Mr. Scott Larson reports

URTHECAST REPORTS FOURTH QUARTER AND 2013 ANNUAL FINANCIAL RESULTS

UrtheCast Corp. is releasing its financial results for the three and 12 months ending on Dec. 31, 2013.

Recent highlights include the following.

The company launched its cameras aboard the Progress 53P cargo ship from Kazakhstan's Baikonur Cosmodrome. Travelling aboard a Soyuz rocket, the company's two cameras -- the world's first one-metre-class, high-resolution Earth video camera and one medium-resolution imaging camera -- arrived at the International Space Station on Nov. 29.

The company successfully installed its two Earth imaging cameras on the Russian segment of the International Space Station on Jan. 27, 2014, and commenced commissioning.

UrtheCast completed a bought-deal public offering of common shares of the company. A total of 5,227,325 common shares were issued at a price of $2.20 per common share for aggregate gross proceeds of $11.5-million.

UrtheCast obtained a comprehensive insurance policy from a leading space insurance broker for the launch, installation, commissioning and business interruption of its two cameras aboard the International Space Station. This insurance coverage provides risk indemnity in the event that the rocket fails to achieve orbit, or in the event that the spacewalk results in damaged or lost cameras. This coverage also includes full protection if camera performance metrics are not achieved postinstallation. Insuring the first repairable and maintainable camera system in space presented a unique opportunity for UrtheCast's brokers and the group of underwriters. Over all, the insurance coverage provided a few firsts for the insurance industry, including ISS failure coverage and coverage for the suitability of the biaxial pointing platform.

UrtheCast successfully completed the initial functional testing of both the MRC and HRC, which included the capture and storage of data in its data handling unit on board the ISS and the downlinking of these data to the ground station in Moscow. Initial test imagery has been acquired from the MRC, which is being used to support the analysis and calibration of the camera. In addition, the company continues to commission and calibrate the HRC's precision pointing platform, which is required before test imagery can be acquired by the HRC.

The company signed six new data distributors for its high-resolution Earth video and imagery. These distributors are located in the Middle East and in Europe. These new distributor agreements have aggregate minimum revenue commitments of $5-million per annum, which distributors must meet in order to retain their respective licences and territorial rights to UrtheCast's imagery. Including these new distributors, the company's data distribution agreements total 16 distributors, representing minimum commitments of $26-million per annum.

UrtheCast continued to build out its work force, increasing its global employee total to 82. Central to the growth of the team in the last quarter was the addition of an operations team to begin the process of planning the collection of images that will be distributed to the company's intended customer base.

Results of operations

The company's operating expenditures increased significantly in 2013 when compared with the prior year, as additional employees were added to the work force to support the development of the infrastructure required to prepare it for the launch of the MRC and HRC in late 2013 and the anticipated start of commercial revenues in the first half of 2014.

Total operating expenses in the fourth quarter were $4.9-million (2012: $1.7-million), of which $1.7-million (2012: $600,000) was attributable to non-cash share-based payments. For the 12 months ending Dec. 31, 2013, the net loss was $19.2-million, or $12.0-million (2012: $7.6-million) net of the non-cash loss on the reverse takeover transaction in the second quarter. The company's total expenses, net of share-based payments for the three and 12 months ending Dec. 31, 2013, were $3.2-million (2012: $1.0-million) and $7.7-million (2012: $3.5-million) respectively.

                                                        Three months                   Years
                                                      ended Dec. 31,          ended Dec. 31,
                                                   2013         2012          2013      2012

General and administrative expenses          $2,902,658     $689,212   $6,469,409 $2,156,036
Research expenditures                           293,480      347,753    1,221,262  1,331,968
Share-based payments                          1,703,474      634,590    4,141,205  4,037,034
Operating loss                                4,899,612    1,671,555   11,831,876  7,525,038
Finance (income)/costs,
foreign exchange loss and (gains)/losses
on short-term investments and derivatives       (71,673)      88,360      (34,949)    68,127
Loss on settlement of convertible debenture           -            -      230,345          -
Non-cash loss on completion of transaction            -            -    7,205,501          -
Net loss                                      4,827,939    1,759,915   19,232,773  7,593,165
Other comprehensive loss                           (502)         837        1,152        837
Comprehensive loss                            4,827,437    1,760,752   19,233,925  7,594,002
Net loss per share                                 0.08         0.07         0.42       0.31

UrtheCast had cash reserves of $21.8-million at Dec. 31, 2013, compared with $1.5-million at Dec. 31, 2012. As a result of the going-public transaction and associated financings, the company had working capital of approximately $23-million at Dec. 31, 2013, compared with a working capital deficiency of approximately $6-million at Dec. 31, 2012.

In the fourth quarter of 2013, the company paid approximately $5-million for an insurance premium for launch and in-orbit business interruption coverage, of which approximately $2.2-million is included in cash flow from operations. The remaining $2.8-million was capitalized in property and equipment and is included in cash flow from investing activities.

Going into 2014, the company had outstanding commitments of only $900,000 for postdelivery support of its camera equipment and for other purchases of property and equipment. Therefore, it anticipates that its cash expenditures for property and equipment in 2014 will be substantially reduced as compared with the approximately $16.9-million spent in 2013. Assuming that the company commences its initial operations in the second quarter of 2014, it expects that its cash used for operating activities will increase in 2014, as compared with the $10.5-million used in 2013. However, the reduction in cash required for property and equipment will be substantially greater than the expected increase in cash used for operations.

In 2011, the company entered into a strategic relationship with Energia and Roscosmos to allow installation of its cameras on board the ISS. This relationship has provided, and is expected to continue to provide, significant in-kind contributions to the cost of the project, such as hardware integration, crew training, hardware delivery to the ISS, provision of a pointing platform, maintenance, extra vehicular spacewalks, and power supply to the cameras and the locations on the ISS to mount the cameras. In return for these contributions to the project, Energia will receive certain rights to the imagery, for use by Russian government agencies, over the life of the project. During the fourth quarter the company capitalized an initial amount of $28.9-million into the carrying value of the camera equipment, representing the fair value of the services that it has received up to Dec. 31, 2013, for the launch of the cameras and the initial installation onto the exterior of ISS. The accounting for this non-cash transaction is more fully described in the notes to the company's consolidated financial statements.

This arrangement has reduced, and is expected to continue to reduce, the company's need to raise additional capital to build, launch and operate its cameras in space. This savings is in two forms, the first being the additional costs that the company would have had to invest to build the hardware systems required to operate as a stand-alone satellite, including solar panels and downlink communication systems, saving dilution to the company's current shareholders. Secondly, the annual costs associated with the operation of the cameras, including the power required to operate the cameras, any required maintenance and the provision of the downlink communications network from the ISS to the ground systems network, will be borne by Energia. The overall effect of this arrangement has enabled the company to launch two cameras into space at a fraction of the cost of building and launching independent satellites, which can range from $100-million to $500-million.

"UrtheCast achieved many significant milestones in 2013," explained Scott Larson, UrtheCast's chief executive officer. "What was key amongst these achievements was the successful financing of the company, which allowed us to complete the development and installation of the cameras. It also set the foundation for the commencement of company operations in 2014."

The full financial statements and accompanying management's discussion and analysis are available on UrtheCast's profile on the System for Electronic Document Analysis and Retrieval and on UrtheCast's website.

We seek Safe Harbor.