With a little help from a couple of new American friends, Vancouver BC based
Urthecast seems to have dodged several fiscal bullets over the last few months, and is well on it's way to the eventual rollout of its planed $142Mln US ($184Mln CDN) UrtheDaily™ constellation.
UrtheCast's problems go back only a year and seem to have begun when an "
unknown backer" asked for the company to develop a standalone radar satellite ahead of the rest of its planned
OptiSAR constellation of sixteen multispectral optical and
synthetic aperture radar (SAR) Earth observation satellites.
Third-quarter revenue amounted to $10.2Mln CDN, while the company recorded a net loss of $6.4Mln CDN although UrtheCast still expected to close financing in December for a second program, the proposed
UrtheDaily™ constellation of eight high-quality, multispectral imagery satellites, optimized for geoanalytics applications.
That plan didn't work.
As outlined in the April 3rd, 2018 post, "
Do the Bells Toll for UrtheCast? Q4 2017 Fiscal Report Shows Another Net Loss and Concern over Long-term Survival," the last part of the funding for a second constellation didn't materialize, overall revenue continued to shrink, the quarterly investor conference call was cancelled and UrtheCast CEO and Director Wade Larson was out (although he remained at UrtheCast as "
a special advisor to the board").
The first indication of a turnaround was the May 3rd, 2018 UrtheCast press release, "
UrtheCast Closes $34 Million Private Placement of Subscription Receipts," which announce the closing of an approximately $27Mln US ($34Mln CDN) private placement of subscription receipts for the UrtheDaily™ constellation.
The private placement was over the minimum $25Mln US ($34Mln CDN) required to move forward with the UrtheDaily™ constellation and released the rest of the approximately $142Mln US ($182Mln CDN) subordinated capital financing for the project.
In it's broadest form, "
subordinated capital financing" is a form of debt or "
preferred equity," senior only to that of the common shares, where the funding is offered in exchange for a claim to the company and with the expectation that the overall value of the company will rise more than the total cost of the project.
Later in the month, and as outlined in the outlined in the May 15th, 2018 UrtheCast press release, "
UrtheCast Reports First Quarter 2018 Financial Results and Provides Update on US$142 Million Credit Facility," the UrtheCast Q1 conference call and quarterly financial results were released without the confusion, fuss and bother which occurred during Q4 2017 report or even any of the concerns which followed the release of the Q3 2017 results.
But the biggest suprise was still to come.
In a series of press releases, the company announced its intention to almost completely restructure its board, subject only to the approval of stockholders at the upcoming annual general meeting (AGM), which will be held in Vancouver on June 25th.
The press releases included:
The proposed changes are so substancial, that UrtheCast has posted a May 30th, 2018
SEDAR filing, under the title, "
Notice of Annual General Meeting and Special Meeting to be held on June 25th, 2018 Management Information Circular" which includes a proposal to:
consider for approval, ratification and confirmation an amendment to General By-law No. 1 of the Company (the "Bylaw") to increase the number of permitted directors who are not Canadian residents to 75% in accordance with the residency requirements of the Business Corporations Act (Ontario) (the "OBCA"), with the full text of the amendment to the Bylaw attached as Exhibit "A" to this Circular (as defined herein).
Those who are "
out" include:
- "Interim" CEO Greg Nordal, who has “decided not to extend" his three-month term and has also resigned from the board of directors effective as of May 29, 2018.
- Board member Tye Burt, a Canadian active in the mining industry.
Those who are "
in," depending on the final June 25th, 2018 vote, include: