URTHECAST CORP. MANAGEMENT'S DISCUSSION AND ANALYSIS

For the year ended December 31, 2019

This Management's Discussion and Analysis ("MD&A") dated May 14, 2020 should be read in conjunction with the audited consolidated financial statements and accompanying notes of UrtheCast Corp. ("UrtheCast" or "the Company") for the year ended December 31, 2019 (the "Annual Financial Statements"), which are available on UrtheCast's SEDAR profile at www.sedar.com. The results reported in this MD&A have been prepared in accordance with International Financial Reporting Standards ("IFRS") and are presented in Canadian dollars.

Unless otherwise indicated, information contained in this MD&A is provided as at December 31, 2019. References to "$", "CAD" or "dollars" are to thousands of Canadian dollars. References to "US $" are to thousands of United States dollars and references to "€" are to thousands of Euros.

The Company reports on certain non-IFRS measures which are used to evaluate financial performance. As non-IFRS measures generally do not have a standardized meaning and therefore may not be comparable to similar measures presented by other issuers, securities regulations require non-IFRS measures to be clearly defined, qualified and reconciled with their nearest IFRS measure. See section entitled "Non IFRS Earnings Measures".

During the first quarter of 2019, the Company committed to a formal plan and commenced a bid process to sell all or substantially all of the assets of Deimos Imaging comprising the Deimos-1 and Deimos-2 satellites, operations and ground station assets. As required under IFRS 5 Non-Current Assets Held for Sale and Discontinued Operations, the operations of Deimos Imaging have been classified as discontinued operations for the year ended December 31, 2019 and re-presented for the comparative year ended December 31, 2018 in the audited consolidated statements of loss and comprehensive loss and the statements of cash flows. The results for the comparative year ended December 31, 2017 have also been re-presented in this MD&A. For purposes of discussing the Company's operating results in this MD&A, financial information has been presented based on the Company's continuing operations unless otherwise noted. The assets and liabilities of Deimos Imaging have been reclassified as held for sale in the audited consolidated statements of financial position as at December 31, 2019. Although operations of Deimos Imaging are treated in this MD&A as a discontinued operation, the Company currently still owns the operation and will continue to own it until the Company completes one or more divestiture transactions relating to this business operation. There can be no assurance that a transaction will be entered into on commercially reasonable terms, in a timely manner, or at all (see "Business Risks and Uncertainties – Risks Related to a Sale of Deimos").

FORWARD-LOOKING STATEMENTS

This MD&A, and, in particular, the sections below entitled "Business Highlights", "Liquidity and Capital Resources", "Critical Accounting Estimates and Judgments", "Financial Instruments" and "Business Risks and Uncertainties" contain "forwardlooking statements" and "forward-looking information" as defined under applicable Canadian securities legislation.

In some cases, forward-looking statements and information can be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "seek", "potential", "estimate", "anticipate", "believe", "could", "would", "should", "continue", "plans", "target", "is/are likely to", or the negative of these terms, or similar expressions intended to identify forward-looking statements. Within this MD&A, forward-looking statements may include, without limitation, statements with respect to UrtheCast's future plans, strategies and objectives, including:

expectations with respect to the Company's ability to raise capital and to continue as a going concern;
expectations regarding UrtheCast's ability to meet its obligations, financial covenants and satisfy its liabilities under its existing indebtedness, and to avoid default or other consequences of a breach of its indebtedness contracts which would grant its lenders rights, including to seize pledged collateral constituting all or substantially all of the Company's assets;
UrtheCast's expectations with respect to its ability to raise proceeds from a subordinated debt or equity offerings and otherwise satisfy the conditions of its indebtedness and business needs generally, including arranging for needed deferrals of payment deadlines*;*
expectations regarding the financing, development, build, launch and commissioning of the constellation known as UrtheDaily (as described below under "Overview – Update on UrtheDaily Financing");
expectations regarding the Company's efforts to find alternative means of monetizing the value of the Company's Synthetic Aperture Radar ("SAR") and OptiSAR technology and related intellectual property ("IP");
expectations regarding the approvals of government regulators responsible for authorizing the sale or licensing of SAR IP and satellite sales, and customers' government budgetary process in respect thereof;
expectations regarding the ability of UrtheCast or its key subcontractors to obtain technology export permits in connection with its engineering and value-added contract;
expectations with respect to the performance of, value of, and ability of the Company to sell imagery and valueadded products and services from our own Deimos-1 and Deimos-2 satellites (until such time as this business is sold), from its Global Imaging Partners network (as described below), and as produced by GEOSYS Technology Holding LLC ("Geosys");
expectation with respect to the ability of the Company to sell or otherwise monetize the Deimos-1 and Deimos-2 satellites and related assets; plans for, timing of, and expansion of the Company's products and value-added services, including new or expanded geo-information and geo-analytics products and involvement of other verticals and industries;
expectations regarding the Company's relationship with its Global Imaging Partners and revenues derived therefrom;
expectations regarding the performance and growth of the business of GEOSYS and its related subsidiaries which were acquired by UrtheCast pursuant to the GEOSYS Acquisition (as defined below);
expectations regarding the Company's ability to satisfy the conditions required for the future payments to Land O' Lakes, Inc. ("Land O' Lakes") in respect of the Geosys Acquisition and to complete the second closing of such acquisition on the terms agreed and complete the expected transfer of certain Geosys IP to UrtheCast (as described below under "Business Highlights – Geosys Acquisition");
expectations regarding the integration of Geosys and the expected efficiencies and other economic benefits to be derived from the acquisition of Geosys;
expectations regarding the WinField SLA (as defined below), and the Company's expected revenues thereunder over the remainder of its 13-year term, and the success of the ongoing relationship with Land O' Lakes in general;
expectations and risk assessments of the Company in respect of the Eastwood Litigation (as defined below), and the Company's expected success in resolving this litigation favourably to the Company, as well as other litigation matters that are ongoing and which, individually, are of a non-material nature;
expectations of the Company to regain compliance under its SADI funding agreement and receive future reimbursements thereunder;
expectations regarding revenue, expenses and operations;
anticipated cash needs and the Company's needs for, and the Company's ability to secure, additional financing for working capital needs, debt repayment obligations and other contractual obligations of the Company;
the Company's ability to protect, maintain and enforce its intellectual property rights;
the Company's ability to defend itself against third-party claims of infringement or violation of, or other conflicts with, intellectual property rights by the Company;
future growth plans, including in respect of the development, launch, commissioning and operation of the UrtheDailyTM satellite constellation (the "UrtheDaily Constellation") and other value-added products and services;
expectations regarding the Company's ability to sign and carry out a manufacturing contract in respect of the UrtheDaily Constellation satellites and a launch contract to deliver them to orbit on reasonable economic terms and in accordance with the Company's anticipated schedule;
expectations regarding the data-buy contracts entered into with prospective customers of the UrtheDaily Constellation, and the Company's ability to satisfy the conditions precedent in these data-buy contracts, or to modify or extend such contracts as may be required to accommodate the Company's current expectations regarding the launch schedule of the UrtheDaily Constellation, in order to receive revenues thereunder, and to

finance the development, build, launch and commissioning of the UrtheDaily Constellation in general which is expected to be based in part on these expected data buy contract revenues;

expectations regarding the Company's ability to secure a build contract with Surrey Satellite Technology Ltd. ("SSTL") or another satellite subcontractor and a satellite launch contract with a launch services provider in respect of the UrtheDaily Constellation;
expectations regarding the debt and equity markets, and the Company's ability to continue to obtain financing in the event of weakening markets as a result of the pandemic related to the disease known as COVID-19;
risks related to global economic, labour and credit conditions generally, including as they are being impacted by COVID-19 and the government responses thereto in an unprecedented and difficult-to-predict manner;
expectations regarding anticipated revenues from our geo-analytics products and the expected effects of seasonal and weather factors, as well as the timing of when major contracts are awarded;
the acceptance by the Company's customers and the marketplace of new satellite imaging content, technologies, and geo-analytics products and solutions;
the Company's ability to attract new customers;
the Company's ability to attract and retain personnel;
the Company's competitive position and its expectations regarding competition;
regulatory developments and the regulatory environments in which the Company operates;
the Company's ability to comply with its debt service obligations and related covenants;
anticipated trends and challenges in the Company's business and the markets in which it operates; and
the expectations of the Company and third-party industry research organizations regarding the future growth of the geo-information and geo-analytics industries.

Forward-looking statements and information reflect the Company's current views with respect to future events and are subject to various known and unknown risks and uncertainties, which are necessarily based upon a number of estimates and assumptions that, while considered reasonable by UrtheCast, are inherently beyond the ability of the Company to control or predict, that may cause the Company's actual results, performance or achievements to be materially different from those expressed or implied thereby, and are developed based on assumptions about such risks, uncertainties and other factors set out herein, including but not limited to the factors referred to below under "Business Risks and Uncertainties". For additional information with respect to certain of these risks or uncertainties, reference should be made to the section entitled "Business Risks and Uncertainties" in this MD&A and to UrtheCast's continuous disclosure materials filed from time to time with the Canadian Securities Regulatory Authorities, including the Company's Annual Information Form for the financial year ended December 31, 2019, quarterly and annual reports, and supplementary information, which are available on SEDAR at www.sedar.com. Additional risks and uncertainties not presently known to the Company or that UrtheCast believes to be less significant may also adversely affect the Company.

The Company undertakes no obligation to update forward-looking information except as required by applicable law. Such forward-looking information represents management's best judgment based on information currently available. No forwardlooking statement can be guaranteed and actual future results may vary materially. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements or forward-looking information.

OVERVIEW

UrtheCast Corp. is a Vancouver-based technology company that serves the rapidly growing and evolving geospatial and geoanalytics markets with a wide range of information-rich products and services. UrtheCast is a Big Data services company specializing in satellite imaging, data services and geo-analytics. The data the Company collects from its satellites and third parties fuel powerful cloud-based analytics platforms at the leading edge of the artificial intelligence and machine learning revolution. The insights gained from the Company's imagery, cloud-based processing chain, and algorithms allows its customers to identify potential adverse events quickly, track long-term trends, monitor change, reduce intervention times,

uncover opportunities, and take targeted, strategic actions to better serve their customers and fulfill their missions. Key markets served are agriculture, forestry, environment, and defence and intelligence.

UrtheCast has designed and proposes to build and launch a satellite constellation designed to capture high-quality, mediumresolution optical imagery of the Earth's entire land mass (excluding Antarctica) everyday, called UrtheDailyTM, and has developed advanced synthetic aperture radar technology for satellites, called OptiSARTM. Subject to UrtheCast financing the build and launch of the UrtheDaily Constellation satellites in a timely manner, the Company currently expects the UrtheDaily Constellation to begin operations in late 2022. UrtheCast has entered into multiple agreements for the sale of imagery from the UrtheDaily Constellation once UrtheCast begins delivering data to customers. The completion of the UrtheDaily Constellation and the financing required to fund its build, launch and commissioning is inherently subject to significant technical, business, economic, competitive and political uncertainties and contingencies and there can be no assurance that the UrtheDaily Constellation will be completed on the expected timeframe or at all (see "Business Risks and Uncertainties" and "Outlook & Going Concern" below).

In January 2019, UrtheCast acquired Geosys, a digital agriculture company that provides a suite of geo-analytics products and services to agribusinesses around the world (see "Business Highlights – Geosys Acquisition"). The acquisition of Geosys positions UrtheCast as a fully vertically-integrated geo-analytics solution provider for the precision agriculture market, able to integrate satellite imagery services with analytics.

The Company currently owns and operates two Earth Observation ("EO") satellites, Deimos-1 and Deimos-2. Imagery data from these sensors is continuously downlinked to ground stations around the world and distributed directly to partners and customers in multiple markets. UrtheCast also processes and distributes imagery data and value-added products on behalf of its Global Imaging Partners, a network of 10 EO satellite operators with a combined 25 medium- and high-resolution EO sensors, led by Deimos Imaging, S.L.U., a wholly-owned subsidiary of UrtheCast. During the first quarter of 2019, the Company committed to a formal plan and commenced a bid process to sell all or substantially all of the assets of Deimos Imaging and therefore the operations of Deimos Imaging have been classified as discontinued operations in the consolidated financial statements for the year ended December 31, 2019 and re-presented for the comparative prior year ended December 31, 2018 in the audited consolidated statements of loss and comprehensive loss and the statements of cash flows. The results for the comparative year ended December 31, 2017 have also been re-presented in this MD&A. (see "Business Risks and Uncertainties – Risks Related to a Sale of Deimos").

OUTLOOK & GOING CONCERN

The Company has a history of significant recurring operating losses and shareholders' deficit, working capital deficiencies and insufficient cash flows from operations to fund its activities and continues to face significant liquidity challenges. As at December 31, 2019, the Company had a working capital deficiency from continuing operations of $47,446. Based on the Company's forecasted cash flows for the next twelve months, the Company's current cash flow from operations will not be sufficient to cover its commitments, obligations and operating costs for at least the next twelve months, which could have a negative impact on its ability to continue as a going concern. The Company monitors its risk of shortage of funds by monitoring forecasted and actual cash flows, maturity dates of existing financial liabilities and commitments as well as compliance with long-term debt and funding agreements and is actively managing its capital to ensure a sufficient liquidity position to finance its general and administrative, working capital and overall capital expenditures.

The Company will need to secure additional sources of financing or undertake asset sales in order to obtain funds to pay for its ongoing costs of operations, service its working capital deficiency, meet its commitments to lenders, fund the development, build and launch of the UrtheDaily Constellation, and pay the remaining consideration to the vendor for the acquisition of Geosys (see "Business Highlights – Geosys Acquisition"). As described above under "Overview - Update on UrtheDaily Financing", the Company is actively working towards securing financing arrangements for the UrtheDaily Constellation, which is also expected to provide additional liquidity for its general working capital needs and recovery of certain financing and advisory costs incurred associated with the Company's efforts in securing an UrtheDaily financing arrangement. The delays in securing a binding financing arrangement for the UrtheDaily Constellation, the associated financing and advisory fees incurred, and the delays in finalizing a sale of the Spanish Earth observation assets have contributed to the Company's working capital deficiency.

During 2019, the Company raised US $15,000 from three secured term loan financings, $6,600 from an unsecured convertible debenture financing, and secured a US $10,000 receivables purchasing agreement to finance qualifying trade receivables (see "Business Highlights – Financings" below). Subsequent to December 31, 2019, the Company completed a further $2,026 financing and is continuing discussions with its lenders as it seeks to enter into binding agreements to further defer maturity and principal repayments of its matured debt facilities. The Company also implemented significant cost reductions and committed to a formal plan to sell all or substantially all of the Deimos Imaging business, including the Deimos-1 and Deimos-2 satellites and ground station assets (see "Business Risks and Uncertainties - Risks Related to the Sabadell Term Loan, the US $12,000 Term Loan, the June Term Loan, the July Term Loan, the $6,600 Financing, the $2,000 Financing and Indebtedness Generally"). In addition, Geosys generated a positive adjusted EBITDA1 contribution, specifically from the 13 year agreement to provide services to Land O'Lakes (see "Business Highlights – Geosys Acquisition"). With these measures, the Company has achieved a significant improvement in its operating results as reflected by an improvement in its adjusted EBITDA1 by $16,588 to negative $7,137 for 2019 compared to 2018.

The Company's ability to continue as a going concern is dependent upon its ability to generate cash flows from operations, asset sales, debt or equity financings or re-financings, or through other arrangements, accretive acquisitions and/or new engineering or licensing contracts to monetize its intellectual property, its ability to secure financing for the UrtheDaily Constellation and its ability to extend maturity dates of its matured debt facilities. While the Company has demonstrated the ability to raise funds in the past, there can be no assurance that future financings will be completed on the required timelines or at all (see "Business Risks and Uncertainties - Risks Related to the Company's Ability to Continue as a Going Concern"). Furthermore, the Company's efforts and its ability to secure any of the aforementioned funding sources may be adversely affected or delayed by the ongoing COVID-19 pandemic and the uncertain market conditions that this has caused (see "Business Risks and Uncertainties - Risks Related to Global Economic Conditions and COVID-19").

Management for the Company has concluded that these conditions, including the risks related to obtaining adequate financing on terms acceptable to the Company or at all for the UrtheDaily Constellation, risks related to its cash flow constraints, liquidity position and ability to meet its debt and other payment obligations, indicate the existence of material uncertainties that may cast significant doubt as to the ability of UrtheCast to continue as a going concern or otherwise execute on its business strategies, and therefore has included notice of such in the Company's audited consolidated financial statements.

Notwithstanding the foregoing, the Company's audited consolidated financial statements have been prepared using generally accepted accounting principles applicable to a going concern, which presumes the realization of assets and discharge of liabilities in the normal course of operations for the foreseeable future. The audited consolidated financial statements do not reflect adjustments that would be necessary if the going concern assumption was not appropriate. If the going concern assumption was not appropriate, adjustments to the carrying value of the assets and liabilities, reported expenses and statement of financial position classifications would be necessary. Such adjustments could be material.

Please refer to Note 1(b) of the Company's consolidated financial statements for the year ended December 31, 2019 for more information.

1 Adjusted EBITDA is a non-IFRS earnings measure that does not have any standardized meaning prescribed by IFRS. See reconciliation to Net Loss under the "Non-IFRS Earnings Measures" heading in this MD&A.

SELECTED FINANCIAL INFORMATION

The following table provides selected financial information of the Company, which was derived from, and should be read in conjunction with, the Annual Financial Statements for the respective periods, whereas the results for the comparative year ended December 31, 2017 have been re-presented for this MDA only. All financial information is in thousands of Canadian dollars, unless otherwise noted, and except for number of shares and per share amounts.

Year ended December 31,	2019	2018	2017
Revenue	$18,280	$6,220	$33,385
Other operating income	1,394	559	338
Operating costs	29,802	34,514	42,210
Operating loss	(10,128)	(27,735)	(8,487)
Net loss from continuing operations	(18,205)	(40,780)	(9,482)
Net loss from discontinued operation	(17,863)	(42,472)	(22,265)
Net loss	(36,068)	(83,252)	(31,747)
Comprehensive loss	(36,057)	(82,590)	(27,959)
Loss per share, basic & diluted	$(0.27)	$(0.67)	$(0.27)
Loss per share, basic & diluted – continuingoperations	$(0.14)	$(0.33)	$(0.08)
Loss per share, basic & diluted – discontinuedoperation	$(0.13)	$(0.34)	$(0.19)
ADJUSTED EBITDA FROM CONTINUINGOPERATIONS 1	$(3,987)	$(14,841)	$4,305
ADJUSTED EBITDA FROM DISCONTINUEDOPERATION 1	(3,150)	(8,884)	(7,458)
ADJUSTED EBITDA 1	$(7,137)	$(23,725)	$(3,153)

As at December 31,	2019	2018	2017
Total assets	$128,992	$113,639	$174,274
Total non-current financial liabilities	$33,554	$39,918	$29,282
Shareholders' (deficiency) equity	$(9,160)	$22,490	$102,193

Overall Performance

Revenue was $18,280 in 2019 compared to $6,220 in 2018.

