2012
ANNUAL REPORT
Intermap Technologies Corporation
President’s Message
Financial information as discussed herein is in U.S. dollars unless otherwise noted.
1
Intermap was able to improve on all aspects of its business during 2012. In each of the last three quarters
we delivered meaningful net income that led to positive adjusted EBITDA of greater than $2.5 million in
each of those quarters. These results are directly attributable to both our solutions approach to selling and
the cost reduction activities of the Company over the past 24 months.
Our 2012 revenue of $28 million was a 15% increase over 2011, and we left the year with a healthy contract
backlog of $15 million. This backlog is directly associated with our solutions approach to selling and
includes a material contract for the creation of an entire spatial data infrastructure for an international
customer, or an SDI. An SDI is a complete operating environment that uses geospatial data, creates the
ability to access such data, performs analytics, and then displays the results in an easy to use browser
format.
By starting with applications that use an assortment of geospatial data, and then combining that data
with market specific information, Intermap is able to deliver unique applications that solve location-based
business problems for its customers. For years, the industry has been focused on just the visualization of
specific geospatial data layers, but at Intermap, we are able to perform the analytics for our customers and
then deliver answers to them conveniently via a web browser application.
These applications are part of our three-dimensional business intelligence (3DBI™) business, which includes
software as a service (SaaS) applications that generate a recurring revenue stream for the Company. Our
SaaS applications are expected to be a growing contributor to revenue over the coming years. We also
believe these SaaS based applications can be an enabler for new businesses to use geospatial information
to solve their industry specific geospatial problems.
In August of 2012, we launched a SaaS based application called AdPro®. Our AdPro application provides an
easy to use business analytics tool for the outdoor advertising market. The application is now being used
by billboard owners, by advertising companies, and is also being integrated into other software platforms
that have already been created by the customer. This application uses data from multiple demographic
and geospatial sources to provide a useful metric that establishes the value of a particular billboard or an
outdoor advertising campaign.
Another product in the Company’s new Pro series applications is RiskPro™. The RiskPro application provides
effects of climate catastrophes around the world to simulate how a specific weather related disaster can
affect business and people. This product is currently in beta development and we are expecting revenue to
begin in mid-year 2013.
Our proprietary airborne data acquisition business continues to do well. This business is highly
differentiated due to Intermap’s unique capability to acquire 3D geospatial information through clouds, in
overcast conditions, and at night. This capability gives us a competitive advantage in regions of the world
that are heavily cloud covered, which is about 15% of the world. These regions tend to be rich in natural
resources and/or have geopolitical importance. Once the data is captured, we then create a contiguous
database of the area that allows our 3DBI applications to readily deliver operational analytics that can
be used in a variety of applications. Other companies talk about delivering 3D geospatial information;
Intermap does it quickly, frequently, and in a scalable manner. We believe that our accurate, edited, and
contiguous database is a major differentiator in industries that need geospatial information.
In 2012, we launched the world’s first worldwide geospatial database called NEXTMap® World 30™. This
product was developed by fusing many types of data into a single database, which supports Intermap’s
position of being sensor agnostic. We ensured the highest quality for this database by using a combination
of computing capabilities, our experienced engineering team, and our world-class production teams
in Calgary, Denver and Southeast Asia. This database is currently being used in the Polar Regions,
South America, Africa, and even China where much of the legacy geospatial data is old or non-existent.
Additionally, this global dataset allows for the rapid development of an initial SDI at a medium resolution.
2
Then, as the need for high-precision applications develop, Intermap has the ability to provide an even
greater resolution data solution through its own airborne radar capability or through the use of a third party
sensor, depending on the customer’s requirements.
In summary, during 2012, Intermap was able to deliver bottom-line financial results that were better than
any other year in the Company’s history. We believe this positive performance is due to our solutions
approach to selling, which includes 3DBI applications, new data acquisitions, and the licensing of data from
our multi-country database.
Unique to Intermap, we now work with a large variety of geospatial sensors. This gives us the capability to
deliver the best, and most economical data, information, and applications to our customers in any region of
the world.
We believe our SDI approach is also a unique differentiator in the geospatial market. Once an SDI is in place,
we work closely with the customer to provide 3DBI software applications that can analyze all of the layers of
a database and deliver a simple answer for any given geospatial requirement.
We believe the geospatial industry is changing. Customers do not have the on-site expertise or technology
to manipulate geospatial data for their businesses, or even understand what they can do with such
geospatial data. There are a number of companies in the geospatial market that are focused primarily on
delivering data, and leaving their customers to do their own analysis to create a functional product. We
believe this approach renders a race to the cheapest pixel, which is not where Intermap is compelled to
compete. Intermap provides feature rich, solutions oriented products and services tailored to our customers
individual needs.
Lastly, on behalf of all of Intermap’s committed employees, I would like to thank both our shareholders
and our other stakeholders for your continued support of Intermap throughout 2012. We look forward to
improving on our results during 2013.
(Signed) Todd Oseth
Todd A. Oseth, President and CEO
Intermap Technologies
Management’s Discussion and Analysis
3
For the year ended December 31, 2012
For purposes of this discussion, “Intermap®” or the “Company” refers to Intermap Technologies® Corporation
and its subsidiaries.
This management’s discussion and analysis (MD&A) is provided as of March 8, 2013, and should be read
together with the Company’s audited Consolidated Financial Statements and the accompanying notes
for the years ended December 31, 2012 and 2011. The results reported herein have been prepared in
accordance with International Financial Reporting Standards (IFRS) and, unless otherwise noted, are
expressed in United States dollars.
Additional information relating to the Company, including the Company’s Annual Information Form (AIF),
can be found on the Company’s Web site at www.intermap.com and on SEDAR at www.sedar.com.
FORWARD-LOOKING STATEMENTS
In the interest of providing the shareholders and potential investors of Intermap with information
about the Company and its subsidiaries, including Management’s assessment of Intermap’s future plans
and operations, certain information provided in this MD&A constitutes forward-looking statements or
information (collectively, “forward-looking statements”). Forward-looking statements are typically identified
by words such as “may,” “will,” “should,” “could,” “anticipate,” “expect,” “project,” “estimate,” “forecast,” “plan,”
“intend,” “target,” “believe,” and similar words suggesting future outcomes or statements regarding an
outlook. Although Intermap believes that these forward-looking statements are based upon assumptions
that Intermap believes to be reasonable based on the information available on the date such statements
are made, such statements are not guarantees of future performance, and readers are cautioned against
placing undue reliance on forward-looking statements. By their nature, these statements involve a variety
of assumptions, known and unknown risks and uncertainties, and other factors, which may cause actual
results, levels of activity, and achievements to differ materially from those expressed or implied by such
statements. The forward-looking information contained in this MD&A is based on certain assumptions
and analysis by management of the Company in light of its experience and perception of historical trends,
current conditions, and expected future developments and other factors that it believes are appropriate.
The material factors and assumptions used to develop the forward-looking statements herein include,
but are not limited to, the following: (i) the Company will continue to maintain sufficient and effective
production capabilities with respect to the cost to produce its products; (ii) there will be no significant
reduction in the availability of qualified and cost-effective human resources; (iii) the continued sales success
of Intermap’s products and services; (iv) the continued success of business development activities; (v) the
continued existence and productivity of subsidiary operations; (vi) there will be no significant delays in
the development and commercialization of the Company’s products; (vii) new products and services will
continue to be added to the Company’s portfolio; (viii) demand for 3D geospatial products and services will
continue to grow in the foreseeable future; (ix) there will be no significant barriers to the integration of the
Company’s products and services into customers’ applications; and (x) superior 3D geospatial technologies /
products do not develop that would render the Company’s current product offerings obsolete.
Intermap’s forward-looking statements are subject to risks and uncertainties pertaining to, among other
things, availability of capital, revenue fluctuations, nature of government contracts, economic conditions,
loss of key customers, retention and availability of executive talent, competing technologies, common
share price volatility, loss of proprietary information, information technology security, breakdown of
strategic alliances, and international and political considerations, including but not limited to those risks
and uncertainties discussed under the heading “Risk Factors” in this MD&A, the Company’s most recently
filed AIF and the Company’s other filings with securities regulators. The impact of any one risk, uncertainty,
or factor on a particular forward-looking statement is not determinable with certainty as these are
interdependent, and the Company’s future course of action depends on Management’s assessment of all
information available at the relevant time. Except to the extent required by law, the Company assumes no
4
2012 Annual Report | Management’s Discussion and Analysis
obligation to publicly update or revise any forward-looking statements made in this MD&A, whether as a
result of new information, future events, or otherwise. All subsequent forward-looking statements, whether
written or oral, attributable to the Company or persons acting on the Company’s behalf, are expressly
qualified in their entirety by these cautionary statements.
BUSINESS OVERVIEW
Intermap is a location-based information (LBI) company creating geospatial solutions and analytics from
uniform, high-resolution 3D digital models of the earth’s surface called NEXTMap®. The Company uses
these 3D digital models, together with integrated third party data, to create geospatial solutions for its
customers. The NEXTMap database consists of high accuracy elevation data and geometric images as well
as other geospatial related information that the Company uses to enhance the value of this database.
These geospatial solutions are used in a wide range of applications, including, but not limited to location-
based information, geographic information systems (GIS), engineering, utilities, GPS maps, geospatial risk
assessment, oil and gas, renewable energy, hydrology, environmental planning, wireless communications,
transportation, advertising, and 3D visualization. The products are also used to improve the positional
accuracy of airborne and satellite images.
Working for private industry, governments, and individual consumers worldwide, Intermap employs its
own proprietary airborne interferometric synthetic aperture radar (IFSAR) mapping technology to build the
foundation layer of its NEXTMap database. This radar mapping technology provides the ability to digitally
map large areas accurately and quickly, and acquire data at any time of the day including overcast and dark
conditions. The Company also aggregates data into its NEXTMap database from other mapping sensor
types such as light detection and ranging (LiDAR) systems, aerial photography, and satellite imagery.
The Company believes the value of its NEXTMap database includes application solutions for specific
vertical markets, and not solely in the data as a standalone product. The Company continues to evaluate
and change its pricing strategy and product offerings to make the purchase of such services and product
offerings more affordable to a wider array of potential users. The Company continues to expand and
improve its Web services offerings to allow its NEXTMap 3D terrain products and related location-based
information to be more accessible via cloud-computing. These Web services offer a suite of hosted tools
that gives even those unfamiliar with GIS the ability to quickly and easily perform terrain analysis based on
an area of interest such as a county, an entire state, or a specific river basin. Subscribers to the Company’s
Web services can access the Company’s 3D terrain information using their current Web browsers and
through popular desktop GIS software applications.
NEXTMap
The NEXTMap database is included in the Company’s data library, which was built from the acquisition,
processing and aggregation of elevation data, geometric images and other geospatial information.
The NEXTMap database includes terrain, elevation and imagery data, as well as other geospatial related
information such as demographics, view sheds, outdoor advertising artifacts, and flood models, to name
a few. The Company uses these diversified geospatial elements to enhance the value of the NEXTMap
database. The Company maintains ownership rights to the data, and sells licenses to the data on a non-
transferable basis. The data library amounts shown on the Company’s consolidated balance sheet include
only elevation related data and imagery from the NEXTMap USA and NEXTMap Europe radar mapping
programs. All other geospatial data and information included in the NEXTMap database is expensed as
acquired.
2012 Annual Report | Management’s Discussion and Analysis
5
NEXTMap USA, the largest NEXTMap program to date, covered an area of nearly 8.0 million square
kilometers of the contiguous United States and Hawaii. The NEXTMap Europe dataset represents 2.5 million
square kilometers of area and includes the 17 countries of Austria, Belgium, Czech Republic, Denmark,
England, France, Germany, Irish Republic, Italy, Luxembourg, Netherlands, Northern Ireland, Portugal, Spain,
Scotland, Switzerland, and Wales.
As of December 31, 2012, the net book values of the NEXTMap USA and NEXTMap Europe datasets were
$7.8 million (year ended December 31, 2011 - $10.4 million) and $6.0 million (year ended December 31,
2011 - $8.0 million), respectively.
FINANCIAL INFORMATION
FINANCIAL INFORMATION
The following table sets forth selected financial information for the periods indicated.
The following table sets forth selected financial information for the periods indicated.
Selected Annual Information
Selected Annual Information
U.S. $ millions, except per share data
Revenue:
Contract services
Data licenses
Total revenue
2012
2011
2010(1)
$
11.9
15.9
$
10.8
13.3
$
4.3
9.6
$
27.8
$
24.1
$
13.9
Impairment of data library
$
-
$
-
$
55.4
Net loss
EPS basic and diluted
Adjusted EBITDA
Assets:
Data library
Total assets
$
(2.9)
$
(13.6)
$
(97.8)
$
(0.04)
$
(0.19)
$
(1.73)
$
5.0
$
(4.5)
$
(19.7)
$
13.8
$
18.4
$
23.0
$
28.9
$
31.6
$
43.6
1.3
$
Total long-term liabilities (including finance
lease obligations)
(1) Amounts presented for 2010 have been restated for IFRS.
(1) Amounts presented for 2010 have been restated for IFRS.
Revenue
Revenue
Consolidated revenue for the year ended December 31, 2012, totaled $27.8 million compared to
Consolidated revenue for the year ended December 31, 2012, totaled $27.8 million compared to $24.1
$24.1 million for the same period in 2011, representing a 15% increase. As of December 31, 2012,
million for the same period in 2011, representing a 15% increase. As of December 31, 2012, there remained
there remained $14.8 million in revenue from existing contracts ($14.3 million in contract services
$14.8 million in revenue from existing contracts ($14.3 million in contract services and $0.5 million in data
and $0.5 million in data licensing contracts) to be recognized in future periods.
licensing contracts) to be recognized in future periods.
$
$
1.6
2.6
Contract services revenue for the years ended December 31, 2012 and 2011, totaled $11.9 million
Contract services revenue for the years ended December 31, 2012 and 2011, totaled $11.9 million and
$10.8 million, respectively. The increase was due to the closing of contracts associated with expanded radar
and $10.8 million, respectively. The increase was due to the closing of contracts associated with
mapping opportunities in Southeast Asia and the United States during 2012.
expanded radar mapping opportunities in Southeast Asia and the United States during 2012.
Data licenses revenue for the year ended December 31, 2012 was $15.9 million, an increase of 20% over the
Data licenses revenue for the year ended December 31, 2012 was $15.9 million, an increase of 20%
same period in 2011, which totaled $13.3 million. The increase was primarily the result of improved sales
over the same period in 2011, which totaled $13.3 million. The increase was primarily the result of
from the Company’s NEXTMap Asia dataset during the year ended December 31, 2012. This increase was
partially offset by a decrease in revenue recognized from the Company’s NEXTMap USA and Western Europe
improved sales from the Company’s NEXTMap Asia dataset during the year ended December 31,
datasets during the same period. The Company also recorded an increase in its 3D business intelligence
(3DBI) applications revenue during the 2012 period, which made up the remainder of the year-over-year
increase.
4
2012. This increase was partially offset by a decrease in revenue recognized from the Company’s
NEXTMap USA and Western Europe datasets during the same period. The Company also recorded
6
an increase in its 3D business intelligence (3DBI) applications revenue during the 2012 period,
2012 Annual Report | Management’s Discussion and Analysis
which made up the remainder of the year-over-year increase.
