Urbanimmersive Technologies Inc. presents its 2012-2013 consolidated financial results

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TSX VENTURE EXCHANGE SYMBOL - UI

HIGHLIGHTS

  • Closing of a qualifying transaction with a $2,500,000 concurrent private placement on October 4, 2012;
  • Signed agreements with several real estate agencies: Sutton, RE/MAX Quebec, Via Capitale and Proprio Direct;
  • Signature of a reseller agreement with ASTRAL TV Plus, now Bell Media;
  • Signing of a partnership agreement with the APCHQ, the provincial association of home builders of Quebec;
  • Encouraging signs of adoption of our AVU3D® immersive technology in the real estate market.

MONTREAL, Jan. 23, 2014 /CNW Telbec/ - Urbanimmersive Technologies Inc. ("Urbanimmersive Technologies"), today presented its audited consolidated financial results, including those of Urbanimmersive Inc. ("Urbanimmersive" and, collectively with Urbanimmersive Technologies, the "Corporation"), its wholly owned subsidiary, for the year ended September 30, 2013.

"The 2012-2013 fiscal year was an opportunity for the Corporation to intensify its efforts on research and development as well as commercialization of its AVU3D® immersive technology" said Ghislain Lemire, President and CEO Urbanimmersive Technologies. "We are pleased that these efforts resulted in agreements with the main actors of the real estate market in the province of Quebec. With these agreements, we were able to set in motion an aggressive sales offensive to create market adoption of our AVU3D® immersive technology, whose impact on the revenues of the Corporation should begin to be felt in the 2013-2014 fiscal year."

"The strategy executed during the 2012-2013 fiscal year enabled the Corporation to acquire around 500 new clients, for which it has delivered nearly 1,000 immersive visits. The rapid adoption of AVU3D® immersive technology is largely related to the "risk-free" sales model which allows realtors to pay for the AVU3D® immersive visits only if there is a sale of the property. Therefore we expect recognition of these revenues in the coming quarters in addition to starting to market the pay functionalities of the AVU3D® platform. Furthermore, the Corporation intends to explore the marketing opportunities of its competitive advantage related to the growth in the number of users of the AVU3D® platform and its prime position on the Google search engine."

"In early 2014, the Corporation plans to modify its "risk-free" offer so that the customer will pay a portion of the sale price on delivery of the immersive visit. We also intend to support the local adoption of our technology through promotional and advertising activities. This advertising strategy will promote the launch of innovative new products and the complete overhaul of the AVU3D® platform. The Corporation also plans to explore different expansion models outside Quebec through agreements with authorized partners."

QUALIFYING TRANSACTION

On October 4, 2012, Urbanimmersive Technologies announced the closing of the acquisition of all of the securities of Urbanimmersive and of its concurrent private placement for aggregate proceeds of $2,500,000 (the "Offering"). The acquisition constituted the qualifying transaction (the "Qualifying Transaction") of Urbanimmersive Technologies pursuant to the Policy 2.4 of the TSX Venture Exchange Inc. (the "Exchange"). As part of the Qualifying Transaction, Urbanimmersive Technologies acquired all of the shares and debentures of the Corporation in exchange for the issuance of an aggregate of 8,311,441 Common Shares of Urbanimmersive Technologies (the "Common Shares") at a deemed price of $0.75 per Common Share for a total consideration of $6,233,580.

The Offering was in the form of the private placement 3,333,334 Common Shares at $0.75 per share for aggregate proceeds of $2,500,000. The Offering was subscribed by accredited investors and other exempt purchasers as well as James McDonald, Chairman of the Board of Directors, and Daniel Robidoux, a Director of the Corporation.

On October 12, 2012, Urbanimmersive Technologies announced that the Exchange had accepted for filing the Qualifying Transaction and had issued its final exchange bulletin. As a result, trading in the Common Shares of Urbanimmersive Technologies Inc. resumed at the opening of the markets on Monday, October 15, 2012. In addition, the name was changed from UI Capital Inc. to Urbanimmersive Technologies Inc.

SELECTED FINANCIAL INFORMATION

  September 30, 2013 September 30, 2012
  $ $
Revenue 885,886 1,012,624
Cost of sales 758,493 732,465
Gross profit 127,393 280,159
Operating expenses 2,122,312 1,300,180
Other expenses 1,314,164 185,500
Net loss and comprehensive loss (3,309,083) (1,205,521)
Assets 1,210,894 1,180,778
Liabilities 759,405 3,384,749
Equity (negative) 451,489 (2,203,971)


OPERATING RESULTS

The Corporation's revenues have decreased from $1,012,624 to $885,886 a decrease of $126,738 or 12.5%. This decrease is mainly due to a reduction in 3D product revenues due to sales efforts that have been focused on the deployment of AVU3D® immersive visits in the real estate market with affiliated real estate agencies.

The Corporation generated a gross profit of $127,393 or 14.38% compared to a $280,159 or 27.66% for the same period in 2012, a decrease of $152,766 or 13.28%. This decrease in gross margin is due to the fact that the Corporation had to bear the production costs of AVU3D® immersive tours while revenue recognition will only take place if there is the sale of the property. Without this situation, the Corporation would have realized a gross margin of 31.65% an increase of 4% compared to 2012.

Operating expenses totalled $2,122,312 compared to $1,300,180 for the same period of 2012, an increase of $822,132 or 63.2% due to an increase in selling expenses of $154,763, to an increase in Administrative expenses of $842,839 and to an increase in research and development fees of $123,090.