Revenue recognized in 2019 related to the provision of geo-analytics imagery products and services as a result of the acquired Geosys business with approximately 73% of these revenues generated from the new 13-year WinField SLA signed with Land O'Lakes in connection with the Geosys Acquisition as described under "Business Highlights – Geosys Acquisition". Under the WinField SLA, we are providing Land O'Lakes with certain geo-analytics imagery products and services historically provided by Geosys.

The Company did not recognize any engineering and value-added services revenue in 2019, compared to $6,220 in 2018, due to delays incurred by its key subcontractors in completing milestones under its engineering and value-added services contract, which resulted in a revised completion date for the project. The Company recognized revenue on contracts for the provision of space hardware in the first quarter of 2018 which were completed during 2018.

Operating costs decreased to $29,802 in 2019 from $34,514 in 2018 primarily as a result of impairment charges of $10,356 being recognized in the prior year. Excluding these prior year impairment charges, the operating costs increased by $5,644 compared to 2018 due to the consolidation of Geosys from the acquisition date, which includes direct costs, selling, general and administrative expenses of $14,117 and depreciation and amortization of $2,780 of Geosys. This increase was partially offset by the impact of cost reduction initiatives implemented during 2018 and in the first quarter of 2019. Operating costs for 2019, excluding Geosys, have decreased by approximately 63% compared to 2018 as a result of headcount and cost reductions, lower professional fees, lower engineering subcontractor costs resulting from subcontractor delays discussed above and engineering contracts that were completed in 2018, and due to the above noted impairment charges recognized in 2018 whereas no impairment charges were recognized in 2019.

The net loss from continuing operations of $18,205 decreased compared to $40,780 in 2018 primarily due to an increase in revenue, a reduction in impairment charges and finance costs, partially offset by an increase in operating costs as a result of the consolidation of Geosys from the acquisition date and a lower gain on derivative financial instruments in 2019 compared to 2018.

The negative adjusted EBITDA1 from continuing operations of $3,987 improved compared to $14,841 in 2018 primarily due to the positive adjusted EBITDA1 contribution by Geosys since the acquisition date and a significant reduction in operating costs, excluding Geosys.

The net loss of $36,068 in 2019 decreased compared to $83,252 in 2018 primarily due to higher revenue as a result of the Geosys acquisition, lower non-Geosys operating costs, as described above, a reduction in impairment charges and finance charges and a lower net loss from discontinued operation, partially offset by a decrease in the gain on derivative financial instruments.

Refer to "Consolidated Results of Operations", below, for a further discussion of the Company's overall performance and refer to "Assets Held for Sale and Discontinued Operations", below, for a discussion of performance of its discontinued operation.

BUSINESS HIGHLIGHTS

Geosys Acquisition

On November 7, 2018, the Company announced that it had entered into a definitive purchase agreement with Land O'Lakes for the acquisition of Geosys, a wholly owned subsidiary of Land O'Lakes, and certain of its intellectual property for an aggregate cash purchase price of US $20,000, subject to customary working capital adjustments, and is payable in three installments for 100% of the ownership of Geosys (the "GEOSYS Acquisition"). The terms and conditions under the purchase agreement were substantially the same as set forth in the binding letter of intent announced on August 14, 2018. The transaction has enabled the Company to offer to its agribusiness customers a full solution of imagery data and geo-analytical

solutions. By unifying these companies, UrtheCast is well-positioned as the leader in fully integrated geo-analytics solutions for the agribusiness industry. The expanded capabilities have allowed UrtheCast to bring advanced agricultural geo-analytics products to customers across a global value chain that spans from retailers to insurance companies, banks and commodity trading houses.

On first closing, which occurred on January 14, 2019, the Company paid US $5,000 to Land O'Lakes. Of this amount, the Company paid US $2,500 in cash and provided a set-off of US $2,500 owing by Land O' Lakes in connection with the WinField SLA described below. A second instalment of US $5,000 was payable on October 14, 2019; however, pursuant to an amendment to the purchase agreement, Land O'Lakes agreed to defer US $750 to January 1, 2020, through a setoff of amounts owed by Land O'Lakes under the WinField SLA, with the balance of US $4,250 to be paid by February 14, 2020. In February 2020, Land O'Lakes agreed to further defer the balance of US $4,250 with US $750 paid on April 1, 2020 through a setoff of amounts under the WinField SLA and US $3,500 payable by May 14, 2020. The Company and Land O'Lakes are in constructive discussions to further extend this payment. A final instalment of US $10,000 is payable on second closing, which is expected to occur prior to April 13, 2021, upon transfer of certain intellectual property of Geosys from Land O' Lakes to the Company ("Geosys IP"). The transfer is subject to the Company completing separation of the Geosys IP from Land O'Lakes' intellectual property, which the Company expects to complete on or before April 13, 2021 based on current progress.

On first closing, the Company also entered into a new 13-year agreement to provide Land O'Lakes with certain services currently provided by Geosys to Land O' Lakes with total annual fees payable to the Company in excess of US $10,000 per year, and an increased rate at such time as the UrtheDaily Constellation is operational (the "WinField SLA"). Land O'Lakes has also agreed to provide to the Company certain services and a license for the Geosys IP from the first closing until the second closing under an interim services agreement.

The Company intends to fund the remaining portion of the purchase price in respect of the acquisition of Geosys with a combination of available funds, expected future operating cashflows, proceeds from expected asset sales, future expected financing arrangements and/or set off from amounts owing under the WinField SLA, as needed. The second closing is subject to customary closing conditions and the separation of the Geosys IP as part of a pre-closing reorganization. No regulatory or third-party consents are expected to be required.

Update on UrtheDaily Constellation

On February 13, 2019, the Company and the senior lenders of the US $142,000 credit agreement dated May 18, 2018 (the "Credit Agreement") that was to finance the planned UrtheDaily Constellation project entered into a mutual termination agreement (the "Termination Agreement") to formally terminate the Credit Agreement as further described below in "Business Highlights - Mutual Termination of UrtheDaily Credit Agreement".

As a result, the Company subsequently engaged a leading investment bank as its financial advisor and has been actively pursuing alternative financing opportunities to finance the UrtheDaily Constellation. As at the date of this MD&A, UrtheCast has received indicative term sheets from a number of institutional investors to finance the project and is actively working towards satisfying due diligence requirements with these prospective investors and finalizing a binding commitment. However, there can be no assurance that a binding agreement will be entered into on commercially reasonable terms, in a timely matter, or at all (see "Business Risks and Uncertainties – Risks Related to Delays in the Financing, Development and Launch of the UrtheDaily Constellation").

With multiple binding contractual commitments from customers to purchase imagery data from the UrtheDaily Constellation, once operational, management believes that the Company's business case for the UrtheDaily Constellation has been validated.

If the financing is completed in accordance with the current schedule, the Company currently targets commencing operations by late 2022.

Although the above statements reflect management's current views on the UrtheDaily Constellation, the completion of the UrtheDaily Constellation and the financing required to fund its build, launch and commissioning, is inherently subject to significant technical, business, economic, competitive and political uncertainties and contingencies which may be exacerbated by the recent COVID-19 pandemic, and there can be no assurance that the UrtheDaily Constellation will be

completed or operational on the expected time frame or at all. Additionally, there can be no assurance that adequate alternative or additional financing will be available on terms acceptable to the Company or at all, which creates a material uncertainty that could have an adverse impact on the Company's financial condition and may cast significant doubt on the Company's ability to build, launch and operate the UrtheDaily Constellation, to continue as a going concern or otherwise execute on its business strategies (see "Business Risks and Uncertainties" below and "Outlook & Going Concern" above).

Deimos Imaging Assets Held for Sale

In the first quarter of 2019, the Company committed to a formal plan and commenced a bid process to sell all or substantially all of the assets of Deimos Imaging, comprised of the Deimos-1 and Deimos-2 satellites, operations and ground station assets ("Deimos Sale"). The proceeds from the Deimos Sale, should a successful transaction be concluded, are expected to be used for the repayment of the Sabadell Term Loan, the secured term loans described below under "Financings", and if excess proceeds are available, for general working capital purposes.

The Company is in the process of negotiating terms and participating in due diligence activities for the sale of all or substantially all of the equity or assets of Deimos Imaging and will provide an announcement when or if a binding transaction is entered into. There can be no assurance that a transaction will be entered into on commercially reasonable terms, in a timely manner, or at all. See "Business Risks and Uncertainties" and "Discontinued Operation" below.

Engineering and SAR Business and OptiSAR Technology

The Company continues to explore potential partnerships and transaction structures to exploit the Company's SAR-IP to capitalize on the growing market for SAR technology, in addition to other strategic alternatives potentially available to the Company, such as licensing the SAR-IP to other companies, selling SAR-IP payloads for inclusion on others' satellites or deployment of the SAR-IP technology in a variety of satellite configurations and applications. The Company has received expressions of interest from outside parties in its SAR technology and continues to pursue these opportunities to maximize value for its shareholders. There can be no assurance that these opportunities will result in any transaction (see "Business Risks and Uncertainties", below).

UrthePipeline Ground Segment Systems Technology

UrtheCast is also developing software and related infrastructure to facilitate EO imagery processing and distribution, at scale. This includes the system referred to as UrthePipeline, which when fully developed, is expected to be a fully automated, cost-effective, highly available, scalable system aimed to process terabytes of satellite imagery data every day. This technology will form an integrated part of the ground segment for Company's proposed UrtheDaily Constellation and is expected to help facilitate the advanced and unique geo-analytics made possible by the UrtheDaily dataset, once operational.

Towards the end of 2019, the Company achieved initial operational capability of the UrthePipeline technology and has launched a fully managed service offering ("UrthePipeline as a Service") on its corporate website. This offering is available for early access and aims to provide an initial set of high-quality ground segment services to other companies and governments as a cost effective alternative to traditional manually driven ground segments. The Company continues to evolve the UrthePipeline technology towards a full scale ground segment service with a wide range of value-added applications.

Government Funding

On May 28, 2019, the Company announced that it was selected to receive $2,000 from the Canadian Space Agency's Space Technology Development Program, in two separate agreements of $1,000 each, for the development of new satellite technologies including the Company's planned UrtheDaily Constellation and the development of the next generation UrtheCast SAR-XL Synthetic Aperture Radar. The work on the qualifying activities has commenced and will be carried out over the next three years.

In July 2019, the Company signed a project funding agreement with Canada's Digital Technology Supercluster to receive up to approximately $1,400 in non-repayable funding to reimburse costs incurred to advance development of its UrthePipeline ground segment systems. The Company filed its first claim during the third quarter of 2019 and filed claims totalling $935 for reimbursement of eligible costs incurred in 2019.

In January 2020, the Company was awarded two short-term fixed-price contracts totaling $364 from the Department of National Defence to complete engineering and costing analysis studies which were substantially completed during the first quarter of 2020.

The Company has been in discussions with the Canadian government for further non-repayable funding to advance the development of its SAR-IP and UrthePipeline ground segment technologies, as well as repayable funding for its planned UrtheDaily Constellation. While the Company has been successful in obtaining government funding in the past and continues to have a positive, supportive and productive relationship with federal government agencies, there can be no assurance that these efforts will be successful or that the available terms and timing of such funding will be suitable, particularly in light of the current global COVID-19 pandemic and the unprecedented government resources and attention being directed to this crisis.

Impact of COVID-19

In March 2020, the World Health Organization declared the outbreak of the novel coronavirus disease known as COVID-19 to be a pandemic.

As of the date of this MD&A, other than with respect to certain financial reporting and audit process delays, we have not experienced any significant disruption in our business operations as a result of COVID-19. While we continue to execute and reach payment milestones under our government contracts and are working closely with our advisors to complete the proposed UrtheDaily Constellation financing and sale of the Deimos Imaging business, in the future ,these efforts may be adversely affected or delayed by the COVID-19 pandemic and the government responses, which have caused general disruptions to equity and debt markets. We are continuing to monitor the situation closely and are prepared to further adjust our operations in Spain, France, the U.S. or Canada as needed to ensure minimal disruption to our business. While we expect that the general market downturn occurring globally may have near-term impacts on new Earth observation data and geo-analytics products and services sales, collection of receivables from customers, and timely completion of milestones under its engineering and value added services contracts, the Company's medium- and long-term outlook are strong and our strategy remains unchanged (see "Business Risks and Uncertainties - Risks Related to Global Economic Conditions and COVID-19").

Financings

US $12 Million Term Loan

On January 14, 2019, the wholly-owned subsidiary of the Company that acquired Geosys (the "Borrower") entered into an approximately US $12,000 term loan (the "US $12,000 Term Loan") with a group of lenders led by Bolzano Investments Limited ("Bolzano") and 1112099 B.C. Ltd. ("1112099"). The US $12,000 Term Loan accrues interest at a rate of 14% per annum, has a maturity date of one year and is secured by all of the Geosys assets owned by the Borrower. In connection with the June Term Loan signed on June 27, 2019, described below, the terms of the US $12,000 Term Loan were amended effective June 26, 2019 to increase the interest rate from 14% per annum to 17% per annum and include any net proceeds from the proposed sale of the Company's Deimos Imaging business or assets, after repayment of the Spanish Term Loan, if and when such a sale is completed, as security. Effective January 15, 2020, the lenders extended the maturity date to April 14, 2020 (the "Extension"). In connection with the Extension, an aggregate extension fee of US $200 was payable to the lenders. The Company is continuing discussions with these lenders as it seeks to enter into binding agreements to further defer maturity and principal repayments as the Company seeks to finalize a binding commitment to finance the UrtheDaily Constellation and, as of the date of this MD&A, the lenders have not issued a notice of default. There can be no assurance a further or binding deferral agreement shall be entered into or that the lenders will not issue a notice of default in the future.

In satisfaction of conditions required by the lenders, (i) Bolzano appointed Mr. Pirmin Lüönd as a director of UrtheCast pursuant to a board appointment right granted by UrtheCast to Bolzano, and Mr. Lüönd was subsequently elected at the Company's last annual general and special meeting of shareholders; (ii) the Borrower agreed to pay Bolzano a finance fee in the amount of US $180 and UrtheCast agreed to issue to Bolzano 19,800,000 common share purchase warrants of UrtheCast having a maturity date of May 25, 2023 and an exercise price of $0.48 per common share, subject to approval from the TSX; (iii) each UrtheCast director agreed to defer cash compensation from January 1, 2019 to June 30, 2019; and (iv) certain UrtheCast directors and executives agreed to loan an aggregate principal amount of US $550, including other funds sourced by such directors and executives from investors acceptable to the lenders, on substantially the same terms as the US $12,000 Term Loan or on such other terms acceptable to the lenders in consideration for a number of common share purchase warrants of UrtheCast proportionate to the number of common share purchase warrants that UrtheCast agreed to issue to Bolzano, subject to approval from the TSX. The Company issued a total of 22,275,713, common share purchase warrants effective January 30, 2019, including the warrants issued to Bolzano, 660,000 warrants to 1112099 and 1,815,713 warrants to certain directors and officers.

Approximately US $7,900 of the US $12,000 Term Loan was advanced on January 14, 2019, US $5,000 was used to repay the previously issued US $5,000 unsecured demand promissory note dated September 28, 2018 and US $2,500 was used to fund a portion of the first installment of the Geosys Acquisition. The balance of the US $12,000 Term Loan was advanced on January 30, 2019 upon the satisfaction of certain conditions required by the lenders, including the completion of definitive documentation relating to the security of the US $12,000 Term Loan and the lenders' conditions described above and was available for general corporate purposes.

Secured US $1.5 Million Term Loan

On June 27, 2019, the Borrower entered into an additional US $1,500 term loan (the "June Term Loan") with Bolzano. The June Term Loan accrues interest at a rate of 17% per annum, had an original maturity date of January 15, 2020 and is secured by all of the Geosys assets owned by the Borrower and any net proceeds from the proposed sale of the Company's Deimos assets, if and when such a sale is completed. The Company is continuing discussions with Bolzano as it seeks to enter into a binding agreement to further defer maturity and principal repayments while the Company seeks to finalize a binding commitment to finance the UrtheDaily Constellation and, as of the date of this MD&A, the lender has not issued a notice of default. There can be no assurance a further or binding deferral agreement shall be entered into or that the lender will not issue a notice of default in the future.

In satisfaction of conditions required by Bolzano, the Borrower agreed to pay Bolzano a finance fee of US $45 and the Company issued to Bolzano 10,560,000 common share purchase warrants of UrtheCast having a maturity date of June 26, 2024 and an exercise price of $0.48 per common share, subject to adjustment in certain circumstances.

Second Secured US $1.5 Million Term Loan

On July 26, 2019, the Borrower entered into a US $1,500 term loan (the "July Term Loan") with Lunar Ventures Inc. ("Lunar") on the same terms as the June Term Loan. The July Term Loan accrues interest at a rate of 17% per annum, had an original maturity date of January 15, 2020 and is secured by all of the Geosys assets owned by the Borrower and any net proceeds from the proposed sale of the Company's Deimos Imaging business or assets, if and when such a sale is completed. The Company is continuing discussions with Lunar as it seeks to enter into a binding agreement to further defer maturity and principal repayments while the Company seeks to finalize a binding commitment to finance the UrtheDaily Constellation and, as of the date of this MD&A, the lender has not issued a notice of default. There can be no assurance a further or binding deferral agreement shall be entered into or that the lender will not issue a notice of default in the future.

In satisfaction of conditions required by the lender, the Borrower paid Lunar a finance fee of US $45 and the Company issued to Lunar 10,560,000 common share purchase warrants of UrtheCast having a maturity date of June 26, 2024 and an exercise price of $0.48 per common share, subject to adjustment in certain circumstances.

$6.6 Million Financing

On September 11, 2019, UrtheCast closed a $6,600 financing (the "$6,600 Financing") with Vine Rose Limited ("Vine Rose"), consisting of a senior unsecured convertible debenture of the Company in the principal amount of $2,980 (the "Convertible Debenture") and a senior unsecured non-convertible debenture of the Company in the principal amount of $3,620 (the "Debenture"). These debentures accrued interest at a rate of 17% per annum and had an original maturity date of October 31, 2019. In connection with the financing, the Company paid Vine Rose a 3% finance fee in the amount of US $150.

The Convertible Debenture is convertible into common shares of the Company ("Common Shares") at the option of the Lender, at any time prior to the maturity date at a conversion price equal to $0.32 per Common Share (the "Original Conversion Price"). The Original Conversion Price is subject to adjustment in certain circumstances, including if the Company issues any Common Shares or securities convertible into Common Shares (other than pursuant to its equity incentive plan) at a lower price, in which case the conversion price shall be reduced to such lower price but not less than $0.24, subject to approval from the Toronto Stock Exchange.

