Urbanimmersive Technologies Inc.
TSX VENTURE : UI

Urbanimmersive Technologies Inc.

August 26, 2014 18:09 ET

Urbanimmersive Technologies Inc. Presents Its Consolidated Financial Results for the Third Quarter of 2013-2014

Highlights

- Sustained growth of immersive tour revenue representing 26.7% of revenues compared to 7.6% in the third quarter of 2013;

- Closing of a private placement of gross proceeds of approximately $348,000;

- Reduction of operational expenses by 31.3% compared to the third quarter of 2013;

- Carrying out of tests on new products aimed at expanding its market for the immersive technology and its adoption in the marketplace.

MONTREAL, CANADA--(Marketwired - Aug. 26, 2014) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Urbanimmersive Technologies Inc. ("Urbanimmersive Technologies") (TSX VENTURE:UI), 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 three-month period ended June 30, 2014.

"The third quarter of 2013-2014 showed that the growth of immersive tour sales in the real estate market is sustained." said Ghislain Lemire, President and Chief Executive Officer of the Corporation. These represent about a quarter of the Corporation's revenues compared to 7.6% in the third quarter of last year. However, these sales continue to fall short of expected goals and we continue to work to adjust the methods, processes, products and approach to the market in order to achieve a more aggressive sales growth and improved margins."

"To this end, during the third quarter, we have concentrated our efforts on research and development in order to expand our market for our immersive technology and support its adoption in the real estate market. The ultimate goal is to reduce the selling price of immersive tours and better promote their benefits through new online services. New products are currently in test phase and more details will be announced once this is completed."

"The Corporation recently announced that it had completed a private placement of gross proceeds of approximately $348,000. In conjunction with efforts to reduce fixed operational expenses of the Corporation Urbanimmersive will continue its financing activities based on the results of new online products."

"In order to acquire expertise related to the real estate market on its Board of Directors, the Corporation is pleased with the recent appointment of Mr. Charles Drouin as director. This appointment fits perfectly with the goals of the Corporation to acquire the specialized expertise of Mr. Drouin, notably to commercialize its immersive technology to the American market."

Selected Financial Information

Three month
period
ended
June 30, 2014
Three month
period
ended
June 30, 2013
Nine month
period
ended
June 30, 2014
Nine month
period
ended
June 30, 2013
$ $ $ $
Revenue 155,339 151,624 510,912 667,026
Cost of sales 154,343 225,328 554,144 582,694
Gross profit (loss) 996 (73,704 ) (43,232 ) 84,332
Operating expenses 367,436 534,646 1,303,509 1,433,463
Other expenses 6,557 5,1882 22,439 1,300,291
Net loss and comprehensive loss (372,997 ) (613,538 ) (1,369,180 ) (2,649,422 )
Basic and diluted net loss per Common Share (0.02 ) (0.04 ) (0.08 ) (0.20 )

Operating Results

The net loss for the three month period ended June 30, 2014 totaled $372,997 or ($0.02) per share compared to $613,538 or ($0.04) per share for the same period in 2013. The net loss for the nine month period ended June 30, 2014 totalled $1,369,180 or ($0.08) per share compared to $2,649,422 or ($0.22) per share for the same period in 2013. The decrease in net loss of $240,541 for the three month period and $1,320,681 for the nine month period is due to changes described below.

The revenues of the Corporation increased from $151,624 to $155,339 for the three month period ended June 30, 2014, an increase of $3,715 or 2.4%. This increase is mainly due to an increase in revenues of immersive tours of $30,094 and related services and other of $6,736. However, this increase was offset by a decrease in 3D services of $37,789 due to marketing efforts that have been focused on the deployment of AVU3D® immersive tours in the real estate market with affiliated estate agents since the first quarter of 2013. Revenues of the Corporation decreased from $667,026 to $510,912 for the nine month period ended June 30, 2014, a decrease of $156,114 or 23.4 %. This decrease is mainly due to two contracts signed, during the nine month period ended June 30, 2013, with different channel partners specialized in children online gaming and industrial sectors, for 3D product a total amount of $102,000 and the sales of licenses for a total amount of $58,000. These licenses allowed the non-exclusive, independent use of the AVU3D® technology. Also, 3D service revenues have generally decreased by $90,172 due to marketing efforts that were focused on the deployment of AVU3D® immersive tours in the real estate market with affiliated estate agents since the first quarter of 2013. These decreases were offset by an increase in revenue for immersive tours of $76,679 and related services and other of $17,485.

