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Orbite Announces Fourth Quarter and Full Year 2015 Results

ID: 1425101
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(businesspress24) - MONTREAL, QUEBEC -- (Marketwired) -- 03/31/16 -- Orbite Technologies Inc. (TSX: ORT)(OTCQX: EORBF) ("Orbite", or the "Company") announced today the filing of its Financial Statements for the fourth quarter and year ended December 31, 2015. During the fourth quarter, the Company reported a loss before net finance expense (income) and taxes of $3.9 million, down 23.5% from $5.1 million for the same period in 2014. For the full year, loss before net finance expense (income) decreased by 13.9%, or $2 million, from $14.4 million to $12.4 million, as compared to fiscal 2014.

As at December 31, 2015, the Company had an aggregate cash and short-term investments balance of $2.6 million, and positive working capital (current assets less current liabilities) of $4.2 million. Subsequent to year end, in fiscal 2016 to date, the Company has raised capital, strengthening its working capital position, with net proceeds of $10 million through a bought deal financing and the exercise of share purchase warrants.

All dollar amounts are in Canadian dollars unless stated otherwise.

Full year and Subsequent Events Highlights

Operational

Management commentary

"Despite the additional delays caused by the speed of piping installation and related increase in construction costs, we have progressed well with plant construction, and are confident in securing the required funds towards completion of the project," stated Glenn Kelly, CEO of Orbite. "Considering the positive progress of our commissioning activities to date, we are also confident in fully commissioning the plant and its subsequent start-up, signalling Orbite''s transformation from a technology development company to a commercial entity. We have a unique and strong technology capable in delivering 5N+ HPA, which has sparked interest from a variety of end users. Additionally, our growing IP on waste monetization has created further interest among waste owners and potential partners in the execution on our waste monetization strategy."

Continued highlights

Financing

Samples

Board of Directors

Patents & technology development

Summary of Q4 2015 Financial Results

Revenues and earnings

The Company is a development stage company and has no revenues.

Net loss for Q4 2015 increased by $3.3 million to $6.8 million, as compared to the same period in the prior year. Net loss for the year was $15.4 million, as compared to $12.4 million for fiscal 2014. The increases in net loss for the quarter and fiscal year are principally due to an increase in net finance expenses, resulting from non-cash mark to market adjustments relating to the 2013, series X and 2015 convertible debentures, the changes in fair value of derivative instruments, and the charge taken on redemption of the 2012 convertible debt, resulting from the accelerated accretion of the interest.

HPA plant operations

HPA plant operations include administration, operating and maintenance costs for the HPA plant in Cap-Chat. HPA plant operation expenses increased by $0.4 million during the quarter ended December 31, 2015, and increased by $0.8 million for the year ended December 31, 2015, as compared to 2014. The increase during the fourth quarter compared to Q4 2014 is due mainly to salaries, consulting fees, training of personnel, environmental services and share-based payments, partially offset by energy, repair and maintenance, and security services. The increase during 2015 compared to 2014 is due mainly to salaries, consulting fees, training of personnel, insurance and share-based payments, partially offset by environmental services and energy.

General and administrative charges

General and administration charges consist mostly of personnel related costs (salaries and benefits), share-based payment expenses, consulting, accounting, business development, legal, and investor relation costs relating to head office activities. General and administrative costs increased by $0.4 million during the quarter ended December 31, 2015 compared to the same period of 2014 and decreased by $0.7 million during the year ended December 31, 2015 compared to 2014. The increase during the fourth quarter is attributable mainly to an increase in salaries, professional and consulting fees, partially offset by a decrease in share-based payment, while the decrease for the year ended December 31, 2015 compared to December 31, 2014 is mainly due to a decrease in share-based payments.

Write-off for redesign

Write-off for redesign decreased by $1.8 million for both the quarter and year ended December 31, 2015 compared to the same periods in 2014, as no other redesign related write-offs were incurred during the year.

Financial position

Cash and short-term investments and working capital

As at December 31, 2015, the Company had an aggregate cash and short-term investments balance of $2.6 million, and positive working capital (current assets less current liabilities) of $4.2 million.

To date in fiscal 2016, the Company has raised financing net proceeds of $10 million through bought deal financings and the exercise of share purchase warrants, which improved Orbite''s working capital position since December 31, 2015.

Financing activities

A more comprehensive description of the Company''s financing activities is provided in the Company''s MD&A and other filings on

Extension of $2M Loan from Government of Quebec

On October 6, 2015, the Company entered into a revised agreement with the government of Quebec regarding its $2 million non-interest bearing loan contracted on March 24, 2010, whereby the first principal payment date was deferred to January 2020 and the last principal payment date in January 2024.

Redemption of 2012 Convertible Debentures

On October 16, 2015, the Company redeemed all outstanding 2012 debentures in the aggregate principal amount of $25 million plus accrued interests. As per the terms of the Trust Indenture, for each $1,000 principal amount of debentures redeemed, the Company issued 285.714 class A share purchase warrants exercisable until December 13, 2017 at a price of $3.50. Accordingly, all of the security granted by the Company to secure the 2012 debentures was released and discharged.

Amendments to Contribution Agreements - CED

On October 20, 2015, the Company entered into amendments to its contribution agreements with Canada Economic Development for the $0.8 million and $4.0 million of non-interest bearing secured loans, contracted on September 4, 2009 and February 5, 2014, respectively. The amendments provide that the $4.0 million loan payable in 10 semi-annual installments, which were to begin in April 2017, have now been deferred to January 2020.

$22M Secured Debt Financing

On November 5, 2015, the Company completed a secured debt financing totalling up to C$22 million (US$16.95 million) in the aggregate (the "Facility"). The Facility is comprised of a C$8.5 million (US$6.5 million) revolving credit facility, term loan A (C$0.6 million, or US$0.45 million) and term loan B (C$13.0 million, or US$10.0 million). The credit facility and term loans will bear interest at the London Interbank Offered Rate (or Libor) rate, which shall be no less than 0.5%, plus 6.5%.

A portion of the revolving credit facility and term loan A will be repayable as ITC payments for the 2014 financial year are received by the Company, while the term loan B principal is repayable in 36 equal monthly installments starting December 1, 2016. The balance of the revolving credit facility will be used to finance the Company''s eligible receivables.

Short term loan

The Company used $3.0 million of the proceeds of its November 5 financing to repay, in full, the bridge loan contracted with IQ to finance the Company''s 2014 ITC. The security granted to IQ on the Company''s 2014 ITC was subsequently discharged.

The Company also announced on November 5, 2015 that Investissement Quebec had agreed to increase the amount of its second secured bridge loan, initially granted in June 2015 in the amount of $5 million, to $7.6 million. This loan is collateralized against the Company''s ITC receivables for the 2015 and subsequent financial years, with interest payable at prime plus 3.5%.

Restricted cash

Restricted cash (including short-term portion) decreased by $12.2 million during 2015, compared to December 31, 2014. These funds include an amount of US$3 million borrowed under the Facility, which may not be used until certain conditions are met.

Property, plant, and equipment

The Company recorded a net increase in Property, plant, and equipment ("PP&E") of $21.0 million in 2015, as compared to 2014. Gross investments of $29.8 million, primarily in the construction of the Company''s HPA plant, were offset partially through $8.5 million in investment tax credits.

Cash Flow Statement

Cash Flows from Operating Activities

Cash flows used in operating activities increased by $1.2 million and decreased by $2.8 million during the quarter and year ended December 31, 2015 respectively, compared to the same periods of 2014.

Cash flows used for operations, which is cash flows used in operating activities, adjusted for certain non-cash working capital items and net interest payments, increased by $0.7 and $0.6 million for the quarter and the year ended December 31, 2015 respectively, compared to the same periods in 2014.

Cash flows from non-cash working capital items increased by $0.3 million and decreased by $3.4 million during the quarter and the year ended December 31, 2015 as compared to the same periods of 2014.

The increase in cash flows used for operations during the quarter ended December 31, 2015 is due mainly to HPA Plant operations and general administrative charges. The increase for the year ended December 31, 2015 is due mainly to HPA Plant operations, offset partially by a reduction in general and administrative expenses.