Upon maturity, effective October 31, 2019, the Company and Vine Rose amended the Convertible Debenture and Debenture agreements such that $6,600 senior unsecured convertible debentures of the Company were issued with an extended maturity date of December 31, 2019, and with generally the same terms as the Convertible Debenture described above. In addition, the Company issued 6,034,745 common share purchase warrants of UrtheCast effective November 15, 2019 with a maturity date of September 11, 2024 and an exercise price of $0.48 per common share, subject to adjustment in certain circumstances. The Company is continuing discussions with Vine Rose as it seeks to enter into a binding agreement to further defer maturity and principal repayments while the Company seeks to finalize a binding commitment to finance the UrtheDaily Constellation and, as of the date of this MD&A, the lender has not issued a notice of default. There can be no assurance a further or binding deferral agreement shall be entered into or that the lender will not issue a notice of default in the future.

$2.0 Million Financing

On January 31, 2020, the Company closed a $2,026 financing (the "$2,000 Financing") with SMF Investments Limited ("SMF") consisting of an unsecured convertible debenture of the Company in the principal amount of $2,026 (the "2020 Debenture"). The 2020 Debenture accrues interest at a rate of 17% per annum, had an original maturity date of March 31, 2020 and is convertible into common shares of the Company ("Common Shares") at the option of SMF, at any time prior to the maturity date at a conversion price equal to $0.32 per Common Share (the "Original Conversion Price"). The Original Conversion Price is subject to adjustment in certain circumstances, including if the Company issues any Common Shares or securities convertible into Common Shares (other than pursuant to its equity incentive plan) at a lower price, in which case the conversion price shall be reduced to such lower price but not less than $0.24, subject to approval from the TSX. In the event of default under the 2020 Debenture, the SMF will receive a license to certain intellectual property of the Company. The Company is continuing discussions with SMF as it seeks to enter into a binding agreement to further defer maturity and principal repayments while the Company seeks to finalize a binding commitment to finance the UrtheDaily Constellation and, as of the date of this MD&A, the lender has not issued a notice of default. There can be no assurance a further or binding deferral agreement shall be entered into or that the lender will not issue a notice of default in the future.

In connection with the financing, the Company paid the Lender a 3% finance fee from the proceeds of the financing and issued to the Lender 4,171,677 Common Share purchase warrants of the Company having an expiry date of January 27, 2025 and an exercise price of $0.48 per Common Share (the "Original Exercise Price"). The Original Exercise Price is subject to adjustment in certain circumstances, including if the Company issues any Common Shares or securities convertible into Common Shares (other than pursuant to its equity incentive plan) at a lower price, in which case the conversion price shall be reduced to such lower price but not less than $0.32, subject to approval from the TSX.

€25 Million Secured Term Loan (the "Sabadell Term Loan")

Prior to December 31, 2018, the Company and its Spanish lender, Banco de Sabadell, S.A. ("Sabadell"), agreed to defer €2,500 of the principal payment which was originally due on December 11, 2018 to January 31, 2019. The Company repaid €1,000 during the six months ended June 30, 2019 and the remaining €1,500 was deferred further by Sabadell to September 30, 2019. In October 2019, the Spanish lender agreed in principle to defer €1,350 of the previously deferred €1,500 to January 31, 2020 in exchange for a partial principal repayment of €150 plus accrued interest. While UrtheCast Imaging was in compliance with the annual debt coverage ratio at December 31, 2019, the lender agreed to grant a waiver in respect of compliance with the annual leverage ratio covenant at December 31, 2019. Furthermore, Sabadell agreed to defer the €4,000 principal repayment that was due in December 2019. In March 2020, an agreement was signed to further extend the repayment date to June 1, 2020 for the principal repayments of €1,350 and €4,000, respectively, in exchange for a partial principal payment of €150 plus accrued interest in order to provide the Company with additional time to complete the proposed Deimos Sale (see "Assets Held for Sale and Discontinued Operations" and "Business Risks and Uncertainties – Risks Related to a Deimos Sale", below). If the Company completes the proposed Deimos Sale, the Company will use the proceeds from the transaction towards repayment of the outstanding loan balance, which is €14,350 at the date of this MD&A, and accrued interest, should a prospective buyer not acquire the loan.

US $10 Million Receivables Purchasing Agreement

On February 26, 2019, the Company signed a US $10,000 receivables purchasing agreement (the "RPA") with a working capital financing agent which allows the Company to finance certain qualifying trade receivables.

The Company financed the quarterly trade receivables under the WinField SLA in March, May and August 2019. In December 2019, the Company financed trade receivables under the WinField SLA with a fair value of US $1,775, net of the US $750 setoff owed to Land O'Lakes on January 1, 2020 for the Geosys Acquisition, and received advance proceeds of approximately US $1,671 which represented 95% of the face value of the trade receivables, net of interest of $15. The remaining 5% of the financed receivables were collected subsequent to December 31, 2019. Similarly, in March 2020, the Company factored US $1,775 of receivables, net of the US $750 setoff owed on April 1, 2020, and received advance proceeds of approximately US $1,671.

Extension of Interest-Bearing Convertible Debentures

On May 3, 2018, the Company announced the closing of an approximately $34,000 (or approximately US $27,000) private placement (the "Subordinated Capital Financing") of subscription receipts (the "Subscription Receipts"). The Subordinated Capital Financing included (i) Subscription Receipts sold through a brokered private placement, (ii) Subscription Receipts sold to certain non-Canadian purchasers directly by the Company; (iii) Debentures (as defined below) and Warrants (as defined below) pursuant to a conditional backstop agreement dated May 3, 2018. 76,217,260 Subscription Receipts were issued at a purchase price of $0.35 and following the final receipt of two short form prospectuses, dated May 17, 2018 and June 14, 2018, the Subscription Receipts automatically converted into non-interest bearing, unsecured senior convertible debentures in the principal amount of $26,676 or $0.35 per debenture (the "Debentures") and 41,681,302 common share purchase warrants (the "Warrants"). Each Debenture is convertible into common shares for a period of six years following issuance of the Debenture and each Warrant is exercisable at an exercise price of $0.48, subject to adjustment, for a period of five years following the issuance of the Warrant.

Gross proceeds of $21,675 were released to the Company in May and June 2018 in several tranches upon satisfaction of the relevant escrow release conditions. We refer you to the Company's press releases issued on April 3, 2018 and May 3, 2018 for further details on the Subordinated Capital Financing.

The last tranche of the brokered private placement of $5,001 was released to the Company in July 2018 pursuant to an Escrow Release and Amending Agreement in consideration for a payment of $100 and amendment to the terms and conditions of certain Debentures, whereby such Debentures shall bear interest at a rate of 12% per annum until the first draw-down condition under the Credit Agreement was to be completed, satisfied or waived (as amended, these are referred to as the "Interest-Bearing Debentures"). Under the initial terms, if the conditions were not satisfied by December 31, 2018, the holder of such Debentures had the right to request repayment and cancellation of all of the Interest-Bearing Debentures and Warrants. In the event of default of such Debentures, the Company would grant to the holder of such Debentures a license that provides the holder of such Debentures certain limited rights over the Company's SAR IP.

Effective February 28, 2019, the Company entered into a further amendment to the Escrow Release and Amending Agreement pursuant to which the holders of the Interest-Bearing Convertible Debentures extended the date by which the Company must draw down on a financing for the UrtheDaily Constellation from February 28, 2019 to April 30, 2019 in consideration for $50 and a general security agreement over the Borrower's assets. Further extensions were granted to August 31, 2019. Subsequently, the Company has continued discussions with the debentureholder as it seeks to enter into a binding agreement to further extend this date, but binding agreements have not yet been formally executed and a notice of default has not been issued as at the date of this MD&A. There can be no assurance a further or binding deferral agreement shall be entered into or that the holders will not issue a notice of default in the future or take other legal action.

Mutual Termination of UrtheDaily Credit Agreement

As described above under "Overview - Update on UrtheDaily Financing", on February 13, 2019, the Company and the senior lenders of the Credit Agreement entered into the Termination Agreement which formally terminated the Credit Agreement among the parties. As a result, the Company has since been actively pursuing alternative sources of financing in order to finance the UrtheDaily Constellation as further described below in "Update on UrtheDaily Constellation".

Under the Termination Agreement, the Company agreed that in lieu of all termination fees otherwise payable under the Credit Agreement, the 14,275,172 warrants, which were issued to the senior lenders on execution of the Credit Agreement, will become exercisable upon alternative financing for the UrtheDaily Constellation being secured and drawn down, subject to approval from the TSX. In addition, the Company agreed to pay the expenses of the senior lenders in connection with the Credit Agreement in the amount of approximately $325. No amount was outstanding under the Credit Agreement and the termination of the Credit Agreement does not impede or adversely impact the Company's ability to service its current customers.

Legal Proceedings

As previously disclosed, on August 9, 2018, Eastwood Capital Corp., a shareholder of the Company, and William Holland, the sole shareholder of Eastwood Capital Corp.,(together, the "Plaintiffs") commenced an action against the Company and certain of its current and former directors in the Supreme Court of British Columbia (the "B.C. Action"). The notice of civil claim in the B.C. Action alleges, among other things, that the Company and certain of its current and former directors failed to disclose material changes and made misrepresentations in reconstituting the Board under a breach of contract theory based on the terms of the subscription agreement used by the Plaintiffs to purchase securities of the Company. The Plaintiffs also sought relief from alleged oppression under the Business Corporations Act (Ontario). In the B.C. Action, the Plaintiffs seek to rescind or otherwise set aside their purchase of securities from the Company.

After the British Columbia action was commenced, the Plaintiffs acknowledged that the oppression claims could not be prosecuted in the British Columbia courts. On October 5, 2018, the Plaintiffs commenced an action in the Ontario Superior Court of Justice (the "Ontario Action") that is substantially the same as the B.C. Action.

The contract claims remain live in British Columbia. The Plaintiffs have indicated that they may abandon the B.C. Action in order to expedite the hearing of the oppression claims in Ontario. Until the Plaintiffs decide how they intend to proceed, neither the Ontario Action nor the B.C. Action is progressing.

The Company continues to believe that the allegations made by the Plaintiffs against it and its current and former directors are without merit and, should the Plaintiffs resume their actions, the Company will vigorously defend itself.

TSX Delisting Review

As previously announced, the Company was under review by the TSX for continued listing. On March 8, 2019, the TSX determined that the Company had regained compliance with the TSX's applicable requirements for continued listing.

ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS

In the first quarter of 2019, the Company committed to a formal plan and commenced a bid process to sell all or substantially all of the Deimos Imaging business, comprised of the Deimos-1 and Deimos-2 satellites, operations and ground station assets ("Deimos Sale"). The proceeds from the sale of these assets, should a successful transaction be concluded, are expected to be used first towards the repayment of the Sabadell Term Loan, and if excess proceeds are available, for the repayment of the secured term loans described above under "Business Highlights - Financings", and lastly for general working capital purposes. The Company is in the process of negotiating terms and participating in due diligence activities for the sale of all or substantially all of the equity or assets of Deimos Imaging and will provide an announcement when or if a binding transaction is entered into. There can be no assurance that a transaction will be entered into on commercially reasonable terms, in a timely manner, or at all. See "Business Risks and Uncertainties – Risks Relate to Deimos Sale", below.

In accordance with IFRS, the results of operations have been presented as a discontinued operation in the Company's audited consolidated statements of loss and comprehensive loss and statements of cash flows for years ended December 31, 2019 and 2018. The historical audited consolidated statements of loss and comprehensive loss and related selected financial information have been retrospectively adjusted to distinguish between continuing operations and the discontinued operation. The assets and liabilities of Deimos Imaging have been reclassified since March 31, 2019 as held for sale in the consolidated statements of financial position. The Company ceased depreciation of Deimos Imaging's significant property and equipment and intangible assets effective April 1, 2019.

	Three Months ended December 31,		Year ended December 31,
	2019		2018	2019		2018
Revenue	$1,177	$	5,638	$9,697	$	9,414
Other operating income	-		147	502		147
	1,177		5,785	10,199		9,561
Operating costs
Direct costs, selling, general andadministrative expenses	3,786		5,885	13,349		18,445
Impairment of assets	9,763		10,085	9,763		10,085
Depreciation and amortization	103		4,080	4,311		16,571
Share-based payments	(4)		18	(72)		145
	13,648		20,068	27,351		45,246
Operating loss	(12,471)		(14,283)	(17,152)		(35,685)
Finance and other costs, net	(295)		(316)	(1,246)		(1,421)
Loss before income taxes	(12,766)		(14,599)	(18,398)		(37,106)
Income tax (expense) recovery	-		(5,754)	535		(5,366)
Net loss from discontinued operation	$(12,766)	$	(20,353)	$(17,863)	$	(42,472)
Loss per share, basic and diluted –discontinued operation	$(0.09)	$	(0.16)	$(0.13)	$	(0.34)

Summarized results from the discontinued operation are as follows:

Revenue from EO imagery sales of $1,177 in the fourth quarter of 2019 (2018 - $5,638) was lower than in the prior year due to a large milestone being recognized as revenue in the fourth quarter of 2018 under the previously announced contract to provide EO products and services to the European Commission and Space Agency ("ESA") which was substantially completed by the end of 2019. Revenue for the full year of $9,697 increased slightly compared to the prior year (2018 - $9,414).

Operating costs of $13,648 in the fourth quarter of 2019 (2018 - $20,068) and $27,351 in the year (2018 - $45,246) were significantly lower than in the prior year. The Company ceased depreciating Deimos Imaging's significant property and equipment and intangible assets effective April 1, 2019 due to their held for sale classification which resulted in a reduction in depreciation and amortization expense of $3,977 in the fourth quarter of 2019 and $12,260 in the year compared to the prior year periods. Direct costs, selling, general and administrative expenses decreased by $2,099 in the fourth quarter of 2019 and $5,096 in the year primarily as a result of the impact of cost reduction and restructuring initiatives implemented during 2018 and in the first quarter of 2019.

		Three Months ended December 31,	Year ended December 31,
	2019	2018	2019		2018
Revenue	$4,368	$201	$18,280	$	6,220
Other operating income	467	155	1,394		559
	4,835	356	19,674		6,779
Operating costs
Direct costs, selling, general andadministrative expenses	5,392	3,372	22,024		19,810
Research expenditures	717	356	1,637		1,810
Depreciation and amortization	886	86	3,483		464
Share-based payments	612	89	2,658		2,074
Impairment of assets	-	9,612	-		10,356
	7,607	13,515	29,802		34,514
Operating loss	(2,772)	(13,159)	(10,128)		(27,735)
Net finance costs	(2,312)	(20,129)	(9,175)		(27,182)
Gain on derivative financial instruments	6,669	10,461	2,042		13,037
Foreign exchange gain (loss)	18	793	(1,402)		1,200
Income (loss) before income taxes	1,603	(22,034)	(18,663)		(40,680)
Income tax recovery (expense)	478	(25)	458		(100)
Net income (loss) from continuing operations	2,081	(22,059)	(18,205)		(40,780)
Net loss from discontinued operation	(12,766)	(20,353)	(17,863)		(42,472)
Net loss	(10,685)	(42,412)	(36,068)		(83,252)
Other comprehensive income (loss)	(67)	411	11		662
Comprehensive loss	$(10,752)	$(42,001)	$(36,057)	$	(82,590)

Loss per common share, basic and diluted	$(0.07)	$(0.33)	$(0.27)	$	(0.67)
Loss per common share, basic and diluted –
discontinued operation	$(0.09)	$(0.16)	$(0.13)	$	(0.34)
Income (loss) per common share, basic anddiluted – continuing operations	$0.02	$(0.17)	$(0.14)	$	(0.33)

CONSOLIDATED RESULTS OF OPERATIONS

The Company's chief operating decision makers, consisting of the chief executive officer, the chief financial officer and the Board, examine the Company's performance based on one reportable operating segment which includes the provision of the Earth Observation imagery, geo-analytics imagery products and services and engineering and value-added services.

Revenue

We recognized revenue of $4,368 in the fourth quarter of 2019 and $18,280 in the year from geo-analytics imagery products and services (2018 - $201 and $6,220 in the three months and year ended December 31, 2018 from engineering and valueadded services). The Company did not recognize any engineering and value-added services revenue in the fourth quarter and year ended December 31, 2019 (2018 - $201 and $6,220, respectively) due to delays incurred by its key subcontractors in completing milestones under its engineering and value-added services contract. Also, the Company recognized revenue on contracts for the provision of space hardware in the first quarter of 2018 which were completed during 2018.

Revenue in the fourth quarter of 2019 and in the year ended December 31, 2019 was from geo-analytics imagery products and services as a result of the consolidation of the results of Geosys from the acquisition date. A significant portion of these revenues were generated from the new 13-year WinField SLA to provide Land O'Lakes with certain geo-analytics imagery products and services historically provided by Geosys as described under "Business Highlights – Geosys Acquisition".

Other Operating Income

Other operating income of $467 in the fourth quarter of 2019 (2018 – $155) and $1,394 in the year (2018 - $559) was from government grants related to certain research activities.

Total Operating Costs

Total operating costs were $7,607 in the fourth quarter of 2019 (2018 - $13,515) and $29,802 in the year (2018 - $34,514). The decrease in total operating costs was mainly due to the impact of our cost reduction initiatives that were implemented during 2018 and in the first quarter of 2019 and a reduction in impairment charges of $10,356, partially offset by the increase in costs due the consolidation of Geosys since the acquisition closing date. Operating costs, excluding Geosys, have decreased by approximately 63% in the year compared to the prior year as a result of the cost and headcount reduction initiatives, lower professional fees, and lower engineering subcontractor costs resulting from the subcontractor delays discussed above and engineering contracts that were completed in 2018.

Direct Costs, Selling, General and Administration ("SG&A")

Our SG&A expenditures include direct costs associated with the delivery of our imagery products and services, sales commissions, subcontractor and other direct costs related to engineering service contracts, salaries and benefits, bad debts, contractors, consulting fees, directors' fees, computer software and cloud storage, insurance, professional fees for legal, audit and tax services, travel, office and other administrative costs.

SG&A expenditures were $5,392 in the fourth quarter of 2019 (2018 - $3,372) and $22,024 in the year (2018 - $19,810). The increases in the fourth quarter and year compared to 2018 were primarily due to the consolidation of Geosys from the acquisition's first closing date on January 14, 2019, partially offset by an overall decrease in non-Geosys operating expenses from our cost and headcount reduction initiatives discussed above, lower engineering subcontractor costs and lower professional fees. Excluding the increase attributable to the acquisition of Geosys, the Company's SG&A expenditures decreased by approximately 49% in the fourth quarter of 2019 and 60% in the year compared to the same period in the prior year.

