OneRoof Energy Group, Inc. Announces First Quarter 2014 Financial Results

Company Continues Investment in Growth Initiatives

SAN DIEGO, May 28, 2014 /CNW/ - OneRoof Energy Group, Inc. ("OneRoof Energy" or the "Company") (TSXV:ON) today announced financial and operational results for the first quarter ended March 31, 2014.

"We made significant progress in the quarter as we continued to invest in our operational capabilities and sales channel so that we are positioned to capitalize on the rapid growth within the residential solar market," said David Field, President and Chief Executive Officer of OneRoof Energy Group, Inc. "We are uniquely positioned to serve a growing ecosystem of channel partners who want to offer residential solar to their customer base, while at the same time reducing the cost of energy to US residential homeowners. We are pleased to report that we expanded our business into Massachusetts and New York in the quarter and continued to develop our solar leasing fulfillment platform which we believe positions us to accelerate growth and deployment in the quarters ahead. Our recently announced alliances with energy retailers and home services companies demonstrate early success of our channel strategy, ability to scale our operations, and rapidly increase our acquisition of customers while decreasing the overall cost to do so."

Q1 2014 Operating Highlights

Key operating highlights in the quarter include:

• Deployed 0.67 megawatts in the first quarter
• Total cumulative megawatts deployed reached 8 megawatts
• Gross bookings totaled 337 systems during the quarter, an increase of 112 percent year-over-year
• Cumulative customers surpassed 1,500 as of March 31

Key strategic milestones since the beginning of the year include:

• Launched proprietary residential solar API (application programming interface) library
• Expanded OneRoof Energy operations to Massachusetts and New York
• Expanded the reach of OneRoof Energy's Professional Affiliate Channel
• Announced the expansion of our Phoenix call center
• Launched marketing alliance with Choose Energy
• Introduced OneRoof Energy SolarSelect® bundled residential energy offering in Massachusetts
• Continued negotiations with retail energy providers to leverage the OneRoof Energy fulfillment platform

Q1 2014 Income Statement

For the first quarter of 2014, core operating lease revenue was $270,000, up 273 percent from $72,000 in the first quarter of 2013, due to an increase in cumulative operating lease megawatts deployed. In addition, the sold system revenue for the first quarter of 2014 was $517,000, compared to zero in the first quarter of 2013, as the Company started selling systems to third parties in the fourth quarter of 2013. Total revenue for the first quarter 2014 increased to $1.5 million from $114,000 in Q1 2013.

Gross profit margin on held leases was 22.0 percent and sold systems was 2.1 percent in the first quarter. Consolidated gross profit (loss) margin was (56.4) percent.

Total operating expenses were $8.1 million for the first quarter of 2014 as compared to $3.8 million in the first quarter 2013. Consistent with the strategy shift in the Company's business model, headcount increased significantly as the Company transitioned its focus from dealer-led to direct channel sales. In addition, the Company continued to invest in its sales and marketing infrastructure to support lead generation and other corporate marketing initiatives.

Loss from operations in the first quarter of 2014 was $8.9 million as compared to $9.1 million in the first quarter of 2013.

IFRS net loss attributable to stockholders per basic and diluted share was $(0.66).

"We are deliberately investing for the long-term as we capitalize on the significant opportunity in solar," commented Dan Halvorson, Executive Vice President and Chief Financial Officer. "As we expand our geographic footprint, focus on operational efficiencies, and build-out our sales and marketing infrastructure, we are investing in a business model that can scale quickly while driving down the costs associated with deploying solar systems."

Earnings Conference Call

An earnings conference call will be held today at 4:30 pm (Eastern Time) or 1:30 pm (Pacific Time). The conference call can be accessed live by dialing 1-855-669-9657 for Canadian callers, 1-412-317-0790 for international callers outside of Canada, and 1-877-870-4263 for callers in the United States.

Please indicate to the operator you are connecting to the "OneRoof Energy Call." A replay will be available one hour after the call and can be accessed by dialing 1-855-669-9658 for Canadian callers, 1-412-317-0088 for international callers outside of Canada, and 1-877-344-7529 for callers in the United States. The passcode for the replay is 10046364. The replay will be available until June 16, 2014 at 9:00 am (Eastern Time).

Interested investors may also listen to a simultaneous webcast of the conference call by logging on at the "Investor Events and Presentations" link of the Investor Relations section of the Company's website at http://oneroofenergy.investorroom.com. The online replay will be available for a limited time beginning immediately following the call.

Non IFRS Measures

The Company uses certain measures which are not in accordance with IFRS. Non-IFRS measures are useful supplemental information but may not have a standardized meaning according to IFRS.

Bookings. Bookings represent a signed agreement and credit approval/bona fide payment source; this is prior to PSA (pre-site analysis) and prior to countersign.

Backlog. Backlog represents the expected quantity of orders we have received but have not yet executed and that are expected to translate into sales within the next 12 months. We use backlog to provide an indication of expected future revenues, and bookings to determine our ability to sustain and increase our revenues.

Deployed. Deployed represents the number of systems that are installed during the period. An installed system is one that is materially complete with all installation requirements. This metric includes solar energy systems deployed under energy contracts, as well as for solar energy system direct sales.

MW Deployed. MW Deployed represents the megawatt production capacity of solar energy systems deployed during the period. This metric includes solar energy systems deployed under energy contracts, as well as for solar energy system direct sales.

MW or Megawatts. MW or megawatts represents the DC nameplate production capacity.

About OneRoof Energy

OneRoof Energy Group, Inc. (TSXV:ON), operating through its wholly-owned subsidiary OneRoof Energy, Inc., is a complete solar services provider dedicated to saving homeowners money. The company offers homeowners everything from traditional and lease financing, superior solar system design and installation project management, to ongoing system monitoring and maintenance services. Utilizing its technology-rich, solar leasing fulfillment platform, OneRoof Energy is partnering with traditional energy retailers and home services companies of all sizes to offer residential customers a wide spectrum of affordable, renewable energy choices. With its unique end-to-end energy solution, the company has created multiple touch points to offer cost-saving energy products and services that create a seamless experience for the homeowner while fulfilling their unique energy needs. Currently, the company serves residential customers in five states including Arizona, California, Hawaii, Massachusetts and New York with plans for additional expansion. For more information, visit www.oneroofenergy.com

Forward Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding the Company's customer and market growth opportunities, financial strategies for cash generation and increasing shareholder value, expected future financial results, the timing of the Company becoming net cash flow positive, additional financial and operational forecasts to be discussed during the conference call referenced in this release, and assumptions relating to the foregoing.

Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved, if at all. Forward-looking statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements, including the effect of electric utility industry regulations, net metering and related policies, the availability and amount of rebates, tax credits and other financial incentives, the availability and amount of financing from fund investors, the retail price of utility-generated electricity or the availability of alternative energy sources, risks associated with the Company's growth, risks that consumers who have executed energy contracts included in reported nominal contracted payments remaining and backlog may seek to cancel those contracts, the Company's limited operating history, particularly as a new public company, changes in strategic planning decisions by management or reallocation of internal resources, and general market, political, economic and business conditions. You should read the section entitled "Risk Factors" in the Company's most recent Management's Discussion and Analysis, which has been filed on SEDAR and identifies certain of these and additional risks and uncertainties. We do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement.

Investor Relations Contact:
Karen Fisher
OneRoof Energy Group, Inc.
858-926-7541 (direct)
[email protected]

OneRoof Energy Group, Inc. Interim Consolidated Statements of Financial Position (Presented in United States Dollars)
		March 31, 2014				December 31, 2013
Assets
Non-Current assets
Other long-term assets		$	317,716			$	303,785
Capitalized software development		352,673				233,867
Property and equipment, net		392,886				373,707
Note receivable - long term		880,555				—
Solar energy systems leased, net		18,260,292				17,586,510
Construction in progress, net		2,030,118				3,065,921
Restricted cash		768,268				768,169
Total non-current assets		23,002,508				22,331,959
Inventory		5,601,965				5,128,367
Prepaid expenses and other current assets		363,065				1,592,664
Receivable from related party		390,651				434,577
Note receivable - short term		84,404				51,479
Treasury grant receivable		10,043				1,519,209
Accounts and rebates receivable, net		1,639,201				2,041,792
Restricted cash		66,000				66,000
Cash and cash equivalents		13,143,627				5,246,545
Total assets		44,301,464				38,412,592
Current liabilities
Accounts payable		$	4,987,396			$	24,791,291
Accrued liabilities		2,020,383				3,648,637
Deferred revenue – current portion		1,629,703				403,635
Deferred grant income - current portion		141,042				151,322
Derivative liabilities		3,620,825				5,849,283
Line of credit, related party		567,365				2,720,710
Promissory notes to related parties		3,590,174				5,083,121
Related party payable		3,887,065				3,843,483
Liability component of convertible debt		—				31,375,326
Total current liabilities		20,443,953				77,866,808
Non-current liabilities
Deferred revenue – net of current portion		6,770,428				6,857,161
Deferred grant income - net of current portion		4,220,308				4,462,542
Other non-current liabilities		4,124				10,310
Total Non-current liabilities		10,994,860				11,330,013
Total liabilities		31,438,813				89,196,821
Equity attributable to the shareholders
Common stock		3,788				169
Additional paid-in capital		89,284,309				18,200,310
Accumulated deficit		(70,105,492)				(63,127,896)
Total (deficit) equity attributable to the Company's shareholders		19,182,605				(44,927,417)
Non-controlling interest		(6,319,954)				(5,856,812)
Total (deficit) equity		12,862,651				(50,784,229)
Total liabilities and equity		$	44,301,464			$	38,412,592

OneRoof Energy Group, Inc. Interim Condensed Consolidated Statements of Comprehensive Loss (Presented in United States Dollars)
		Three Months Ended
		March 31, 2014				March 31, 2013
Revenues:
Sold systems		$	517,339			$	—
Held systems, lease revenue		269,907				72,417
Rebate revenue		7,161				3,611
Other revenue (inventory sales of $679,196 in 2014)		697,552				38,046
Total revenue		1,491,959				114,074
Cost of revenue:
Depreciation of solar energy systems, leased		210,616				53,544
Impairment of held systems		188,300				1,893,364
Cost of sold systems		506,391				—
Inventory write-off		321,190				979,193
Other cost of revenue (inventory sales of $680,931 in 2014)		1,106,845				2,493,614
Total cost of revenue		2,333,342				5,419,715
Gross loss		(841,383)				(5,305,641)
Selling, general and administrative expense
Compensation and benefits		4,447,895				2,359,821
Professional and consulting fees		1,178,795				711,822
Marketing and advertising costs		869,765				98,616
Other general and administrative costs		1,579,452				599,022
		8,075,907				3,769,281
Other income		9,580				—
Net loss before net finance costs and income taxes		(8,907,710)				(9,074,922)
Net Finance costs
Change in fair value of derivative liabilities		3,411,093				1,202,486
Interest income		49,937				533
Interest expense		(1,852,175)				(1,155,840)
		1,608,855				47,179
Loss before provision for income taxes		(7,298,855)				(9,027,743)
Provision for income taxes		—				—
Net loss and comprehensive loss		$	(7,298,855)			$	(9,027,743)
Net loss attributable to:
Shareholders		$	(6,977,596)			$	(7,716,875)
Non-controlling interest		(321,259)				(1,310,868)
		$	(7,298,855)			$	(9,027,743)
Net loss per share attributable to common shareholders
Basic and Diluted		$	(0.66)			$	(2.17)
Weighted average number of shares outstanding
Basic and Diluted		$	10,633,910			$	3,553,671

OneRoof Energy Group, Inc. Interim Condensed Consolidated Statements of Cash Flows (Presented in United States Dollars)
		Three Months Ended
		March 31, 2014				March 31, 2013
Cash flows from operating activities
Net loss		$	(7,298,855)			$	(9,027,743)
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation and amortization		253,039				77,730
Impairment of inventory		321,190				979,185
Impairment of solar energy systems, leased and construction in progress		188,300				1,893,366
Amortization of debt discount and deferred financing costs		2,579,325				632,681
Share-based compensation		567,431				218,135
Other non-cash transactions		(72,134)				228,192
Change in fair value of derivative liabilities		(3,411,093)				(1,202,486)
Accrued interest on convertible debt		—				(106,807)
Accrued interest on promissory notes to related party		27,391				4,673
Changes in operating assets and liabilities:
Accounts and rebates receivable		478,322				(196,701)
Treasury grant receivable		247,071				—
Proceeds from Treasury grant		1,262,095				—
Due to related party		—				81,773
Prepaid expenses and other assets		1,232,711				(614,672)
Inventory		(794,788)				100,708
Deferred revenue		1,139,335				2,099,646
Deferred grant income		(252,514)				—
Accounts payable and accrued liabilities		(21,499,995)				(7,149,735)
Net cash used in operating activities		(25,033,169)				(11,982,055)
Cash flows from investing activities
Restricted cash		(99)				(902)
Purchase of property and equipment		(47,824)				—
Issuance of notes receivable		(913,480)				—
Software development		(127,140)				—
Construction of solar energy systems - leased		(42,339)				(3,967,899)
Cash received in acquisition		111,746				—
Net cash used in investing activities		(1,019,136)				(3,968,801)
Cash flows from financing activities
Proceeds from corporate equity transaction, net of financing costs		40,237,438				—
Proceeds from issuance of convertible of debt		—				6,099,109
Repayment of convertible debt		(2,511,735)				—
Proceeds from line of credit		1,422,606				7,451,510
Repayment of line of credit		(3,624,212)				(1,082,696)
Proceeds from issuance of promissory notes to related party		3,580,154				—
Repayment of related party notes		(5,100,492)				(1,034,359)
Contributions from non-controlling interests		—				4,482,059
Distributions paid to non-controlling interests		(54,372)				(176,955)
Net cash provided by financing activities		33,949,387				15,738,668
Net (decrease) increase in cash and cash equivalents		7,897,082				(212,188)
Cash and cash equivalents, beginning of year		5,246,545				8,993,020
Cash and cash equivalents, end of year		$	13,143,627			$	8,780,832

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SOURCE: OneRoof Energy, Inc.

http://www.oneroofenergy.com

http://photos.prnewswire.com/prnh/20140225/MM71994LOGO