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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
three-month period ended March 31, 2014.
"The second quarter of 2013-2014 was marked by the growth of our revenues
related to the sale of AVU3D(R) immersive tours." said Ghislain Lemire,
President and Chief Executive Officer of the Corporation. These revenues
represent nearly a quarter of our revenue compared to 4.2% in the second quarter
of the previous year. This increase is significant and shows that our
technological solution is gradually making its place in the market."
"Thanks to the measures implemented in recent months and recent trade
agreements, we now rely on factors promoting income generation: better
visibility amongst brokers and consumers, particularly offered by RE/MAX Quebec,
the leader in the real estate brokerage market in Quebec; a new source of
revenue from web services related to new web functionalities in the AVU3D(R)
software available to realtors and home builders and sold in the form of a
monthly package or individually; visibility and continued support from new home
builders through the Provincial Home Builders' Association of Quebec, APCHQ, and
numerous data and testimonials of real estate brokers and home builders
demonstrating tangible results of our technology on their property sales."
"In parallel to these recent developments in our local market, our market
research efforts to define an expansion model outside Quebec continue following
recent advances and we expect to confirm this model in the coming quarters."
"On the other hand, with sales falling below expectations and in order to
improve the gross margin, we undertook, during this quarter, to adjust our
methods and processes of production, remuneration paid to the photographers and
selling prices. Also, the management of the Corporation has proceeded with an
internal restructuring that will reduce our operating, sales and administrative
expenses in the coming quarters and the review of its distribution channels."
Selected Financial Information
----------------------------------------------------------------------------
Three month Three month Six month Six month
period ended period ended period ended period ended
March 31, March 31, March 31, March 31,
2014 2013 2014 2013
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$ $ $ $
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Revenue 201,969 178,759 355,573 515,402
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Cost of sales 205,713 175,356 399,801 357,366
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Gross profit (loss) (3,744) 3,403 (44,228) 158,036
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Operating expenses 485,977 528,343 936,073 898,817
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Other expenses 9,218 6,742 15,882 1,295,103
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Net loss and
comprehensive loss (498,939) (531,682) (996,183) (2,035,884)
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Basic and diluted net
loss per common
share (0.03) (0.04) (0.06) (0.15)
----------------------------------------------------------------------------
Operating Results
The net loss for the three month period ended March 31, 2014 totaled $498,939 or
($0.03) per share compared to $531,682 or ($0.04) per share for the same period
in 2013. The net loss for the six month period ended March 31, 2014 totalled
$996,183 or ($0.06) per share compared to $2,035,884 or ($0.15) per share for
the same period in 2013. The decreases in net loss of $32,743 for the three
month period and $1,039,701 for the six month period is due to changes described
below.
The revenues of the Corporation increased from $178,759 to $201,969 for the
three month period ended March 31, 2014, an increase of $23,210 or 13%. This
increase is mainly due to an increase in revenues of immersive tours of $41,119
and related services and other of $9,794. However, this increase was offset by a
decrease in 3D services of $27,703 due to marketing efforts that have been
focused on the deployment of AVU3D(R) immersive tours in the real estate market
with affiliated estate agents since the first quarter of 2013. Revenues of the
Corporation increased from $515,402 to $355,573 for the six month period ended
March 31, 2014, a decrease of $159,829 or 31.0 %. This decrease is mainly due to
two contracts signed, during the six month period ended March 31, 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 use of our
AVU3D(R) technology and this independently. Also, 3D services revenues have
generally decreased by $56,265 and due to marketing efforts that were focused on
the deployment of AVU3D(R) 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 revenues for immersive tours of $46,586 and related
services and other of $10,749.
During the three month period ended March 31, 2014, the Company completed 196
immersive tours (453 for the six month period) under its "risk free" offer for a
grand total of 1,149 immersive tours under its "risk free" offer as of March 31,
2014. To date, 131 visits tours were withdrawn from the market, and 218
immersive tours contributed to the sale of the property. According to the
Corporation's "risk free" business model, revenue are recognized only when the
services are rendered, which is at the sale of the property. As of March 31,
2014, the Corporation has a total of 800 immersive tours active on the market as
part of its "risk free" offer. The Corporation ended its entirely "risk free"
offer in the second quarter of 2014 and replaced it with a revised offer.
The Corporation recorded during the three month period ended March 31, 2014, a
gross loss of ($3,744) or (1.9%) (gross loss of $44,228 or 12.4% for the six
month period) compared to gross profit of $3,403 or 1.9% (gross profit of
$158,036 or 30.7% for the six month period) for the same period in 2013. This
decrease in gross margin due to 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(R) immersive tours realized during the period for which the revenue will
be recognized only upon the sale of the property.
Operating expenses during the three month period ended March 31, 2014 totaled
$485,977 ($936,073 for the six month period) compared to $528,343 ($898,817 for
the six month period) for the same period in 2013, a decrease of $42,366 or 8.0%
(increase of $37,256 or 4.1% for the six month period). Changes in operating
expenses are due to the variation in the selling expenses and administrative
expenses. Selling expenses totaled $198,522 ($320,858 for the six month period)
compared to $127,913 ($222,647 for six months), an increase of $70,609 or 55.2%
($98,211 or 44.1% for the six month period) mainly related to an increase in
advertising expenses of $31,366 ($18,080 for the six month period), in salaries
of $14,755 ($64,334 for the six month period) and a recognition of a penalty of
$21,857 for a terminated contract. Administrative expenses totalled $201,638
($439,083 for the six month period) compared to $286,979 ($470,598 for the six
month period), a decrease of $85,341 or 29.7% ($31,515 or 6.7% for the six month
period) mainly related to a decrease in share-based payments of $28,561 (an
increase of $3,037 for the six month period), a decrease in professional fees of
$18,121 (an increase of $8,343 for the six month period) and a decrease in bad
debt of $23,814 ($16,990 for the six month period).
During the six month period ended March 31, 2014 other expenses totalled $15,882
compared to $1,295,103 for the same period of 2013, a decrease of $1,279,221.
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 tactics currently held 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.
Appointment of an Interim Chief Financial Officer
The Corporation announces the interim appointment of Mr. Jean Asselin as Chief
Financial Officer, in replacement of Mrs. Isabelle Gauthier who has resigned
from this position, effective May 30, 2014.
Mr. Asselin, a founder of the Corporation, has extensive knowledge of its
activities, having occupied various positions since 2008, including Chief
Financial Officer and Controller. Mr. Asselin holds a Bachelor's Degree in
Commerce from the Ecole des Hautes Etudes Commerciales de Montreal. He formerly
worked for Transport Asselin, as Vice President Finance, a family owned company
with more than 400 employees.
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(R) suite of
products and web services enabling 3D real estate advertising.
The AVU3D(R) suite of web products and services includes the AVU3D(R)
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(R) application in their marketing.
The AVU3D(R) 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(R) environments.
AVU3D(R) 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(R) 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(R)
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 May 27, 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.
FOR FURTHER INFORMATION PLEASE CONTACT:
Ghislain Lemire
President and CEO
514-394-7820
ghislainlemire@urbanimmersive.com
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