VANCOUVER, April 2, 2018 — (PRNewswire) — UrtheCast Corp. (TSX: UR) ("UrtheCast" or the "Company") today announces financial results for the three and twelve months ended on December 31, 2017 and provides an update on its financial condition.

2017 Financial Results

 

Revenue was $40.4 million in 2017 compared to $111.3 million in 2016, or $49.9 million when excluding the non-cash revenue of $61.4 million in 2016 related to the Company's cameras on the International Space Station (the "ISS Cameras").

Engineering services revenue of $32.6 million in 2017, compared to $34.7 million in 2016, decreased due to a change in the expected completion date of one of our engineering services contracts, which resulted in revenue being recognized over a longer period, and also due to lower revenue being recognized on one of our contracts for the provision of space hardware, as a higher percentage of the work was completed in the prior year. Earth Observation ("EO") imagery revenue of $7.8 million in 2017, compared to $15.2 million in 2016, was significantly lower due to ongoing delay in securing a major contract award.

The net loss of $31.8 million and negative adjusted EBITDA of $3.2 million in 2017 increased when compared to the net loss of $29.3 million and positive adjusted EBITDA of $5.6 million in 2016, primarily as a result of the lower revenues, which were only partially offset by the lower operating costs set out above.

Outlook and Going Concern

The Company continues to face significant liquidity challenges with recurring operating losses and negative cash flows.

As at March 31, 2018, the Company had (i) less than $7.5 million in cash on hand, a decrease of $4.5 million from its previously announced cash position of $12 million as at February 28, 2018, and a decrease of $15.7 million since December 31, 2017; and (ii) $16.6 million in restricted cash. Based on the Company's forecasted cash flows for the next twelve months, the Company's current cash flow from operations may not be sufficient to cover its commitments, obligations and operating costs.  The Company will need to complete the UrtheDaily Financing described below in order to pay for its ongoing costs of operations as well as service its working capital deficiency, meet its commitments to lenders and fund the development of the UrtheDaily Constellation. There can be no assurance that any such financing will be completed on the terms described below or at all.

Management for the Company has concluded that material uncertainties regarding the Company's ability to secure adequate financing to fund its working capital deficiency and meet its commitments to lenders raise significant doubt as to the ability of UrtheCast to continue as a going concern and therefore has included notice of such in the Company's audited financial statements.  Please refer to Note 1 of the Company's consolidated financial statements for the year ended December 31, 2017 for more information.

The Company's auditor has included an Emphasis of Matter paragraph in its independent auditor's report of the Company's audited financial statements with respect to conditions and matters that indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern.

Notwithstanding the foregoing, the Company's financial statements have been prepared on a going concern basis, meaning that the Company will be able to realize its assets and discharge its liabilities in the normal course of operations. The financial statements do not reflect adjustments that would be necessary if the going concern assumption was not appropriate. If the going concern assumption was not appropriate for these financial statements, adjustments to the carrying value of the assets and liabilities, reported expenses and statement of financial position classifications would be necessary. Such adjustments could be material.