Cash Flows from Financing Activities

Cash flows from financing activities decreased by $7.6 million and by $10.4 million during the quarter and the year ended December 31, 2015, as compared to the same periods in 2014. The decrease for the quarter is due mainly to the redemption of the $25 million 2012 convertible debentures, offset by the proceeds from the long-term debt financing and the short-term loan, as well as the issuance of shares, warrants, rights and exercise of options. The decrease for 2015 year end compared to 2014 is principally due to lower proceeds from issuance of shares and the redemption of the 2012 convertible debentures, offset by lower debt financing received in 2014.

Cash Flows used in Investing Activities

Cash flows used in investing activities decreased by $16.1 and $13.3 million during the quarter and the year ended December 31, 2015 respectively, compared to the same periods in 2014. The decreases for the quarter and the year ended December 31, 2015 compared to the same periods in 2014, are due to changes in restricted cash and receipts from investment tax credits receivable on property, plant and equipment, partially offset by the investments in HPA Plant construction.

Conference call

Orbite management will hold a conference call and provide a live audio webcast today, March 31, 2016 at 10:00 a.m. (EDT) to discuss the Company''s financials and provide an update on the Company''s HPA project.

The call will be held in English. The Q&A session will be in English and French.

CONFERENCE CALL DETAILS:

Webcast:

Notice to Reader

The information provided in this press release is entirely qualified by the disclosures in the Company''s Consolidated Interim Financial Statements and Management Discussion & Analysis (MD&A) for the quarter ended December 31, 2015, which are available at and under the Company''s profile at .

About Orbite

Orbite Technologies Inc. is a Canadian cleantech company whose innovative and proprietary processes are expected to produce alumina and other high-value products, such as rare earth and rare metal oxides, at one of the lowest costs in the industry, and in a sustainable fashion, using feedstocks that include aluminous clay, kaolin, nepheline, bauxite, red mud, fly ash as well as serpentine residues from chrysotile processing sites. Orbite is currently in the process of finalizing its first commercial high-purity alumina (HPA) production plant in Cap-Chat, Quebec and has completed the basic engineering for a proposed smelter-grade alumina (SGA) production plant, which would use clay mined from its Grande-Vallee deposit. The Company''s portfolio contains 16 intellectual property families, including 32 patents and 101 pending patent applications in 11 different countries and regions. The first intellectual property family is patented in Canada, USA, Australia, China, Japan and Russia. The Company also operates a state of the art technology development center in Laval, Quebec, where its technologies are developed and validated.

Forward-looking statements

Certain information contained in this document may include "forward-looking information". Without limiting the foregoing, the information and any forward-looking information may include statements regarding projects, costs, objectives and future returns of the Company or hypotheses underlying these items. In this document, words such as "may", "would", "could", "will", "likely", "believe", "expect", "anticipate", "intend", "plan", "estimate" and similar words and the negative form thereof are used to identify forward-looking statements. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether, or the times at or by which, such future performance will be achieved. Forward-looking statements and information are based on information available at the time and/or the Company management''s good-faith beliefs with respect to future events and are subject to known or unknown risks, uncertainties, assumptions and other unpredictable factors, many of which are beyond the Company''s control. These risks uncertainties and assumptions include, but are not limited to, those described in the section of the Management''s Discussion and Analysis (MD&A) entitled "Risk and Uncertainties" as filed on March 30, 2016 on SEDAR, including those under the headings "Recent increase in budgeted capital costs will require additional financing and may adversely impact our prospects", "We will need to raise capital to continue our growth" and "Development Goals and Time Frames".

The Company does not intend, nor does it undertake, any obligation to update or revise any forward-looking information or statements contained in this document to reflect subsequent information, events or circumstances or otherwise, except as required by applicable laws.

Contacts:


NATIONAL Equicom
Marc Lakmaaker, External Investor Relations Consultant
416-848-1397


For Media Inquiries:
NATIONAL Equicom
Scott Anderson, External Media Relations Consultant
416-586-1954



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Date: 03/31/2016 - 11:30
Language: English
News-ID 1425101
Character count: 3500
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Firma: Orbite Technologies Inc.
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Stadt: MONTREAL, QUEBEC
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