The Company believes that users of geospatial information in Southeast Asia do not have access to
as large a selection of high quality geospatial information that is available in the USA and Western
The Company believes that users of geospatial information in Southeast Asia do not have access to as
Europe. As a result, the Company believes the immediate opportunity to sell its products and
large a selection of high quality geospatial information that is available in the USA and Western Europe. As
services in Southeast Asia and other underdeveloped regions are greater than in the USA and
a result, the Company believes the immediate opportunity to sell its products and services in Southeast
Western Europe. The Company is, however, currently developing new products and services that
Asia and other underdeveloped regions are greater than in the USA and Western Europe. The Company is,
are expected to exploit the underlying value of the NEXTMap USA and Europe database and
however, currently developing new products and services that are expected to exploit the underlying value
of the NEXTMap USA and Europe database and increase future revenue opportunities. Additionally, the
increase future revenue opportunities. Additionally, the Company is developing new low cost,
Company is developing new low cost, market-specific applications that utilize the entire NEXTMap database
market-specific applications that utilize the entire NEXTMap database to address customers’
to address customers’ specific geospatial needs.
specific geospatial needs.
Classification of Operating Costs
Classification of Operating Costs
The composition of the operating costs classification on the Consolidated Statements of
The composition of the operating costs classification on the Consolidated Statements of Comprehensive
Income is as follows:
Comprehensive Income is as follows:
U.S. $ millions
2012
2011
Personnel
Purchased services & materials
Travel
Facilities and other expenses
$
$
12,936
7,358
1,152
1,947
23,393
16,990
10,185
1,620
2,581
31,376
$
$
Personnel
Personnel
Personnel expense includes direct labor, employee compensation, employee benefits, and
Personnel expense includes direct labor, employee compensation, employee benefits, and commissions.
commissions.
Personnel expense for the years ended December 31, 2012 and 2011, totaled $12.9 million and $17.0
Personnel expense for the years ended December 31, 2012 and 2011, totaled $12.9 million and
million, respectively. The 24% decrease in the year ended December 31, 2012, from the same period in
$17.0 million, respectively. The 24% decrease in the year ended December 31, 2012, from the same
2011, is primarily due to workforce reductions associated with the Company’s restructuring activities during
period in 2011, is primarily due to workforce reductions associated with the Company’s
2011. The amount shown for the year ended December 31, 2011 includes $1.3 million of severance and
termination costs.
restructuring activities during 2011. The amount shown for the year ended December 31, 2011
includes $1.3 million of severance and termination costs.
Consolidated active employee headcount was 185 at December 31, 2012 (including 88 in Jakarta,
Indonesia), a 26% decrease from 249 at December 31, 2011 (including 137 in Jakarta, Indonesia). The
Consolidated active employee headcount was 185 at December 31, 2012 (including 88 in Jakarta,
decrease in personnel count was driven by a decrease in the following functional areas: operations 30%, or
Indonesia), a 26% decrease from 249 at December 31, 2011 (including 137 in Jakarta, Indonesia).
37 personnel; sales and marketing 12%, or 4 personnel; engineering, research and development 15%, or 8
The decrease in personnel count was driven by a decrease in the following functional areas:
personnel; and administrative 42%, or 15 personnel.
operations 30%, or 37 personnel; sales and marketing 12%, or 4 personnel; engineering, research
Non-cash compensation expense is included in operating costs and relates to share options and shares
and development 15%, or 8 personnel; and administrative 42%, or 15 personnel.
granted to employees and non-employees. Non-cash share-based compensation for the years ended
Non-cash compensation expense is included in operating costs and relates to share options and
December 31, 2012 and 2011, totaled $0.7 million and $1.0 million, respectively. The decrease of $0.3
million in the year ended December 31, 2012, was primarily due to (i) share based compensation issued
shares granted to employees and non-employees. Non-cash share-based compensation for the years
to the Company’s Chief Executive Officer pursuant to his employment agreement in 2011 with no similar
compensation issued in 2012, (ii) the expiration, forfeiture and full vesting of prior issued share options that
5
occurred during the current year, and (iii) Board of Directors compensation paid in cash during the current
year where such compensation was paid in common shares during the prior year.
Purchased Services and Materials
Purchased services and materials (PS&M) includes (i) aircraft and radar related costs, (ii) professional and
consulting costs, (iii) third-party support services related to the collection, processing, and editing of the
Company’s airborne radar data collection activities, and (iv) software expenses (including maintenance and
support).
2012 Annual Report | Management’s Discussion and Analysis
7
For the years ended December 31, 2012 and 2011, PS&M expense was $7.4 million and $10.2 million,
respectively. The decrease in this category of expense in 2012 is primarily related to a decrease in job and
subcontractor expenses associated with the Company’s airborne radar data collection activities that were
performed during the respective periods. The stage of progress on each radar data collection contract and
the individual requirements and logistics associated with radar collection efforts can also create expense
variations between reporting periods.
Travel
For the years ended December 31, 2012 and 2011, travel expense was $1.2 million and $1.6 million,
respectively. The decrease during the year ended December 31, 2012 compared to the same period in
2011 is primarily the result of decreased travel associated with the Company’s international airborne radar
data collection activities, as well as decreased travel for sales and marketing personnel resulting from the
Company’s cost control measures.
Facilities and Other Expenses
For the years ended December 31, 2012 and 2011, facilities and other expenses were $1.9 million and $2.6
million, respectively. The decrease for the year ended December 31, 2012, compared to the same period in
2011 is primarily due to an early lease termination of the Company’s Munich, Germany facility, decreased
office space in the Company’s Denver office, and other cash conservation efforts to reduce facility and other
operational expenses initiated in 2011 and fully realized in 2012.
Adjusted EBITDA
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) is not a recognized
performance measure under IFRS. The term EBITDA consists of net income (loss) and excludes interest,
taxes, depreciation and amortization. Adjusted EBITDA also excludes restructuring costs, share-based
compensation, gain or loss on the disposal of equipment, and gain or loss on foreign currency translation.
because Management believes that such measurement provides a better assessment of the
Adjusted EBITDA is included as a supplemental disclosure because Management believes that such
Company’s operations on a continuing basis by eliminating certain non-cash charges and charges
measurement provides a better assessment of the Company’s operations on a continuing basis by
or gains that are nonrecurring. The most directly comparable measure to adjusted EBITDA
eliminating certain non-cash charges and charges or gains that are nonrecurring. The most directly
calculated in accordance with IFRS is net income (loss). The following is a reconciliation of the
comparable measure to adjusted EBITDA calculated in accordance with IFRS is net income (loss). The
Company’s net loss to adjusted EBITDA.
following is a reconciliation of the Company’s net loss to adjusted EBITDA.
U.S. $ millions
Net loss
Depreciation of property and equipment
Amortization of data library
Amortization of intangible assets
Restructuring costs (recovery)
Interest expense
EBITDA
Share-based compensation
Gain on disposal of equipment
Loss on foreign currency translation
Adjusted EBITDA
2012
2011
$
$
$
(2.9)
1.8
4.6
0.2
(0.1)
0.5
4.1
0.7
-
0.2
5.0
$
$
$
(13.6)
3.4
4.6
0.5
1.5
0.2
(3.4)
1.3
(2.5)
0.1
(4.5)
Adjusted EBITDA for the year ended December 31, 2012, was $5.0 million, compared to negative
Adjusted EBITDA for the year ended December 31, 2012, was $5.0 million, compared to negative $4.5
$4.5 million for the same period in 2011. The improvement in the adjusted EBITDA loss on a year-
million for the same period in 2011. The improvement in the adjusted EBITDA loss on a year-over-year basis
over-year basis is primarily attributable to an increase in revenue of $3.7 million, and a reduction of
is primarily attributable to an increase in revenue of $3.7 million, and a reduction of operating expenses (net
operating expenses (net of restructuring costs) of $6.7 million.
of restructuring costs) of $6.7 million.
Depreciation of Property and Equipment
Depreciation expense for the year ended December 31, 2012, totaled $1.9 million, compared to $3.4
million for the same period in 2011. The decrease in depreciation expense is primarily the result of
certain assets dedicated to the Company’s NEXTMap database development reaching the end of
their useful lives, without the addition of comparable replacement assets.
Amortization of Data Library
For the years ended December 31, 2012 and 2011, amortization expense relating to the data library
was $4.6 million in each year. The asset is amortized on a straight-line basis, and no additions or
adjustments were made to the asset during the periods presented.
Gain on Disposal of Equipment
During 2010, the Company committed to sell one of its radar enabled aircraft, which was no longer
required subsequent to the completion of the NEXTMap USA and NEXTMap Europe datasets. The
aircraft and radar equipment (including associated processing technology and software tools) had a
net book value of $1.2 million and $0.3 million, respectively, at the end of June 2011 when the
aircraft title passed to the purchaser. The Company received full proceeds from the sale of the assets
totaling $4.0 million in December 2010. The gain recognized from the sale of these assets during
2011 was $2.5 million.
Financing Costs
7
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2012 Annual Report | Management’s Discussion and Analysis
Depreciation of Property and Equipment
Depreciation expense for the year ended December 31, 2012, totaled $1.9 million, compared to $3.4 million
for the same period in 2011. The decrease in depreciation expense is primarily the result of certain assets
dedicated to the Company’s NEXTMap database development reaching the end of their useful lives, without
the addition of comparable replacement assets.
Amortization of Data Library
For the years ended December 31, 2012 and 2011, amortization expense relating to the data library was
$4.6 million in each year. The asset is amortized on a straight-line basis, and no additions or adjustments
were made to the asset during the periods presented.
Gain on Disposal of Equipment
During 2010, the Company committed to sell one of its radar enabled aircraft, which was no longer required
subsequent to the completion of the NEXTMap USA and NEXTMap Europe datasets. The aircraft and radar
equipment (including associated processing technology and software tools) had a net book value of $1.2
million and $0.3 million, respectively, at the end of June 2011 when the aircraft title passed to the purchaser.
The Company received full proceeds from the sale of the assets totaling $4.0 million in December 2010. The
gain recognized from the sale of these assets during 2011 was $2.5 million.
Financing Costs
Financing costs for the year ended December 31, 2012, totaled $524 thousand, compared to $160 thousand
for the same period in 2011. The increase in financing costs is attributable to interest on a convertible note
issued in June 2012. These financing costs were partially offset by the reduction of principal resulting from
recurring payments on long-term debt.
Gain (Loss) on Foreign Currency Translation
The Company continuously monitors the level of foreign currency assets and liabilities carried on its
consolidated balance sheet in an effort to minimize as much of the foreign currency translation exposure
as possible. Steps taken to minimize translation effects have included the movement of cash and cash
equivalents between Canadian dollar, Australian dollar, Euro and United States dollar currencies. The result
is a partial natural currency hedge for the Company.
During the year ended December 31, 2012, a foreign currency translation loss of $233 thousand was
recorded, compared to a loss of $72 thousand for the same period in 2011. The losses for 2012 and 2011
were primarily the result of losses on the accounts payable balances held in foreign currencies.
Income Tax
Current income tax recovery of $20 thousand was incurred during the year ended December 31, 2012,
compared to an expense of $170 thousand during the same period in 2011. The recovery for the year ended
December 31, 2012 is due to a recovery of tax deposits made during the 2011 tax year for the Company’s
German subsidiary. This recovery amount was offset by taxes on income generated from the Company’s
United Kingdom and Czech Republic subsidiaries. The expense in the year ended 2011 relates to taxable
income generated from the Company’s Indonesian, German, United Kingdom, Czech Republic and
Australian subsidiaries.
During the year ended December 31, 2012, a deferred income tax recovery of $45 thousand, compared to
a recovery of $80 thousand for the same period in 2011 was recorded. The increase was due to the deferred
tax effect of the convertible note issued in June 2012.
2012 Annual Report | Management’s Discussion and Analysis
9
Amounts Receivable and Unbilled Revenue
Work is performed on contracts that provide invoicing upon the completion of identified contract
milestones. Revenue on certain of these contracts is recognized using the percentage-of-completion
method of accounting based on the ratio of costs incurred to date over the estimated total costs to
complete the contract. While an effort is made to schedule payments on contracts in accordance with work
performed, the completion of milestones does not always coincide with the costs incurred on a contract,
resulting in revenue being recognized in excess of billings. These amounts are recorded in the consolidated
balance sheet as unbilled revenue.
Amounts receivable and unbilled revenue increased from $6.4 million at December 31, 2011, to $8.4 million
at December 31, 2012. The increase was primarily due to timing of collections, as well as the unbilled
portion of work performed in late 2012 on an outstanding mapping services contract. These amounts
at December 31, 2011, and reflect specific project billing milestones on current contracts that were
represent 42 days’ sales at December 31, 2012, compared to 66 days sales at December 31, 2011, and reflect
specific project billing milestones on current contracts that were in progress on those dates.
in progress on those dates.
Accounts Payable and Accrued Liabilities
Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities generally include trade payables, project-related accruals
Accounts payable and accrued liabilities generally include trade payables, project-related accruals and
and personnel-related costs. Accounts payable and accrued liabilities decreased from $5.1 million at
personnel-related costs. Accounts payable and accrued liabilities decreased from $5.1 million at December
December 31, 2011, to $4.7 million at December 31, 2012. This decrease is due primarily to the
31, 2011, to $4.7 million at December 31, 2012. This decrease is due primarily to the timing of payments
against the Company’s trade payables, but also includes a decrease in compensation related accrued
timing of payments against the Company’s trade payables, but also includes a decrease in
liabilities during the period ended December 31, 2012.
compensation related accrued liabilities during the period ended December 31, 2012.
2012
2011
Accounts payable
Accrued liablities
Other taxes payable
$
$
2,152
2,572
23
4,747
2,384
2,665
48
5,097
$
$
Provisions
Provisions
Provisions decreased to $0.7 million at December 31, 2012, compared to $1.1 million at December
Provisions decreased to $0.7 million at December 31, 2012, compared to $1.1 million at December 31, 2011.
31, 2011. The decrease is the result of activity during 2012 related to separation payments made to
The decrease is the result of activity during 2012 related to separation payments made to former employees
of $0.2 million, facility payments of $0.1 million, and a reversal of facility expense of $0.1 million due to an
former employees of $0.2 million, facility payments of $0.1 million, and a reversal of facility
early lease termination of the Company’s Munich, Germany facility.
expense of $0.1 million due to an early lease termination of the Company’s Munich, Germany
facility.
Notes Payable
The notes payable balance increased to $1.8 million at December 31, 2012, compared to $1.7 million at
December 31, 2011. The increase relates to reimbursable project development funds received by the
Company. Such funds are repayable upon the completion of development efforts on specifically identified
Notes Payable
technology and the first sale of the resulting developed products. The Company estimates the repayment
The notes payable balance increased to $1.8 million at December 31, 2012, compared to $1.7
will begin in the second quarter of 2013. See “Note 9” to the Consolidated Financial Statements for a
million at December 31, 2011. The increase relates to reimbursable project development funds
discussion of the terms of the notes.
received by the Company. Such funds are repayable upon the completion of development efforts on
The promissory note balance of $1.7 million is payable to a service provider for an outstanding balance.
specifically identified technology and the first sale of the resulting developed products. The
Payment of the principal balance began at the end of the fourth quarter of 2012 and the promissory note
Company estimates the repayment will begin in the second quarter of 2013. See “Note 9” to the
matures in November 2014.
Consolidated Financial Statements for a discussion of the terms of the notes.
The promissory note balance of $1.7 million is payable to a service provider for an outstanding
balance. Payment of the principal balance began at the end of the fourth quarter of 2012 and the
promissory note matures in November 2014.
