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

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TSX VENTURE EXCHANGE SYMBOL - UI

Highlights  

• The Company recorded an increase in revenue of 27.7% for the first quarter of 2013 compared to the first quarter of the previous year.
• The acquisition on October 4, 2012 of all securities of Urbanimmersive Inc. and closing of a concurrent private placement for aggregate proceeds of $2,500,000, constituting the qualifying transaction ("Qualifying Transaction") of Urbanimmersive Technologies Inc.
• On November 22, 2012, the Corporation completed a private placement in the form of the issuance of 200,000 Common Shares at $0.75 per share for aggregate proceeds of $150,000.
• The Corporation generated AVU3D^® licensing revenue by entering into license agreements with two channel partners respectively specialized in the serious gaming market and online gaming for kids.

MONTREAL, Feb. 22, 2013 /CNW Telbec/ - Urbanimmersive Technologies Inc. ("Urbanimmersive Technologies"), presented today its unaudited consolidated financial results, including those of Urbanimmersive Inc. ("Urbanimmersive" and, collectively with Urbanimmersive Technologies, the "Corporation"), its wholly owned subsidiary, for the first quarter ended December 31, 2012. During this first quarter of 2013, the Corporation generated total revenue of $336,643, an increase of 27.7% compared to $263,700 in the first quarter of 2012.

"While we have been relatively discreet during the first quarter of 2013, the work performed on many fronts by our management team will act as a launch pad for the Corporation" said Ghislain Lemire, Urbanimmersive Technologies's President and CEO. "The concurrent private placement completed with the Corporation's qualifying transaction has allowed us to launch the commercialization plan for our AVU3D^® immersive technology. Firmly focused on our immersive solutions for the real estate market, Urbanimmersive is now positioned as a technology solutions provider.

The financial results for this first quarter reflect the first stages of the repositioning of our strategic plan. As a result of our new business objectives, the revenue related to our visual content production services have not significantly progressed during the quarter, and we anticipate that that they may stagnate or even regress in the upcoming quarters. In the medium-term, revenue generated from licensing our technology to 3D visual content providers should compensate Urbanimmersive's revenue generated from visual content production services.

The 2013 first quarter includes the initial AVU3D^® licensing revenue. We are currently experiencing a very positive market response towards our immersive solutions and we are confident that other opportunities will soon materialize into agreements. These agreements should confirm the adoption of our immersive technologies by various markets. Licensing revenue should vary in accordance with the business model adopted by each partner."

Qualifying Transaction

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

For the first quarter ended December 31 2012, revenue totalled $ 336,643, an increase of $72,943 or 27.7% compared to revenue of $263,700 for the same period in the 2012 year.

Contracts include AVU3D products and 3D services, namely the production of 3D drawings, images and 3D animations, interactive color changing application and 3D online immersive environments. Contracts generated $276,964, or 82.3% of revenue, an increase of $13,264 or 5% compared to $263,700 in the first quarter of 2012, due to moderate growth mainly from existing customers as well as the refocus of the sales force on the deployment of AVU3D licence sales. Those sales generated revenue of $59,679 or 17.7% of total revenue, compared to no revenue from the sale of software licenses for the first quarter of 2012.

For the first quarter of 2013, the gross profit was $154,633 or 45.9% of revenue compared to $77,829 or 29.5%, in the first quarter of 2012, an increase of $76,804 or 17% as a percentage of revenue. The cost of sales is incurred in the production of Contract revenue while software license revenue incurs no cost. Thus, the improved gross profit resulted from a $59,679, or 100%, contribution from software license revenue and a $94,954, or 34.3% gross profit on Contracts revenue, an improvement over the 29.5% gross profit of the previous year.

Operating expenses totaled $370,475 during the first quarter of 2013 compared to $300,693 for the same period of 2012, an increase of $69,782 or 23% due primarily to certain officers being compensated in salaries during the first quarter of 2013, as opposed to being compensated through share redemptions in lieu of their salaries during the same period of 2012. As a result, the operating loss during the first quarter of 2013 was $215,841 compared to a loss of $222,864 for the same period of 2012, a decrease of $7,023.

Other expenses assumed by the Corporation during the first quarter of 2013, totalling $1,288,361, were unusually high due to the expenses related to the conclusion of the Qualifying Transaction and the Offering. Despite a reduction of $34,134 in financial expenses, from $41,891 to $7,757, primarily due to the conversion of the convertible debentures into Common Shares, the non-cash expense related to the Exchange listing of Urbanimmersive totalled $1,181,417.  In addition, the Corporation also had to account for a $99,187 loss resulting from an amendment of a convertible debenture, as detailed in note 4 of the interim financial statements ended December 31, 2012.

Due primarily to the expenses related to the Qualifying Transaction and the Offering completed on October 4 2012, the net loss for the first quarter of 2013 was $1,539,202 compared to a net loss of $264,755 for the same period of 2012, an increase of $1,239,447.

As of December 31, 2012, the Corporation had working capital of $1,283,197, mostly composed of $1,330,054 in cash, compared to a working capital deficiency of $2,833,753 as of September 30, 2012, an improvement of $4,116,950. This change was primarily due to the conclusion of the Qualifying Transaction, the Offering with gross proceeds of $2,225,000, as well as the conversion of the convertible debentures, the subscription receipts and the share capital redeemable at the holder's option, and the reduction in trade and other payables and bank loans.

Selected Financial Information

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 financial statements for the year ended September 30, 2012.  These consolidated interim financial statements are unaudited.

About Urbanimmersive

Headquartered in Laval, Québec, the Corporation is a leading-edge digital media company that combines its innovative immersive technology with high quality visual content to offer, in thereal 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 25 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 hot spots 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 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 February 21, 2013 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 Inc.