Impairment Charges

No impairment charges from continuing operations were recognized in the fourth quarter of 2019 (2018 - $9,612) and in the year (2018 - $10,356). In 2018, we wrote down the optical components of the OptiSAR development costs to their estimated net recoverable amount resulting in an impairment charge of $9,612. Our web platform development costs were written down to their estimated recoverable amount of nil, resulting in an impairment loss of $744, as these assets were determined to have no future intended use. See "Critical Accounting Estimates and Judgments" for further details.

Research Expenditures

In 2019, research activities are primarily comprised of research on future value-added products to be developed from our imagery and work to define the system requirements for the UrtheDaily Constellation. Internal costs incurred to date on defining the requirements for the UrtheDaily Constellation are being expensed as research expenditures until such time that the criteria for capitalization of development costs under IFRS are met.

Research expenditures were $717 in the fourth quarter of 2019 (2018 - $356) and $1,637 in the year (2018 - $1,810) were comparable to the prior year.

Depreciation and Amortization

We recorded depreciation and amortization expenses of $886 in the fourth quarter of 2019 (2018 - $86) and $3,483 in the year (2018 - $464). The increase compared to the prior year is due primarily to the depreciation and amortization expense related to the property and equipment and intangible assets acquired in the Geosys Acquisition.

Share-Based Payments

Share-based payment expenses were $612 in the fourth quarter of 2019 (2018 - $89) and $2,658 in the year (2018 - $2,074), resulting from the amortization of stock options and restricted share units ("RSUs") granted in the current and prior periods under the Company's shareholder-approved Equity Incentive Plan. The Company has also adopted a cash-settled share-based payment incentive plan, as described below under "Cash-Settled Share-Based Payments" which allows the Company to grant phantom share units ("PSUs") to its employees. The Company granted 14,354,318 PSUs during 2019, all of which were unvested and outstanding as at December 31, 2019 and which vest within two years. The PSUs are considered cash-settled share-based payments by the Company and it recognized share-based payment expense of $207 during the fourth quarter of 2019 and $680 in the year from the amortization of PSUs.

Net Finance Costs

Net finance costs were $2,312 in the fourth quarter of 2019 (2018 - $20,129) and $9,175 in the year (2018 - $27,182). The net finance costs in 2019 were primarily related to transaction costs and interest expense incurred in connection with the US $12,000 Term Loan, the June Term Loan, July Term Loan and the $6,600 Financing, accretion on the deferred consideration related to the Geosys Acquisition, as well as accretion and interest expense related to the convertible debentures. The net finance costs during the fourth quarter and year ended December 31, 2018 related primarily to onetime transaction costs associated with the Subordinated Capital Financing and the Credit Agreement.

Development Activities

During 2019, we capitalized costs of $4,111 for the development of SAR-related technologies and the UrthePipeline ground segment systems (2018 - $8,803), net of $2,122 of government grants claimed for the period (2018 - $2,937). During the year, we also capitalized $5,754 relating to the Geosys' software tools, of which $4,180 was recognized on the acquisition date. The capitalized costs were comprised of engineering salaries and benefits, external engineering subcontractors and consultants, and other directly attributable costs related to the design, development and testing of prototypes and the associated ground segment infrastructure.

Financial Position

Total assets were $128,992 at December 31, 2019 compared with $113,639 at December 31, 2018. Cash increased by $397 in the year, as discussed below under "Liquidity and Capital Resources – Cash Flow". Restricted term deposits decreased by $7,821 in 2019 primarily due to a reclassifying $7,526 restricted term deposits as assets held for sale in connection with the proposed Deimos sale. Trade and other receivables decreased by $6,653, primarily due reclassifying $2,830 of trade and other receivables as assets held for sale in connection with the proposed Deimos sale. Property and equipment decreased by $28,776 in the year due to the reclassification of Deimos Imaging property and equipment of $20,790 to assets held for sale and depreciation and impairment expense recorded in the period, partially offset by additions from the Geosys Acquisition and recognition of right-of-use assets from the adoption of IFRS 16 on January 1, 2019. Intangible assets increased by $4,165 in the year due to the addition of intangible assets from the Geosys Acquisition and the capitalization of costs related to its SAR-related technologies and UrthePipeline ground segment systems in the period, partially offset by the reclassification of Deimos Imaging intangible assets of $9,754 to assets held for sale, government grant claims and the amortization and impairment expense recorded in the period. Shareholders' Equity decreased by $31,650, to a deficiency of $9,160 at December 31, 2019, from shareholders' equity of $22,490 at December 31, 2018, primarily due to the loss in the period.

NON-IFRS EARNINGS MEASURES

We have reported "Adjusted EBITDA" as we believe that the disclosure of Adjusted EBITDA allows investors to evaluate the operational and financial performance of the Company's ongoing business, using the same evaluation that Management uses, and is therefore a useful indicator of the Company's performance or expected performance of recurring operations. "Adjusted EBITDA" is calculated based on EBITDA, or earnings before interest, income taxes, depreciation and amortization, and further adjusted to exclude asset impairment charges, share based payments expense, gains and losses on derivative financial instruments, foreign exchange gains and losses and items of an unusual nature that do not reflect our ongoing operations.

EBITDA and Adjusted EBITDA are commonly reported and widely used by investors and lenders as an indicator of a company's operating performance and ability to incur and service debt, and as a valuation metric. EBITDA and Adjusted EBITDA do not have any standardized meaning prescribed by IFRS and, therefore, may not be comparable to similar measures presented by other companies and should not be considered as an alternative to measures of performance prepared in accordance with IFRS.

The following tables reconcile our Non-IFRS earnings measures to Net Loss prepared in accordance with IFRS.

	Three Months ended December 31,	Year ended December 31,
	2019	2018		2019		2018
ADJUSTED EBITDA:
Net income (loss) from continuingoperations	$2,081	$(22,059)	$	(18,205)	$	(40,780)
Add back (subtract):
Depreciation and amortization	886	86		3,483		464
Net finance costs	2,312	20,129		9,175		27,182
Income tax (recovery) expense	(478)	25		(458)		100
EBITDA from continuing operations	4,801	(1,819)		(6,005)		(13,034)
Impairment of assets	-	9,612		-		10,356
Share-based payments	612	89		2,658		2,074
Gain on derivative financial instruments	(6,669)	(10,461)		(2,042)		(13,037)
Foreign exchange (gain) loss	(18)	(793)		1,402		(1,200)
ADJUSTED EBITDA FROM CONTINUINGOPERATIONS	$(1,274)	$(3,372)	$	(3,987)	$	(14,841)
ADJUSTED EBITDA FROM DISCONTINUEDOPERATION	(2,609)	(100)		(3,150)		(8,884)
ADJUSTED EBITDA	$(3,883)	$(3,472)	$	(7,137)	$	(23,725)

	Three Months Ended December 31,		Year Ended December 31,
	2019		2018	2019		2018
ADJUSTED EBITDA FROM DISCONTINUEDOPERATION:
Net loss from discontinued operation	$(12,766)	$	(20,353)	$(17,863)	$	(42,472)
Add back (subtract):
Depreciation and amortization	103		4,080	4,311		16,571
Net finance costs	281		331	1,233		1,429
Income tax expense (recovery)	-		5,754	(535)		5,366
EBITDA from discontinued operation	(12,382)		(10,188)	(12,854)		(19,106)
Impairment of assets	9,763		10,085	9,763		10,085
Share-based payments	(4)		18	(72)		145
Gain on derivative financial instruments	(45)		(17)	(43)		(16)
Foreign exchange loss	59		2	56		8
ADJUSTED EBITDA FROM DISCONTINUEDOPERATION	$(2,609)	$	(100)	$(3,150)	$	(8,884)

QUARTERLY RESULTS

The following table summarizes select financial information for the Company's eight most recent quarters.

		2019				2018
3 months ended	Dec 31	Sep 30	Jun 30	Mar 31	Dec 31	Sep 30	Jun 30	Mar 31
Revenue	$4,368	$4,429	$5,058	$4,425	$201	$1,225	$1,543	$3,251
Net income (loss) fromcontinuing operations	2,081	(14,462)	(4,722)	(1,102)	(22,059)	(9,639)	(5,206)	(3,876)
Net loss fromdiscontinued operation	(12,766)	(18)	(26)	(5,053)	(20,353)	(6,890)	(8,047)	(7,182)
Net loss	(10,685)	(14,480)	(4,748)	(6,155)	(42,412)	(16,529)	(13,253)	(11,058)
Earnings (loss) per share,basic and diluted –continuing operations	$0.02	$(0.11)	$(0.04)	$(0.01)	$(0.17)	$(0.08)	$(0.04)	$(0.03)
Loss per share, basic anddiluted	(0.07)	(0.11)	(0.04)	(0.05)	(0.33)	(0.13)	(0.11)	(0.09)
Adjusted EBITDA –continuing operations1	$(1,274)	$(1,236)	$(702)	$(775)	$(3,372)	$(4,209)	$(3,730)	$(3,530)
Adjusted EBITDA1	(3,883)	(849)	(337)	(2,068)	(3,472)	(6,821)	(7,368)	(6,064)

Revenue from our geo-analytics and related EO business may be impacted by seasonal and weather factors, as well as the timing of when major contracts are awarded and fulfilled, which can cause revenue to vary from quarter to quarter. Revenue from our engineering and value-added services business were impacted by delays in expected project completion dates in 2018, which resulted in revenue being recognized over a longer period. Similarly, throughout 2019, subcontractor delays and performance issues as well as delays with obtaining export permits have delayed revenue recognition and milestone payments due from our customer in respect of our engineering services contract. Also, the Company did not recognize any revenue from one of its contracts to provide engineering and space hardware in the second and third quarters of 2018 as the project neared completion. Other significant factors affecting the comparability of the results over the last eight quarters are described below:

Revenue in 2019 was from geo-analytics imagery products and services as a result of the consolidation of the results from Geosys since the acquisition closing date.
The net loss from continuing operations for the fourth quarter of 2018 includes the expensing of financing fees of $15,696 related to the UrtheDaily financing facility (which was terminated pursuant to the Termination Agreement discussed above), impairment charges of $9,612 related to the impairment of the optical components of the OptiSAR development costs, accretion and interest expense on convertible debentures of $3,616 and acquisition costs related to the Geosys Acquisition of $624.
The Company ceased depreciating the significant assets of Deimos Imaging in the second quarter of 2019 which resulted in lower depreciation and amortization expense for the second, third and fourth quarters of 2019 and lower net loss and net loss from discontinued operation in the second, third and fourth quarters of 2019 compared to prior quarters.

The net loss from discontinued operation for the fourth quarter of 2019 includes impairment charges of $9,763 related to satellite assets and related equipment and intangible assets. The net loss from discontinued operations for the fourth quarter of 2018 includes impairment charges of $10,085 related to goodwill, customer relationships and trade names and the derecognition of the deferred tax asset of $4,764.
The net income or loss from continuing operations for the second and fourth quarters of 2018 and first and fourth quarters of 2019 includes an unrealized gain of $4,607, $10,774, $3,390 and $6,669, respectively, and the net loss from continuing operations in the third quarter of 2018 and second and third quarters of 2019 includes an unrealized loss of $1,621, $231 and $7,478 on derivative financial instruments relating to a fair value adjustment of the embedded derivatives in the convertible debentures and derivative warrant liabilities.
The net loss from continuing operations for the third quarter of 2018 includes one-time transaction costs of $446 expensed related to the Subordinated Capital Financing and $5,734 in the second quarter of 2018 as well as accretion and interest expense on convertible debentures of $617.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flow

At December 31, 2019, we had a working capital deficiency from continuing operations of $47,446, which excluded the Deimos Imaging current assets and liabilities as classified as held for sale at December 31, 2019, compared to a working capital deficiency of $17,733 at December 31, 2018, which included the Deimos Imaging current assets and liabilities. The following table provides selected cash flow information for the three months and year ended December 31, 2019 and 2018:

	Three Months ended December 31,		Year ended December 31,
	2019	2018	2019		2018
Cash used in continuing operating activities	$(1,456)	$(2,615)	$(1,571)	$	(11,159)
Cash used in continuing investing activities	(717)	(513)	(11,168)		(5,623)
Cash (used) from continuing financingactivities	(1,437)	196	15,673		9,000
Net (decrease) increase in cash duringthe period, continuing operations	(3,610)	(2,932)	2,934		(7,782)
Net increase (decrease) in cash during theperiod, discontinued operation	688	(2,828)	(1,475)		(14,234)
Cash at beginning of period	5,823	7,202	1,438		23,206
Effect of foreign exchange rate changeson cash	(145)	(4)	(141)		248
Cash at end of period	$2,756	$1,438	$2,756	$	1,438
Cash attributable to continuing operations	$1,835	$1,261	$1,835	$	1,261
Cash attributable to discontinued operation	$921	$177	$921	$	177

Cash outflows from continuing operations were $1,456 in the fourth quarter of 2019 (2018 – outflows of $2,615) and $1,571 for the year (2018 – outflows of $11,159). The decrease in cash flows from operations in the year compared to the prior year periods is primarily due to payments received under the WinField SLA in 2019 and a decrease in cash operating costs largely due to the cost reductions implemented during 2018 and in the first quarter of 2019, as described above in "Consolidated Results of Operations – Total Operating Costs".

Cash outflows from continuing investing activities of $717 in the fourth quarter of 2019 (2018 - $513) and $11,168 in the year (2018 - $5,623) include cash expenditures of $701 in the fourth quarter of 2019 (2018 - $515) and $5,932 in the year (2018 - $5,632) for the development of our SAR related technologies, UrthePipeline ground segment systems and Geosys software tools, net of proceeds received from government grants. The cash outflows in the year also includes the first payment for the acquisition of Geosys, net of cash acquired, in the amount of $5,201.

Cash outflows from financing activities were $1,437 in the fourth quarter of 2019 (2018 – inflows of $196) whereas cash inflows for the year were $15,673 (2018 – inflows of $9,000). The cash inflows for the year were obtained from proceeds of short-term bank and other loans amounting to $19,757 (2018 – inflows of $7,590) less repayment of a $6,807 promissory note and $499 of financing costs. The company also obtained proceeds from issuance of a convertible debenture in the amount of $6,600, less transactions costs of $265. Financing costs of $1,863 were paid in 2019 compared to $10,126 in 2018.

UrtheCast Corp.

MANAGEMENT'S DISCUSSION AND ANALYSIS

For the year ended December 31, 2019

(in thousands of Canadian dollars, unless otherwise noted, and except for number of shares and per share amounts)

Contractual Obligations, Commitments and Contingencies

Contractual Obligations atDecember 31, 2019 –		Less than			After
Discontinued Operation	Total	1 year	1-3 years	4-5 years	5 years
Bank and other loans and longterm debt	$22,619	$21,584	448	$391	$196
Leases	6,059	5,934	125	-	-
Other contractual commitments	1,320	1,320	-	-	-
Total Contractual Obligations	$29,998	$28,838	$573	$391	$196

Contractual Obligations at

December 31, 2019 –		Less than			After
Continuing Operations	Total	1 year	1-3 years	4-5 years	5 years
Bank and other loans and longterm debt	$35,755	$19,509	$-	$1,625	$14,621
Deferred consideration	19,549	6,516	13,033	-	-
Subcontractors	6,319	6,319	-	-	-
Capital commitments	5,779	5,779	-	-	-
Leases	4,693	1,018	1,743	1,205	727
Total Contractual Obligations	$72,095	$39,141	$14,776	$2,830	$15,348

Capital Resources

Discontinued operation

Liabilities directly associated with assets held for sale includes long-term debt of $22,619 at December 31, 2019 which includes the €14,500 of remaining principal on the €25,000 Sabadell Term Loan obtained by our wholly-owned Spanish subsidiary, UrtheCast Imaging, S.L.U. (which directly owns the Deimos Imaging business and assets), in December 2015 and the associated interest payments. The Sabadell Term Loan has a five-year term and accrues interest at the 6-month Euro Interbank Offered Rate ("EURIBOR") plus 2.6% per annum and is repayable in annual instalments of €4,000 over the first four years and €9,000 is repayable on the maturity date. As at December 31, 2019, the Company was in compliance with the annual debt coverage ratio covenant of the loan agreement, but the Company obtained, prior to the end of the year, a waiver from the lender with respect to the annual leverage ratio covenant. The lender had agreed to defer €2,500 of the €4,000 principal payment which was due on December 11, 2018. The Company repaid €1,000 during the six months ended June 30, 2019 and the remaining €1,500 was deferred further by the Spanish lender to September 30, 2019. Subsequently, a further partial deferral of €1,350 was granted by the Spanish lender, in principle. An amendment was subsequently signed in March 2020 to defer the principal payments of €1,350 and €4,000, which was due on December 15, 2019, to June 1, 2020, in order to provide the Company with additional time to complete the proposed sale of the Deimos Imaging business as further described above under the "Business Highlights – Financings" heading of this MD&A.

At December 31, 2019, Deimos Imaging had lease commitments of $6,059 which primarily related to a finance lease and operating leases for premises in Spain.

Continuing operations

Bank and other loans and long-term debt of $35,755 include the US $12,000 Term Loan, the June Term Loan, the July Term Loan and the $6,600 Financing (2018 – $6,807 from an unsecured demand promissory note) and $16,246 of principal and interest on low-interest government loans (2018 - $14,262), which are repayable in semi-annual instalments ending in 2037. This includes the repayable government funding under the SADI funding agreement which the Company is presently not in compliance with as further disclosed below under "Risks Related to Government Funding".

At December 31, 2019, we had deferred consideration related to the Geosys Acquisition of US $15,000 or $19,549 (2018 – nil) as described under "Business Highlights – Geosys Acquisition".

Subcontractor commitments of $6,319 at December 31, 2019 (2018 – $6,390) are amounts payable to subcontractors with respect to our engineering and value-added services contracts. At December 31, 2019, we had capital commitments of $5,779 for the development of our SAR-related technology (2018 – $6,245). Lease liabilities of $4,693 include the recognition of lease liabilities on adoption of IFRS 16 on January 1, 2019 related to leases for our premises in Canada, France and the United States.

Our cash balance attributable to continuing operations at December 31, 2019 was $1,835 and we had restricted term deposits of $237 which are designated as security for corporate credit cards.

In 2019, we entered into transactions for additional capital, including the completion of the three term loan financings totalling US $15,000, a $6,600 Financing consisting of Convertible Debentures and Debentures and a US $10,000 receivables purchasing agreement to finance qualifying trade receivables.

In order to manage our obligations and capital requirements, we prepare detailed rolling twelve-month cash flow forecasts. Based on our forecasted cash flows for the next twelve months, our current cash flow from operations will not be sufficient to cover our commitments, obligations and operating costs for at least the next twelve months. See "Outlook & Going Concern", above, and "Business Risks and Uncertainties" below, particularly "Risks Related to Cash Flow Constraints", "Risks Related to the Company's Ability to Continue as a Going Concern" and "Risks Related to the Sabadell Term Loan, the US $12,000 Term Loan, the June Term Loan, the July Term Loan, the $6,600 Financing, the $2,000 Financing and Indebtedness Generally".

