Urbanimmersive Technologies reports its financial results for the third quarter of 2012-2013

TSX VENTURE EXCHANGE SYMBOL - UI

Highlights

• Signature of an AVU3D^® technology agreement with Via Capital increasing to up to 8,000  the number of potential real estate agents affiliated to Urbanimmersive;
• Significant growth in operational metrics in the first quarter of the strategic plan implementation focused on real estate brokerage:
• 300 real estate agents have become Urbanimmersive customers during the third quarter;
• 520 immersive tours have been delivered during the third quarter;
• To date, new customers have ordered an average of 1.87 immersive tours per month;
• 72,000 potential online homebuyers have used the Urbanimmersive platform during the third quarter;
• Signature of an AVU3D^® technology reseller agreement with Astral TV Plus;
• Signature of a strategic agreement with www.goyub.net, a Quebec social online buying group web site, recognizing the potential commercial value of Urbanimmersive's highly profiled users;
  
  
  

MONTREAL, Aug. 28, 2013 /CNW Telbec/ - Urbanimmersive Technologies Inc. ("Urbanimmersive Technologies"), today presented its unaudited consolidated financial results, including those of Urbanimmersive Inc. ("Urbanimmersive" and, collectively with Urbanimmersive Technologies, the "Corporation"), its wholly owned subsidiary, for the third quarter ended June 30, 2013.

"The observed significant change in our operational metrics clearly confirms that the Corporation is going in the right direction." said Ghislain Lemire, Urbanimmersive Technologies's President and CEO.

"We are delighted that more and more real estate agents use the Urbanimmersive trademark for the marketing of their services. In addition, the feedback received from real estate agents is very positive due to the added value provided to them by our immersive tours in obtaining new listings."

"Over the third quarter, the quantity of potential homebuyers using our immersive platform reached 72,000 unique visitors, now allowing us to consider monetizing our platform. Indeed, given that we are able to identify most of these unique visitors during their authentication required to use the immersive technology, they represent highly profiled internet users for advertising campaigns for product and service suppliers in the real estate market. "

"Moreover, the financial results for the third quarter of 2013 are representative of the implementation of the new customer acquisition model. Indeed, the immersive tours sold in the third quarter are payable at the conclusion of the related real estate transaction because of the risk free sales model offered to real estate agents affiliated with our partners. Therefore, we cannot recognize revenue on these sales during the third quarter, but in the subsequent quarters, while all expenditures related to the production of these tours have been recorded in this quarter."

"While we are still in the process of deploying our solution through our newest partners, we continue to strongly support the acquisition of customers through various promotional activities, which should include the opportunity to present our immersive platform to more than 2,500 new real estate agents during the upcoming months of September and October."

Qualifying Transaction

As communicated previously, on October 4, 2012, Urbanimmersive Technologies announced the closing of the acquisition (the "Acquisition") of all of the securities of Urbanimmersive and of a concurrent private placement for aggregate proceeds of $2,500,000 (the "Offering"). The Acquisition constituted the Qualifying Transaction of Urbanimmersive Technologies pursuant to 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 Urbanimmersive 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.

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

Operating Results Analysis

The net loss for the three-month period ended June 30, 2013 was $613,538 or ($0.04) per share, compared to $257,593 or ($0.06) per share for the three-month period ended June 30, 2012. The net loss for the nine-month period ended June 30, 2013 was $2,649,422 or ($0.20) per share compared to $727,114 or ($0.16) per share for the nine-month period ended June 30, 2012. The net loss increase of $355,945 for the three month period and $1,922,308 for the nine-month period are due to the following important changes.

During the three-month period ended June 30, 2013, the Corporation's revenues have decreased from $250,718 to $151,624 a decrease of $99,094 or 39.5% during the three-month period ended June 30, 2013 and from $821,040 to $667,026; a decrease of $154,014 or 18.8% during the nine-month period ended June 30, 2013.

These decreases come mainly from 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. During the three-month period ended June 30, 2013, the Corporation completed 520 immersive visits for total potential revenues of $104,000 if all sales of these properties are realized. The Corporation recognized no revenue given the sale is recognized when the property is sold.

The Corporation also sold licenses for a total amount of $53,325 during the nine-month period ended June 30, 2013 compared to no sales during the same period in 2012. These licenses, which allow the non-exclusive use of AVU3D^® technology, were sold to different channel partners specialized in children online gaming and industrial sectors.

Due to a reduction in 3D product revenues for similar production costs during the third quarter of 2013, the Corporation generated a gross loss of $73,704 compared to a gross profit of $63,303 for the same period in 2012, a decrease of $137,007. Moreover, during the nine-month period ended June 30, 2013 the Corporation generated a gross profit of $84,332 compared to a gross profit of $249,342 for the same period in 2012, a decrease of $165,010.

