Further to the update provided during its third quarter earnings release on November 14, 2017, the Company has evaluated multiple opportunities and selected an institutional investor with which it has entered into an exclusivity agreement on December 15, 2017 for the previously announced US$175 million financing for the development of the UrtheDailyTM Constellation. The Company is currently working closely with the investor to finalize closing documentation as soon as practicable, with a target completion date for the financing extended to the end of January 2018. Completion is subject to final definitive documentation being completed and agreed, the lender's completion of confirmatory due diligence and receiving approval of our Board of Directors. Following funding, UrtheCast will have a path to the launch and commercialization of the UrtheDailyTM Constellation. With signed binding agreements for both data subscriptions totaling in excess of C$100 million, and a contract to build the UrtheDailyTM Constellation, the Company continues to target the commencement of the UrtheDailyTM operations in the 2020 growing season notwithstanding the extension of the financing closing date.
With recently announced partnerships with SI Imaging Services, Beijing Space View Technology and e-GEOS, along with the expanded assets available through the PanGeo Alliance, UrtheCast is now better positioned for 2018 with an increased number of product offerings, and the ability to provide customers with a more diversified level of decision making data.
As announced in the third quarter earnings release, the Company's EO revenues were impacted by a delay in the award of a major contract and accordingly, annual revenue excluding non-cash revenue, and Adjusted EBITDA is expected to be in the range of C$40 million and negative C$5 million, respectively1. In addition, the Company obtained a waiver from its lender Banco de Sabadell S.A. with respect to its €25 million term loan in relation to certain financial covenants for the year ended December 31, 2017, and a six-month deferment of its required December 2017 principal payment obligation.
The Company continues to focus its efforts on securing near term contracts for the SAR Accelerator missions, including obtaining the necessary export applications. The Company continues to await final approval of the financing condition by the customer's government agency for the previously announced SAR XL contract. As a result of the focus on the SAR Accelerator missions, the Company's timeline for the OptiSARTM Constellation has been pushed out to 2023 at the earliest. The Company also confirms that the conditions precedent to the agreement with the confidential government customer for the OptiSARTM Constellation (as disclosed on January 17, 2017) have not been satisfied and the contract will expire on December 31, 2017.
1 Revenue excluding non-cash revenue, and Adjusted EBITDA are non-IFRS measures. Refer to the Non-IFRS Measures section of the Company's third quarter MD&A for an explanation of these measures and reconciliation to the Company's reported financial results in accordance with IFRS.
UrtheCast Corp. is a Vancouver-based technology company that serves the rapidly evolving geospatial and geoanalytics markets with a wide range of information-rich products and services. The Company operates Earth Observation (EO) sensors in space, through its subsidiary Deimos Imaging, including two satellites, Deimos-1 and Deimos-2, to produce imagery data for partners and customers in multiple markets. UrtheCast processes and distributes imagery data and value-added products on behalf of the PanGeo Alliance, a network of seven satellite operators with a combined 13 medium- and high-resolution EO sensors. Additionally, UrtheCast is developing and expects to launch the world's first fully-integrated constellation of sixteen multispectral optical and SAR satellites, called OptiSAR™, and a satellite constellation designed to capture high-quality, medium- resolution optical imagery of the Earth's entire landmass (excluding Antarctica) every day, called UrtheDaily™. Common shares of UrtheCast trade on the Toronto Stock Exchange as ticker "UR".
For more information, visit UrtheCast's website at www.urthecast.com.
Non-IFRS Financial Measures
The Company prepares its financial statements in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board. This release includes certain non-IFRS financial measures, such as non-IFRS revenue excluding non-cash revenue, and adjusted EBITDA. The Company uses these non-IFRS financial measures as supplemental indicators of its operating performance and financial position. These measures do not have any standardized meanings prescribed by IFRS and therefore are unlikely to be comparable to the calculation of similar measures used by other companies, and should not be viewed as alternatives to measures of financial performance calculated in accordance with IFRS or considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These non-IFRS financial measures should be read in conjunction with the Company's financial statements and accompanying MD&A.
Forward Looking Information
This release contains certain information which, as presented, constitutes "forward-looking information" or "forward-oriented financial information" within the meaning of applicable Canadian securities laws. Forward-looking information involves statements that relate to future events and often addresses expected future business and financial performance, containing words such as "anticipate", "believe", "plan", "target", "estimate", "expect" and "guidance", statements that an action or event "may", "might", "could" or "will" be taken or occur, or other similar expressions and includes, but is not limited to, statements relating to: UrtheCast's expected completion of the UrtheDailyTM financing on the terms set forth in the exclusivity agreement or at all; any potential transaction or other strategic alternative being available to the Company as a result of the Special Committee's review; UrtheCast's expectations with respect to its current sensors and proposed OptiSAR™ and UrtheDailyTM constellations and precursor SAR satellite; the satisfaction of the financing and other conditions set out in the agreement for the purchase of the precursor SAR satellite; its plans for and timing of expansion of its product offering and value-added services; its future growth and operations plans; expectations regarding the award of major contracts; expectations regarding government contributions and reimbursement grants; and anticipated trends and challenges in its business and the markets in which the Company operates. Such statements reflect UrtheCast's current views with respect to future events. Such statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by UrtheCast, are inherently subject to significant uncertainties and contingencies. Many factors could cause UrtheCast's actual results, performance or achievements to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements, including, among others: UrtheCast's inability to enter into definitive documentation for the UrtheDailyTM financing; UrtheCast's inability to close the UrtheDailyTM financing on the terms set forth in the exclusivity agreement or at all; UrtheCast's ability to satisfy the conditions precedent to certain contracts signed and announced; any delays or failures in the design, development, construction, launch and operational commissioning of the proposed OptiSARTM or UrtheDailyTM constellations or precursor SAR satellite; the Company being unable to, adequately and on acceptable terms, finance the development, building, launch and commissioning of the UrtheDailyTM Constellation, to convert the remaining MOUs and other customer discussions in respect of the OptiSARTM constellation into binding, definitive agreements in a timely manner or at all; any failure by any customer of UrtheDailyTM, the Government of Canada or one of UrtheCast's third-party lenders to comply with the terms of their respective contracts with UrtheCast, and UrtheCast's ability to comply with any of its covenants thereunder; the decline of key relationships in, or termination of, the PanGeo Alliance of EO satellite operators; failures aboard the ISS or the Deimos-1 or Deimos-2 satellites; failure to obtain, or loss of, regulatory approvals; as well as those factors and assumptions discussed in UrtheCast's annual information form dated March 27, 2017 , (the "AIF"), which is available under UrtheCast's SEDAR profile at
www.sedar.com . UrtheCast undertakes no obligation to update forward-looking statements except as required by Canadian securities laws. Readers are cautioned against attributing undue certainty to forward-looking statements.