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UrtheCast Corp. Closes $2.0 Million Financing and Provides Corporate Update

Press Release From: UrtheCast
Posted: Monday, February 3, 2020

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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.

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