Orbite Provides Corporate Update
MONTRÉAL, QUÉBEC–(Marketwired – March 29, 2018) – Orbite Technologies Inc. (“Orbite” or the “Company”) (NEX:ORT.H)today provided an update on on its continuing efforts to repair the faulty calcination equipment at its Cap-Chat Plant and also to emerge from insolvency protection.
Update on the Outotec Calcination Equipment
As announced on January 30, 2018, Orbite continues working with Outotec, the supplier of the faulty calcination equipment in order to resolve the issues with the equipment.
The causes of the problems encountered and their solutions have been identified by Outotec. However, to date, the parties are unable to agree on the financial responsibility and the time frame needed to perform the repairs nor on the warranty offered on the repaired equipment. Discussions are ongoing between the parties to come to a satisfactory agreement. Should no such agreement be reached in the short term, Orbite will commence legal proceedings.
Appeal of the decision on the motion against its insurer for indemnification
As announced on March 6, 2018, the Quebec Court of Appeal (“Court of Appeal”) ruled that Company had the right to appeal the decision rendered by the Superior Court of Québec (the “CCAA Court”) which denied the motion filed against its insurer.
The appeal will be heard on May 11, 2018, by a panel of three judges.
Additional reductions of expenses
In order to protect its cash for as long as possible and finance its legal proceedings, the Company implemented a series a cost-cutting measures. In particular, Orbite has reduced the working hours of all of its employees regardless of their location, the Cap-Chat plant, the technology development center in Laval or the head office in Saint-Laurent.
Consequently, the 45 employees, including upper management, are affected by the measure. Most of them will be temporarily laid-off whereas a small group will remain with reduced work hours to maintain continuity of operations.
The Company intends to call the employees back as soon as possible if an agreement with Outotec is reached or should the Court of Appeal rule in favour of Orbite. There are no guarantees as to whether such an agreement will be reached or regarding the ruling by the Court of Appeal.
CCAA Court extends the Stay Period
As announced on January 30, 2018, the CCAA Court issued an order pursuant to the Companies’ Creditors Arrangement Act (“CCAA”) providing for a stay of all proceedings until March 30, 2018 (the “Stay Period”). On March 29, 2018 the CCAA Court granted a motion filed by the Company and issued the following orders:
- extending the Stay Period until June 8, 2018;
- relieving Orbite from its obligation to call the annual meeting of shareholders on or before April 27, 2018 and directing Orbite to call such annual meeting, as the case may be, by October 31, 2018; and
- authorizing Orbite to make a payment of 50% of the amounts owing to the Eligible Employees, under the Key Employee Retention Program which was approved by the CCAA Court on May 23, 2017.
There can be no guarantees that the Company will be successful in its restructuring efforts or will emerge from CCAA protection.
Orbite Technologies Inc. is a Canadian cleantech company whose innovative and proprietary processes are expected to produce alumina and other high-value products, such as rare earth and rare metal oxides, at one of the lowest costs in the industry, and in a sustainable fashion, using feedstocks that include aluminous clay, kaolin, nepheline, bauxite, red mud, fly ash as well as serpentine residues from chrysotile processing sites. Orbite is currently in the process of finalizing its first commercial high-purity alumina (HPA) production plant in Cap-Chat, Québec and has completed the basic engineering for a proposed smelter-grade alumina (SGA) production plant, which would use clay mined from its Grande-Vallée deposit. The Company’s portfolio contains 15 intellectual property families, including 44 patents and 33 pending patent applications in 11 different countries and regions. The first intellectual property family is patented in Canada, USA, Australia, Japan and Russia. The Company also operates a state of the art technology development center in Laval, Québec, where its technologies are developed and validated.
Certain information contained in this document may include “forward-looking information”. Without limiting the foregoing, the information and any forward-looking information include statements regarding projects, costs, objectives and future returns of the Company or hypotheses underlying these items. In this document, words such as “may”,” confident”, “would”, “could”, “will”, “likely”, “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate” and similar words and the negative form thereof are used to identify forward-looking statements. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether, or the times at or by which, such future performance will be achieved. Forward-looking statements and information are based on information available at the time and/or the Company management’s good-faith beliefs with respect to future events and are subject to known or unknown risks, uncertainties, assumptions and other unpredictable factors, many of which are beyond the Company’s control. Risks, uncertainties and other factors that could affect anticipated results and future events also include, but are not limited to, those described in the section of the Management’s Discussion and Analysis (MD&A) entitled “Risk and Uncertainties” as filed on November 28, 2017 on SEDAR, as well as those under the headings “Going Concerns”, Commercial Operation of HPA Plant”, “We will need to raise capital to continue our growth” and “Development Goals and Time Frames” described in the MD&A filed on March 31, 2017.
The Company does not intend, nor does it undertake, any obligation to update or revise any forward-looking information or statements contained in this document to reflect subsequent information, events or circumstances or otherwise, except as required by applicable laws.
Yves Noel, VP Business Development
Eric Gamache, Senior Director