Convertible Note
The convertible note balance of $2.4 million at December 31, 2012, is due to a private placement
convertible debt financing that closed June 27, 2012. The principal balance of the note is $2.5
million, and the discount of $0.2 million will be recognized over the twelve month term of the note
using the effective interest method. Simple interest is payable at maturity at an annual rate of 21%.
Under the terms of the note, the accrued interest payable on any converted principal balance will be
9
10
2012 Annual Report | Management’s Discussion and Analysis
Convertible Note
The convertible note balance of $2.4 million at December 31, 2012, is due to a private placement
convertible debt financing that closed June 27, 2012. The principal balance of the note is $2.5 million,
and the discount of $0.2 million will be recognized over the twelve month term of the note using the
effective interest method. Simple interest is payable at maturity at an annual rate of 21%. Under the terms
of the note, the accrued interest payable on any converted principal balance will be waived at the time of
conversion. The note is convertible into common shares of the Company, at any time, at the option of the
holder, at a per share price of C $0.21. Any unconverted balance is payable at maturity, on June 26, 2013.
See “Note 10” to the Consolidated Financial Statements for a detailed discussion of the terms of the note.
Unearned Revenue
The unearned revenue balance at December 31, 2012, decreased to $0.1 million from $1.5 million at
December 31, 2011. This balance consists of payments received from customers on revenue contracts for
which the Company has not yet fulfilled its obligations, or which the necessary revenue recognition criteria
has not been met. The decrease from December 31, 2011, is primarily due to the fulfillment of production
related obligations on a contract services project during the year ended December 31, 2012.
Finance Lease Obligations and Long-Term Debt
Finance lease obligations and long-term debt at December 31, 2012, decreased to $0.3 million from $1.2
million at December 31, 2011 due to recurring payments on outstanding finance lease obligations and full
payment of a long-term bank loan obligation.
QUARTERLY FINANCIAL INFORMATION
Selected Quarterly Information
The following table sets forth selected quarterly financial information for Intermap’s eight most recent fiscal
quarters. This information is unaudited, but reflects all adjustments of a normal, recurring nature that are,
in the opinion of Management, necessary to present a fair statement of Intermap’s consolidated results of
operations for the periods presented. Quarter-to-quarter comparisons of Intermap’s financial results are not
necessarily meaningful and should not be relied on as an indication of future performance.
U.S. $ millions, except per
share data
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Revenue:
Contract services
Data licenses
$
2.9
$
2.4
$
3.2
$
2.3
$
3.3
$
1.6
$
4.1
$
2.9
3.9
2.0
4.9
2.5
0.9
6.4
3.9
4.7
Total revenue
$
6.8
$
4.4
$
8.1
$
4.8
$
4.2
$
8.0
$
8.0
$
7.6
Depreciation and amortization
$
2.1
$
2.1
$
2.0
$
1.8
$
1.8
$
1.6
$
1.6
$
1.6
Net income (loss)
$
(4.9)
$
(3.4)
$
(0.8)
$
(4.5)
$
(5.1)
$
0.8
$
0.4
$
1.0
Net income (loss) per share
- basic and diluted
$
(0.08)
$
(0.05)
$
(0.01)
$
(0.06)
$
(0.06)
$
0.01
$
0.01
$
0.01
Adjusted EBITDA
$
(1.1)
$
(2.9)
$
1.5
$
(2.0)
$
(2.9)
$
2.7
$
2.5
$
2.7
Revenue
Revenue
Consolidated revenue for the fourth quarter of 2012 totaled $7.6 million, compared to $4.8 million
Consolidated revenue for the fourth quarter of 2012 totaled $7.6 million, compared to $4.8 million for the
for the same period in 2011, representing a 58% increase. Contract services revenue for the fourth
same period in 2011, representing a 58% increase. Contract services revenue for the fourth quarter of 2012
quarter of 2012 increased to $2.9 million, a 26% increase over the $2.3 million recorded during the
increased to $2.9 million, a 26% increase over the $2.3 million recorded during the same period in 2011. The
increase in 2012 was primarily the result of the recognition of $1.1 million in revenue from a new mapping
same period in 2011. The increase in 2012 was primarily the result of the recognition of $1.1
services contract that commenced in late 2012. Data licenses revenue for the fourth quarter of 2012 totaled
million in revenue from a new mapping services contract that commenced in late 2012. Data
licenses revenue for the fourth quarter of 2012 totaled $4.7 million, compared to $2.5 million for
the same period in 2011, representing an 88% increase. The increase was primarily the result of
revenue recognized during the fourth quarter of 2012 on a $2.3 million contract that was
announced in November 2012 for the sale of data from the Company’s Southeast Asia NEXTMap
database.
Personnel
Personnel expense for the fourth quarter of 2012 was $2.9 million, compared to $3.7 million for the
same period in 2011. The 22% decrease in the quarter ended December 31, 2012, from the same
period in 2011, is due to normal employee attrition, primarily in the Company’s Jakarta, Indonesia
office, and secondarily from reduced sales commissions.
Non-cash share-based compensation expense for the three-month periods ended December 31,
2012 and 2011, totaled $0.1 million in each period.
Purchased Services and Materials
For the three-month periods ended December 31, 2012 and 2011, PS&M expense was $1.3 million
and $2.5 million, respectively. The decrease is primarily due to decreased job and subcontractor
expenses associated with the stage of progress on outstanding mapping services contracts in place
during each respective period.
Travel
For the three-month periods ended December 31, 2012 and 2011, travel expense was $0.3 million
and $0.4 million, respectively. The decrease during the three-month period ended December 31,
11
2012 Annual Report | Management’s Discussion and Analysis
11
$4.7 million, compared to $2.5 million for the same period in 2011, representing an 88% increase. The
increase was primarily the result of revenue recognized during the fourth quarter of 2012 on a $2.3 million
contract that was announced in November 2012 for the sale of data from the Company’s Southeast Asia
NEXTMap database.
Personnel
Personnel expense for the fourth quarter of 2012 was $2.9 million, compared to $3.7 million for the same
period in 2011. The 22% decrease in the quarter ended December 31, 2012, from the same period in 2011, is
due to normal employee attrition, primarily in the Company’s Jakarta, Indonesia office, and secondarily from
reduced sales commissions.
Non-cash share-based compensation expense for the three-month periods ended December 31, 2012 and
2011, totaled $0.1 million in each period.
Purchased Services and Materials
For the three-month periods ended December 31, 2012 and 2011, PS&M expense was $1.3 million and $2.5
million, respectively. The decrease is primarily due to decreased job and subcontractor expenses associated
with the stage of progress on outstanding mapping services contracts in place during each respective
period.
Travel
2012 compared to the same period in 2011 is primarily the result of decreased travel by operations
For the three-month periods ended December 31, 2012 and 2011, travel expense was $0.3 million and $0.4
personnel associated with the stage of progress on outstanding mapping services contracts in place
million, respectively. The decrease during the three-month period ended December 31, 2012 compared to
the same period in 2011 is primarily the result of decreased travel by operations personnel associated with
during each respective period.
the stage of progress on outstanding mapping services contracts in place during each respective period.
Facilities and Other Expenses
Facilities and Other Expenses
For the three-month periods ended December 31, 2012 and 2011, facilities and other expenses were
$0.5 million.
For the three-month periods ended December 31, 2012 and 2011, facilities and other expenses were $0.5
million.
CONTRACTUAL OBLIGATIONS
CONTRACTUAL OBLIGATIONS
Contractual obligations include (i) convertible note; (ii) operating leases on office locations; (iii)
Contractual obligations include (i) convertible note; (ii) operating leases on office locations; (iii) notes
notes payable; (iv) provisions; and (v) finance leases on computer equipment and software.
payable; (iv) provisions; and (v) finance leases on computer equipment and software. Principal and interest
Principal and interest repayments of these obligations are as follows:
repayments of these obligations are as follows:
Contractual obligations
Convertible note
Operating leases
Notes payable
Provisions
Finance leases
Total
Total
$
2,757
2,648
1,899
720
276
8,300
$
Payments due by Period (US $ thousands)
Less than 1 year
2,757
$
959
956
720
276
5,668
$
1 - 3 years
4 - 5 years After 5 years
-
$
1,319
943
-
-
2,262
$
-
$
370
-
-
-
370
$
-
$
-
-
-
$
-
LIQUIDITY AND CAPITAL RESOURCES
LIQUIDITY AND CAPITAL RESOURCES
Management continually assesses liquidity in terms of the ability to generate sufficient cash flow to fund
Management continually assesses liquidity in terms of the ability to generate sufficient cash flow to
the business. Net cash flow is affected by the following items: (i) operating activities, including the level
fund the business. Net cash flow is affected by the following items: (i) operating activities, including
of amounts receivable, unbilled receivables, accounts payable, accrued liabilities and unearned revenue,
the level of amounts receivable, unbilled receivables, accounts payable, accrued liabilities and
(ii) investing activities, including the purchase of property and equipment, and (iii) financing activities,
unearned revenue, (ii) investing activities, including the purchase of property and equipment, and
including debt financing and the issuance of capital stock.
(iii) financing activities, including debt financing and the issuance of capital stock.
Cash generated from operations during the year ended December 31, 2012, totaled $0.3 million,
compared to cash used in operations of $9.1 million during the same period in 2011. The
improvement of $9.4 million is due primarily to increased revenues of $3.7 million and decreased
operating costs of $8.0 million. The decreased operating costs were primarily related to decreases in
personnel related expenses and other general operating expenses resulting from the Company’s
restructuring activities during 2011.
Net cash used in investing activities totaled $0.4 million for the year ended December 31, 2012,
compared to $0.3 million during the same period in 2011. Cash used in investing activities during
the years ended December 31, 2012 and 2011, was for the development of intangible assets (the
Company’s NEXTMap WebStore™) of $113 thousand and $242 thousand, respectively.
Additionally, cash used in investing activities during the years ended December 31, 2012 and 2011,
12
12
2012 Annual Report | Management’s Discussion and Analysis
Cash generated from operations during the year ended December 31, 2012, totaled $0.3 million, compared
to cash used in operations of $9.1 million during the same period in 2011. The improvement of $9.4 million
is due primarily to increased revenues of $3.7 million and decreased operating costs of $8.0 million. The
decreased operating costs were primarily related to decreases in personnel related expenses and other
general operating expenses resulting from the Company’s restructuring activities during 2011.
Net cash used in investing activities totaled $0.4 million for the year ended December 31, 2012, compared
to $0.3 million during the same period in 2011. Cash used in investing activities during the years ended
December 31, 2012 and 2011, was for the development of intangible assets (the Company’s NEXTMap
WebStore™) of $113 thousand and $242 thousand, respectively. Additionally, cash used in investing
activities during the years ended December 31, 2012 and 2011, included the purchase of aircraft related
property and equipment of $288 thousand and computer related property and equipment of $102
thousand, respectively.
Net cash generated by financing activities totaled $1.5 million during the year ended December 31, 2012,
compared to net cash generated by financing activities totaling $5.6 million during the same period in
2011. The net cash generated from financing activities during the year ended December 31, 2012, was due
primarily to the receipt of $2.4 million of net proceeds in connection with a convertible note issued in June
2012. This amount was offset by payments on long-term debt and capital lease obligations of $1.0 million
during the year. The net cash generated from financing activities during the year ended December 31, 2011,
was due to the completion of a share issuance of 16,125,000 units (each unit consist of one Class A common
share of the Company and one common share purchase warrant) for total gross consideration of $6.8
million. This amount was offset by $0.4 million of securities issuance costs and the repayment of long-term
debt and capital lease obligations totaling $0.8 million.
The cash position of the Company at December 31, 2012 (cash and cash equivalents), was $2.1 million,
compared to $0.6 million at December 31, 2011. Working capital improved to $1.9 million as of December
31, 2012, from a negative $1.0 million as of December 31, 2011. The improvement in working capital at
December 31, 2012 compared to December 31, 2011, is primarily the result of an increase in cash, amounts
receivable and unbilled revenue of $3.5 million and a decrease in accounts payable, accrued liabilities,
provisions and debt totaling $1.1 million, which was offset by increases in notes payable, convertible note
and unearned revenue totaling $1.8 million.
During the year ended December 31, 2012, the Company incurred a net loss of $2.9 million, had positive
adjusted EBITDA of $5.0 million, and positive cash flow from operations of $0.3 million. In addition, the
Company has an accumulated deficit of $186.2 million. Although the Company has made significant
financial progress during its most recent fiscal year, its continuing operations are dependent on its ability
to continue to produce future profitable operations and generate positive cash flows from operations.
The Company is also considering the selling of excess capacity assets to improve its cash position. If these
activities are not adequate to fund the Company’s ongoing operations, the Company may be required to
explore additional financing alternatives, if available. Failure to achieve one or more of these requirements
could have a material adverse effect on the Company’s financial condition and / or results of operations in
future periods.
The above factors raise significant doubt about the Company’s ability to continue as a going concern.
Management has taken actions to address these issues including a company-wide cost reduction program,
the introduction of new products and services, a revised approach to pricing and selling of the Company’s
products and services, and has obtained additional financing. These actions have begun to make a positive
impact on the performance of the Company, as is evidenced by a significant year-over-year improvement
in its bottom line financial performance, including positive adjusted EBITDA of $5.0 million. However, the
Company cannot be certain that its future cash generated from operations will be sufficient to satisfy its
liquidity requirements on a go forward basis.
2012 Annual Report | Management’s Discussion and Analysis
13
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Revenue Recognition
Revenue is recognized when (i) persuasive evidence of an arrangement exists; (ii) the significant risks and
rewards of ownership, including managerial involvement, have been transferred to the buyer; (iii) the
amount of revenue can be measured reliably; and (iv) costs incurred or to be incurred can be measured
reliably. Billings in excess of revenue are recorded as unearned revenue. Revenue recognized in excess of
billings is recorded as unbilled revenue.
Goods Sold
Revenue from the sale of data licenses in the ordinary course is measured at the fair value of the
consideration received or receivable.
Subscriptions
Revenue from data sold on a subscription basis is recognized straight-line over the term of the agreement.
Fixed-price Contracts
Revenue from fixed-price contracts is recognized using the percentage-of-completion method, based
on the ratio of costs incurred to estimated final contract costs. The use of the percentage of completion
method requires estimates to determine the cost to complete each contract. These estimates are reviewed
monthly and adjusted as necessary. Provisions for estimated losses, if any, are recognized in the period in
which the loss is determined. Contract losses are measured in the amount by which the estimated costs of
the related project exceed the estimated total revenue for the project.
Multiple Component Arrangements
When a single sales transaction requires the delivery of more than one product or service (multiple
components), the revenue recognition criteria are applied separately to identifiable components. A
component is considered to be separately identifiable if the product or service delivered has stand-alone
value to that customer and the fair value associated with the product or service can be measured reliably.
The amount recognized as revenue for each component is the fair value of the element in relation to the fair
value of the arrangement as a whole.
Data Library (NEXTMap)
The Company maintains a data library, which results from the acquisition and processing of digital map
data. Ownership rights to this data are retained by the Company and the data is licensed to customers. The
direct costs of acquiring and processing the data are capitalized as an investment in the data library when it
can be shown that such costs create material future value to the Company. Capitalized costs include direct
overhead associated with the acquisition and processing of the data and the depreciation of the property
and equipment used in the production of the data.
The data library balance is being amortized on a monthly basis using the straight-line amortization method
over 60 months.
The carrying value of the data library is reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. The Company has determined
that the NEXTMap USA and NEXTMap Europe datasets represent separate cash generating units for
impairment testing purposes. The Company has identified addressable markets for each of these datasets
and has estimated future data library licenses sales and cash flows within these addressable markets. The
forecasts of estimated data library cash flows are reviewed each quarter taking into account economic and
market trends, technical advances, competitive developments, and actual sales versus forecasts.
14
2012 Annual Report | Management’s Discussion and Analysis
FUTURE CHANGES IN ACCOUNTING POLICIES
Consolidated Financial Statements
The International Accounting Standards Board (IASB) has issued a new standard for consolidation that
will replace the existing standard. This new standard provides a single consolidation model that identifies
control as the basis for consolidation for all types of entities. This new standard is effective for our fiscal year
beginning January 1, 2013. The Company does not expect this new standard to have a material impact on
the financial statements.
Disclosure of Interests in Other Entities
The IASB has issued a new standard for the disclosure requirements for all forms of interest in other entities,
including subsidiaries, joint arrangements, associates and unconsolidated structured entities. This new
standard requires disclosure of the nature of, and risks associated with an entity’s interests in other entities
and the effects of these interests on its financial position, financial performance and cash flows. This new
standard is effective for the Company’s fiscal year beginning January 1, 2013. The Company is currently
assessing the impact of this new standard on the financial statements.
Investments in Associates and Joint Ventures
The IASB issued a new standard on accounting for investments in joint ventures to require they be
accounted for using the equity method. The new standard is effective for our fiscal year beginning January
1, 2013. The Company does not expect this new standard to have a material impact on the financial
statements.
Presentation of Financial Statements
The IASB has revised the standard for presentation requiring the entity present separately the items of
other comprehensive income that may be reclassified to profit or loss in the future from those that would
never be reclassified to profit or loss. This new standard is effective for the Company’s fiscal year beginning
January 1, 2013. The Company does not expect this new standard to have a material impact on the financial
statements.
Fair Value Measurement
The IASB has issued a new standard for fair value measurement that provides a common definition of fair
value and establishes a framework for measuring fair value. This new standard is effective for the Company’s
fiscal year beginning January 1, 2013. The Company does not expect this new standard to have a material
impact on the financial statements.
OUTSTANDING SHARE DATA
The Company’s authorized capital consists of an unlimited number of Class A common shares without par
value and an unlimited number of Class A participating preferred shares without par value. At the close of
business on March 8, 2013, 79,414,013 Class A common shares were issued and outstanding. There are no
preferred shares currently issued and outstanding.
As of March 8, 2013, 4,814,970 share options are outstanding in the Company’s share option plan with
a weighted average exercise price of C$0.82. In addition, there are 19,050,00 warrants outstanding that
are exercisable with a weighted average exercise price of C$0.46, and each warrant entitles the holder to
purchase one Class A common share.
2012 Annual Report | Management’s Discussion and Analysis
15
DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROLS
Disclosure Control Risks
Disclosure controls and procedures have been designed to provide reasonable assurance that information
required to be disclosed is accumulated and communicated to Management as appropriate to allow timely
decisions regarding required disclosure. Pursuant to Multilateral Instrument 52-109, the Chief Executive
Officer and Chief Financial Officer have concluded, based on their evaluation of the effectiveness of the
disclosure controls and procedures as at December 31, 2012, that disclosure controls and procedures
provide reasonable assurance that material information is made known to them by others within the
Company.
Internal Control Risks
Internal controls over financial reporting have been designed to provide reasonable assurance regarding
the reliability of financial reporting. Management, including the Chief Executive Officer and Chief Financial
Officer, reviewed and evaluated the design and operating effectiveness of the internal controls over
financial reporting (as defined by Multilateral Instrument 52-109) and concluded that sufficient controls
exist at December 31, 2012, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with IFRS. There have been
no significant changes in the design of internal controls over financial reporting that occurred during the
year ended December 31, 2012, that have materially affected, or are reasonably likely to materially affect,
the Company’s internal control over financial reporting.
RISKS AND UNCERTAINTIES
The risks and uncertainties described below are not exhaustive. Additional risks not presently known or
currently deemed immaterial may also impair the Company’s business operation. If any of the events
described in the following business risks actually occur, overall business, operating results, and the financial
condition of the Company could be materially adversely affected.
Availability of Capital
The Company cannot be certain that cash generated from its operations will be sufficient to satisfy its
liquidity requirements and it may need to raise capital by selling additional equity and or by securing credit
facilities. The Company’s future capital requirements will depend on many factors, including, but not limited
to, the market acceptance of its products and services. No assurance can be given that any such additional
funding will be available or that, if available, it can be obtained on terms favorable to the Company.
The Company currently has no commitments for additional working capital funding and therefore its ability
to meet any unexpected liquidity needs is uncertain. If additional funds are raised through the issuance of
equity securities, the Company’s shareholders may experience significant dilution. Furthermore, if additional
financing is not available when required, or is not available on acceptable terms, the Company may be
unable to develop or market its products, take advantage of business opportunities, or may be required to
significantly curtail its business operations.
The Company is uncertain what impact the current volatility in worldwide credit and equity markets may
have on its ability to obtain future financing. In the past several years, there has been unprecedented
turmoil in equity and credit markets. Because of the severity of these market events and because the
markets currently remain volatile, the Company cannot predict what effect these events will have on its
ability to obtain financing in the future, if required.
16
2012 Annual Report | Management’s Discussion and Analysis
Revenue Fluctuations
Intermap’s revenue has fluctuated over the years. Mapping services projects, the purchase of archived
data, and the purchase of geospatial solutions by the Company’s customers are all scheduled according to
customer requirements and the timing of regulatory and / or budgetary decisions. The commencement
or completion of mapping projects within a particular quarter or year, the timing of regulatory approvals,
operating decisions of clients, and the fixed-cost nature of Intermap’s business, among other factors, may
cause the Company’s results to vary significantly between fiscal years and between quarters in the same
fiscal year.
Nature of Government Contracts
Intermap conducts a significant portion of its business either directly or in cooperation with the United
States government, other governments around the world, and international funding agencies. In many
cases, the terms of these contracts provide for cancellation at the option of the government or agency
at any time. In addition, many of Intermap’s products and services require government appropriations
and regulatory licenses, permits, and approvals, the timing and receipt of which are not within Intermap’s
control. Any of these factors could have an effect on Intermap’s revenue, earnings, and cash flow.
General Economic Trends
The worldwide economic slowdown and tightening of credit in the financial markets may impact the
business of our customers, which could have an adverse effect on Intermap’s business, financial condition,
or results of operations. Adverse changes in general economic or political conditions in any of the major
countries in which the Company does business could also adversely affect Intermap’s operating results.
Key Customers
During 2012, the Company had three key customers that accounted for 66% of total revenue. In 2011, the
Company had four key customers that accounted for approximately 43% of total revenue. To the extent that
significant customers cancel or delay orders, Intermap’s revenue, earnings, and cash flow could be materially
and adversely affected.
Executive Talent
Intermap is in a repositioning phase in its markets. This repositioning, coupled with the development of
new product lines, Web services, and developing applications, requires the retention of executive talent. The
Company will continue to invest in training and leadership development in response to the changes within
the Company to retain talent. Although Intermap has a talented team of experienced executives, it may
not be able to further develop executive talent internally or attract and retain enough executive talent to
effectively manage the anticipated growth and changes within the Company.
New Competing Technologies
It is possible that commercially available satellite images could, in the future, match or come close to
the image resolution offered by the Company’s radar technology. However, the Company believes that
the technology to perform 3D radar imaging from space at 1-meter resolution with postings every 5
meters is considered to be two or more years away, and may never be achievable. In any event, Intermap
continues to evaluate its data collection capabilities and look for improvements to the performance of
its radar technology. Although there are only a few direct Intermap competitors currently, the industry
is characterized by rapid technological progress. Intermap’s ability to continue to develop and introduce
new products and services, or incorporate enhancements to existing products and services, may require
significant additional research and development expenditures and investments in support infrastructure.
2012 Annual Report | Management’s Discussion and Analysis
17
Another approach to production of digital elevation models is the use of auto correlation software to
analyze common points in two or more optical images of the same area taken from different viewing
angles. Essentially this is the same principle that is used by technicians as they extract elevation points
using stereo photogrammetric techniques, but in this case it is automated using computer software image
matching algorithms. This process is well known and has been used with limited success over small areas.
Advances in computing power, coupled with massive storage solutions, may make this technology useful
over larger areas in the future, and if so, could represent a significant competing technology.
Any required additional financing needed by the Company to remain competitive with these other
technologies may not be available or, if available, may not be on terms satisfactory to the Company.
Common Share Price Volatility
The market price of the Company’s common shares has fluctuated widely in recent periods and is likely
to continue to be volatile. A number of factors can affect the market price of Intermap’s common stock
including (i) actual or anticipated variations in operating results, (ii) the announcement of material
contract(s), (iii) the low daily trading volume of the Company’s stock, (iv) announcement of technological
innovations or new products by the Company or its competitors, (v) competition, including pricing
pressures and the potential impact of competitors products on sales, (vi) changing conditions in the digital
mapping and related industries, (vii) unexpected production difficulties, (viii) changes in financial estimates
or recommendations by stock market analysts regarding Intermap or its competitors, (ix) announcements
by Intermap or its competitors of acquisitions, strategic partnerships, or joint ventures, (x) additions or
departures of senior management, and (xi) changes in economic or political conditions.
Additionally, in recent years, the stock market in general and shares of technology companies in particular,
have experienced extreme price and volume fluctuations. These fluctuations have often been unrelated or
disproportionate to the operating performance of these technology companies. These broad market and
industry fluctuations may harm the market price of Intermap’s common stock, regardless of its operating
results.
Loss of Proprietary Information
Intermap does not currently hold patents on the technology used in its operations and relies principally
on trade secrets, know-how, expertise, experience, and the marketing ability of its personnel to remain
competitive. Although Intermap requires all employees, consultants, and third parties to agree to keep its
proprietary information confidential, no assurance can be given that the steps taken by Intermap will be
effective in deterring misappropriation of its technologies. Additionally, no assurance can be given that
employees or consultants will not challenge the legitimacy or scope of their confidentiality obligations, or
that third parties, in time, could not independently develop and deploy equivalent or superior technologies.
Information Technology Security
The success of the NEXTMap programs has resulted in the NEXTMap database becoming the single most
valuable asset of the Company. While Intermap has invested in database management, information
technology security, firewalls, and offsite duplicate storage, there is a risk of a loss of data through
unauthorized access or a customer violating the terms of the Company’s end user licensing agreements
and distributing unauthorized copies of its data. Intermap has, and will continue to invest, in both legal
resources to strengthen its licensing agreements with its customers and in overall information technology
protection.
18
2012 Annual Report | Management’s Discussion and Analysis
Breakdown of Strategic Alliances
Intermap has fostered a number of key alliances over the past several years and intends to enter into new
alliances in the future. The Company believes these new alliances will help enable access to significant
scalable markets that would not otherwise be accessible in a timely manner. The breakdown or termination
of some or all of those alliances could have a material impact on the Company. At this time, the Company is
not aware of any material issues in its strategic relationships. Should any one of these companies be unable
to continue its alliance with Intermap, or otherwise choose to dissolve the relationship, the Company would
seek to replace the connection with other entities, but there is no guarantee such replacement would occur.
Exporting Products – Political Considerations
Intermap’s data collection systems contain technology that is classified as a defense article under the
International Traffic and Arms Regulations. All mapping efforts undertaken outside the United States,
therefore, constitute a temporary export of a defense article, requiring prior written approval by the United
States Department of State for each country within which mapping operations are to be performed. The
Company does not currently anticipate that requirements for export permits will have a material impact
on the Company’s operations, although either government policy or government relations with select
foreign countries may change to the point of affecting the Company’s operational opportunities. The data
produced by Intermap’s airborne radar system falls under Department of Commerce regulations and is
virtually unrestricted.
Foreign Operations
A significant portion of Intermap’s revenue is expected to come from customers outside of the United
States and is therefore subject to additional risks, including foreign currency exchange rate fluctuations,
agreements that may be difficult to enforce, receivables difficult to collect through a foreign country’s
legal system, and the imposition of foreign-country-imposed withholding taxes or other foreign taxes.
Intermap relies on contract prepayments or letters of credit to secure payment from certain of its customers
when deemed necessary. The Company has in the past secured export credit insurance on certain of its
international receivables, which greatly reduces the commercial and political risks of operating outside of
North America.
Political Instability
Intermap understands that not every region enjoys the political stability that is taken for granted in
North America. Developments in recent years in the Middle East and Asia illustrate this clearly. Political or
significant instability in a region where Intermap is conducting data collection activities, or where Intermap
has clients, could adversely impact Intermap’s business.
Regulatory Approvals
The development and application of certain of the Company’s products requires the approval of applicable
regulatory authorities. A failure to obtain such approval on a timely basis, or material conditions imposed by
such authority in connection with the approval, would materially affect the prospects of the Company.
Aircraft / Radar Lost or Damaged
Although the Company believes that the probability of one of the Company’s aircraft or radar sustaining
significant damage or being lost in its entirety is extremely low, such damage or loss could occur. The
Company expects to have available to it, for data collection purposes, one additional aircraft at any given
time. The risk to the Company of loss from the damage of an aircraft is therefore considered to be minimal.
In the event that a radar mapping system is lost in its entirety through the destruction of the aircraft, it
would take the Company approximately six to nine months to replace the lost equipment, if required.
2012 Annual Report | Management’s Discussion and Analysis
19
Global Positioning System (“GPS”) Failure
GPS satellites have been available to the commercial market for many years. The continued unrestricted
access to the signals produced by these GPS satellites is a requirement in the collection of the Company’s
radar data. A loss of GPS would have such a global impact that it is believed that controlling authorities
would almost certainly make another system available to GPS receivers in relatively short order.
Information Openly Available to the Public
The Company accesses information available to the public via the Internet and may incorporate portions
of such information into its products. If a source of public information determined that the Company was
profiting from free information, there is risk it could seek compensation.
Force Majeure
The Company’s projects may be adversely affected by risks outside the control of the Company including
labor unrest, civil disorder, war, subversive activities or sabotage, fires, floods, explosions or other
catastrophes, epidemics, or quarantine restrictions.
Additional Information
Additional risk factors may be detailed in the Company’s Annual Information Form, which can be found on
the Company’s Web site at www.intermap.com and on SEDAR at www.sedar.com.
20
THIS PAGE INTENTIONALLY LEFT BLANK.
Management’s Report
21
The accompanying financial statements of Intermap Technologies Corporation and all the information
in this annual report are the responsibility of the Company‘s management. The consolidated financial
statements have been prepared by management in accordance with International Financial Reporting
Standards, as issued by the International Accounting Standards Board, using best estimates and
judgements, where appropriate. Management has prepared the financial information presented elsewhere
in this annual report and has ensured that it is consistent with the financial statements.
Management maintains appropriate systems of internal control that provide reasonable assurance that
assets are adequately safeguarded and that the financial reports are sufficiently well-maintained for the
timely preparation of the consolidated financial statements.
The Audit Committee members, all of whom are non-management directors, are appointed by the Board of
Directors. The Committee has reviewed these statements with the Auditors and management. The Board of
Directors has approved the financial statements of the Company, which are contained in this report.
(Signed) Todd Oseth
(Signed) Richard L. Mohr
Todd Oseth
President and Chief Executive Officer
Richard L. Mohr
Senior Vice President and Chief Financial Officer
22
Independent Auditors’ Report to the Shareholders
To the Shareholders of Intermap Technologies Corporation
We have audited the accompanying consolidated financial statements of Intermap Technologies Corporation,
which comprise the consolidated balance sheets as at December 31, 2012 and December 31, 2011,
the consolidated statements of comprehensive income, changes in equity and cash flows for the years
then ended, and notes, comprising a summary of significant accounting policies and other explanatory
information.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with International Financial Reporting Standards, and for such internal control as
management determines is necessary to enable the preparation of consolidated financial statements that are
free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our
audits. We conducted our audits in accordance with Canadian generally accepted auditing standards.
Those standards require that we comply with ethical requirements and plan and perform the audits to
obtain reasonable assurance about whether the consolidated financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the consolidated financial statements. The procedures selected depend on our judgment, including
the assessment of the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error. In making those risk assessments, we consider internal control relevant to the
entity’s preparation and fair presentation of the consolidated financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the consolidated financial statements.
Opinion
We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a
basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the
consolidated financial position of Intermap Technologies Corporation as at December 31, 2010 and
In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated
December 31, 2009, and its consolidated results of operations and its consolidated cash flows for the
financial position of Intermap Technologies Corporation as at December 31, 2012 and December 31, 2011,
years then ended in accordance with Canadian generally accepted accounting principles.
and its consolidated financial performance and its consolidated cash flows for the years then ended in
accordance with International Financial Reporting Standards.
Emphasis of Matter
Emphasis of Matter
Without qualifying our opinion, we draw attention to Note 1 to the consolidated financial statements
which describes that for the year ended December 31, 2010 the Company incurred a net loss of
$96,872,000, had negative cash flow from operations of $8,160,000 and as at December 31, 2010 has an
accumulated deficit of $175,377,000. These conditions, along with other matters described in Note 1,
indicate the existence of a material uncertainty which may cast significant doubt on the Company’s ability
to continue as a going concern.
Without modifying our opinion, we draw attention to Note 2(a) in the consolidated financial statements
which describes that for the year ended December 31, 2012 the Company incurred a net loss of $2,926,000,
had cash flow from operations of $266,000 and as at December 31, 2012 had an accumulated deficit of
$186,198,000. These conditions along with other matters described in Note 2(a), indicate the existence of
a material uncertainty which may cast a significant doubt on the Company’s ability to continue as a going
concern.
Chartered Accountants, Licensed Public Accountants
Chartered Accountants, Licensed Public Accountants
March 8, 2013
Ottawa, Canada
March 3, 2010
Ottawa, Canada
Consolidated Financial Statements
INTERMAP TECHNOLOGIES CORPORATION
Consolidated Balance Sheets
CONSOLIDATED BALANCE SHEETS
(In thousands of United States dollars)
(In thousands of United States dollars)
23
Assets
Current assets:
Cash and cash equivalents
Amounts receivable
Unbilled revenue
Work in process
Prepaid expenses
Property and equipment (Note 5)
Data library (Note 6)
Intangible assets (Note 7)
Deferred tax assets (Note 15)
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities (Note 8)
Convertible note (Note 10)
Current portion of provisions (Note 17)
Current portion of notes payable (Note 9)
Current portion of deferred lease inducements
Unearned revenue
Income taxes payable
Current portion of obligations under finance leases (Note 11)
Current portion of long-term debt (Note 12)
Long-term notes payable (Note 9)
Deferred lease inducements
Long-term provisions (Note 17)
Obligations under finance leases (Note 11)
Long-term debt (Note 12)
Deferred tax liabilities (Note 15)
Shareholders' equity:
Share capital (Note 14(a))
Accumulated other comprehensive income
Contributed surplus (Note 14(c))
Deficit
Going concern (Note 2(a))
Commitments (Note 16)
See accompanying notes to consolidated financial statements.
On behalf of the Board:
December 31,
2012
December 31,
2011
$
2,055
5,735
2,709
10
625
11,134
$
597
5,512
865
26
616
7,616
3,703
13,829
235
-
28,901
$
5,273
18,439
290
5
31,623
$
$
4,747
2,357
720
892
97
145
10
262
-
9,230
$
5,097
-
888
69
97
1,544
43
323
548
8,609
923
390
-
-
-
-
10,543
194,144
58
10,354
(186,198)
18,358
1,629
363
223
262
95
13
11,194
193,992
46
9,663
(183,272)
20,429
$
28,901
$
31,623
See accompanying notes to consolidated financial statements.
(Signed) Larry G. Garberding
Larry G. Garberding
Director
(Signed) Donald R. Gardner
Donald R. Gardner
Director
24
2012 Annual Report | Consolidated Financial Statements
INTERMAP TECHNOLOGIES CORPORATION
Consolidated Statements of Comprehensive Income
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands of United States dollars, except per share information)
(In thousands of United States dollars, except per share information)
For the year ended December 31,
2012
2011
Revenue:
Contract services
Data licenses
Expenses:
Operating costs (Note 13)
Depreciation of property and equipment
Amortization of data library
Amortization of intangible assets
Operating loss
Gain on disposal of equipment
Financing costs
Financing income
Loss on foreign currency translation
Loss before income taxes
Income tax (expense) recovery (Note 15):
Current
Deferred
$
11,902
15,851
27,753
$
10,813
13,254
24,067
23,393
1,851
4,610
168
30,022
(2,269)
34
(524)
1
(233)
(2,991)
20
45
65
31,376
3,377
4,610
495
39,858
(15,791)
2,514
(160)
3
(72)
(13,506)
(170)
80
(90)
Net loss for the period
$
(2,926)
$
(13,596)
Other comprehensive loss:
Foreign currency translation differences
12
(82)
Total comprehensive loss for the period
$
(2,914)
$
(13,678)
Basic and diluted loss per share
$
(0.04)
$
(0.19)
Weighted average number of Class A
common shares - basic and diluted (Note 14(d))
78,700,809
72,563,227
See accompanying notes to consolidated financial statements.
See accompanying notes to consolidated financial statements.
2012 Annual Report | Consolidated Financial Statements
25
INTERMAP TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Consolidated Statements of Changes in Equity
(In thousands of United States dollars)
(In thousands of United States dollars)
Share
Capital
Contributed
Surplus
Cumulative
Translation
Adjustments
Deficit
Total
Balance at January 1, 2011
$
187,253
$
8,700
$
128
$
(169,676)
$
26,405
Comprehensive loss for the period
Share-based compensation
Issuance of shares
Issuance costs
Compensation options issued to agent
-
597
6,791
(384)
(265)
-
698
-
-
265
Balance at December 31, 2011
193,992
9,663
Comprehensive loss for the period
Share-based compensation
Warrant component of convertible note
Conversion option of convertible note
Issuance costs
Deferred tax effect of convertible note
-
138
19
-
(1)
(4)
-
592
-
136
(4)
(33)
(82)
-
-
-
-
46
12
-
-
-
-
-
(13,596)
-
-
-
-
(13,678)
1,295
6,791
(384)
-
(183,272)
20,429
(2,926)
-
-
-
-
-
(2,914)
730
19
136
(5)
(37)
Balance at December 31, 2012
$
194,144
$
10,354
$
58
$
(186,198)
$
18,358
See accompanying notes to consolidated financial statements.
See accompanying notes to consolidated financial statements.
26
2012 Annual Report | Consolidated Financial Statements
INTERMAP TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Consolidated Statements of Cash Flows
(In thousands of United States dollars)
(In thousands of United States dollars)
Cash flows provided by (used in):
Operating activities:
Net loss for the period
Adjusted for the following non-cash items:
Depreciation of property and equipment
Amortization of data library
Amortization of intangible assets
Share-based compensation expense
Gain on disposal of equipment
Amortization of deferred lease inducements
Deferred taxes
Net financing costs
Current income tax expense
Interest paid
Income tax paid
Change in non-cash operating working capital
Investing activities:
Purchase of property and equipment
Investment in intangible assets
Proceeds from sale of equipment
Financing activities:
Proceeds from issuance of convertible note
Proceeds from issuance of common shares
Financing costs of convertible note
Issuance costs of convertible note
Securities issuance costs
Proceeds from reimbursable project funding
Repayment of obligations under finance lease
Repayment of long-term debt
Repayment of notes payable
Effect of foreign exchange on cash
Increase/(decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of period
For the years ended
December 31,
2012
2011
$
(2,926)
$
(13,596)
1,851
4,610
168
673
(34)
74
(46)
523
(19)
(131)
(107)
(4,370)
266
(288)
(113)
41
(360)
2,500
-
(70)
(5)
-
151
(323)
(643)
(69)
1,541
11
1,458
597
3,377
4,610
495
1,011
(2,514)
55
(80)
160
170
(99)
(105)
(2,545)
(9,061)
(102)
(242)
1
(343)
-
6,791
-
-
(384)
-
(239)
(531)
-
5,637
8
(3,759)
4,356
Cash and cash equivalents, end of period
$
2,055
$
597
See accompanying notes to consolidated financial statements.
See accompanying notes to consolidated financial statements.
Notes to Consolidated Financial Statements
27
(In thousands of United States dollars, except per share information)
1. Reporting entity:
Intermap Technologies® Corporation (the Company) is incorporated under the laws of Alberta, Canada.
The head office of Intermap is located at 8310 South Valley Highway, Suite 400, Englewood, Colorado, USA
80112. Its registered office is located at 1250 Standard Life Building, 639 – 5th Avenue S.W., Calgary, Alberta,
T2P 0M9.
The Company is a provider of location-based information (LBI) solutions created from its uniform, high-
resolution 3D digital models of the earth’s surface. Using a combination of the Company’s proprietary
airborne interferometric synthetic aperture radar (IFSAR) data collection technology, third party sensors,
and other available geospatial related information, the Company is aggregating this information and
creating a database of elevation data, geometric images, and location-based information called NEXTMap®.
This NEXTMap database is the foundation for the Company’s 3D business intelligence solutions created to
help solve the geospatial-related challenges of its customers.
2. Basis of preparation:
a. Going concern:
These financial statements have been prepared assuming the Company will continue as a going
concern. The going concern basis of presentation assumes the Company will continue in operation for
the foreseeable future and be able to realize its assets and discharge its liabilities and commitments
in the normal course of business. During the year ended December 31, 2012, the Company incurred
a net loss of $2,926 and positive cash flow from operations of $266. In addition, the Company has an
accumulated deficit of $186,198.
The above factors raise significant doubt about the Company’s ability to continue as a going concern.
Management has taken actions to address these issues including a company-wide cost reduction
program, the introduction of new products and services, a revised approach to pricing and selling of
the Company’s products and services, and has obtained additional financing. The Company’s ability to
continue as a going concern is dependent on management’s ability to successfully generate a profit
from operations, sell assets, or obtain additional financing, if required. Failure to achieve one or more of
these requirements could have a material adverse effect on the Company’s financial condition and / or
results of operations.
The Company cannot be certain that cash generated from its operations will be sufficient to satisfy its
liquidity requirements, and it may need to continue to raise capital by selling additional equity and / or
by securing credit facilities. The Company’s future capital requirements will depend on many factors,
including, but not limited to, the market acceptance of its products and services. No assurance can be
given that any such additional funding will be available or that, if available, it can be obtained on terms
favorable to the Company.
The financial statements do not reflect adjustments that would be necessary if the going concern
assumption were not appropriate. If the going concern basis was not appropriate for these financial
statements, then adjustments would be necessary to the carrying value of assets and liabilities, the
reported revenues and expenses, and the balance sheet classifications used.
b. Statement of compliance:
These consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board. The significant
accounting policies are summarized in Note 3.
The policies applied in these consolidated financial statements are based on IFRS issued and effective
as of March 8, 2013, the date the Board of Directors approved the consolidated financial statements.
28
2012 Annual Report | Consolidated Financial Statements
c. Measurement basis:
The financial statements have been prepared mainly on the historical costs basis. Other measurement
bases used are described in the applicable notes.
d. Use of estimates:
Preparing financial statements in conformity with IFRS requires management to make judgments,
estimates and assumptions that affect the application of accounting policies and reported amounts
of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenue and expenses during the period. Actual results could
differ from these estimates.
Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting
estimates are recognized in the period in which the estimates are reviewed and in any future periods
affected.
Information about critical judgments in applying accounting policies that have the most significant
effect on the amounts recognized in the consolidated financial statements is included in note 3(k)
- Impairment.
Information about assumptions and estimation uncertainties that have a significant risk of resulting in
a material adjustment within the next financial year include the following:
i. Depreciation and amortization rates:
In calculating the depreciation and amortization expense, management is required to make
estimates of the expected useful lives of property and equipment and intangible assets.
ii. Amounts receivable:
The Company uses historical trends and performs specific account assessments when
determining the allowance for doubtful accounts. These accounting estimates are in respect to
the amounts receivable line item in the Company’s consolidated balance sheet. At December 31,
2012, amounts receivable represented 20% of total assets.
The estimate of the Company’s allowance for doubtful accounts could change from period
to period due to the allowance being a function of the balance and composition of amounts
receivable.
iii. Share-based compensation:
The Company uses the Black-Scholes option-pricing model to determine the grant date fair value
of share-based compensation. The following assumptions are used in the model: dividend yield;
expected volatility; risk-free interest rate; expected option life; and fair value.
Changes to assumptions used to determine the grant date fair value of share-based compensation
awards can affect the amounts recognized in the consolidated financial statements.
iv. Provisions :
A provision is recognized, if as a result of a past event, the Company has a present legal or
constructive obligation that can be estimated reliably, and it is probable that an outflow of
economic benefits will be required to settle the obligation. If the future settlement were to
adversely differ from management’s expectations, the Company could incur either an additional
expense or reversal of the expense previously recorded. (see Note 3(h)).
2012 Annual Report | Consolidated Financial Statements
29
v. Revenue :
Changes to the assumptions used to measure revenue could impact the amount of revenue
recognized in the consolidated financial statements. (see Note 3(l)).
e. Functional and presentation currency:
These consolidated financial statements are presented in United States dollars, which is the Company’s
functional currency. All financial information presented in United States dollars has been rounded to
the nearest thousand.
f.
Foreign currency translation:
Items included in the financial statements of each of the Company’s subsidiaries are measured using
the currency of the primary economic environment in which the entity operates (the functional
currency). Foreign currency transactions are translated into the functional currency using the exchange
rates prevailing at the dates of the transaction. Foreign exchange gains and losses resulting from
the settlement of such transactions and from the translation of monetary assets and liabilities not
denominated in the functional currency of an entity are recognized in net loss for the period.
Assets and liabilities of entities with functional currencies other than United States dollars are
translated at the period end rates of exchange, and the results of their operations are translated
at exchange rates prevailing at the dates of transactions. The resulting translation adjustments are
included in accumulated other comprehensive income in shareholders’ equity.
3. Summary of significant accounting policies:
a. Consolidation:
The accompanying consolidated financial statements include the accounts of the Company and its
wholly owned subsidiaries, Intermap Technologies Inc. and Intermap Federal Services Inc. (both U.S.
corporations); Intermap Technologies GmbH (a German corporation); Intermap Technologies UK
Limited (a U.K. corporation); Intermap Technologies PTY Ltd (an Australian corporation); Intermap
Technologies s.r.o. (a Czech Republic corporation); and a 90% owned subsidiary, PT ExsaMap Asia (an
Indonesian corporation).
Inter-company balances and transactions, and any unrealized income and expenses arising from intra-
group transactions, are eliminated in preparing the consolidated financial statements. The accounting
policies of all subsidiaries are consistent with the Company’s policies.
b. Cash and cash equivalents:
Cash and cash equivalents include unrestricted cash balances and highly liquid marketable securities
with maturity at the date of purchase of 30 days or less.
c. Work in process:
Work in process is measured at the lower of cost or net realizable value. When work in process is sold,
the carrying amount of the work in process is recognized as an expense in the period in which the
related revenue is recognized. Net realizable value is the estimated selling price in the ordinary course
of business, less the estimated costs of completing and selling expenses. The amount of any write-
down of work in process to net realizable value is recognized as an expense in the period in which the
write-down or loss occurs.
d. Property and equipment:
Property and equipment are measured at cost less accumulated depreciation. Cost includes
expenditures that are directly attributable to the acquisition of the asset. The cost of aircraft overhauls
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Year ended December 31, 2012
Page 5
Work in process is measured at the lower of cost or net realizable value. When work in process
is sold, the carrying amount of the work in process is recognized as an expense in the period in
which the related revenue is recognized. Net realizable value is the estimated selling price in the
ordinary course of business, less the estimated costs of completing and selling expenses. The
amount of any write-down of work in process to net realizable value is recognized as an expense
in the period in which the write-down or loss occurs.
30
(d) Property and equipment:
2012 Annual Report | Consolidated Financial Statements
Property and equipment are measured at cost less accumulated depreciation. Cost includes
expenditures that are directly attributable to the acquisition of the asset. The cost of aircraft
overhauls are capitalized and depreciated over the period until the next overhaul. When parts of
are capitalized and depreciated over the period until the next overhaul. When parts of an item
an item of property and equipment have different useful lives, they are accounted for as
of property and equipment have different useful lives, they are accounted for as separate items.
separate items. Depreciation is calculated over the depreciable amount which is the cost of an
Depreciation is calculated over the depreciable amount which is the cost of an asset, less its residual
asset, less its residual value. Depreciation is provided on the straight-line basis over the useful
value. Depreciation is provided on the straight-line basis over the useful lives of the assets at the
following annual rates:
lives of the assets at the following annual rates:
Assets
Rate
Aircraft
Aircraft engines
Mapping equipment and software
Radar equipment
Furniture and fixtures
Leasehold improvements
9 %
15%
33%
20%
20%
Shorter of useful life or term of lease
Depreciation methods, useful lives and residual values are reviewed at each financial year end
Depreciation methods, useful lives and residual values are reviewed at each financial year end and
and adjusted, if appropriate.
adjusted, if appropriate.
Assets under construction are not depreciated until available for use by the Company.
Assets under construction are not depreciated until available for use by the Company. Expenditures for
maintenance and repairs are expensed when incurred.
Expenditures for maintenance and repairs are expensed when incurred.
The cost of replacing an item of property and equipment is recognized in the carrying amount of
The cost of replacing an item of property and equipment is recognized in the carrying amount
the item if it is probable that the future economic benefits embodied within the part will flow to
of the item if it is probable that the future economic benefits embodied within the part will flow
the Company, and its cost can be measured reliably. The carrying amount of the replaced part is
to the Company, and its cost can be measured reliably. The carrying amount of the replaced
derecognized. The costs of the day-to-day servicing of property and equipment are recognized in profit
part is derecognized. The costs of the day-to-day servicing of property and equipment are
or loss as incurred.
recognized in profit or loss as incurred.
Gains and losses on disposal of property and equipment are determined by comparing the proceeds
from disposal with the carrying amount, and are recognized net of costs associated with the disposal
within other income in net loss for the period.
e. Data library:
The Company maintains a data library, which results from the acquisition and processing of digital map
data. In general, all ownership rights to this data are retained by the Company, and the data is licensed
to customers on a non-transferable basis.
Capitalized costs represent all of the direct costs of acquiring and processing the digital map data.
These costs include direct overhead associated with the acquisition and processing of the data and the
depreciation of the property and equipment used in the production of the data.
Subsequent expenditures are capitalized only when they increase the future economic benefits
embodied in the specific asset to which they relate. All other expenditures are expensed as incurred.
Data library capitalized costs are amortized on a straight-line basis over five years. The amortization
period represents the minimum estimated useful life over which benefits from the data are expected to
be derived. Amortization is recognized in profit or loss on a straight-line basis over the estimated useful
life of the data library, from the date that they are available for use, since this most closely reflects the
expected pattern of consumption of the future economic benefits embodied in the asset.
The carrying value of the data library is reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable.
2012 Annual Report | Consolidated Financial Statements
31
f.
Intangible assets:
Identifiable intangible assets represent assets acquired in a business combination, and internally
developed assets. Upon acquisition, identifiable intangible assets are recorded at fair value and are
carried at cost less accumulated amortization. These intangible assets held by the Company are
amortized on a straight-line basis, based on the estimated useful life of the asset.
The intangible assets acquired in a business combination represent technology, customer relationships
and contracts and are amortized over a period of five years.
The intangible assets internally developed represent Web site development costs, and are amortized
over a period of three years. The amortization method, estimate of the useful life, and residual values of
intangible assets are reviewed annually.
g. Leases:
Leases are classified as either finance or operating in nature.
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor
are classified as operating leases. Payments under an operating lease (net of any incentives received
from the lessor) are recognized in net loss on a straight-line basis over the period of the lease.
Finance leases are those that substantially transfer the benefits and risks of ownership to the lessee.
Assets acquired under finance leases are measured at the lower of the present value of the minimum
lease payments or the fair value of the leased asset at the inception of the lease. Subsequent to
initial recognition, the asset is accounted for in accordance with the accounting policy applicable to
that asset. Obligations recorded under finance leases are reduced by the principal portion of lease
payments. The imputed interest portion of lease payments is charged to finance costs.
h. Provisions:
A provision is recognized, if as a result of a past event, the Company has a present legal or constructive
obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will
be required to settle the obligation. Provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects the current market assessments of the time value of money and the
risks specific to the liability. The unwinding of the discount is recognized as finance cost.
i.
Restructuring:
A provision for restructuring is recognized when the Company has approved a detailed and formal
restructuring plan, and the restructuring either has commenced or has been announced publicly.
Future operating losses are not provided for.
ii. Onerous Contracts:
A provision for onerous contracts is recognized when the expected benefits to be derived by the
Company from a contract are lower than the unavoidable cost of meeting its obligations under
the contract. The provision is measured at the present value of the lower of the expected cost
of terminating the contract and the expected net cost of continuing with the contract. Before a
provision is established, the Company recognizes any impairment loss on the assets associated
with the contract.
i. Deferred lease inducements:
Deferred lease inducements represent the unamortized cost of lease inducements on certain of the
Company’s leased commercial office space. Amortization is provided on the straight-line basis over the
term of the lease and recognized as a reduction in rent expense.
32
2012 Annual Report | Consolidated Financial Statements
j.
Income taxes:
Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in
profit or loss except to the extent that it relates to a business combination, or items recognized directly
in equity or in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using
tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in
respect of previous years.
Deferred tax is recognized in respect of temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is not recognized for the following temporary differences: the initial recognition of assets
or liabilities in a transaction that is not a business combination and that affects neither accounting
nor taxable profit or loss, and differences relating to investments in subsidiaries and jointly controlled
entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition,
deferred tax is not recognized for taxable temporary differences arising on the initial recognition
of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to temporary
differences when they reverse, based on the laws that have been enacted or substantively enacted by
the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to
offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority
on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities
and assets on a net basis or their tax assets and liabilities will be realized simultaneously. A deferred
tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the
extent that it is probable that future taxable profits will be available against which they can be utilized.
Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no
longer probable that the related tax benefit will be realized.
k.
Impairment:
The carrying values of all property and equipment, data library and intangible assets are reviewed for
impairment whenever events or changes in circumstances indicate that their carrying amounts may
not be recoverable.
The recoverable amount of an asset or cash generating unit is the greater of its value in use and its fair
value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current market assessments of the time value
of money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot
be tested individually are grouped together into the smallest group of assets that generates cash
inflows from continuing use that are largely independent of the cash inflows of other assets or groups
of assets (the cash-generating unit, or CGU).
An impairment loss is recorded when the recoverable amount of an asset or its CGU is less than its
carrying amounts. Impairment losses are evaluated for potential reversals when events or changes in
circumstances warrant such consideration.
l.
Revenue recognition:
Revenue is recognized when (i) persuasive evidence of an arrangement exists; (ii) the significant risks
and rewards of ownership have been transferred to the buyer; (iii) the amount of revenue can be
measured reliably; and (iv) costs incurred or to be incurred can be measured reliably. Billings in excess
of revenue are recorded as unearned revenue. Revenue recognized in excess of billings is recorded as
unbilled revenue.
2012 Annual Report | Consolidated Financial Statements
33
i. Goods Sold:
Revenue from the sale of data in the ordinary course is measured at the fair value of the
consideration received or receivable.
ii. Subscriptions:
Revenue from data sold on a subscription basis is recognized straight-line over the term of the
agreement.
iii. Fixed-price Contracts:
Revenue from fixed-price contracts is recognized using the percentage-of-completion method,
based on the ratio of costs incurred to estimated final costs. The use of the percentage of
completion method requires estimates to determine the cost to complete each contract. The
stage of completion is determined by costs incurred and labor hours worked in comparison to
total expected costs and hours. These estimates are reviewed monthly and adjusted as necessary.
Provisions for estimated losses, if any, are recognized in the period in which the loss is determined.
Contract losses are measured in the amount by which the estimated costs of the related project
exceed the estimated total revenue for the project.
iv. Multiple Component Arrangements:
When a single sales transaction requires the delivery of more than one product or service
(multiple components), the revenue recognition criteria are applied separately to identifiable
components. A component is considered to be separately identifiable if the product or service
delivered has stand-alone value to that customer. The consideration is allocated to deliverables
based on their relative fair values. The fair value of each component is determined using vendor
specific objective evidence, third party evidence of selling price, or estimated selling price.
m. Research and development:
Research costs are expensed as incurred. Development costs are expensed in the year incurred unless
management believes a development project meets the specified criteria for deferral and amortization.
n. Share-based compensation:
The grant date fair value of share-based payment awards granted to employees is recognized as
an employee expense, with a corresponding increase in equity, over the period the employees
unconditionally become entitled to the awards. The amount recognized as an expense is adjusted
to reflect the number of awards for which the related service and non-market vesting conditions
are expected to be met, such that the amount ultimately recognized as an expense is based on the
number of awards that do meet the related service and non-market performance conditions at the
vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of
the share-based payment is measured to reflect such conditions and there is no true-up for differences
between expected and actual outcomes.
Share-based payment arrangements in which the Company receives goods or services as consideration
for its own equity instruments are accounted for as equity-settled share-based payment transactions,
regardless of how the equity instruments are obtained by the company.
o. Earnings per share:
The basic earnings per share is computed by dividing net earnings (loss) by the weighted average
number of common shares outstanding during the reporting period. Diluted earnings per share is
computed similar to basic earnings per share, except the weighted average number of common shares
outstanding are increased to include additional shares from the assumed exercise of share options and
warrants, if dilutive.
34
2012 Annual Report | Consolidated Financial Statements
p. Financial instruments:
i. Non-derivative financial assets:
The Company initially recognizes loans and receivables on the date that they are originated. All
other financial assets are recognized initially on the date at which the Company becomes a party
to the contractual provisions of the instrument.
The Company derecognizes a financial asset when the contractual rights to the cash flows from
the asset expire, or it transfers the rights to receive the contractual cash flows on the financial
asset in a transaction in which substantially all the risks and rewards of ownership of the financial
asset are transferred. Any interest in transferred financial assets that is created or retained by the
Company is recognized as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in the consolidated
balance sheet when, and only when, the Company has a legal right to offset the amounts and
intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.
A financial asset not carried at fair value through profit or loss is assessed at each reporting date to
determine whether there is objective evidence that it is impaired.
The Company has loans and receivables, non-derivative financial assets and non-derivative
financial liabilities.
ii. Loans and receivables:
Loans and receivables are financial assets with fixed or determinable payments that are not
quoted in an active market. Such assets are recognized initially at fair value plus any directly
attributable transaction costs. Subsequent to initial recognition, loans and receivables are
measured at amortized cost using the effective interest method, less any impairment losses.
iii. Non-derivative financial liabilities:
The Company initially recognizes debt liabilities on the date that they are originated. All other
financial liabilities are recognized initially on the date at which the Company becomes a party to
the contractual provisions of the instrument.
The Company derecognizes a financial liability when its contractual obligations are discharged,
cancelled or expire.
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
The Company has the following non-derivative financial liabilities: loans and borrowings, bank
overdrafts, and trade and other payables.
Year ended December 31, 2012
Page 13
Such financial liabilities are recognized initially at fair value plus any directly attributable
Such financial liabilities are recognized initially at fair value plus any directly attributable
transaction costs. Subsequent to initial recognition, these financial liabilities are measured at
transaction costs. Subsequent to initial recognition, these financial liabilities are measured at
amortized cost using the effective interest method.
amortized cost using the effective interest method.
The following is a summary of the classification the Company has applied to each of its significant
The following is a summary of the classification the Company has applied to each of its
categories of financial instruments outstanding:
significant categories of financial instruments outstanding:
Financial instrument:
Cash and cash equivalents
Amounts receivable
Unbilled revenue
Accounts payable and accrued liabilities
Obligations under finance leases
Convertible note
Notes payable
Long-term debt
Share capital:
Classification:
Loans and receivables
Loans and receivables
Loans and receivables
Other liabilities
Other liabilities
Other liabilities
Other liabilities
Other liabilities
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of
ordinary shares are recognized as a deduction from equity, net of any tax effects.
Compound financial instruments:
Compound financial instruments issued by the Company comprise convertible notes
denominated in United States dollars that can be converted to share capital at the option of the
holder.
The liability component of a compound financial instrument is recognized initially at the fair
value of a similar liability that does not have an equity conversion option. The equity
component is recognized initially at the difference between the fair value of the compound
financial instrument as a whole and the fair value of the liability component. Any directly
attributable transaction costs are allocated to the liability and equity components in proportion
to their initial carrying amounts.
Subsequent to initial recognition, the liability component of a compound financial instrument
is measured at amortized cost using the effective interest method. The equity component of a
compound financial instrument is not remeasured subsequent to initial recognition.
Interest related to the financial liability is recognized in profit or loss. On conversion, the
financial liability is reclassified to equity and no gain or loss is recognized.
(q) Segments:
2012 Annual Report | Consolidated Financial Statements
35
iv. Share capital:
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of
ordinary shares are recognized as a deduction from equity, net of any tax effects.
v. Compound financial instruments:
Compound financial instruments issued by the Company comprise convertible notes
denominated in United States dollars that can be converted to share capital at the option of the
holder.
The liability component of a compound financial instrument is recognized initially at the fair value
of a similar liability that does not have an equity conversion option. The equity component is
recognized initially at the difference between the fair value of the compound financial instrument
as a whole and the fair value of the liability component. Any directly attributable transaction costs
are allocated to the liability and equity components in proportion to their initial carrying amounts.
Subsequent to initial recognition, the liability component of a compound financial instrument
is measured at amortized cost using the effective interest method. The equity component of a
compound financial instrument is not remeasured subsequent to initial recognition.
Interest related to the financial liability is recognized in profit or loss. On conversion, the financial
liability is reclassified to equity and no gain or loss is recognized.
q. Segments:
The operations of the Company are in one industry segment: digital mapping and related services.
4. New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations are effective for annual periods
beginning after January 1, 2012, and have not been applied in preparing these consolidated financial
statements. Those which may be relevant to the Company are set out below. The Company does not plan to
adopt these standards early.
a. Consolidated Financial Statements:
The International Accounting Standards Board (IASB) has issued a new standard for consolidation
that will replace the existing standard. This new standard provides a single consolidation model that
identifies control as the basis for consolidation for all types of entities. This new standard is effective for
the Company’s fiscal year beginning January 1, 2013. The Company does not expect this new standard
to have a material impact on the financial statements.
b. Disclosure of Interests in Other Entities:
The IASB has issued a new standard for the disclosure requirements for all forms of interest in other
entities, including subsidiaries, joint arrangements, associates and unconsolidated structured entities.
This new standard requires disclosure of the nature of, and risks associated with an entity’s interests
in other entities and the effects of these interests on its financial position, financial performance and
cash flows. This new standard is effective for the Company’s fiscal year beginning January 1, 2013. The
Company is currently assessing the impact of this new standard on the financial statements.
c.
Investments in Associates and Joint Ventures:
The IASB issued a new standard on accounting for investments in joint ventures to require they be
accounted for using the equity method. The new standard is effective for our fiscal year beginning
January 1, 2013. The Company does not expect this new standard to have a material impact on the
financial statements.
36
2012 Annual Report | Consolidated Financial Statements
d. Presentation of Financial Statements:
The IASB has revised the standard for presentation requiring the entity present separately the items
of other comprehensive income that may be reclassified to profit or loss in the future from those that
would never be reclassified to profit or loss. This new standard is effective for the Company’s fiscal year
beginning January 1, 2013. The Company does not expect this new standard to have a material impact
on the financial statements.
e. Fair Value Measurement:
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
INTERMAP TECHNOLOGIES CORPORATION
(In thousands of United States dollars, except per share information)
Notes to Consolidated Financial Statements
Year ended December 31, 2012
(In thousands of United States dollars, except per share information)
The IASB has issued a new standard for fair value measurement that provides a common definition of
fair value and establishes a framework for measuring fair value. This new standard is effective for the
Company’s fiscal year beginning January 1, 2013. The Company does not expect this new standard to
have a material impact on the financial statements.
5. Property and equipment:
Year ended December 31, 2012
Page 16
Page 16
5. Property and equipment:
5. Property and equipment:
Property and equipment
Aircraft
Property and equipment
Balance at January 1, 2011
Aircraft
3,629
$
Additions
Balance at January 1, 2011
Finance lease
Disposals
Additions
Depreciation
Finance lease
Transfer from under construction
Disposals
Depreciation
Balance at December 31, 2011
Transfer from under construction
$
-
3,629
-
-
-
(661)
-
-
-
(661)
2,968
-
Mapping
equipment
Mapping
equipment
$
3,771
Furniture,
fixtures &
auto
Furniture,
fixtures &
auto
$
77
Under
construction
Leases
Under
construction
$
31
Leases
400
$
Total
Total
$
7,908
$
3,771
102
614
(16)
102
(2,518)
614
31
(16)
(2,518)
1,984
31
$
-
77
-
-
(46)
-
-
-
-
(46)
31
-
$
400
42
-
42
(152)
-
-
(152)
-
290
$
$
-
31
-
-
-
(31)
-
-
-
-
(31)
-
7,908
144
614
(16)
144
(3,377)
614
-
(16)
(3,377)
5,273
-
Additions
Balance at December 31, 2011
Disposals
Depreciation
Additions
Disposals
Balance at December 31, 2012
Depreciation
217
2,968
-
(568)
217
-
2,617
(568)
$
1,984
51
-
(1,162)
51
-
$
873
(1,162)
-
31
-
(7)
(18)
(7)
$
6
(18)
-
290
-
(103)
-
-
(103)
187
$
20
-
-
-
20
-
-
$
20
5,273
288
(7)
(1,851)
288
(7)
3,703
(1,851)
$
$
2,617
Balance at December 31, 2012
$
The gross amount of property and equipment at December 31, 2012, was $40,669 (year ended
December 31, 2011 – $41,088). The accumulated depreciation at December 31, 2012, was $36,966
The gross amount of property and equipment at December 31, 2012, was $40,669 (year ended December
The gross amount of property and equipment at December 31, 2012, was $40,669 (year ended
(year ended December 31, 2011 – $35,815).
31, 2011 – $41,088). The accumulated depreciation at December 31, 2012, was $36,966 (year ended
December 31, 2011 – $41,088). The accumulated depreciation at December 31, 2012, was $36,966
December 31, 2011 – $35,815).
(year ended December 31, 2011 – $35,815).
$
6
$
$
$
873
187
20
3,703
6. Data library:
6. Data library:
6. Data library:
Data library
Data library
Balance at January 1, 2011
Balance at January 1, 2011
Amortization
Amortization
Balance at December 31, 2011
Balance at December 31, 2011
Amortization
Amortization
Balance at December 31, 2012
$
23,049
$
23,049
(4,610)
(4,610)
18,439
18,439
(4,610)
$
(4,610)
13,829
Balance at December 31, 2012
13,829
The gross amount of data library at December 31, 2012 and 2011 was $120,330. In December 2010, an asset
The gross amount of data library at December 31, 2012 and 2011 was $120,330. In December 2010,
impairment charge of $55,362 was recorded. The accumulated amortization at December 31, 2012, was
an asset impairment charge of $55,362 was recorded. The accumulated amortization at December
The gross amount of data library at December 31, 2012 and 2011 was $120,330. In December 2010,
$51,139 (year ended December 31, 2011 - $46,529).
31, 2012, was $51,139 (year ended December 31, 2011 - $46,529).
an asset impairment charge of $55,362 was recorded. The accumulated amortization at December
31, 2012, was $51,139 (year ended December 31, 2011 - $46,529).
$
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
INTERMAP TECHNOLOGIES CORPORATION
Year ended December 31, 2012
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
7. Intangible assets:
2012 Annual Report | Consolidated Financial Statements
Page 17
37
Year ended December 31, 2012
Intangible Assets
7.
7. Intangible assets:
Intangible assets:
Balance at January 1, 2011
Intangible Assets
Additions
Balance at January 1, 2011
Amortization
Effect of movements in exchange rates
Additions
Amortization
Balance at December 31, 2011
Effect of movements in exchange rates
Additions
Balance at December 31, 2011
Amortization
Additions
Amortization
Balance at December 31, 2012
Acquired
Page 17
Internally
developed
Total
Acquired
$
Internally
551
developed
-
Total
$
551
$
551
-
(480)
(8)
$
-
-
(480)
(8)
242
(15)
-
$
63
$
$
63
-
$
(63)
227
$
-
(63)
$
-
113
(105)
$
242
551
(15)
-
242
(495)
227
(8)
113
290
(105)
113
(168)
235
242
(495)
(8)
$
290
113
(168)
$
235
Balance at December 31, 2012
The gross amount of intangible assets at December 31, 2012, was $2,419 (year ended December 31,
The gross amount of intangible assets at December 31, 2012, was $2,419 (year ended December 31,
The gross amount of intangible assets at December 31, 2012, was $2,419 (year ended December 31, 2011 –
2011 – $2,306). The accumulated amortization at December 31, 2012, was $2,184 (year ended
$2,306). The accumulated amortization at December 31, 2012, was $2,184 (year ended December 31, 2011
2011 – $2,306). The accumulated amortization at December 31, 2012, was $2,184 (year ended
December 31, 2011 – $2,016).
– $2,016).
December 31, 2011 – $2,016).
8. Accounts payable and accrued liabilities:
$
$
-
$
235
235
8. Accounts payable and accrued liabilities:
8. Accounts payable and accrued liabilities:
December 31,
December 31,
December 31,
2012
2011
2012
December 31,
2011
Accounts payable
Accounts payable
Accrued liablities
Accrued liablities
Other taxes payable
Other taxes payable
$
$
2,152
$
2,572
23
4,747
$
$
2,152
2,572
23
$
4,747
2,384
$
2,665
48
5,097
$
2,384
2,665
48
5,097
9. Notes payable:
9. Notes payable:
9. Notes payable:
Notes payable includes a promissory note with a service provider that defines the payment terms of
Notes payable includes a promissory note with a service provider that defines the payment terms of an
Notes payable includes a promissory note with a service provider that defines the payment terms of
an outstanding balance. The note bears interest at 5% per annum and is secured by a second priority
outstanding balance. The note bears interest at 5% per annum and is secured by a second priority lien in
an aircraft owned by the Company. The repayment terms of the note payable are thirty-six months ending
an outstanding balance. The note bears interest at 5% per annum and is secured by a second priority
lien in an aircraft owned by the Company. The repayment terms of the note payable are thirty-six
November 2014. The balance of the promissory note at December 31, 2012, was $1,664 (year ended
months ending November 2014. The balance of the promissory note at December 31, 2012, was
lien in an aircraft owned by the Company. The repayment terms of the note payable are thirty-six
December 31, 2011 – $1,698), of which $96 is accrued interest (year ended December 31, 2011 – $68).
$1,664 (year ended December 31, 2011 – $1,698), of which $96 is accrued interest (year ended
months ending November 2014. The balance of the promissory note at December 31, 2012, was
INTERMAP TECHNOLOGIES CORPORATION
Additionally, at December 31, 2012, the notes payable balance includes reimbursable project development
December 31, 2011 – $68).
$1,664 (year ended December 31, 2011 – $1,698), of which $96 is accrued interest (year ended
Notes to Consolidated Financial Statements
funds provided by a corporation designed to enable the development and commercialization of geomatics
(In thousands of United States dollars, except per share information)
Additionally, at December 31, 2012, the notes payable balance includes reimbursable project
solutions in Canada. The funding is repayable upon the completion of development and the first sale of any
December 31, 2011 – $68).
developed product(s). Repayment is to be made in quarterly installments equal to 25% of the prior quarter
development funds provided by a corporation designed to enable the development and
sales. The Company estimates the repayment will begin in the second quarter of 2013.
Additionally, at December 31, 2012, the notes payable balance includes reimbursable project
commercialization of geomatics solutions in Canada. The funding is repayable upon the completion
development funds provided by a corporation designed to enable the development and
of development and the first sale of any developed product(s). Repayment is to be made in quarterly
Year ended December 31, 2012
Page 18
December 31,
2012
December 31,
2011
installments equal to 25% of the prior quarter sales. The Company estimates the repayment will
commercialization of geomatics solutions in Canada. The funding is repayable upon the completion
Promissory note payable
begin in the second quarter of 2013.
of development and the first sale of any developed product(s). Repayment is to be made in quarterly
Reimbursable project funding
1,664
151
1,698
-
$
$
installments equal to 25% of the prior quarter sales. The Company estimates the repayment will
1,815
1,698
Less current portion
begin in the second quarter of 2013.
(892)
(69)
$
923
$
1,629
10. Convertible note:
On June 27, 2012, the Company issued a convertible promissory note for $2,500. Simple interest is
payable at maturity at an annual rate of 21%. The note is convertible into common shares of the
Company, at any time at the option of the holder, at a per share price of $0.21 CDN. Under the
terms of the note, the accrued interest payable on any converted principal balances will be waived at
the time of conversion. The note also includes 1,700,000 warrants to purchase Class A common
shares at a per share price of $0.31 CDN that expire on June 26, 2015 The note is secured by a
general security interest in all the assets of the Company. Any unconverted principal and accrued
interest balance is payable at maturity, on June 26, 2013.
Proceeds from convertible note
Transaction costs
Net proceeds
Amounts classified as equity:
Conversion option
Warrants
$
2,500
(75)
2,425
(132)
(18)
82
Effective interest incurred on note discount
Carrying amount of convertible note at December 31, 2012
$
2,357
The convertible note represents a hybrid instrument that needs to be bifurcated between its liability
and equity components. The liability component was determined by reference to the fair value of a
similar stand alone debt instrument, excluding the equity components, with the residual amount
allocated to the equity components.
The fair value of a similar stand alone note excluding the equity components was determined using
an estimated discount rate of 29%. The estimated discount rate was derived based on the evaluation
of other longer term debt offerings and is subject to estimation uncertainty. The amount of the
convertible note classified as equity of $150 is net of attributable transaction costs of $5 and was
allocated between the warrants (share capital) and conversion option (contributed surplus) based
on the relative fair value of the two components, as determined by the number of shares that could
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Year ended December 31, 2012
Page 18
Promissory note payable
Reimbursable project funding
Less current portion
December 31,
December 31,
$
1,664
$
1,698
2012
151
1,815
(892)
2011
-
1,698
(69)
$
923
$
1,629
10. Convertible note:
38
2012 Annual Report | Consolidated Financial Statements
On June 27, 2012, the Company issued a convertible promissory note for $2,500. Simple interest is
payable at maturity at an annual rate of 21%. The note is convertible into common shares of the
Company, at any time at the option of the holder, at a per share price of $0.21 CDN. Under the
10. Convertible note:
terms of the note, the accrued interest payable on any converted principal balances will be waived at
On June 27, 2012, the Company issued a convertible promissory note for $2,500. Simple interest is payable
at maturity at an annual rate of 21%. The note is convertible into common shares of the Company, at any
the time of conversion. The note also includes 1,700,000 warrants to purchase Class A common
time at the option of the holder, at a per share price of $0.21 CDN. Under the terms of the note, the accrued
shares at a per share price of $0.31 CDN that expire on June 26, 2015 The note is secured by a
interest payable on any converted principal balances will be waived at the time of conversion. The note
general security interest in all the assets of the Company. Any unconverted principal and accrued
also includes 1,700,000 warrants to purchase Class A common shares at a per share price of $0.31 CDN that
expire on June 26, 2015 The note is secured by a general security interest in all the assets of the Company.
interest balance is payable at maturity, on June 26, 2013.
Any unconverted principal and accrued interest balance is payable at maturity, on June 26, 2013.
Proceeds from convertible note
Transaction costs
Net proceeds
Amounts classified as equity:
Conversion option
Warrants
Effective interest incurred on note discount
$
2,500
(75)
2,425
(132)
(18)
82
Carrying amount of convertible note at December 31, 2012
$
2,357
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
The convertible note represents a hybrid instrument that needs to be bifurcated between its liability and
The convertible note represents a hybrid instrument that needs to be bifurcated between its liability
equity components. The liability component was determined by reference to the fair value of a similar stand
and equity components. The liability component was determined by reference to the fair value of a
alone debt instrument, excluding the equity components, with the residual amount allocated to the equity
components.
similar stand alone debt instrument, excluding the equity components, with the residual amount
The fair value of a similar stand alone note excluding the equity components was determined using an
allocated to the equity components.
estimated discount rate of 29%. The estimated discount rate was derived based on the evaluation of other
longer term debt offerings and is subject to estimation uncertainty. The amount of the convertible note
The fair value of a similar stand alone note excluding the equity components was determined using
classified as equity of $150 is net of attributable transaction costs of $5 and was allocated between the
an estimated discount rate of 29%. The estimated discount rate was derived based on the evaluation
warrants (share capital) and conversion option (contributed surplus) based on the relative fair value of the
of other longer term debt offerings and is subject to estimation uncertainty. The amount of the
two components, as determined by the number of shares that could potentially be issued. Transaction costs
of $70 were allocated to the liability component which will be accreted to redemption value over the term
convertible note classified as equity of $150 is net of attributable transaction costs of $5 and was
potentially be issued. Transaction costs of $70 were allocated to the liability component which will
of the note using the effective interest method.
be accreted to redemption value over the term of the note using the effective interest method.
allocated between the warrants (share capital) and conversion option (contributed surplus) based
The Company has the option, after nine months from the closing date of the note and upon sixty days
The Company has the option, after nine months from the closing date of the note and upon sixty
on the relative fair value of the two components, as determined by the number of shares that could
notice, to repay the note at 121% of the outstanding principal balance. The fair value of the prepayment
days notice, to repay the note at 121% of the outstanding principal balance. The fair value of the
option at December 31, 2012, was $Nil. At December 31, 2012, $268 of accrued interest is included in
prepayment option at December 31, 2012, was $Nil. At December 31, 2012, $268 of accrued interest
accrued liabilities.
is included in accrued liabilities.
