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August 13, 2015
UrtheCast Reports Second Quarter 2015 Financial Results

VANCOUVER, August,13, 2015 — UrtheCast Corp. (UR) ("UrtheCast" or the "Company"), a technology company that is developing the world's first interactive Earth Observation platform, today announces financial results for the three and six months ended June 30, 2015. The Company reported revenues of $5 million and $8.2 million for the three and six month periods ending June 30, 2015, respectively compared to nil revenues for the same periods in 2014. Net cash flow from operations for the six-month period ending June 30, 2015, was approximately $15 million, helping the Company's cash position increase to $37.8 million at June 30, 2015, up from $11.4 million at June 30, 2014.

Recent highlights include:

UrtheCast HRC Achieves First Light

The Company released videos of London, Boston, and Barcelona at a media event held in New York City. These videos, which can be viewed on our website, showcase daily life, reveal the diverse nature of our remarkable planet, and display the unique utility of UrtheCast's unprecedented technology.

High-Resolution Camera ("HRC") Initial Operating Capability ("IOC") Achieved

Commissioning work on the HRC reached IOC in late July, which includes both data quality and processing capacity. Going forward, this allows us to begin delivering limited quantities of videos to a select group of customers. Our engineering team will continue to work to improve the HRC's processing speed, to achieve Full Operating Capability ("FOC").

Closing the Acquisition of Deimos Imaging

UrtheCast closed its acquisition of Deimos Imaging for an aggregate price of €76.4 million. Of that amount, €71.2 million was paid at closing with an additional €5.2 million to be paid over the next five years.

In addition to being financially accretive, Deimos Imaging is also expected to materially expand UrtheCast's core Earth Observation capabilities and scale, as well as accelerate the Company's ongoing web platform development, and the build-out of UrtheCast's recently-announced constellation.

Raised $100 Million in Equity to Finance the Deimos Imaging Acquisition

Concurrently with the Deimos Imaging acquisition, UrtheCast also issued 24,868,750 common shares of the Company at $4.00 per share, raising gross proceeds of approximately $100 million.

Announced the World's First Commercial SAR and Optical 16-Satellite Constellation

The Company also disclosed its plans to build, launch and operate the world's first fully-integrated, multispectral optical and Synthetic Aperture Radar (SAR) commercial constellation of Earth Observation satellites (the "Constellation"), to be deployed over multiple launches expected in 2019 and 2020.  UrtheCast also announced that it has entered into multiple non-binding memoranda of understanding ("MOUs") with commercial partners, including an anchor MOU worth US$195 million, to assist in funding the Constellation during the build phase.

Results of Operations

Three Months ended June 30, Six Months ended June 30,
2015 2014 2015 2014
Revenue $ 4,975,135 $ - $ 8,233,109 $ -
Other operating income 1,384,318 - 4,064,568 -
6,359,453 - 12,297,677 -
Operating costs
Direct costs, selling, general and administrative expenses 5,067,336 2,975,374 8,254,258 5,529,759
Research expenditures 3,198,257 484,070 5,128,421 975,619
Share-based payments 647,777 644,048 1,351,373 1,490,471
8,913,370 4,103,492 14,734,052 7,995,849
Operating loss (2,553,917) (4,103,492) (2,436,375) (7,995,849)
Acquisition costs (3,029,815) - (3,029,815) -
Net finance (costs) income (58,244) 36,620 (128,696) 87,712
Foreign exchange gain (loss) (33,254) (2,532) 169,240 (30,227)
Net loss (5,675,230) (4,069,404) (5,425,646) (7,938,364)
Other comprehensive income (loss) (16,177) (12,515) (2,193) (15,960)
Comprehensive loss $ (5,691,407) $ (4,081,919) $ (5,427,839) $ (7,954,324)
Net loss per share – basic and diluted $ (0.08) $ (0.06) $ (0.08) $ (0.12)

The Company recorded a net loss of $5.7 million in the second quarter of 2015 and revenue of $5.0 million as compared to a loss of $4.1 million and zero revenues in the same time period last year. The Company recorded net loss of $5.4 million in the six months ended June 30, 2015 and revenue of $8.2 million as compared to a loss of $8.0 million and zero revenues in the same time period last year. In addition, in the second quarter of 2015 the Company recorded income of $1.25 million from its business interruption insurance policy and $134 thousand from government grants associated with the development of its second-generation ("Gen-2") sensors. Income from business interruption insurance and government grants for the six months ended June 30, 2015 was $3.5 million and $565 thousand, respectively. Operating costs increased by approximately $4.8 million in the second quarter, compared with the same period last year, primarily due to the direct costs associated with our two new engineering services contracts and the additional staff and associated infrastructure around our Gen-2 sensor development. Commencing in the first quarter of 2015, we added additional staff to work on the Gen-2 systems requirements engineering and for the web platform.

Cash Flow

Three Months ended June 30, Six Months ended June 30,
2015 2014 2015 2014
Cash inflows (outflows) from operating activities $ 12,115,172 $ (2,250,875) $ 14,923,387 $ (5,077,733)
Cash outflows from investing activities (6,249,721) (3,029,984) (8,782,150) (6,866,980)
Cash inflows from financing activities 19,206,725 - 19,825,481 1,570,043
Increase (decrease) in cash and cash equivalents during the period 25,072,176 (5,280,859) 25,966,718 (10,374,670)
Cash and cash equivalents at beginning of period 12,680,777 16,698,227 11,398,052 21,787,577
Effect of foreign exchange rate changes on cash and cash equivalents 5,355 (4,150) 393,538 311
Cash and cash equivalents at end of period $ 37,758,308 $ 11,413,218 $ 37,758,308 $ 11,413,218

Our cash balance at June 30, 2015 was $37.8 million as compared to a cash balance of $11.4 million at December 31, 2014. In the three months ended June 30, we received net proceeds of approximately $15.9 million from the issuance of Common Shares. In addition, we received the balance of the 20% cash advance of US $10 million for our US $65 million contract and the first milestone payment of US $5.6 million in the second quarter of 2015. We also received further payments under our business interruption insurance policy of $2.9 million in the second quarter. We also anticipate claiming an amount of up to $2.0 million for recovery of costs related to our corrective actions to resolve the technical issues related to commissioning of the HRC. These proceeds, in addition to the initial anticipated revenues from the Medium Resolution Camera ("MRC") and HRC, are expected to fund our current level of operations and capital commitments over the next twelve months and beyond.

"This was a transformative quarter for us", explained Scott Larson, UrtheCast's Chief Executive Officer. "The declaration of IOC for the HRC, the release of our First Light videos, the positive reaction to our acquisition of Deimos Imaging, together with the disclosure of our plans for the world's first fully-integrated SAR/Optical constellation, all allow us to confidently enter the second half of fiscal 2015."

The full financial statements and accompanying Management's Discussion & Analysis are available on UrtheCast's profile on the System for Electronic Document Analysis and Retrieval ("SEDAR") at its website www.sedar.com, and on UrtheCast's website at www.urthecast.com.

The Company will host a conference call regarding its corporate earnings for the three months ended June 30, 2015, at 5:00 p.m. ET (2:00 p.m. PT) on Tuesday, August 11, 2015. The live conference call will be available by calling toll-free at 866-696-5910, or by toll call at 416-695-7806. The participant pass code is 7902213.

An archived version of the conference call will be made available on the Company's investor webcast page following the live conference call.

About UrtheCast Corp.

UrtheCast Corp. is a Vancouver-based technology company that is developing the world's first Ultra HD video feed of Earth, streamed from space in full color. Working with renowned aerospace partners from across the globe, UrtheCast has built, launched, installed and begun to operate its Ultra HD video camera, Iris, on the ISS alongside its MRC, which reached IOC in 2014. UrtheCast also owns and operates the Deimos-1 and Deimos-2 satellites through its Spanish subsidiary, operating as Deimos Imaging. Video and still image data captured by the cameras will be downlinked to ground stations across the planet and displayed on the UrtheCast web platform, or distributed directly to partners and customers. UrtheCast's cameras will provide Ultra HD video and still imagery of Earth that will allow for monitoring of the environment, humanitarian relief, social events, agricultural land, etc. Common shares of UrtheCast trade on the Toronto Stock Exchange as ticker 'UR'.

For more information visit UrtheCast's website at www.urthecast.com.

 

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