We are actively pursuing different financing and asset sale options, as noted above under "Overview", to provide additional capital for us to meet our business objectives. Although we have, in the past, been successful in obtaining financing, there are inherent risks related to our ability to raise capital in the future and there is no assurance that we will be able to continue to do so in the future on similar terms as past financings, or at all. Furthermore, the Company's efforts and its ability to secure any of the aforementioned funding sources may be negatively affected by the ongoing COVID-19 pandemic and the uncertain market conditions that this has caused (see "Business Risks and Uncertainties - Risks Related to Global Economic Conditions and COVID-19"). Our Common Shares involve a high degree of risk, which could affect our ability to attract investors should additional financings be required. See "Outlook & Going Concern", above, and "Business Risks and Uncertainties" and "Financial Instruments" below, particularly "Risks Related to Cash Flow Constraints", "Risks Related to the Company's Ability to Continue as a Going Concern", "Risks Related to the Sabadell Term Loan, the US $12,000 Term Loan, the June Term Loan, the July Term Loan, the $6,600 Financing, the $2,000 Financing and Indebtedness Generally" and "Liquidity Risk".

Share Capital

As at the date of this MD&A, there were 143,202,716 Common Shares outstanding.

At December 31, 2019, Debentures in the aggregate principal amount of $28,209 were outstanding. Each Debenture is convertible into common shares at an original conversion price of $0.32, subject to certain downward adjustments, for a period of six years following the issuance of such Debenture, except for the Convertible Debentures issued under the $6,600 Financing, which matured on October 31, 2019 and were subsequently refinanced with an amended maturity date of December 31, 2019. The Company is in continuing discussions with the debenture holder to further defer maturity and principal repayments of these Convertible Debentures. Debentures in the principal amount of $4,293 were converted into 13,415,625 common shares in 2019.

At December 31, 2019, there were 129,004,432 common share purchase warrants outstanding with a weighted average exercise price of $0.42, expiring in 2023 and 2024. The warrants were issued as result of the Subordinated Capital Financing, under the now-terminated Credit Agreement (under which 14,275,172 warrants at an exercise price of $0.48 were also issued to the senior lenders and will become exercisable upon alternative financing for the UrtheDaily Constellation being secured and drawn down, subject to approval from the TSX), the US $12,000 Term Loan, the June Term Loan, the July Term Loan and the $6,600 Financing as described under the "Business Highlights – Financings" heading of this MD&A.

At December 31, 2019, there were 1,790,335 fully vested stock options outstanding, with a weighted average exercise price of $1.16 and a weighted average remaining contractual life of 2.3 years. There were also 1,202,665 unvested stock options outstanding with a weighted average exercise price of $0.56 and a weighted average remaining contractual life of 3.3 years. No stock options were granted or exercised during 2019. 1,550,000 stock options were granted and no stock options were exercised in 2018.

Each stock option entitles the holder thereof to acquire one Common Share of UrtheCast.

At December 31, 2019, there were 16,725,997 RSUs outstanding, of which 4,531,383 are vested and issuable as Common Shares. The remaining 12,194,614 RSUs vest by April 2021. Each RSU entitles the participant to receive one Common Share for each vested RSU. During 2019, 14,054,426 RSUs were granted to certain directors, officers and employees of the Company (2018 – 10,524,748 RSUs granted to certain directors and former directors, officers and employees of the Company), 2,199,165 Common Shares were issued upon the vesting of RSUs (2018 – 3,630,134) and 4,676,551 RSUs were cancelled or forfeited (2018 – 560,000).

TRANSACTIONS WITH RELATED PARTIES

Related parties include key management personnel and Bolzano Investments Limited.

Under the conditions of the US $12,000 Term Loan described under "Business Highlights – Financings", certain officers and directors of the Company agreed to participate in the financing and contribute an aggregate principal amount of US $550. In consideration, the Company issued 1,815,713 common share purchase warrants to those officers and directors.

In connection with the US $12,000 Term Loan, Bolzano appointed Mr. Pirmin Lüönd as a director of UrtheCast pursuant to a board appointment right granted by the Company to Bolzano. Mr. Lüönd was subsequently elected as a director by shareholders at the Company's 2019 annual general and special meeting of shareholders.

The Company issued 22,275,713 common share purchase warrants in connection with the US $12,000 Term Loan and an additional 10,560,000 common share purchase warrants in connection with the June Term Loan and incurred interest expense of US $349 and US $1,011 to Bolzano during the three months and year ended December 31, 2019, respectively.

Salaries and short-term employee benefits for key management personnel, including directors' fees, amounted to $345 and $1,541 in the three months and year ended December 31, 2019, respectively (2018 - $549 and $2,565 in the three months and year ended December 31, 2018, respectively). The Company deferred cash compensation to certain officers to July 2019 and all of its directors for the full 2019 year in order to satisfy conditions under the US $12,000 Term Loan. As at December 31, 2019, deferred cash compensation of $493 was payable to certain officers, directors and former directors of the Company. The reduction in salaries and short-term employee benefits to its key management personnel, including directors'

fees, for the year ended December 31, 2019 of $1,024 or approximately 40% compared to the prior year was primarily due to a reduction of the Company's executive team and short-term employee benefits. The Company also reduced its Board from eight to five directors effective June 26, 2019.

Share-based payment expenses include amortization of stock options, RSUs and PSUs granted to officers and directors of $1,590 in 2019 (2018 - $1,989). The Company granted 6,909,741 RSUs and 3,504,047 PSUs to officers and 2,000,000 RSUs to directors during 2019 (2018 – 900,000 options and 3,486,193 RSUs were granted to certain officers of which 2,500,000 RSUs were subsequently cancelled in 2019. 4,699,663 RSUs were granted to certain directors and former directors of the Company of which 260,870 RSUs were subsequently cancelled in 2019).

OFF-BALANCE SHEET ARRANGEMENTS

The Company does not have any off-balance sheet arrangements.

CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

The Company's significant accounting policies are described in Note 3 of the Annual Financial Statements for the year ended December 31, 2019. New accounting policies, which were effective on January 1, 2019 due to the adoption of new accounting standards, are described in Note 4 of the audited consolidated financial statements for the year ended December 31, 2019 and under the "Adoption of New Accounting Standards" heading of this MD&A.

The preparation of financial statements in accordance with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenues and expenses.

Assumption and Estimation Uncertainties

Estimates and assumptions are continually evaluated and are based on historical experience and various factors that management believes to be reasonable under the circumstances. However, due to the nature of estimates, actual results may differ from estimates. The effect of a change in accounting estimate is recognized prospectively by including it in comprehensive loss in the year of the change, if the change affects that year only, or in the year of the change and future years, if the change affects both. Specific areas requiring the use of assumptions and estimation are discussed below.

• Fair Values of Assets and Liabilities Acquired in Business Combinations

The fair value of net assets acquired is determined using valuation techniques that require estimation of replacement costs, future net cash flows and discount rates. As described in Note 6 of the audited consolidated financial statements for the year ended December 31, 2019, the Company allocated the purchase price to the estimated fair value of the identifiable assets acquired and liabilities assumed at January 14, 2019, as presented in the table below, based on an independent valuation of the intangible assets and management's best estimate of fair values of other assets acquired and liabilities assumed. The fair value of the deferred consideration is determined by discounting the future consideration, which requires estimation of the timing of those outflows and discount rates.

The fair value of deferred contingent consideration related to the Geosys Acquisition is based on estimates of future revenues on royalty-bearing products of the acquired business over the contractual earn-out period as measured against the contractually agreed revenue targets, as described further in Note 6 of the audited consolidated financial statements for the year ended December 31, 2019.

UrtheCast Corp.

MANAGEMENT'S DISCUSSION AND ANALYSIS

For the year ended December 31, 2019

(in thousands of Canadian dollars, unless otherwise noted, and except for number of shares and per share amounts)

	Fair Values at Acquisition Date
		USD		CAD
Cash	$	1,080	$	1,433
Trade and other receivables		2,333		3,097
Prepaid expenses and deposits		550		730
Property and equipment		1,762		2,338
Intangible assets – technologies and software		3,150		4,180
Intangible assets – customer relationships		8,100		10,748
Intangible assets – trade names		650		862
Total assets		17,625		23,388
Trade and other payables		(2,671)		(3,544)
Income taxes payable		(215)		(285)
Deferred revenue		(676)		(897)
Other financial liabilities		(1,435)		(1,904)
Deferred income tax liabilities		(2,943)		(3,905)
Total identifiable net assets at acquisition date	$	9,685	$	12,853
Goodwill		8,700		11,543
Total net assets at acquisition date	$	18,385	$	24,396
Purchase consideration
Cash paid	$	5,000	$	6,635
Deferred consideration		12,068		16,013
Deferred royalty consideration		1,317		1,748
Total purchase consideration	$	18,385	$	24,396

• Estimated Impairment of Non-current Assets Held for Sale

The Company assesses non-current assets classified as held for sale for impairment at the end of each reporting period.

During the year ended December 31, 2019, management considered the non-current assets of Deimos Imaging, which were classified as held for sale during the three months ended March 31, 2019, for impairment at the time of classification as held for sale and subsequently. The Company performed an impairment test by comparing the carrying value of the disposal group against its estimated fair value less costs to sell which resulted in an impairment loss of $9,763 at December 31, 2019. The impairment loss is included in the results of the discontinued operation and was primarily due to the deterioration in market conditions impacting the disposal group's projected future cashflows from its Deimos-1 and Deimos-2 satellites and third party sales, delays in securing large contracts, a smaller salesforce and lower than budgeted sales for the year. The Company ceased depreciation and amortization of the non-current assets of Deimos Imaging after the first quarter of 2019 when these assets were classified as held for sale.

The key assumptions underlying the recoverable amount involve a significant degree of estimation, including management's expectations of revenue growth rates, cash flow projections, the inputs used to calculate the discount rate, and terminal value multiplier, as further discussed in Note 11(a)(ii) of the annual financial statements for the year ended December 31, 2019.

• Estimated Impairment of Property and Equipment and Intangible Assets with Finite Lives

We assess whether property and equipment and intangible assets with finite lives are impaired in accordance with the accounting policy described in Note 3(i) of the Annual Financial Statements for the year ended December 31, 2019.

The Company assessed development costs that were not yet in use for impairment at December 31, 2019 and determined that there was no impairment.

During the year ended December 31, 2018, the Company recognized impairment losses of its web platform development costs and the optical component of its OptiSAR development costs which are included in technologies and software in development.

Management determined the web platform assets to be obsolete with no future intended use and that the carrying value of the assets of $744 should be written down to nil. Also, the estimated recoverable amount relating to the optical component of its OptiSAR development costs were determined to be minimal due to the high level of uncertainty over whether the Company will be able to monetize these assets, Company's revised strategy under its new leadership to pursue SAR-based stand-alone projects that do not require an optical sensor, and the deterioration of geopolitical relations in the fourth quarter of 2018 which restricted the Company's ability to close new contracts with an existing customer. As a result, the Company recognized an impairment loss of $9,612 relating to this optical component and a total impairment loss of $10,356 on technologies and software in development during the year ended December 31, 2018.

The estimated recoverable amount of technologies and software in development are sensitive to a number of considerations including how the technology compares to other available technology, cost to replicate development and timing and the ability to negotiate contracts to monetize the assets. Changes to these assumptions could have a material impact on the impairment.

• Impairment of Goodwill and Intangible Assets with Indefinite Lives

The Company assesses goodwill and intangible assets with indefinite lives for impairment on an annual basis, or more frequently when circumstances exist which indicate that the carrying amount may not be recoverable. For the purpose of assessing impairment, assets are grouped at the lowest level, or CGU, for which there are separately identifiable cash flows that are largely independent of the cash flows from other assets or groups of assets. The recoverable amount is the higher of an asset or CGU's fair value less cost of disposal and its value in use. An impairment loss is recognized for the amount by which the asset or CGU's carrying amount exceeds its recoverable amount. The key assumptions underlying the recoverable amount involve a significant degree of estimation, including management's expectations of revenue growth rates, cash flow projections, the inputs used to calculate the discount rate, and terminal value multiplier. These assumptions are further discussed in Note 12(a) of the annual financial statements for the year ended December 31, 2019 with respect to the impairment testing of goodwill from the Geosys acquisition.

Judgments

Information about critical judgments in applying accounting policies that have the most significant risk of causing material adjustment to the carrying amounts of assets and liabilities recognized in the consolidated financial statements within the next financial year are discussed below.

• Functional Currency

As described in Note 2(c) of the Annual Financial Statements, the Company and its subsidiaries use the Canadian dollar, Euro and United States dollar, respectively, as their functional currency, based on the predominant currency of each entity's transactions and cash flows. Management uses judgment in determining the primary economic environment in which a subsidiary operates in assessing a subsidiary's functional currency, as well as the functional currency to be used for presentation purposes in the consolidated financial statements.

• Capitalization of Internally Developed Intangible Assets

As described in Note 3(g) of the Annual Financial Statements, the Company capitalizes internally developed intangible assets when certain criteria are met. In particular, the Company uses judgment in making determinations about the technical and commercial feasibility of the technologies under development and of the future economic benefits to be derived from them.

• Valuation of Derivative Financial Instruments

In measuring the fair value of its embedded derivatives and derivative warrant liabilities, the Company uses judgment to determine key assumptions used in the valuation model, specifically with respect to the probability of a down-round provision and the probability of a change of control.

• Accounting for Business Combinations

While title over the Geosys IP is to be transferred from Land O'Lakes to the Company on second closing of the acquisition, the Company has made the judgment that sufficient control over the assets existed at the time of first closing and therefore included the estimated fair value of the Geosys IP in intangible assets within the purchase price allocation.

Accounting for a business combination requires an assessment of the existence, fair value and expected useful lives of separable intangible assets such as technologies and software, customer relationships and tradenames at the date of acquisition. The assessment of useful lives requires significant judgment and determines future amortization charges and carrying amounts.

ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS

The Company adopted the following new accounting standard and accounting policies effective January 1, 2019.

IFRS 16 Leases

The Company adopted IFRS 16 in its consolidated financial statements on January 1, 2019 using the modified retrospective approach which requires transitional adjustments, if any, to be recorded in retained earnings on the date of initial application, without restating prior year comparatives. The Company elected to apply the optional practical expedients such that for any expired or existing leases it did not reassess lease classification, initial direct costs or whether any expired or existing contracts are or contain leases.

IFRS 16 replaced IAS 17 Leases and eliminated the current distinction between on-balance sheet finance leases and offbalance sheet operating leases. Instead, IFRS 16 requires that nearly all leases be capitalized by the lessee, with an exemption for leases of very low value or of a short-term duration, resulting in an accounting treatment similar to finance leases under IAS 17.

Lessee Accounting

The Company leases assets, including office premises, antenna equipment and office equipment.

As a lessee, the Company previously classified leases as operating or finance leases based on its assessment of whether the lease transferred substantially all the risks and rewards of ownership. Under IFRS 16, the Company recognizes right-of-use assets ("ROU assets") and lease liabilities for most leases on the balance sheet.

However, the Company elected to apply the optional practical expedient such that short-term leases with a term not exceeding 12 months as well as leases where the underlying asset is of low value were not recognized ROU assets. The Company expenses the lease payments associated with these leases in direct costs, selling, general and administrative expenses.

On adoption of IFRS 16, the Company recognized lease liabilities for leases which had previously been classified as operating leases under IAS 17, other than short-term leases and leases of low value assets. These liabilities were measured at the present value of the remaining lease payments, discounted using the Company's incremental borrowing rate as of January 1, 2019 of 12%. The lease liabilities are included in Other Financial Liabilities.

The associated ROU assets were measured at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognized in the balance sheet as at December 31, 2018. There were no onerous lease contracts that would have required an adjustment to the ROU assets at the date of initial application. The ROU asset is depreciated on a straight-line basis over the lease term or, if it is shorter, over the useful life of the leased asset. The provisions of IAS 36 concerning the determination and recognition of impairments of assets also apply to ROU assets. The ROU assets are included in Property and Equipment.

For leases previously classified as finance leases the Company recognized the carrying amount of the lease asset and lease liability immediately before transition as the carrying amount of the right of use asset and the lease liability at the date of initial application. The measurement principles of IFRS 16 are only applied after that date.

The initial application of IFRS 16 resulted in recording ROU assets in the amount of $2,605 and lease liabilities in the amount of $2,673 in the condensed interim consolidated statements of financial position as of January 1, 2019. There were no transitional adjustments recognized in opening retained earnings.

Lessor Accounting

The accounting policies applicable to the Company as lessor are not different from those under IAS 17. However, when the Company is an intermediate lessor, if the head lease is a short-term lease that the Company has accounted for applying the short-term lease exemption, the sublease has been classified as an operating lease. Otherwise, the sub-leases are classified with reference to the ROU asset arising from the head lease, not with reference to the underlying asset.

Non-current assets held for sale and discontinued operation

Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets arising from employee benefits, financial assets and investment property that are carried at fair value and contractual rights under insurance contracts, which are specifically exempt from this requirement.

An impairment loss is recognized for any initial or subsequent write-down of the asset (or disposal group) to fair value less costs to sell. A gain is recognized for any subsequent increases in fair value less costs to sell of an asset (or disposal group), but not in excess of any cumulative impairment loss previously recognized. A gain or loss not previously recognized by the date of the sale of the noncurrent asset (or disposal group) is recognized at the date of derecognition.

Non-current assets (including those that are part of a disposal group) are not depreciated or amortized while they are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale continue to be recognized.

Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale are presented separately from the other assets in the balance sheet. The liabilities of a disposal group classified as held for sale are presented separately from other liabilities in the balance sheet.

A discontinued operation is a component of the Company's business, the operations and cashflows of which can be clearly distinguished from the rest of the Company and which represents a separate major line of business or geographic area of operations, is part of a single coordinated plan to dispose of a separate major line of business or geographic area of operations; or is a subsidiary acquired exclusively with the view to re-sale.

Classification as a discontinued operation occurs at the earlier of disposal or when the operation meets the criteria to be classified as held-for-sale. When the operation is classified as a discontinued operation, the interim consolidated statements of loss and comprehensive loss are re-presented as if the operation had been discontinued from the start of the comparative year.

Cash-settled Share-Based Payments

The Company adopted a phantom share unit ("PSU") plan in June 2019, which entitles participants to receive, for each vested PSU, a cash payment equivalent to the closing market price of the Company's Common Shares on the vesting date. At the discretion of the Company, it may instead settle the payout of PSUs by issuing an RSU to such participant, pursuant to the Company's existing and shareholder-approved Equity Incentive Plan, for each PSU, subject to any required regulatory approvals, the existing limits under the Equity Incentive Plan and the participant's eligibility under the Equity Incentive Plan. The PSUs are considered cash-settled share-based payments by the Company.

