VANCOUVER, Feb. 3, 2020 /CNW/ - UrtheCast Corp.
(TSX:UR) ("UrtheCast" or the "Company"), a leading
provider of information-rich products and services in the rapidly
growing geospatial and geo-analytics markets, is pleased to
announce the closing of a $2.0
million (US$1.55 million)
financing (the "Financing") with SMF Investments Limited
(the "Lender"). The Company also provides a corporate
update.
$2.0 Million Financing
The Financing consists of an unsecured convertible debenture of
the Company in the principal amount of $2,025,773 (the "Convertible Debenture").
The Convertible Debenture accrues interest at a rate of 17% per
annum, has a maturity date of March 31,
2020, and is convertible into common shares of the Company
("Common Shares") at the option of the Lender, at any time
prior to the maturity date at a conversion price equal to
$0.32 per Common Share (the
"Original Conversion Price"). The Original Conversion Price
is subject to adjustment in certain circumstances, including if the
Company issues any Common Shares or securities convertible into
Common Shares (other than pursuant to its equity incentive plan) at
a lower price, in which case the conversion price shall be reduced
to such lower price but not less than $0.24, subject to approval from the Toronto Stock
Exchange (the "TSX"). In the event of default under the
Convertible Debenture, the Lender will receive a license to certain
intellectual property of the Company.
In connection with the Financing, the Company paid the Lender a
3% finance fee from the proceeds of the Financing and issued to the
Lender 4,171,677 Common Share purchase warrants of the Company
having an expiry date of January 27,
2025 and an exercise price of $0.48 per Common Share (the "Original Exercise
Price"). The Original Exercise Price is subject to adjustment
in certain circumstances, including if the Company issues any
Common Shares or securities convertible into Common Shares (other
than pursuant to its equity incentive plan) at a lower price, in
which case the exercise price shall be reduced to such lower price
but not less than $0.32, subject to
approval from the TSX.
The proceeds of the Financing will be used primarily to fund
upfront legal and advisory fees related to the expected financing
of the UrtheDaily Constellation and debt service costs.
The Company is in discussion with the Lender regarding
additional funding, subject to reaching mutually agreeable
terms.
Corporate Update
As previously disclosed, the Company has received a number of
indicative term sheets from institutional investors to finance the
UrtheDaily Constellation project and has been actively working
towards satisfying due diligence requirements with these
prospective investors. The Company continues to make progress in
this competitive process and remains focused on finalizing a
binding commitment.
With regards to the sale of its Deimos Imaging business, the
Company believes that it has successfully satisfied technical due
diligence with a prospective buyer and the parties are progressing
towards the completion of the remaining financial and legal due
diligence activities in order to secure a binding sale
agreement.
Extension of US$12.0 Million
Term Loan
Effective January 15, 2020, the
lenders of the previously announced US$12.0
million term loan entered into on January 14, 2019 (the "Term Loan")
extended the maturity date of the Term Loan to April 14, 2020 (the "Extension"). In
connection with the Extension, an aggregate extension fee of
US$200,000 is payable to the
lenders.
Extension of Other Loans and Convertible Debentures
The Company is in constructive discussions with its lenders for
extensions of the maturity dates under the Company's (i)
US$1.5 million secured term loan
entered into in June 2019, (ii)
US$1.5 million secured term loan
entered into in July 2019 and (iii)
convertible debentures in the aggregate principal amount of
C$6.6 million issued in September 2019.
Deferral of Second Instalment Payable to Land O'Lakes
The Company and Land O'Lakes have agreed in principal to further
defer the remaining US$4.25 million
balance of the second instalment for the Geosys acquisition, which
is due by February 14, 2020, such
that US$0.75 million is to be paid on
April 1, 2020 through a setoff of
amounts owed by Land O'Lakes under its 13-year services agreement
and US$3.5 million is to be paid by
May 14, 2020.
About UrtheCast
UrtheCast Corp. is a Vancouver-based company that serves the
rapidly growing and evolving geospatial and geo-analytics markets
with a wide range of information-rich products and
services.
For more information, visit UrtheCast's website at
www.urthecast.com.
Forward Looking Information
This release contains certain information which, as
presented, constitutes "forward-looking 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 "plan" and "propose", statements that an
action or event "may" or "will" be taken or occur, or other similar
expressions and includes, but is not limited to, statements
relating to: UrtheCast's expectations with respect to its ability
to raise capital and to continue as a going concern; expectations
regarding UrtheCast's ability to meet its obligations and satisfy
its liabilities under its existing
indebtedness, the Convertible Debenture and the
Term Loan; UrtheCast's expectations with respect to discussions
with the Lender for additional funding; UrtheCast's expectations
with respect to financing of the UrtheDaily Constellation,
including UrtheCast's ability to enter into binding commitments
with prospective investors on terms satisfactory to UrtheCast or at
all; UrtheCast's expectations with respect to completing the
remaining financial and legal due diligence and entering into
a binding sale agreement with respect to the sale of Deimos
Imaging; expectations regarding the Company's discussions with the
lenders for extensions of the maturity dates under the Company's
secured term loans and convertible debentures; and expectations
regarding UrtheCast's ability to meet its obligations in connection
with the Geosys acquisition, including its ability to pay the
balance of the second instalment of the purchase price in a timely
manner, or at all, and Land O'Lakes' agreement in principal to
defer such payment. Such statements reflect UrtheCast's
current views with respect to future events, and are necessarily
based upon a number of estimates and assumptions that, while
considered reasonable by UrtheCast as at the date of this press
release, are inherently subject to significant uncertainties and
contingencies. Many factors could cause UrtheCast's actual results
or performance to be materially different from expectations that
may be expressed or implied by such forward-looking statements,
including, among others: the Company's ability to rectify
its current cash constraints and to continue as a going concern;
the Company's ability to enter into alternative financing for the
UrtheDaily Constellation, and any delays or failures in the design,
development, construction, launch and operational commissioning of
the such constellation; the Company's ability to comply with debt
and repayment obligations and avoid the exercise of lenders'
rights, including with respect to seizing secured assets and other
rights available to lenders; the inability of the Company to obtain
additional funding from the Lender on commercially reasonable terms
or at all; the Company's inability to repay the Sabadell Loan;
lower than expected revenues from the Company's products and
services; the Company's ability to fund its future operations,
which is contingent on its efforts to raise additional financing
and/or sell certain assets of the Company; the Company's ability to
successfully complete a sale or other transaction involving Deimos
Imaging on commercially reasonable terms, or at all; loss,
reduction in scope, termination, failure to satisfy conditions
precedent or decline in general of the Company's agreements or
relationships with its key partners, including Land O' Lakes, Inc.
and the Company' lenders; the inability of the Company to
obtain an extension of the maturity dates under its secured term
loans and convertible debentures; and those factors and assumptions
discussed in UrtheCast's Annual Information Form dated March 29, 2019, which is available under
UrtheCast's SEDAR profile
at www.sedar.com. UrtheCast cautions
readers that such factors and uncertainties are not exhaustive and
that should certain risks or uncertainties materialize, or should
underlying estimates or assumptions prove incorrect, actual
results, performance or achievements may vary significantly from
those expected. 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.
SOURCE UrtheCast Corp.