During the three-month period ended June 30, 2013 operating expenses totalled $534,646 compared to $276,330 during the same period in 2012, an increase of $258,316 or 93%. Selling expenses totalled $127,052 compared to $72,502, an increase of $54,550 or 75.2% related to an increase in salaries of $45,000 due to an increase in staff. Administrative expenses totalled $306,444 compared to $135,031, an increase of $171,413 or 126.9% related to an increase in salaries for $51,000 due to the fact that the compensation of certain officers were paid by the redemption of preferred shares in 2012, to an increase in share-based payments of $32,000 and to an increase in professional fees and regulatory fees of $85,000.

During the nine-month period ended June 30, 2013 operating expenses totalled $1,433,463 compared to $840,696 for the same period of 2012, an increase of $592,767 or 70.5%. Selling expenses totalled $349,699 compared to $287,907, an increase of $59,792 or 20.7% related to an increase in salaries of $33,000, an increase in share-based payments of $16,000, an increase in advertising and promotional costs of $65,000 and to an increase in amortization of property and equipment as well as intangible assets of $54,000. Administrative expenses totalled $777,042 compared to $335,877, an increase of $441,165 or 131.3% related to an increase in salaries of $122,000 due to the fact that the compensation of certain officers were paid by the redemption of preferred shares in 2012, to an increase in share-based payments of $89,000 and to an increase in professional fees and regulatory fees of $243,000.

Operating Activities

During the three-month period ended June 30, 2013, operating activities used cash flows of $460,264 compared to $5,723 for the same period in 2012. This increase in the use of cash flows is mainly due to the fact that non-cash working capital items were unable to offset the net loss of $613,538 in 2013 as opposed to 2012.

During the nine-month period ended June 30, 2013, operating activities used cash flows of $1,783,641 compared to $68,874 for the same period in 2012. This increase in the use of cash flows is due to the net loss and to the non-cash working capital items that required cash flows of $705,748 due mainly to an increase in non-current trade receivables of $162,076 and to an important decrease in accounts payable and other liabilities of $597,123 following the Qualifying Transaction. In 2012, the non-cash working capital items were able to offset the net loss by the fact that the Corporation had increased its payables.

Quarterly Results 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 these quarters was determined in the same way as for our audited financial statements for the year ended September 30, 2012.  These consolidated interim financial statements are unaudited.

	Results (Consolidated)			Results (Unconsolidated)				Results (Unconsolidated)
	2013			2012				2011
	Q3	Q2	Q1	Q4	Q3	Q2	Q1	Q4
	$	$	$	$	$	$	$	$
Revenue	152	179	337	192	251	307	263	249
Gross profit (loss)	(74)	3	155	33	63	108	78	71
Operating loss	(614)	(532)	(1,504)	(478)	(258)	(205)	(265)	(253)
Basic and diluted net loss per Common Share	(0.040)	(0.040)	(0.113)	(0.098)	(0.055)	(0.050)	(0.057)	(0.053)

Liquidity, Capital Resources and Sources of Financing

As of June 30, 2013, the Corporation had working capital of $295,945 compared to a working capital deficiency of $2,833,753 as of September 30, 2012, an improvement of $3,129,698. This improvement is primarily due to the conclusion of the Qualifying Transaction on October 4, 2012 and to the private financings for total gross proceeds of $2,375,000.

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.

As of the present date, the Corporation believes it will not have sufficient liquidity to fund its operations and capital needs for the next 12 months and consequently intends to raise capital in the short term to generate cash in sufficient amounts to meet its business plan objectives.

End of Contract with Sun International Communications

The Corporation announces that Sun International Communications is no longer providing investor relations and corporate and financial communications advisory services to the Corporation, effective as of August 22, 2013.

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

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 are forward-looking statements or information. The Corporation is hereby providing cautionary statements identifying important factors that could cause the Corporation's actual results to differ materially from those projected in the forward-looking statements. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as "may", "is expected to", "anticipates", "estimates", "intends", "plans", "projection", "could", "vision", "goals", "objective" and "outlook") are not historical facts and may be forward-looking and may involve estimates, assumptions and uncertainties which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. In making these forward-looking statements, the Corporation has assumed that the current market will continue and grow and that the risks listed below will not adversely impact the business of the Corporation. By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, which contribute to the possibility that the predicted outcomes may not occur or may be delayed. The risks, uncertainties and other factors, many of which are beyond the control of the Corporation that could influence actual results include, but are not limited to: future capital requirements; intellectual property protection and infringement risks; competition; reliance on key management personnel and the other risks factors summarized under the heading "Risks and Uncertainties" in the Corporation management discussion and analysis dated August 27, 2013.

Furthermore, unless otherwise noted, any forward-looking statement speaks only as of the date of this press release, and, except as required by applicable law, the Corporation does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for management to predict all such factors and to assess in advance the impact of each such factor on the business of the Corporation, or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statement.

For additional information with respect to certain of these and other assumptions and risk factors, please refer to the Corporation's management discussion and analysis dated August 27, 2013 and filed with the Canadian securities commissions.

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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

Urbanimmersive:
Ghislain Lemire, President and CEO
514-394-7820 or [email protected]