UrtheCast CEO Wade Larson Steps Down as Company Struggles to Close Financing

Credit: UrtheCast.

UrtheCast today provided and update on their efforts to close the financing needed for their UrtheDaily Constellation. According to the press release, the hold-up is the need to raise the last US$25 million of subordinated capital or equity financing.

The company also announced that founder and president and CEO Wade Larson was stepping down. The released said Larson “will be stepping down as CEO and director and moving into a new role as a special advisor to the Board focused on the strategic business development of the Company’s innovative SAR technology.”

Board member Greg Nordal was appointed as the interim CEO “to refocus the operations of the Company and execute on a performance improvement plan” while the company looks for a new CEO.

The other two steps the company is taking are;

  • Execute the UrtheDaily™ debt financing and related subordinated capital or equity offering as expeditiously as possible. The Company’s first priority is to close the UrtheDaily™ financing and to identify, secure and close the most favourable subordinated capital or equity financing that can be obtained to satisfy the pre-condition to drawdown.
  • Implement Performance Improvement and Financing Initiatives. In addition to Seaport Global Securities LLC, the Company’s advisor on the UrtheDaily™ debt financing, the Company has retained FTI Consulting Canada Inc. to advise it in assessing its immediate performance improvement, cost reduction and financing options. The Company is also refocusing its business, which includes a clear focus on the construction and development of the UrtheDaily™ Constellation and deriving value from our SAR technology.

The company had expected to have their financing in place by the end January. That date was then extended.

In today’s releases UrtheCast explained the situation in more detail saying “further to the update provided on January 31, 2018, the Company confirms that it has continued to advance the financing negotiations with the selected institutional investor to close the previously announced financing for the UrtheDaily™ Constellation. As previously disclosed, the financing is subject to the completion of final documentation, the lender’s completion of confirmatory due diligence and approval by our Board of Directors. The amount available under the debt financing facility for the UrtheDaily™ Constellation will be approximately US$140 million. In addition to customary drawdown conditions, the conditions to drawdown under the proposed financing include the Company receiving US$45 million from subordinated capital sources. Key elements of the US$45 million include US$20 million of available vendor financing and will require an additional US$25 million of subordinated capital or equity financing. The Company is continuing to explore all alternative sources for such balance of US$25 million. The financing package described above will fund US$185 million of the approximately US$195 million required for the UrtheDaily™ Constellation.”

According to the company, UrtheCast’s “cash balance has decreased from approximately $25 million, as at the end of the third quarter of 2017, to approximately $12 million as at February 28, 2018.”

The cash crunch is also in part due to a contract the company had expected to be renewed by now with the European Space Agency that was being serviced by its subsidiary Deimos Imaging. That contract had to be re-tendered.

With the cash balance being low, SpaceQ has learned that in the last month UrtheCast gave notice to several of its staff that they were being let go.

UrtheCast will report 2017 fourth quarter and full-year financial results on March 19.

About Marc Boucher

Boucher is an entrepreneur, writer, editor & publisher. He is the founder of SpaceQ Media Inc. and CEO and co-founder of SpaceRef Interactive LLC. Boucher has 20+ years working in various roles in the space industry and a total of 30 years as a technology entrepreneur including creating Maple Square, Canada's first internet directory and search engine.

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