Share-based awards are measured at fair value on the date of the grant, which for PSUs is the greater of the closing market price of the Common Shares on the day prior to the grant and the volume weighted average price of the shares for the five trading days prior to the grant date. Subsequent to the date of grant, PSUs are re-measured at their fair value at each reporting period based on the closing market price of the Common Shares.

The fair value of PSUs that are expected to vest is recognized as share-based payments expense over the vesting period with a corresponding increase in liabilities. The fair value of each tranche is expensed on a graded basis over the vesting period. Management uses judgment to determine the number of PSUs that are expected to vest, which includes an estimation of expected forfeiture rates and satisfaction of performance conditions.

All cash-settled PSUs are recorded as a liability until redeemed. Upon settlement, vested PSUs are cancelled and the liability is reduced by the settlement amount.

FINANCIAL INSTRUMENTS

We are exposed, through our operations, to foreign currency risk, credit risk and liquidity risk. Our financial instrument risk management policies and strategies are as follows:

Objectives, Policies and Processes

The Board of Directors of the Company (the "Board") has overall responsibility for the determination of the Company's risk management objectives and policies. The Board has delegated the authority for designing and operating processes that ensure the effective implementation of the risk objectives and policies to the Company's finance function.

The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Company's competitiveness and flexibility.

Foreign Currency Risk

Foreign currency risk is the risk that a variation in exchange rates between the Canadian dollar and US dollar, Euro or other foreign currencies will affect our operations and financial results.

Fluctuations in foreign exchange rates could result in unanticipated fluctuations in our operating results. We have transactions that are denominated in US dollars, British pounds and Euros, but do not have exposure to any highly inflationary foreign currencies. At December 31, 2019, we have entered into forward contracts to fix the exchange rate on future supplier payments of £3,600 related to our OptiSAR technology development. We recorded a mark-to-market gain of $430 and $122 in the three months and year ended December 31, of 2019, respectively (2018 – loss of $312 and $724 in the three months and year ended) based on the fair value of the forward contracts at December 31, 2019 and a liability of $710 was recorded in other financial liabilities in our Statement of Financial Position at December 31, 2019 (December 31, 2018 – liability of $886).

Based on our net exposure on our outstanding foreign currency denominated monetary assets and liabilities at December 31, 2019, a 10% weakening in the Canadian dollar in relation to the US dollar would have decreased the Company's net loss in 2019 by approximately $963. Based on our net exposure at December 31, 2019, a 10% weakening in the Canadian dollar in relation to the British pound would have increased the Company's net loss in 2019 by approximately $862. A 10% weakening in the Canadian dollar in relation to the Euro would have decreased the Company's net loss in 2019 by approximately $450. A 10% strengthening in the Canadian dollar in relation to these currencies would have had the opposite effect.

Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Financial instruments that are potentially subject to credit risk consist primarily of cash and cash equivalents and trade and other receivables.

Cash is maintained with financial institutions of reputable credit and may be redeemed upon demand. Restricted term deposits have maturities of one year or less, except for those classified as non-current, and are held by financial institutions as security for a credit facility and in connection with letters of credit and bank guarantees. The maximum exposure relating to cash and restricted term deposits at December 31, 2019 was $2,072 (2018 - $9,730).

The Company has policies to limit the amount of risk with each individual customer, and exposure to bad debts is managed as part of the Company's normal activities. Each customer's credit rating is assessed considering its financial position, past experience and other factors. Credit limits are regularly monitored, and the Company has formal procedures for detecting objective evidence of impairment of trade receivables. For our significant engineering services contract, amounts receivable invoiced to the customer is secured by a 20% advance payment and a letter of credit for the balance of payments once milestone billings are achieved and accepted by the customer. These measures may not sufficiently mitigate the risk relating to the Company's unbilled accounts receivable balance on the contract. The maximum exposure relating to trade

and other receivables at December 31, 2019 was $20,381, including $4,856 which were classified as held for sale (2018 - $22,178).

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. As described under "Outlook and Going Concern", the Company is currently experiencing severe cash flow constraints and may not have sufficient funds to be able to pay its debt and other obligations in the future. The Company's policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation. The key to success in managing liquidity is the degree of certainty in the cash flow projections. If future cash flows are fairly uncertain, the liquidity risk increases. The Company monitors its risk of shortage of funds by monitoring forecasted and actual cash flows and maturity dates of existing financial liabilities and commitments and is actively managing its capital to ensure a sufficient liquidity position to finance its general and administrative, working capital and overall capital expenditures.

The Company has a history of significant operating losses and shareholders' deficit, working capital deficiencies and insufficient cash flows from operations to fund its activities. Based on the Company's forecasted cash flows for the next twelve months, the Company's current cash flow from operations will not be sufficient to cover its commitments, obligations and operating costs for at least the next twelve months, which could have a negative impact on its ability to continue as a going concern.

The Company is actively working towards securing financing for the building and launch of the UrtheDaily Constellation (see "Overview – Update on UrtheDaily Financing" above).

The Company will need to secure additional capital through debt or equity financing or undertake asset sales in order to obtain funds to pay for its ongoing costs of operations, meet its commitments to lenders, fund the remaining development, and the build and launch, of the UrtheDaily Constellation and pay the remaining consideration to Land O' Lakes for the Geosys Acquisition. The Company monitors its risk of shortage of funds by monitoring forecasted and actual cash flows, maturity dates of existing financial liabilities and commitments as well as compliance with long-term debt and funding agreements and is actively managing its capital to ensure a sufficient liquidity position to finance its general and administrative, working capital and overall capital expenditures.

In order to address its working capital deficiency, as of the date of this MD&A, the Company raised US $15,000 from three secured term loan financings, $6,600 from the issuance of Convertible Debentures and Debentures, $2,026 from the issuance of unsecured convertible debentures, secured a US $10,000 receivables purchasing agreement to finance qualifying trade receivables, implemented significant cost reductions, and committed to a formal plan for the Deimos Sale. In addition, the Company expects Geosys to continue to generate positive operating cash flows, specifically from the 13-year WinField SLA.

There can be no assurance that the Company will be successful in achieving the results set out in its internal cash flow projections. If future cash flows are uncertain, the liquidity risk increases. See "Business Risks and Uncertainties – Risks Related to Cash Flow Constraints", "Business Risks and Uncertainties – Risks Related to the Company's Ability to Continue as a Going Concern", "Business Risks and Uncertainties – Risks Related to Delays in the Financing, Development and Launch of the UrtheDaily Constellation" "Business Risks and Uncertainties – Risks Related to the Acquisition and Integration of Geosys" and "Business Risks and Uncertainties – Risks Related to a Deimos Sale".

Interest Rate Risk

Our interest rate risk arises from our long-term bank debt, which is at a floating interest rate, and the interest received on cash and short-term investments. Excess cash is invested on a short-term basis, when appropriate, to ensure adequate liquidity for payment of operational and capital expenditures.

Our bank debt exposes us to cash flow interest rate risk, which is partially offset by cash held at variable rates. We manage our cash flow interest rate risk by using a floating-to-fixed interest rate swap on the Sabadell Term Loan, which has the economic effect of converting the loan from a floating to a fixed rate. We recorded an unrealized mark-to-market gain of $45 in the fourth quarter of 2019 (2018 – gain of $17) and a gain of $43 in the year (2018 – gain of $15) in our loss from discontinued operation, and a liability of $52 was recorded in liabilities directly associated with assets held for sale in our Statement of Financial Position at December 31, 2019 (2018 - $100 recorded in other financial liabilities).

Fair Value Risk

Fair values have been determined for measurement and/or disclosure purposes. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes to the audited consolidated financial statements specific to that asset or liability.

The Consolidated Statement of Financial Position carrying amounts for cash, restricted term deposits, and trade and other receivables approximate fair value due to their short-term nature. The fair value of the Company's trade and other payables, bank and other loans, and long-term debt at December 31, 2019 may be less than the carrying value as a result of the Company's credit and liquidity risk described above.

INTERNAL CONTROL OVER FINANCIAL REPORTING

Disclosure Controls and Procedures ("DC&P")

Under the supervision of the Chief Executive Officer ("CEO") and the Chief Financial Officer ("CFO"), management evaluated the design and operation of the Company's DC&P as at December 31, 2019. Based on that evaluation, the CEO and CFO concluded that the Company's DC&P were effective as at December 31, 2019 at providing reasonable assurance that information required to be disclosed by the Company in reports filed under Canadian securities legislation is (i) recorded, processed, summarized and reported within the time periods specified in the Canadian securities legislation and (ii) accumulated and communicated to the Company's management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Internal Controls over Financial Reporting ("ICFR")

Management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with IFRS. Because of the inherent limitations in a cost-effective internal control system, any internal control system, no matter how well designed and operated, can provide only reasonable assurance that it will prevent or detect all misstatements due to error or fraud from occurring in the consolidated financial statements. Under the supervision of the CEO and CFO, management evaluated the design and operation of the Company's ICFR as at December 31, 2019, based on the framework established by in the Committee of Sponsoring Organizations of the Treadway Commission ("COSO")'s Internal Control – Integrated Framework: 2013. Based on that evaluation, the CEO and CFO concluded that the Company's ICFR was effective as at December 31, 2019.

Excluding the controls, policies and procedures of Geosys, as noted below, there were no changes in the Company's internal controls over financial reporting during year ended December 31, 2019 that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting. The adoption of IFRS 16 Leases required the implementation of new accounting processes, which changed the Company's controls over financial reporting. We have completed the design and implementation of these controls and they did not result in significant changes to our internal control over financial reporting due to the adoption of the new standard in the first quarter of 2019.

In accordance with Section 3.3 of National Instrument 52-109 – Certificate of Disclosure in Issuers' Annual and Interim Filings, we have limited the design and disclosure controls and procedures and internal controls over financial reporting to exclude controls, policies and procedures of Geosys, which was acquired not more than 365 days before the end of the interim period ended December 31, 2019. The table below shows a summary of the financial information for Geosys, which is included in the audited consolidated financial statements of the Company as at December 31, 2019:

	December 31, 2019
Current assets	$2,656
Non-current assets	29,239
Current liabilities	6,436
Non-current liabilities	4,950

BUSINESS RISKS AND UNCERTAINTIES

The Company is subject to a number of risks and uncertainties that can significantly affect its business, financial condition and future financial performance, as described below. Additional risk factors, including those associated with an investment in the Company's Common Shares, are described in the Annual Information Form ("AIF") for the year ended December 31, 2019, which is available on UrtheCast's SEDAR profile at www.sedar.com. In addition to the financial risk oversight provided by the Audit Committee, the Board has established a Technical and Operational Committee to identify, manage and mitigate risk wherever possible. The risk factors described below, as well as risks not currently known to us, could materially adversely affect our future business, operations and financial condition and could cause them to differ materially from the estimates described in forward-looking statements contained herein. By their nature, forward-looking statements involve numerous assumptions and known and unknown risks and uncertainties, of both a general and specific nature, that could cause actual results to differ materially from those suggested by the forward-looking statements or contribute to the possibility that predictions, forecasts or projections will prove to be materially inaccurate.

With respect to the UrtheDaily Constellation and the Company's financial position, we refer you to the risk factors set forth below:

Risks Related to Cash Flow Constraints

The Company is experiencing cash flow constraints and may not have sufficient funds to be able to pay its debt and other obligations in the future, including but not limited to key suppliers, the remaining US $3,500 payment due on the second closing of the Geosys Acquisition and the US $10,000 payment due on or before April 13, 2021 related to the Geosys Acquisition, or may be unable to service its contractual obligations under the WinField SLA, resulting in a breach of that agreement or of the Purchase and Sale Agreement in respect of the Geosys Acquisition (see "Business Highlights – Geosys Acquisition"). The second instalment of US $5,000 was payable on October 14, 2019; however, the Company reached an agreement with Land O'Lakes to set-off US $750 of this payment for amounts payable by Land O' Lakes to UrtheCast under the WinField SLA on January 1, 2020 and to defer the remaining US $4,250 to February 14, 2020. In February 2020, Land O'Lakes agreed to further defer the balance of US $4,250 with US $750 paid on April 1, 2020 through a setoff of amounts under the WinField SLA and US $3,500 payable by May 14, 2020. The Company and Land O'Lakes are in constructive discussions to further extend this payment. A final instalment of US $10,000 is payable on second closing, which is expected to occur prior to April 13, 2021 If the Company continues to experience cash flow constraints and its cash flow becomes inadequate to meet its obligations or if the Company is unable to generate sufficient cash flow or otherwise obtain funds necessary to pay its debts and meet its obligations, it will be in default under the relevant payment terms of such debts, including but not limited to the repayment of certain deferred amounts under the Sabadell Term Loan, which had a principal balance outstanding of €14,500 as at December 31, 2019, the debt financings of US $15,000 from three secured term loan financings (the "Term Loans"), $6,600 from the issuance of Convertible Debentures and Debentures, $2,026 from the issuance of 2020 Debenture, and the secured US $10,000 receivables purchasing agreement, as well potentially under other facilities, such as its trade receivables facility and SADI Funding agreement, and may be unable to satisfy the upcoming payment obligations in respect of the Geosys Acquisition, which would preclude the second closing of that acquisition and result in the inability to obtain the Geosys IP and other adverse consequences. If the Company cannot make scheduled payments on its debt, or comply with its covenants in these agreements, it will be in default of such indebtedness, including applicable cross-default covenants which automatically trigger a default under other credit facilities or debt arrangements when the Company defaults under another of its credit facilities or debt arrangements, and, as a result: holders of such debt could declare all outstanding principal and interest to be due and payable; the lenders could terminate their commitments to lend the Company money; the holders of the Company's secured debt could realize upon the assets securing their borrowings (which effectively extends to all material assets of the Company at this time, and includes all assets of UrtheCast Spain and Deimos under the Sabadell Term Loan, all assets of Geosys under the aforementioned Term Loans and certain SAR IP, and all proceeds of the Deimos Sale, if completed); the Company would cross-default under certain material agreements; the Company could become the subject of restructuring, insolvency, bankruptcy or liquidation proceedings, which could result in securityholders losing their investment; and the value of the Common Shares could decline. Any of these outcomes would have a material adverse effect on UrtheCast's business, prospects, financial position and operating results. No assurance can be given that the Company will be able to secure additional or alternative debt or financing on satisfactory terms or at all.

The Company, in the past, has experienced negative cash flows. Since cash collections from the engineering services business and certain long-term EO data contracts are based on the achievement of major project milestones, UrtheCast expects that it will continue to sustain significant variability of cash flows from quarter to quarter. The Company cannot guarantee that it will have a cash flow positive status. To the extent that the Company has negative operating cash flows in future periods, it will need to deploy a portion of its existing working capital to fund such negative cash flow or undertake additional equity or debt financing to fund operations. No assurance can be given that the Company will be able to secure additional or alternative debt or financing on satisfactory terms or at all.

Risks Related to the Company's Ability to Continue as a Going Concern

The Company has a history of operating losses and shareholders' deficit, working capital deficiencies and generating insufficient cash flows from operations to fund its activities. Based on the Company's forecast cash flows for the next twelve months, the Company's current cash flow from operations will not be sufficient to cover its commitments, obligations and operating costs for at least the next twelve months, which would have a significant negative impact on its ability to continue as a going concern. There is substantial doubt as to whether or when the Company can attain positive operating cash flows from operations on a reliable basis or that the Company can continue as a going concern.

The Company is pursuing alternative sources of financing in order to finance the UrtheDaily Constellation. The Company will need to secure alternative sources of financing or undertake asset sales in order to pay for its ongoing costs of operations, meet its commitments to lenders and fund the development, build and launch of the UrtheDaily Constellation. The Company monitors its risk of shortage of funds by monitoring forecasted and actual cash flows and maturity dates of existing financial liabilities and commitments and is actively managing its capital to ensure a sufficient liquidity position to finance its general and administrative, working capital and overall capital expenditures.

In order to address the working capital deficiency, the Company will rely, in part, on cost reductions and transactions entered into during 2019 and continuing in 2020, including the cash flows expected to be generated from services provided to Land O'Lakes as part of the Geosys Acquisition, the Term Loan financings for a total of US $15,000, the $6,600 Financing, the $2,000 Financing and a US $10,000 receivables purchasing agreement to finance qualifying trade receivables, and other efforts to monetize or sell its existing assets, including the OptiSAR IP, UrthePipeline ground segment technology, and the Deimos Sale.

Management for the Company has concluded that the material uncertainties regarding the Company's ability to secure adequate financing to fund its working capital deficiency, meet its commitments to lenders and fund the development of the UrtheDaily Constellation, raise significant doubt as to the ability of UrtheCast to continue as a going concern and therefore has included notice of such in the Company's financial statements for the year ended December 31, 2019.

The Company's ability to continue as a going concern is dependent upon its ability to generate cash flows from operations, asset sales, equity financings or through other arrangements, accretive acquisitions, new engineering or licensing contracts to monetize its intellectual property, its ability to secure financing for the UrtheDaily Constellation and its ability to extend maturity dates of its matured debt facilities. While the Company has been successful in arranging financing in the past, there can be no assurance the debt financing, equity offering or asset sales will be completed on the terms currently being negotiated or at all. These conditions indicate the existence of a material uncertainty that may cast significant doubt regarding the Company's ability to continue as a going concern. The Company's financial statements for the year ended December 31, 2019 may not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and balance sheet classifications that would be necessary were the going concern assumption deemed to be inappropriate. These adjustments could be material.

Risks Related to Liquidity

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company is currently experiencing severe cash flow constraints and may not have sufficient funds to be able to pay its debt and other obligations in the future. The Company's policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation. The key to success in managing liquidity is the degree of certainty in the cash flow projections. If future cash flows are fairly uncertain, the liquidity risk increases. The Company monitors its risk of shortage of funds by monitoring forecasted and actual cash flows and maturity dates of existing financial liabilities and commitments and is actively managing its capital to ensure a sufficient liquidity position to finance its general and administrative, working capital and overall capital expenditures.

At December 31, 2019, the Company had approximately $1,835 in cash on hand, which indicates that its currently available funds are insufficient for it to continue to pay its debts as they come due and to maintain the Company as a going-concern for any extended period of time. Based on the Company's forecasted cash flows for the next twelve months, the Company's current cash flow from operations will not be sufficient to cover its commitments, obligations and operating costs for at least the next twelve months.

