VANCOUVER, Oct. 26, 2018 /CNW/ - UrtheCast Corp. (TSX: UR) ("UrtheCast") announced that it has received a letter dated October 24, 2018 from the lenders (the "Lenders") under the credit agreement (the "Credit Agreement") dated as of May 18, 2018 among UrtheCast, Deimos Imaging, S.L.U. ("Deimos"), the Lenders and U.S. Bank National Association, advising that an Event of Default has occurred under the Credit Agreement as a result of the recent resignation of Fabrizio Pirondini as an executive of Deimos. UrtheCast also announced that it has entered into a forbearance agreement (the "Forbearance Agreement") dated October 25, 2018 with the Lenders pursuant to which the Lenders have agreed to refrain from taking any actions or seeking any remedies available to them under the terms of the Credit Agreement until November 23, 2018. Mr. Pirondini was identified as a key man under the Credit Agreement in May 2018, at a time when UrtheCast had interim leadership and was searching for a new chief executive officer.
UrtheCast has requested that the Lenders remove Mr. Pirondini as a key man under the Credit Agreement or otherwise waive any Event of Default. As no amount is outstanding under the Credit Agreement, the practical consequence of the Event of Default is that the Lenders are not obligated to fund under the Credit Agreement. In addition, as the first drawdown under the Credit Agreement has not yet occurred, any such termination also would result in the termination of the Lenders' royalty entitlement and the cancellation of the Lenders' warrants issued under the Credit Agreement. The Board of Directors of UrtheCast believes that Mr. Pirondini's departure does not adversely impact its operational capabilities, and that his departure is facilitating a necessary restructuring of senior personnel and other optimization measures initiated by Donald F. Osborne, UrtheCast's Chief Executive Officer.
UrtheCast is also continuing to work to meet all previously announced first drawdown conditions under the Credit Agreement, including the refinancing of the Sabadell loan and the receipt of confirmation from the Lenders that the minimum annual binding contractual commitments for UrtheDaily have been met. With more than $350 million in binding contractual commitments, management believes that UrtheCast's business case, including for the UrtheDaily Constellation, has been validated, and intends to seek out alternative funding sources if the Lenders choose not to fund under the Credit Agreement. While discussions are ongoing with the Lenders, there can be no assurance that the Lenders will agree to continue to forbear, that the Event of Default will be cured, that the Lenders will otherwise be prepared to make advances under the Credit Agreement or that any alternative financing will be available on similar terms as the Credit Agreement or at all.
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. The Company currently owns and operates two Earth Observation (EO) satellites, Deimos-1 and Deimos-2. Together with its exclusive partnerships, spanning an additional 20 satellites, UrtheCast processes and distributes imagery data and value-added products on a global scale to partners and customers in multiple markets. UrtheCast is also launching UrtheDaily™, a satellite constellation that will be the most advanced change detection system in the world, designed to capture daily, scientific grade, high-quality, medium resolution optical imagery of the Earth's entire landmass (excluding Antarctica). UrtheCast is also developing OptiSAR™, a constellation of SAR satellites which, together with UrtheDaily™, will form the world's first fully-integrated optical and SAR constellation. Common shares of UrtheCast trade on the Toronto Stock Exchange as ticker "UR".
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" or "forward-oriented financial 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 "anticipate", "plan", "explore" and "expect", statements that an action or event "may", "should" 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 cure the Event of Default; UrtheCast's expectations with respect to any alternative financing; UrtheCast's expected completion of the UrtheDaily financing on the terms set out in this press release, the definitive documentation related thereto, or at all; UrtheCast's expectations with respect to its ability to raise proceeds from a subordinated debt or equity offering, achieve the required leverage and contracted revenue ratios and otherwise satisfy the first drawdown conditions and the final drawdown conditions under the Credit Agreement in a timely manner. Such statements reflect UrtheCast's current views with respect to future events. Such statements 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, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others: UrtheCast's inability to cure the Event of Default; UrtheCast's inability to secure any alternative financing; UrtheCast's inability to close the UrtheDaily financing on the terms set out in this press release, the definitive documentation related thereto, or at all; UrtheCast's inability to raise proceeds from a subordinated debt or equity offering, achieve the required leverage and contracted revenue ratios or otherwise satisfy the first drawdown conditions or the final drawdown conditions under the Credit Agreement in a timely manner or at all; as well as those factors and assumptions discussed in UrtheCast's annual information form dated April 2, 2018, 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. There can be no assurance that the actual strategies, results, performance, events or activities anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company.
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.
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