The Corporation recorded during the three month period ended June 30, 2014, a gross profit of $996 or 0.6% (a gross loss of ($43,232) or (8.5%) for the nine month period) compared to a gross loss of ($73,704) or (48.6%) (a gross profit of $84,332 or 12.6% for the nine month period) for the same period in 2013. For the three month period ended June 30, 2014, this improvement of the gross profit is mainly due to the reduction in production salaries of $73,516. For the nine month period ended June 30, 2014, this decrease in gross margin is due to a decrease in licensing revenue and a decrease in revenue from production of 3D visual content without immersive technology due to the fact that the Corporation decided to focus its efforts to promote its immersive technology and to an increase in production costs that the Corporation had to bear related to AVU3D® immersive tours realized during the two first quarter for which the revenue will be recognized only upon the sale of the property.

Operating expenses during the three month period ended June 30, 2014 totaled $367,436 ($1,303,509 for the nine month period) compared to $534,646 ($1,433,463 for the nine month period) for the same period in 2013, a decrease of $167,210 or 31.3% ($129,954 or 9.1% for the nine month period). Changes in operating expenses are due to the variation in the selling expenses and administrative expenses. Selling expenses totaled $103,186 ($424,044 for the nine month period) compared to $127,052 ($349,699 for nine months), a decrease of $23,866 or 18.8% (an increase of $74,345 or 21.3% for the nine month period) Administrative expenses totalled $175,725 ($614,808 for the nine month period) compared to $306,444 ($777,402 for the nine month period), a decrease of $130,719 or 42.7% ($162,234 or 20,9% for the nine month period) mainly related to a decrease in share-based payments of $20,814 ($17,777 for the nine month period), a decrease in professional fees of $56,274 ($47,931 for the nine month period), a decrease of salaries of $20,754 ($19,251 for the nine month period) and a decrease in expenses for press releases of $17,679 ($20,747 for the nine month period).

During the nine month period ended June 30, 2014 other expenses totalled $22,439 compared to $1,300,291 for the same period of 2013, a decrease of $1,277,852. This decrease is due to the recognition, in 2013, of a stock listing exchange expense of $1,181,417 and a loss on amendment of a convertible debenture of $99,187. These elements are directly related to the completion of the Qualifying Transaction of the Corporation on October 4, 2012. Readers are invited to refer to the audited consolidated financial statements for the year ended September 30, 2013 for more details on this operation.

Liquidity, Capital Resources and Sources of Financing

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 believes that current cash will not cover the activities for the next twelve months and does not allow the continuation of the commercial strategies currently pursued by the Corporation. In order to support the level of investment required, the Corporation is considering various options to finance its activities. There is no assurance that these measures will be successful.

About Urbanimmersive

Headquartered in Laval, Quebec, the Corporation is a digital media corporation engaged in providing interactive advertising solutions for the real estate industry. The Corporation develops and commercialises its AVU3D® suite of products and web services enabling 3D real estate advertising.

The AVU3D® suite of web products and services includes the AVU3D® application that allows to produce and publish, on web and mobile platforms, immersive 3D environments of real and future properties using photographs or digital images. The Corporation developed the www.avu3d.com site, a portal that allows Internet users to search and view properties for sale or for rent in 3D and find decoration and renovation ideas. This site also provides Internet users the ability to have a direct access to real estate agent contact information using the AVU3D® application in their marketing.

The AVU3D® suite of web products and services is also a complete and innovative suite of marketing and web service solutions for real estate customers such as visibility opportunities on the www.avu3d.com home page and on web page search results, lead generation solutions, real time alerts, live chat services, live visual user interactions and online editing applications enabling insertion of graphic and text information into the AVU3D® environments. AVU3D® Ads platform is an application enabling advertisers to capture Internet users' attention when looking for a property for sale or rent, and this in various locations within the AVU3D® environment. All these marketing solutions are accessible via an online central order management and appointment system enabling photographers and 3D artists to have, among others, a direct link with real estate agents and home builders to schedule and produce their AVU3D® visual content. The Corporation also offers visual content production services to its customers.

The target audience and customers of the Corporation include realtors in the residential and commercial sectors, builders of new homes, rental professionals, architects and advertisers such as suppliers of services related to real estate, mortgage lenders and insurance and consumer products companies.

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 August 26, 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.

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.

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