Other expenses totalled $1,314,164 compared to $185,500 for the same period of 2012, an increase of $1,128,664. This increase is due to the recognition of a stock listing exchange expense of $1,181,417, to a loss on amendment of a convertible debenture of $99,187 and to a reduction in financial expenses of $151,940, due the conversion of the convertible debentures into common shares. These elements are directly related to the completion of the Qualifying Transaction of the Corporation.

QUARTERLY RESULT TRENDS (IN THOUSANDS OF $)

The operating results for each of the last eight quarters are presented in the following table. Management considers that the information for each of those quarters was determined in the same way as for our audited consolidated financial statements for the year ended September 30, 2013.

  Results
(Consolidated)
Results
(Unconsolidated)
  2013 2012
  Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
  $ $ $ $ $ $ $ $
Revenue 218 152 179 337 192 251 307 263
Gross profit (loss) 43 (74) 3 155 31 63 108 78
Operating loss (659) (614) (532) (1,504) (478) (258) (205) (265)
Basic and diluted net loss per Common Share (0.047) (0.040) (0.040) (0.113) (0.098) (0.055) (0.050) (0.057)


LIQUIDITY, CAPITAL RESOURCES AND SOURCES OF FINANCING

As of September 30, 2013, the Corporation had a cash position of $135,915 and a working capital deficiency of $188,557 compared to a working capital deficiency of $2,833,753 as of September 30, 2012, an improvement of $2,645,196. This improvement is primarily due to the completion of the Qualifying Transaction on October 4, 2012 and to the private placement for total gross proceeds of $2,375,000, after deduction of subscription receipts of $275,000 received in 2012.

The Corporation manages its capital structure and brings about adjustments related to changes in the economic environment and underlying risks of its assets. To preserve or modify its capital structure and to carry on the development and commercialization of technology and fulfill its various financial obligations, the Corporation may issue additional common shares or negotiate new loans.

The Corporation has prepared a budget for 2014 using assumptions that management considers reasonable. Achieving budgeted results depends mainly on the increase of sales, compliance with the gross operating margin forecast and control of general and administrative expenses. Management expects to meet its budget and have sufficient liquidity to fund its operations at least beyond September 30, 2014 following the private placement of $1,000,000 finalized on December 5, 2013. Although management believes it has developed action plans to manage liquidity risk and operational, there is no assurance that these measures will be successful.

APPOINTMENT OF A VICE-PRESIDENT LEGAL AFFAIRS

The Corporation is pleased to announce the appointment of Mrs. Laurence Virtue-Deshaies as Vice-President, Legal Affairs, in replacement of Mrs. Emmanuelle Robichaud who has held this position since 2010. The Corporation wishes to thank Mrs. Robichaud for her contribution in the management team and wishes her every success in her future endeavors.

Mrs. Virtue-Deshaies joined the Corporation in 2013. Previously, Mrs. Virtue-Deshaies worked for several years in the technology and media fields, namely at Moment Factory's legal and corporate affairs. Mrs. Virtue-Deshaies holds a Bachelor of Laws (LL.B.) from Université de Montréal and a Bachelor in Management from Hautes Études Commerciales (B.Gest.). She is a member of the Quebec Bar.

ABOUT URBANIMMERSIVE

Headquartered in Laval, Quebec, the Corporation is a leading-edge digital media company that combines its innovative immersive technology with high quality visual content to offer, in the real estate online, offline and mobile advertising markets, digital media visual content immersive solutions. The Corporation also licenses its full suite of software and technology to channel partners in other markets. The Corporation currently has 36 employees.

The Corporation is a one stop shop for visual content digital media in the real estate market. Its customers consist of residential, commercial and industrial realtors, brokers and home builders to whom the Corporation offers an innovative and unique immersive technology which products are utilized for real estate online, offline and mobile advertising, as well as a large range of visual content services.

The Corporation's visual content services include the production of 3D drawings, images and 3D animations, interactive color changing application and 3D online immersive environments.

AVU3D®, the Corporation's immersive multimedia technology, produces 3D immersive environments of real and future building assets through which vendors and customers can interact online, either with one another or with objects present in the virtual environment, as if they were fully immersed in it. The Corporation's comprehensive suite of software related to its AVU3D® immersive technology enables its partners and advertisers to add elements such as hotspots containing links, videos, and gaming elements. It allows for an engaging immersive user experience therefore providing a better multimedia and interactive experience for internet users.

The Corporation has a limited direct sales force; however, it reaches the real estate market through specialized resellers including architectural photographers, virtual tour providers, web site producers, architects and marketing communication agencies.

The Corporation's immersive technology is also applied to other markets such as, but not limited to, serious games, advergames, security, building and facility management and business advertising. The Corporation reaches other market segments through channel partners with which it enters into license agreements enabling them to integrate Urbanimmersive's immersive multimedia technology into their business strategy as a value added offer to their customers.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

Certain statements made in this press release that are not historical facts are forward-looking statements and are subject to important risks, uncertainties and assumptions. The results or events predicted in these forward-looking statements may differ materially from actual results or events. As a result, readers are cautioned not to place undue reliance on these forward-looking statements. For additional information with respect to certain of these and other assumptions and risk factors, please refer to the Corporation's MD&A dated January 23, 2014 and filed with the Canadian securities commissions. The forward-looking statements contained in this press release represent our expectations as of the date hereof. We disclaim any intention and assume no obligation to update or revise any forward-looking statements.

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This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States or to any U.S. Persons. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended, or the securities laws of any state of the United States of America and may not be offered or sold within the United States of America or its territories or possessions unless pursuant to an exception therefrom.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Urbanimmersive Technologies

For further information:

Ghislain Lemire, President and CEO
514-394-7820 or ghislainlemire@urbanimmersive.com