Warrants that shall be attached to the Convertible Notes of a Tranche shall be determined as follows: 20% of the nominal value of the Convertible Notes of a Tranche divided by the Exercise Price of Warrants, the resulting number of Warrants being rounded down to the nearest whole number. For the purposes of the aforesaid, the "Exercise Price of Warrants" shall be 115% of the lowest daily volume weighted average price in the 15 trading days immediately preceding the request to issue a new Tranche, except for the Warrants issued in connection with the first Tranche in respect of which the Exercise Price of the Warrants shall be 115% of the lowest of (i) the lowest daily volume weighted average price in the 15 trading days immediately preceding the date of signing the agreement on the Arrangement and (ii) the lowest daily volume weighted average price in the 15 trading days immediately preceding the request to issue the first Tranche.

The subscription period of the Company's shares pursuant to the Warrants is five (5) years from the issuance of each Warrant.

The exact number of the Company's shares to be issued based on the conversion of the Convertible Notes and the exercise of the Warrants depends, in the manner described above, on the conversion ratio applied to the Convertible Notes and Warrants and is thus not yet known. Depending on the exact number of the Company's shares to be issued based on the conversion of the Convertible Notes and the exercise of the Warrants, it may be necessary for the Board of Directors of the Company to apply for additional authorizations from the general meeting of shareholders in order to implement the entire Arrangement.

There is a weighty financial reason for the Company to issue the Convertible Notes and Warrants to Winance as the purpose of the Arrangement is to strengthen the tight working capital situation of the Company. The subscription price of the Convertible Notes and Warrants as well as the shares of the Company to be subscribed based on the Convertible Notes and Warrants is based on the agreement between the Company and Winance.

The drawdown of each Tranche requires that certain representations and warranties given by the Company and other customary conditions relating to financing arrangements of this nature are met.

Winance has the right to terminate the Arrangement if the Company’s operations become subject to a material adverse effect, there has been a change of control in the Company or in the event of default which, if curable, is not cured within 30 business days.

Valoe will pay Winance on the Arrangement a commitment fee equal to EUR 30,000 in Convertible Notes.

The terms and conditions of the Convertible Notes and of the Warrants (without schedules) are included in all material respects in the Appendices 1 and 2 of this release.

In Mikkeli on 20 December 2018

Valoe Oyj

BOARD OF DIRECTORS

For more information:

CEO Iikka Savisalo, Valoe Oyj
tel. +358 405216082
email: iikka.savisalo@valoe.com

Distribution:
Nasdaq Helsinki Oy
Main media
www.valoe.com

Valoe Corporation specializes in the clean energy, especially in photovoltaic solutions. Valoe provides automated production technology for solar modules based on the company’s own technology; production lines for modules; solar modules and special components for solar modules. Valoe's head office is located in Mikkeli, Finland.



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