As noted above, the Company has been actively pursuing alternative financing opportunities and is in advanced discussions with several institutional investors for securing financing for the UrtheDaily Constellation. The Company will need to secure additional capital through alternative sources of financing or undertake asset sales in order to obtain funds to pay for its ongoing costs of operations, meet its commitments to lenders and fund the development, build and launch of the UrtheDaily Constellation. The Company monitors its risk of shortage of funds by monitoring forecasted and actual cash flows, maturity dates of existing financial liabilities and commitments as well as compliance with long-term debt and funding agreements and is actively managing its capital to ensure a sufficient liquidity position to finance its general and administrative, working capital and overall capital expenditures. In order to address the working capital deficiency, the Company will rely, in part, on cost reductions and transactions completed during 2019 and the year-to-date, including the cash flows generated from services provided to Land O'Lakes as part of the Geosys Acquisition, the Term loan financings completed for a total of US$ 15,000, the $6,600 Financing, the $2,000 Financing, the US $10,000 receivables purchasing agreement to finance qualifying trade receivables and other options to monetize its assets, including by the Deimos Sale or other monetization of the OptiSAR IP.

There can be no assurance that the Company will be successful in achieving the results set out in its internal cash flow projections. If future cash flows are uncertain, the liquidity risk increases. See "Business Risks and Uncertainties – Risks Related to Cash Flow Constraints", "Business Risks and Uncertainties – Risks Related to the Company's Ability to Continue as a Going Concern", and "Business Risks and Uncertainties – Risks Related to Delays in the Financing, Development and Launch of the UrtheDaily Constellation".

Risks Related to Negative Cash Flows

The Company has a history of negative cash flows from operations including the financial year ended December 31, 2019, and, since cash collections from the engineering services business and certain long-term EO data and geo-analytics contracts are based on the achievement of major project milestones, UrtheCast expects that it will continue to experience significant variability of cash flows from quarter to quarter. The Company cannot guarantee that it will have a cash flow positive status. To the extent that the Company has negative operating cash flows in future periods, it will need to deploy a portion of its existing working capital to fund such negative cash flow or undertake additional equity or debt financing to fund operations.

Risks Related to the Sabadell Term Loan, the US $12,000 Term Loan, the June Term Loan, the July Term Loan, the $6,600 Financing, the $2,000 Financing and Indebtedness Generally

On December 11, 2015, the Company's wholly-owned Spanish subsidiary, UrtheCast Spain, obtained the €25,000 Secured Term Loan from Sabadell, a Spanish bank. Pursuant to the Sabadell Term Loan agreement and related documents (together, the "Sabadell Secured Term Loan Agreement"), the Sabadell Term Loan has a five-year term and accrues interest at the 6 month Euro Interbank Offered Rate (EURIBOR), which shall be deemed to be no less than 0%, plus 2.6% per annum. The loan is repayable in annual instalments of €4,000 over the first four years, of which the first payment was made in 2016, and €9,000 is repayable on the maturity date. The Sabadell Term Loan had a principal balance outstanding of €14,500 at December 31, 2019. UrtheCast Spain was in compliance with the annual debt coverage ratio at December 31, 2019 and received a waiver from Sabadell in respect of compliance with the annual leverage ratio covenant pursuant to the Sabadell Secured Term Loan Agreement. Sabadell also agreed to defer €2,500 of the €4,000 principal payment which was due on December 11, 2018 to January 31, 2019. In the first quarter of 2019, Sabadell agreed to revise the previously negotiated principal repayment amounts such that the Company repaid €1,000 during the first half of 2019 and €1,500 became payable on July 31, 2019, was deferred by the Spanish lender to August 31, 2019 and further deferred to September 30, 2019. In October 2019, Sabadell agreed to defer €1,350 of the previously deferred €1,500 to January 31, 2020 in exchange for a partial principal repayment of €150 plus accrued interest. Furthermore, the Spanish lender agreed, in principle, to defer the €4,000 principal repayment that was due in December 2019. An amendment was subsequently signed to defer the principal payments of €1.35 million and €4.0 million to June 1, 2020 in order to provide the Company with additional time to complete the proposed Deimos Sale. If the Company completes the proposed Deimos Sale, it is expected that the Company will use the partial proceeds from the transaction towards repayment of the outstanding loan balance and accrued interest. Under the Sabadell Secured Term Loan Agreement, the Company is required to fund a Debt Service Reserve Account ("DSRA") up to a maximum of €1,000 per year when annual EBITDA falls within certain thresholds. No funding of the DSRA was required with respect to 2019 or 2018.

The Sabadell Term Loan Agreement has usual and customary covenants to keep the facility in good standing, including, but not limited to, repayment of the principal advanced thereunder and accrued interest, receipt of regular financial reports, compliance with all applicable laws and applicable securities legislation, obligation to provide notice of material events, compliance with the use of proceeds provisions of the Secured Term Loan, and obligation to maintain secured assets and insurance thereon. If UrtheCast defaults in respect of its obligations under the Secured Term Loan Agreement, UrtheCast may lose the shares of certain of its international subsidiaries (which are pledged as collateral under the Sabadell Term Loan) and other property securing its obligations under the Sabadell Secured Term Loan Agreement, which would have a material effect on the Company's operations.

On January 14, 2019, the wholly-owned subsidiary of the Company that acquired GEOSYS, 1185781 B.C. LTD. (the "Borrower") entered into the January 2019 Term Loan, the terms of which are more fully described above under the heading "Business Highlights – Financings". Subsequently, the Company entered into the June Term Loan and July Term Loan, together the Term Loans. The Term Loans have usual and customary covenants to keep the loan in good standing, including, but not limited to, repayment of the principal advanced thereunder and accrued interest, compliance with all applicable laws and applicable securities legislation, obligation to provide notice of material events, compliance with the use of proceeds provisions of the US $12,000 Term Loan, and obligation to maintain secured assets and insurance thereon. If UrtheCast defaults in respect of its obligations under the US $12,000 Term Loan, UrtheCast may lose all assets of the Borrower, which constitutes UrtheCast's interest in the Geosys business and which are pledged as collateral under the US $12,000 Term Loan, and other property securing its obligations under such US $12,000 Term Loan agreement, which would have a significant material effect on the Company's operations and financial expectations The subsequent Term Loans entered into in June 2019 and July 2019 have similar covenants and security provisions in the event of default, as well as cross-default covenants which automatically trigger a default when the Company defaults under another of its credit facilities or debt arrangements. Any default under one or more of these agreements could result in the seizure of these pledged material assets of the Company as enforcement of security.

In addition, in connection with the Interest-bearing Debentures, the corresponding Escrow Release and Amending Agreement between the Company and the debenture holders was further amended on February 28, 2019 pursuant to which the debenture holders agreed to extend the date by which UrtheCast must draw down on a financing for the UrtheDaily Constellation from February 28, 2019 to April 30, 2019 in consideration for $50 and a general security agreement over the Company's assets. This date was subsequently extended to August 31, 2019. Under the initial agreement, if these conditions were not satisfied by December 31, 2018, the debenture holder had the right to request repayment and cancellation of its Interest-Bearing Debentures and warrants which, in the event of default, the Company would grant to the debenture holder a licensing agreement that provides the investor certain limited rights over the Company's SAR IP. While holders have not issued a notice of default as of the date of this MD&A, although there can be no assurance a further or binding deferral agreement shall be entered into or that the holders will not issue a notice of default in the future. Depending on the success of the Company's ongoing efforts to complete the planned financing for the UrtheDaily Constellation, or any delay in respect thereof, the Company may need to renegotiate the amended terms with the debentureholders to obtain such extension, which efforts may not be successful or may not be on favourable terms.

Furthermore, the Company has certain low-interest loans with government agencies, such as the SADI Funding. The Company's ability to receive expected funding and/or repay amounts owing in respect of this funding is contingent on its ability to generate future positive cash flows or otherwise obtain additional financing. The Company is also required to maintain certain covenants with respect to these government funding programs, and is currently not in compliance with its SADI Funding covenants.

The Company has indebtedness to certain suppliers and consultants pursuant to existing contracts for services related to the OptiSAR technology development, UrtheDaily Constellation, the EO business, and corporate support, such as legal services. The Company is seeking to negotiate acceptable repayment terms with such suppliers, which efforts have been successful to date, but there can be no assurance that such efforts will continue to be successful in the future and these suppliers may seek redress through legal or other means at any time.

The Company's level of indebtedness and the terms thereof will have several important effects on its future operations, including, without limitation, that it:

will require the Company to dedicate a portion of its cash flow from operations, if any, including any from the UrtheDaily Constellation, once operational, to the payment of principal and interest on the Company's outstanding indebtedness, thereby reducing the funds available to it for operations and any future business opportunities;
could increase the Company's vulnerability to adverse changes in general economic and industry conditions, as well as to competitive pressure; and
depending on the levels of its outstanding debt, could limit the Company's ability to obtain additional financing for working capital, capital expenditures, general corporate and other purposes.

The Company's ability to make payments of principal and interest on its indebtedness depends upon the Company's expected future revenues, will be subject to prevailing economic conditions, changes in the applicable interest rate, industry cycles and financial, business and other factors affecting its operations, many of which are beyond the Company's control. If the Company's revenues are insufficient to, or the Company cannot raise sufficient funds to, meet its debt service and other obligations in the future, the Company may be required, among other things, to:

obtain additional financing in the debt or equity markets;
refinance or restructure all or a portion of its indebtedness; and/or
sell selected assets.

The Company cannot provide assurance that such measures will be sufficient to enable the Company to service its debt. In addition, any such financing, refinancing or sale of assets might not be available on economically favorable terms or at all. If the Company does not generate sufficient cash flow from operation, and additional financings, borrowings or refinancings, or proceeds of asset sales are not available to it, the Company may not have sufficient cash to enable it to meet its obligations. Should the Company default in its obligations, secured lenders may enforce the security granted to it under their respective loan agreements and seize all material assets of the Company.

Risks Related to Delays in the Financing, Development and Launch of the UrtheDaily Constellation

UrtheCast is in the process of designing the UrtheDaily Constellation and seeking financing alternatives to advance its build, launch and operational commissioning. The design, manufacture, testing, launch and commissioning of the UrtheDaily Constellation involves complex processes and technology. UrtheCast is relying, and will continue to rely, on third party contractors for the manufacture, testing (of certain components), insuring and launch of the UrtheDaily Constellation, such as Surrey Satellite Technology Ltd. ("SSTL") and other experienced suppliers. Many factors, including, but not limited to, the inability to reach acceptable contractual terms, inability to obtain suitable insurance, unavailability of parts, subcontractor and supplier delays and anomalies discovered during testing, may result in significant delays or even the termination of the Constellation program, even if suitable financing is obtained.

As discussed above under "Overview", the Company is pursuing alternative financing arrangements for the UrtheDaily Constellation and is in advanced discussions with several institutional investors for securing alternative sources of financing in order to finance the build, launch and commissioning of the UrtheDaily Constellation. These alternative sources of financing may involve further debt, vendor financing, equity, asset sales or other means. Such financing may not be available as required or, if available, the terms of such arrangements or transactions may not be favourable or suitable to UrtheCast and may involve substantial dilution to existing shareholders or a pledge of assets that may be senior to the interests of shareholders. Because UrtheCast's ability to meet its obligations and maintain operations is contingent upon the successful completion of additional financing arrangements or transactions, a failure to raise capital as required would have a material adverse effect on UrtheCast's business, financial condition and results of operations. The ability to obtain needed financing may be impaired by a variety of issues such as the state of the capital markets, UrtheCast's present stage of development, competitive conditions and the significant risks inherent in UrtheCast's business. If the Company does not generate sufficient cash flow from operations, and additional financings, borrowings or re-financings, or proceeds of asset sales are not available to UrtheCast, UrtheCast will not have sufficient cash to enable it to continue or complete the design, construction, launch and operational commissioning of the UrtheDaily Constellation. Any of these risks, if materialized, may limit the anticipated volume and quality of imagery and geoanalytics products and services available to meet UrtheCast's business needs and plans, which could have a material adverse effect on UrtheCast's business, financial condition and results of operations.

Furthermore, any program delays, failure to obtain export permits or further failures or delays encountered in the financing, design, construction, launch and operational commissioning of the Company's proposed UrtheDaily Constellation, may require UrtheCast to continue and increase its reliance on the Deimos-1 and Deimos-2 satellites, if not disposed of in connection with the Deimos Sale, Geosys products and services, and sale of third-party data to meet its business and capital needs, which could have a material adverse effect on UrtheCast's business, financial condition and results of operations and decrease its revenue diversification and expected growth.

Similarly, delays in the financing, development, build, launch or commissioning of the UrtheDaily Constellation may also result in a breach of the covenants, or failures to satisfy conditions precedent to customer payment obligations, under UrtheCast's data-buy agreements and other purchasers of advanced data subscription agreements in respect of the UrtheDaily Constellation, and therefore release these customers from obligations to purchase imagery derived from the UrtheDaily Constellation, which would have a material adverse effect on UrtheCast's financing efforts, anticipated revenues and ability to launch the UrtheDaily Constellation according to its current schedule expectations, or at all. UrtheCast is seeking and will seek to extend the deadlines to make data available under these advance data-buy agreements, but there can be no assurance it will be successful in these efforts.

In addition, launch windows and specific dates, once scheduled, are subject to change and may be materially delayed for reasons beyond UrtheCast's control, including intervening launch failures of other satellites, reduced availability of launch facilities and support crew, weather and pre-emption by certain government launches. The launches of the satellites comprising the UrtheDaily Constellation are a complex process involving advanced technologies and explosive propellants and could suffer partial or catastrophic failure during the launch, ascent or deployment phases. After any launch, if any such launch occurs, the satellites comprising the UrtheDaily Constellation must be calibrated and tested to confirm operational capability, a commissioning process that typically takes several months. The UrtheDaily Constellation may not pass the operational commissioning tests or may not otherwise operate as required. For example, satellites may experience technical difficulties communicating with the ground antennas or collecting imagery in the same quality or volume that was intended.

The failure to launch the UrtheDaily Constellation on the Company's currently proposed timeline or to achieve operational commissioning as expected, or at all, could affect UrtheCast's ability to meet its obligations under its agreements with UrtheDaily Constellation customers. Any disclosure herein regarding the anticipated completion time for the building phase of the UrtheDaily™ Constellation as well as the time frame for the launch and commissioning phases are estimates only and any failure or delay during any of these phases could have a material adverse effect on UrtheCast's business, financial condition and results of operations, as well as its ability to comply with its existing debt covenants and those expected to be imposed in connection with the UrtheDaily financing, if and when completed.

Risks Related to Lack of Revenue and Additional Funds

The Company can give no assurance that its strategies to further commercialize its imagery offerings, engineering services and geo-analytics products and services can or will be successful, or that it will be able to achieve sustained profitability. In addition, the Company cannot guarantee that it will be able to generate additional revenue in the future. If the Company is unable to further commercialize its products and achieve sustained profitability, it could face cash-flow shortfalls and may need to engage in debt financing or further rounds of equity financing, if possible given market constraints, its debt covenants and current market capitalization. The Company also needs to obtain further financing to support the development, build and early operations phases of its UrtheDaily Constellation, its ongoing debt service obligations and for its immediate working capital needs. Any future equity financing would result in equity dilution for UrtheCast's shareholders and could trigger a significant downward adjustment in exercise price of the Company's outstanding warrants if such equity financing were to take place below the current exercise price of such warrants. In addition, although the Company has been successful in raising funds in the past, there can be no assurance that it will be able to raise sufficient funds in the future on reasonable terms acceptable to the Company or at all. Any failure to raise necessary funds could have a material adverse effect on the Company's growth prospects and financial condition.

Risks Related to the Operation of the Deimos-1 and Deimos-2 Satellites and the Expected Operation of the UrtheDaily Constellation

If Deimos-1, Deimos-2, and the satellites to comprise UrtheCast's planned UrtheDaily Constellation or any other constellation or stand-alone satellites which the Company may build, launch and/or operate (together, in this section, the "Satellites") fail to operate as intended, UrtheCast's ability to sell Deimos-1 and Deimos-2 and its ability to collect imagery and market its current and proposed products and services successfully could be materially and adversely affected. The Satellites employ, or are expected to employ, advanced technologies and sensors that are exposed to severe environmental stresses in space that could affect the Satellites' performance. Hardware component problems in space could lead to deterioration in performance or loss of functionality of a Satellite, with attendant costs and net revenue losses. In addition, human operators may execute improper implementation commands that may negatively impact a Satellite's performance and experienced operators may not be available given the specialized nature of satellite operations. Exposure of the Satellites to an unanticipated catastrophic event, such as a meteor shower or a collision with space debris, could reduce the performance of, or completely destroy, the affected Satellite.

UrtheCast cannot provide any assurance that the Satellites will continue to operate, in the case of Deimos-1 and Deimos-2, or will operate at all, in the case of future Satellites, successfully in space throughout their expected operational lives. Even if a Satellite is operated properly, technical flaws in that Satellite's sensors or other technical deficiencies or anomalies could significantly hinder its performance, which could materially affect UrtheCast's ability to collect imagery and market its current and expected products and services successfully. While some anomalies are or may be covered by insurance policies, others are not or may not be covered, or may be subject to large deductibles.

If UrtheCast suffers a partial or total loss of a deployed Satellite, or of a Satellite during launch, it would need a significant amount of time and would incur substantial expense to replace that Satellite, which may not be covered by satellite operations or launch insurance. UrtheCast may experience other problems with the Satellites that may reduce their performance. During any period of time in which a Satellite is not fully operational, UrtheCast may lose most or all of the net revenue that otherwise would have been derived from that Satellite. In addition, UrtheCast may not have on hand, or may be unable to obtain in a timely manner, the necessary funds to cover the cost of any necessary replacement of such Satellite. UrtheCast's inability to repair or replace a defective Satellite or correct any other technical problem in a timely manner could result in a significant loss of net revenue. Finally, any damage to the Deimos-1 or Deimos-2 satellites would severely prejudice the Company's ability to complete its plan to sell the Deimos Imaging business.

Risks Related to the Acquisition and Integration of Geosys

The Company completed the first closing of the Geosys Acquisition in January 2019. The integration of Geosys is a complex process, involving the integration of teams across continents, languages and cultures, and familiar with different operational systems and business processes. Although integration has thus far been positive and contributed to the Company's cash flows for the 2019 fiscal year, the Company cannot guarantee the integration will result in all of the expected synergies, efficiencies and other expected benefits of the acquisition. Any failure of the Geosys business to perform to management expectations could result in a material adverse effect on UrtheCast's financial position and operations, and result in management distraction and adversely affect other aspects of operations.

In addition, due to the staggered nature of the closing, UrtheCast must make additional payments to Land O' Lakes totalling US $15,000 after December 31, 2019, including US $3,500 due on May 14, 2020, to complete the acquisition and obtain ownership of valuable Geosys IP. Due to the Company's current financial position, it may be unable to make these additional payments or may be unable to obtain the necessary financing on commercially viable terms or at all. Any failures by UrtheCast to comply with its obligations to Land O' Lakes in respect of the second closing, additional payments of the purchase price or to service WinField under the WinField SLA could result in a breach of the acquisition agreement, penalties and/or a loss of key Geosys assets, all of which would have a material adverse impact on UrtheCast's financial position and operations.

Risks Related to Legal Proceedings

As previously disclosed, on August 9, 2018, Eastwood Capital Corp., a shareholder of the Company, and William Holland, the sole shareholder of Eastwood Capital Corp. (referred to herein as the Plaintiffs), commenced an action against the Company and certain of its current and former directors in the Supreme Court of British Columbia and in the Superior Court of Justice in Ontario (referred to herein as the Eastwood Litigation), alleging that, among other things, the Company and certain of its current and former directors failed to disclose material changes and made misrepresentations in reconstituting the Board. The Plaintiffs sought relief from claimed oppression under the Business Corporations Act (Ontario) and to rescind or otherwise set aside their purchase of securities from the Company.

On February 12, 2019, the Company successfully obtained an order from the Ontario Superior Court of Justice for the permanent stay of the contract claims in the Ontario Action, and a temporary stay, pending the resolution of the B.C. Action, of the oppression claims asserted in the Ontario Action. The Plaintiffs unsuccessfully sought leave to appeal the temporary stay of the oppression claims in the Ontario Action, and then abandoned their appeal of the order granting a permanent stay of the contract claims asserted in the Ontario Action. The contract claims remain live in British Columbia. The Plaintiffs have indicated that they may abandon the B.C. Action in order to expedite the hearing of the oppression claims in Ontario. Until the Plaintiffs decide how they intend to proceed, neither the Ontario Action nor the B.C. Action is progressing. The Company continues to believe that the allegations made by the Plaintiffs against it and its current and former directors are without merit and, should the Plaintiffs resume their actions, the Company will vigorously defend itself.

Like other multinational companies, the Company is also periodically subject to or threatened with claims of a non-material nature, relating to supplier or customer contracts, use of software and employment or consulting matters. While unlikely to adversely affect the Company individually, due to the Company's liquidity limitations and negative operating cash flow, in combination, these claims or actions could have a material adverse effect of the Company and trigger cross-defaults under its various credit and debt facilities should they result in an adverse outcome in such actions.

Risks Related to the Development of the OptiSAR Technology and its Monetization

While UrtheCast continues to develop the technology relating to OptiSAR and SAR-IP and seek financing and partnership opportunities to achieve its vision, it has not yet obtained the necessary financing and has prioritized the immediate development of the UrtheDaily Constellation. While UrtheCast continues to seek alternative customers, partnerships and monetization opportunities for the OptiSAR and SAR technology and intellectual property, it has indefinitely placed on hold the implementation of the federated-ownership OptiSAR business model as initially proposed.

The Company continues to explore potential partnerships and transaction structures to exploit the Company's SAR-IP related technologies for inclusion on others' large and small satellites or deployment of the SAR-IP technology in a variety of terrestrial applications.

The completion of any transaction involving the OptiSAR technology and other SAR-IP is inherently subject to significant business, economic, competitive, political and timing uncertainties and contingencies and there can be no assurance that such transaction will be completed. There can be no assurance that future monetization efforts will be successful. Further delays in the OptiSAR program or in efforts to monetize the SAR-IP through asset sales or licensing arrangements would adversely affect the Company's financial position and could result in a write-down of certain assets or other negative financial consequences.

Risks Related to the Global Imaging Partners Network

As discussed above, UrtheCast also processes and distributes imagery data and value-added products on behalf of its Global Imaging Partners, a network of 10 EO satellite operators with a combined 25 medium- and high-resolution EO sensors. A breakdown in the commercial relationships with other Global Imaging Partners, the termination of any distribution, reseller or value-added services agreements with such partners or the termination of the network altogether may materially reduce the Company's anticipated revenues and could have a material adverse effect on its business, financial condition and results of operations. In addition, the proposed sale of the Deimos Imaging business could adversely affect the Company's ability to continue to participate in the network, or reduce the revenues therefrom.

Risks Related to Reliance on Key Agreements and Relationships

Due to the nature of the services rendered to Deimos Imaging by DCM, Deimos Space, S.L.U. ("Elecnor Deimos Space") and Elecnor pursuant to the Service Level Agreement through which DCM and Elecnor Deimos Space are obligated to provide services and premises to Deimos Imaging that are necessary in connection with the use of the Deimos-2 satellite and related operations, any failure by DCM or Elecnor Deimos Space to meet their obligations under the Service Level Agreement would have a material adverse effect on the value of Deimos Imaging and UrtheCast and could adversely affect the prospects of successfully completing the Deimos Sale.

In addition, the Company has also entered into a contract dated November 24, 2014, as amended, for US$65 million to provide engineering services to a confidential customer over a five-year period. A break down in the relationship with this confidential customer, or the termination of the contract, or inability of UrtheCast or its key subcontractors to obtain technology export permits, may materially reduce the Company's remaining revenues thereunder, could result in a material impairment of its unbilled accounts receivable balance, and could have a material adverse effect on its business, financial condition and results of operations. In addition, the Company relies on key subcontractors for portions of the work provided under this contract and any delays, non-conforming deliverables or breakdown in the relationship could cause delays in achieving the payment milestones under our contract, and thus delaying our receipt of this revenue.

The Company considers SSTL a strategic implementation partner in the development and construction of the UrtheDaily Constellation. This is a significant relationship, and the deterioration of the relationship or any failure by SSTL to fulfill its obligations to UrtheCast could affect UrtheCast's ability to complete the UrtheDaily Constellation and could have a material adverse impact on UrtheCast's business and operations should a suitable replacement contractor be unable to provide similar services.

Risks Related to Government Funding

As discussed above, the SADI Funding provided by the Government of Canada is being used, in part, to develop technology related to the Company's OptiSAR program and related potential data products. The terms of this funding include various positive and negative covenants, including obligations to maintain ownership of certain intellectual property in Canada, to meet certain solvency and liquidity thresholds and an obligation to maintain a credit facility. To satisfy this latter obligation, in March 2017, UrtheCast obtained a $10 million revolving demand credit facility with the Royal Bank of Canada to finance up to 90% of bank approved accounts receivable, including the receivables under UrtheCast's previously announced US$65 million engineering services contract (the "RBC Facility"), which has since been terminated.

Should the Company fail to meet these positive or negative covenants, the Government of Canada may cease reimbursing UrtheCast using the SADI Funding or may demand mandatory early repayment of all previous funding or other penalties, including a penalty of up to 1.65x of funding. Either outcome could adversely impact the SAR IP and related technology development, and have a material adverse effect on UrtheCast's financial position and business operations. In connection with some of its financing arrangements, UrtheCast was required to reduce and subsequently terminate the RBC Facility and therefore is not presently in compliance with the terms of the SADI Funding program. While the Company has not received formal default notice from SADI, management is currently seeking an amendment to the terms of the SADI Funding and/or waiver of this requirement from the Government of Canada, or additional financing. In March 2020, the Company received reimbursement for $1.4 million of eligible costs related to previously filed claims pursuant to a one-time waiver granted by SADI while the Company continues to seek an alternative credit facility to satisfy the facility requirement under the agreement or an amendment to the terms of the SADI Funding and/or waiver of this facility requirement. While the Company expects to resolve this matter and on favourable terms, there can be no assurance that these efforts will be successful. Should the Company fail to regain compliance with the agreement, the Government of Canada will cease reimbursing UrtheCast using the SADI Funding or may demand mandatory early repayment of all previous funding or other penalties, including a penalty of up to 1.65x of funding. Either outcome could adversely impact the SAR IP and related technology development and have a material adverse effect on UrtheCast's financial position and business operations

Risks Related to Dilution and Potential Dilution and the Preferred Shares

The issuance of the Common Shares (including upon conversion of the Debentures and/or the Interest-Bearing Debentures and exercise of the warrants issued in connection therewith and in connection with the Company's other recent financings discussed herein, as well as the 14,275,172 warrants which were issued to the senior lenders on execution of a now terminated Credit Agreement discussed in the AIF and which will become exercisable upon the closing of an alternative UrtheDaily financing) will have a dilutive effect on the holders of Common Shares and the Company may issue additional Common Shares in subsequent offerings. While the Company cannot predict the size or timing of future issuances of securities, any future issuance of Common Shares may have a dilutive effect on shareholders, and if offered a price below the exercise price of the outstanding warrants of the Company, will result in a downward adjustment of such exercise price.

In addition, UrtheCast has an unlimited number of Common Shares and an unlimited number of Preferred Shares that may be issued, subject to securities laws and the rules of the TSX, without further action or approval of UrtheCast's shareholders. While the Board is required to fulfill its fiduciary obligations in connection with the issuance of the Common Shares or any Preferred Shares, such shares may be issued in transactions with which not all shareholders agree, and the issuance of such shares will cause dilution to the ownership interests of UrtheCast's shareholders or may place them in a subordinate position, in the case of Preferred Shares which would rank senior to the Common Shares in a winding-up or liquidation of the Company. Additional financing may be needed to continue funding the Company's development and operation of its business and may require the issuance of additional securities of the Company. UrtheCast cannot predict the size of future issuances of securities or the effect, if any, that future issuances and sales of securities will have on the market price of the Common Shares. Sales or issuances of substantial numbers of Common Shares or Preferred Shares, or the perception that such sales could occur, may adversely affect prevailing market prices of the Common Shares.

Risks Related to A Sale of Deimos

As discussed above, in early 2019, UrtheCast commenced efforts to explore a potential sale of some or all assets of Deimos and is in the process of negotiating the terms of such a purchase and participating in diligence activities. However, there can be no assurance that a transaction will be entered into on commercially reasonable terms, in a timely manner, or at all. Any delay or failure to enter into a binding transaction with respect to the Deimos business could have an adverse effect on UrtheCast's financial position and result in further cash flow constraints and could require adjustments to the Company's treatment of the Deimos assets in its financial statements for future periods.

Risks Related to Obtaining Funding in case of Loss of or Damage to a Satellite

The availability of many of the Company's current and proposed products and services depends on the operation of its satellites. UrtheCast determines a satellite's useful life, or its expected operational life, using a complex calculation involving the probabilities of failure of the satellite's components from design or manufacturing defects, environmental stresses, estimated remaining fuel or other causes. The Deimos-1 satellite was launched in 2009 with an expected lifetime of 10 years and the Deimos-2 satellite was launched in 2014 with an expected lifetime of more than seven years.

The expected operational lives of the Deimos-1 and Deimos-2 satellites are affected by a number of factors, including the quality of design and construction, the supply of fuel, the expected gradual environmental degradation of solar panels, the durability of various satellite components and the orbits and space environments in which the Deimos-1 and Deimos-2 satellites are placed and operated. The failure of satellite components could cause damage to or loss of the use of a Satellite before the end of its expected operational life. Electrostatic storms or collisions with other objects could also damage the Deimos-1 or Deimos-2 satellites. UrtheCast cannot provide any assurance that each satellite will remain in operation until the end of its expected operational life. Furthermore, UrtheCast expects the performance of each Satellite to decline gradually near the end of its expected operational life. UrtheCast can offer no assurance that the Satellites will maintain their prescribed orbits or remain operational and any failures would adversely affect the prospects of successfully completing the Deimos Sale.

If UrtheCast does not complete the Deimos Sale, generate sufficient funds from operations, or is unable to obtain adequate insurance coverage, it may need to obtain additional financing from outside sources to replace a lost or damaged satellite. If UrtheCast does not generate sufficient funds from operations and cannot obtain financing or adequate insurance coverage, UrtheCast will not be able to replace the Deimos-1 and Deimos-2 satellites or any of UrtheCast's future satellites that are commissioned, at the end of their operational lives. UrtheCast cannot provide any assurance that it will be able to generate sufficient funds from operations, insurance proceeds or raise additional capital on favorable terms or on a timely basis, if at all, to develop or deploy additional medium- or high-resolution satellites.

Risks Related to Global Economic Conditions and COVID-19

Disruption and volatility in global financial markets may lead to increased rates of default and bankruptcy and may negatively impact consumer-spending levels. In particular, the recent spread of the coronavirus which causes the disease known as COVID-19 has disrupted supply chains, impeded travel, closed borders, caused significant declines in global markets, and will likely have further repercussions to global supply and shipping networks as well as financing sources and credit markets generally. The short- and medium-term impacts are unprecedented in modern history and are difficult to estimate at this time. The extent of the economic damage remains unknown but it is expected to be severe and economic recession, market volatility and political uncertainty may last months or years as global supply chains, labour forces and credit markets recover. As a multinational company with business plans that depend on the supply of satellite components from various jurisdictions and the global sale of imagery and geoanalytics products, these macroeconomic developments could adversely affect UrtheCast's business, operating results or financial condition, as well as its ability to obtain any necessary future financing on reasonable terms. It could also delay the Company's satellite programs, including the proposed build and launch of the UrtheDaily Constellation, which, as discussed above, is depending on obtaining financing to fund such work. Current or potential customers, including foreign governments, may delay or decrease spending on UrtheCast's products and services as their business and/or budgets are impacted by economic conditions, and lenders may be unwilling or unable to extend credit during the ongoing disruption. The inability of customers to pay for UrtheCast's products and services may adversely affect the Company's anticipated future earnings and cash flows and any delay in the financing for UrtheDaily would materially impact the Company's business plans and financial prospects.

Risks Related to Failure to Obtain, or Loss of, Regulatory Approvals

A failure by UrtheCast to obtain or maintain regulatory approvals could result in service interruptions or could impede it from executing its business plan. The EO industry falls within the jurisdiction of the 1986 United Nations resolution "Principles Relating to Remote Sensing of the Earth from Space (1986)", which stipulates that images taken by government and commercial satellites are lawful as long as such images are provided to the countries that have been imaged upon request from such countries.

After significant consultation with lawyers and leading Canadian experts in the field of space law, and after discussions with the Canadian government, the Company has concluded that the Remote Sensing Space Systems Act (Canada) (the "RSSSA") does not apply to its existing EO business given that the Deimos Imaging is based and operated entirely in Spain and the Deimos-1 and Deimos-2 satellites are regulated by Spanish laws. Notwithstanding the Company's conclusion, there is no certainty that its interpretation of the RSSSA is correct.

The Company has engaged with Global Affairs Canada in connection with its planned UrtheDaily Constellation and, in 2019, received provisional approval for the operation of the UrtheDaily satellite constellation. While UrtheCast has a cooperative relationship with its regulators in Canada and abroad, such regulations and the approvals based thereon are inherently subject to political risks, and there can be no certainty that future regulatory or licensing decisions will be favourable to UrtheCast. Any limitation on UrtheCast's business or the planned UrtheDaily Constellation, or an alteration of the provisional license or failure to be issued a final licence, as a result of government regulation, in Canada or in other jurisdictions where UrtheCast operates, would increase compliance costs or adversely affect its expected revenue growth.

In addition, certain aspects of UrtheCast's business plan may be subject to the International Traffic in Arms Regulations in the United States, the Export and Import Permits Act (Canada) or other similar regulatory or legislative regimes in the United States, France and Canada, and a failure by UrtheCast to obtain or maintain regulatory approvals in connection with such regimes could result in service interruptions or could impede the Company from executing its business plan, which would have a material adverse impact on the Company's anticipated revenues and business plans.

Risks Related to Third Party Credit Risk

The Company is or may be exposed to third party credit risk through its contractual arrangements with its current or future data customers and other parties. If such entities fail to meet their contractual obligations, such failures could have a material adverse effect on the Company and its expected cash flow from future operations.

Risks Related to Currency Exchange Rate

The Company's results are reported in Canadian dollars. UrtheCast currently actively operates in Canada, France, Spain and the United States, and distributes its geo-analytics products and services in various jurisdictions around the world. With the Geosys acquisition, UrtheCast has substantial operations in France where many Geosys employees are located. As a result, significant portions of the Company's current and future costs and revenue streams are denominated in foreign currencies, including the U.S. dollar, the U.K. Pound Sterling and the Euro. To the extent that there are fluctuations in the Canadian dollar relative to other currencies, the Company's revenue and operating results may be negatively impacted.

FURTHER INFORMATION

Further information relating to the Company, including the AIF and other disclosure documents, is available online on the Company's website at www.urthecast.com and on UrtheCast's SEDAR profile at www.sedar.com.

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UrtheCast Corp. — Management Reports 2020

45472_rns_2020-05-14_ea427142-3ebe-4d93-a71a-6d7336fff672.pdf

FORWARD-LOOKING STATEMENTS

OVERVIEW

OUTLOOK & GOING CONCERN

SELECTED FINANCIAL INFORMATION

Overall Performance

BUSINESS HIGHLIGHTS

Geosys Acquisition

Update on UrtheDaily Constellation

Deimos Imaging Assets Held for Sale

Engineering and SAR Business and OptiSAR Technology

UrthePipeline Ground Segment Systems Technology

Government Funding

Impact of COVID-19

Financings

US $12 Million Term Loan

Secured US $1.5 Million Term Loan

Second Secured US $1.5 Million Term Loan

$6.6 Million Financing

$2.0 Million Financing

€25 Million Secured Term Loan (the "Sabadell Term Loan")

US $10 Million Receivables Purchasing Agreement

Extension of Interest-Bearing Convertible Debentures

Mutual Termination of UrtheDaily Credit Agreement

Legal Proceedings

TSX Delisting Review

ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS

CONSOLIDATED RESULTS OF OPERATIONS

Revenue

Other Operating Income

Total Operating Costs

Direct Costs, Selling, General and Administration ("SG&A")

Impairment Charges

Research Expenditures

Depreciation and Amortization

Share-Based Payments

Net Finance Costs

Development Activities

Financial Position

NON-IFRS EARNINGS MEASURES

QUARTERLY RESULTS

LIQUIDITY AND CAPITAL RESOURCES

UrtheCast Corp.

MANAGEMENT'S DISCUSSION AND ANALYSIS

Contractual Obligations at

Capital Resources

Discontinued operation

Continuing operations

Share Capital

TRANSACTIONS WITH RELATED PARTIES

OFF-BALANCE SHEET ARRANGEMENTS

CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

Assumption and Estimation Uncertainties

• Fair Values of Assets and Liabilities Acquired in Business Combinations

UrtheCast Corp.

MANAGEMENT'S DISCUSSION AND ANALYSIS

• Estimated Impairment of Non-current Assets Held for Sale

• Estimated Impairment of Property and Equipment and Intangible Assets with Finite Lives

• Impairment of Goodwill and Intangible Assets with Indefinite Lives

Judgments

• Functional Currency

• Capitalization of Internally Developed Intangible Assets

• Valuation of Derivative Financial Instruments

• Accounting for Business Combinations

ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS

IFRS 16 Leases

Lessee Accounting

Lessor Accounting

Non-current assets held for sale and discontinued operation

Cash-settled Share-Based Payments

FINANCIAL INSTRUMENTS

Objectives, Policies and Processes

Foreign Currency Risk

Credit Risk

Liquidity Risk

Interest Rate Risk

Fair Value Risk

INTERNAL CONTROL OVER FINANCIAL REPORTING

UrtheCast Corp. Management Reports 2020