Year ended December 31, 2012
Page 19
11. Finance lease liabilities:
11. Finance lease liabilities:
Finance lease liabilities are payable as follows:
Finance lease liabilities are payable as follows:
December 31, 2012
December 31, 2011
Future
minimum
lease
payments
Interest (1)
Present
value of
minimum
lease
payments
Future
minimum
lease
payments
Interest (1)
Present
value of
minimum
lease
payments
Less than one year
(current portion)
Between one and five years
(long-term portion)
$
276
$
14
$
262
$
381
$
58
$
323
-
276
$
-
$
14
-
262
$
276
657
$
$
14
72
262
585
$
1)
Interest rates ranging from 12.93% to 16.97%.
(1) Interest rates ranging from 12.93% to 16.97%.
In September 2011, the Company entered into a finance lease to purchase $614 of data storage
equipment and software. The lease bears interest at an implicit rate of 12.93% and is secured by the
underlying asset. The lease matures in September 2013.
12. Long-term debt:
Less current portion
Bank term loan
$
-
$
643
December 31,
December 31,
2012
-
-
2011
643
(548)
$
-
$
95
In December 2007, the Company obtained a term loan from a Canadian bank in the amount of
$2,522 ($2,500 CDN). The loan is repayable in monthly installments of $42 ($40 CDN) over a term
of 60 months maturing on February 28, 2013. The loan bears interest at 6.25% and is secured by a
general security agreement. An aircraft owned by the Company is listed as the primary collateral
under the general security agreement. The loan was repaid in its entirety in July 2012.
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Year ended December 31, 2012
Page 19
potentially be issued. Transaction costs of $70 were allocated to the liability component which will
be accreted to redemption value over the term of the note using the effective interest method.
The Company has the option, after nine months from the closing date of the note and upon sixty
days notice, to repay the note at 121% of the outstanding principal balance. The fair value of the
prepayment option at December 31, 2012, was $Nil. At December 31, 2012, $268 of accrued interest
is included in accrued liabilities.
11. Finance lease liabilities:
Finance lease liabilities are payable as follows:
December 31, 2012
December 31, 2011
Future
minimum
lease
payments
Present
value of
minimum
lease
Future
minimum
lease
Interest (1)
payments
payments
Interest (1)
Present
value of
minimum
lease
payments
$
276
$
14
$
262
$
381
$
58
$
323
262
-
2012 Annual Report | Consolidated Financial Statements
$
585
276
-
$
14
$
276
657
-
262
$
$
14
72
$
39
Less than one year
(current portion)
Between one and five years
(long-term portion)
1)
Interest rates ranging from 12.93% to 16.97%.
In September 2011, the Company entered into a finance lease to purchase $614 of data storage
In September 2011, the Company entered into a finance lease to purchase $614 of data storage equipment
equipment and software. The lease bears interest at an implicit rate of 12.93% and is secured by the
and software. The lease bears interest at an implicit rate of 12.93% and is secured by the underlying asset.
underlying asset. The lease matures in September 2013.
The lease matures in September 2013.
12. Long-term debt:
12. Long-term debt:
Bank term loan
Less current portion
December 31,
2012
December 31,
2011
$
-
$
643
-
-
643
(548)
$
-
$
95
INTERMAP TECHNOLOGIES CORPORATION
In December 2007, the Company obtained a term loan from a Canadian bank in the amount of $2,522
($2,500 CDN). The loan is repayable in monthly installments of $42 ($40 CDN) over a term of 60 months
In December 2007, the Company obtained a term loan from a Canadian bank in the amount of
Notes to Consolidated Financial Statements
maturing on February 28, 2013. The loan bears interest at 6.25% and is secured by a general security
(In thousands of United States dollars, except per share information)
$2,522 ($2,500 CDN). The loan is repayable in monthly installments of $42 ($40 CDN) over a term
agreement. An aircraft owned by the Company is listed as the primary collateral under the general security
of 60 months maturing on February 28, 2013. The loan bears interest at 6.25% and is secured by a
agreement. The loan was repaid in its entirety in July 2012.
general security agreement. An aircraft owned by the Company is listed as the primary collateral
13. Operating costs:
under the general security agreement. The loan was repaid in its entirety in July 2012.
For the twelve months ended December 31,
Year ended December 31, 2012
13. Operating costs:
Page 20
2011
2012
Personnel (1)
Purchased services & materials (2)
Travel
Facilities and other expenses (3)
$
$
12,936
7,358
1,152
1,947
23,393
16,990
10,185
1,620
2,581
31,376
$
$
(1) Includes $Nil and $1,266 of separation costs during the twelve months ended December 31,
(1) Includes $Nil and $1,266 of separation costs during the twelve months ended December 31, 2012 and 2011, respectively
2012 and 2011, respectively.
(2) Purchased services and materials include aircraft costs, project costs, professional and consulting fees, and selling and
(2) Purchased services and materials include aircraft costs, project costs, professional and
marketing costs.
consulting fees, and selling and marketing costs.
(3) Includes an expense reversal of $90 and $349 associated with facility closure costs during the twelve months ended
December 31, 2012 and 2011, respectively.
(3) Includes an expense reversal of $90 and $349 associated with facility closure costs during the
14. Share capital:
twelve months ended December 31, 2012 and 2011, respectively.
a. Authorized:
14. Share capital:
(a) Authorized:
The authorized share capital of the Company consists of an unlimited number of Class A common
shares and an unlimited number of Class A participating preferred shares. There are no Class A
participating preferred shares outstanding.
The authorized share capital of the Company consists of an unlimited number of Class A common
shares and an unlimited number of Class A participating preferred shares. There are no Class A
participating preferred shares outstanding.
(b) Issued:
Class A common shares
Shares
Amount
Shares
Amount
December 31, 2012
Number of
December 31, 2011
Number of
Balance, beginning of period:
Unrestricted shares
Restricted shares held in escrow
Share-based compensation
Restricted shares issued into
(released from) escrow
Issuance of shares
Compensation warrants issued to agent
Warrant component of convertible note
Convertible note Issuance costs
Deferred tax effect of convertible note
Securities Issuance costs
Balance, end of period:
Unrestricted shares
78,405,534
582,700
193,992
-
60,796,507
-
$
187,253
-
482,381
138
1,484,027
(56,602)
-
-
-
-
-
-
-
-
-
-
19
(1)
(4)
582,700
16,125,000
-
-
-
-
-
597
-
6,791
(265)
-
-
-
(384)
Restricted shares held in escrow
526,098 $ -
582,700 $ -
78,887,915
$
194,144
78,405,534
$
193,992
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Year ended December 31, 2012
Page 20
For the twelve months ended December 31,
2012
2011
13. Operating costs:
Purchased services & materials (2)
Personnel (1)
Travel
Facilities and other expenses (3)
$
12,936
$
16,990
7,358
1,152
1,947
10,185
1,620
2,581
$
23,393
$
31,376
(1) Includes $Nil and $1,266 of separation costs during the twelve months ended December 31,
2012 and 2011, respectively.
(2) Purchased services and materials include aircraft costs, project costs, professional and
consulting fees, and selling and marketing costs.
(3) Includes an expense reversal of $90 and $349 associated with facility closure costs during the
twelve months ended December 31, 2012 and 2011, respectively.
14. Share capital:
(a) Authorized:
40
The authorized share capital of the Company consists of an unlimited number of Class A common
2012 Annual Report | Consolidated Financial Statements
shares and an unlimited number of Class A participating preferred shares. There are no Class A
participating preferred shares outstanding.
b.
(b) Issued:
Issued:
Class A common shares
Shares
Amount
Shares
Amount
December 31, 2012
Number of
December 31, 2011
Number of
Balance, beginning of period:
Unrestricted shares
Restricted shares held in escrow
Share-based compensation
Restricted shares issued into
(released from) escrow
Issuance of shares
Compensation warrants issued to agent
Warrant component of convertible note
Convertible note Issuance costs
Deferred tax effect of convertible note
Securities Issuance costs
Balance, end of period:
Unrestricted shares
Restricted shares held in escrow
78,405,534
582,700
193,992
-
60,796,507
-
$
187,253
-
482,381
138
1,484,027
(56,602)
-
-
-
-
-
-
-
-
-
19
(1)
(4)
-
582,700
16,125,000
-
-
-
-
-
597
-
6,791
(265)
-
-
-
(384)
78,887,915
194,144
526,098 $ -
$
78,405,534
193,992
582,700 $ -
$
On June 26, 2012, the Company received proceeds from a convertible promissory note. The value
attributable to the warrants and included in share capital at inception of the note was $14, net of
issuance costs of $1 and future tax benefit of $4 (see Note 10).
On June 25, 2012, 349,680 Class A common shares were issued to directors of the Company as
compensation for services. Compensation expense of $81 for these Class A common shares is included
in operating costs (see Note 14(e)).
On March 28, 2012, 61,005 Class A common shares were issued to directors of the Company as
compensation for services. Compensation expense of $27 for these Class A common shares was
included in operating costs in the prior year (see Note 14(e)).
On January 17, 2012, 71,696 Class A common shares, of which 56,602 were released from escrow, were
issued to employees of the Company as compensation for services. Compensation expense of $30 for
these Class A common shares was included in operating costs in the prior year (see Note 14(f)).
On December 12, 2011, 28,351 Class A common shares were issued to an employee of the Company as
compensation for services. Compensation expense of $6 for these Class A common shares is included
in operating costs (see Note 14(f)).
On August 23, 2011, 498,429 Class A common shares were issued to directors of the Company as
compensation for services. Compensation expense of $171 for these Class A common shares is
included in operating costs (see Note 14(e)).
On June 2, 2011, the Company issued 450,000 Class A common shares pursuant to a three-year
employment agreement with the Company’s Chief Executive Officer (CEO). The shares are held by a
third party escrow agent pursuant to an Escrow Agreement (see Note 14(j)) and can be released from
escrow upon the achievement of certain market performance conditions.
On June 2, 2011, the Company issued 384,615 Class A common shares to be issued in exchange for
compensation for employment services provided during the first year of the three year employment
agreement with the Company’s Chief Executive Officer. The shares are held by a third party escrow
agent pursuant to an Escrow Agreement (see Note 14(j)), and are released in quarterly installments
equivalent to $37.5, less applicable withholding taxes. As of December 31, 2012, 308,517 shares have
been released for services rendered.
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
2012 Annual Report | Consolidated Financial Statements
41
Year ended December 31, 2012
Page 22
On April 29, 2011, the Company completed a private placement resulting in the issuance of
On June 2, 2011, 20,656 Class A common shares were issued to a director of the Company as
16,125,000 Units for aggregate consideration of $6,791. Each Unit had a purchase price of $0.40
compensation for services. Compensation expense of $8 for these Class A common shares is included
CDN and consisted of one Class A common share of the Corporation and one Class A common
in operating costs (see Note 14(e)).
share purchase warrant. Each warrant entitles the holder to purchase one Class A common share at
On April 29, 2011, the Company completed a private placement resulting in the issuance of 16,125,000
a purchase price of $0.48 CDN per share for a period of three years from the issue date. In addition,
Units for aggregate consideration of $6,791. Each Unit had a purchase price of $0.40 CDN and
the Corporation paid agency fees of $384 and 1,225,000 warrants to a third party for services
consisted of one Class A common share of the Corporation and one Class A common share purchase
rendered in connection with the transaction. The agency fee warrants were issued on the same
warrant. Each warrant entitles the holder to purchase one Class A common share at a purchase price
terms as the private placement warrants with an exercise price of $0.48 CDN. The Company
of $0.48 CDN per share for a period of three years from the issue date. In addition, the Corporation
paid agency fees of $384 and 1,225,000 warrants to a third party for services rendered in connection
recorded non-cash issuance costs related to this award based on the fair value of the award at the
with the transaction. The agency fee warrants were issued on the same terms as the private placement
date of the closing of $265, bringing the total costs of the issuance to $649. The securities issued in
warrants with an exercise price of $0.48 CDN. The Company recorded non-cash issuance costs related
connection with the private placement contain certain restrictions associated with the resale of the
to this award based on the fair value of the award at the date of the closing of $265, bringing the total
shares.
costs of the issuance to $649. The securities issued in connection with the private placement contain
certain restrictions associated with the resale of the shares.
On March 15, 2011, 79,689 Class A common shares were issued to directors of the Company as
compensation for services. Compensation expense of $33 for these Class A common shares is
On March 15, 2011, 79,689 Class A common shares were issued to directors of the Company as
compensation for services. Compensation expense of $33 for these Class A common shares is included
included in operating costs (see Note 14(e)).
in operating costs (see Note 14(e)).
On March 15, 2011, 548,376 Class A common shares were issued to employees of the Company as
On March 15, 2011, 548,376 Class A common shares were issued to employees of the Company
compensation for services. Compensation expense of $263 for these Class A common shares is
as compensation for services. Compensation expense of $263 for these Class A common shares is
included in operating costs (see Note 14(f)).
included in operating costs (see Note 14(f)).
On February 28, 2011, 56,611 Class A common shares were issued to an employee of the Company
On February 28, 2011, 56,611 Class A common shares were issued to an employee of the Company as
as compensation for services. Compensation expense of $30 for these Class A common shares is
compensation for services. Compensation expense of $30 for these Class A common shares is included
included in operating costs (see Note 14(f)).
in operating costs (see Note 14(f)).
c. Contributed surplus:
(c) Contributed surplus:
Balance, beginning of period
Share-based compensation
Conversion option of convertible note
Issuance costs of convertible note
Deferred tax effect of convertible note
Compensation warrants issued to agent/underwriter
Balance, end of period
d. Loss per share:
(d) Loss per share:
December 31,
2012
December 31,
2011
$
9,663
592
136
(4)
(33)
-
$
8,700
698
-
-
-
265
$
10,354
$
9,663
The calculation of loss per share is based on the weighted average number of Class A common
The calculation of loss per share is based on the weighted average number of Class A common
shares outstanding. Where the impact of the exercise of options or warrants is anti-dilutive, they
shares outstanding. Where the impact of the exercise of options or warrants is anti-dilutive, they are
are not included in the calculation of diluted loss per share. The Company has incurred a net loss for
each period presented and the inclusion of outstanding options and warrants in the loss per share
calculation are considered to be anti-dilutive and are therefore not included in the calculation.
The underlying Class A common shares pertaining to (i) 4,846,320 outstanding share options,
(ii) 19,050,000 outstanding warrants, and (iii) 11,842,729 resulting from the full conversion of an
outstanding convertible note payable (see Note 9) could potentially dilute earnings.
e. Director’s share compensation plan:
The Company has a director’s share compensation plan which originally allowed for the issuance
of up to 400,000 shares of the Company’s Class A common shares to non-employee directors of the
42
2012 Annual Report | Consolidated Financial Statements
Company as part of their annual compensation and was amended in 2011 to 1,400,000 shares. At
the Annual General and Special Meeting of the Shareholders on August 9, 2012, an amendment to
the share compensation plan was approved to increase the maximum number of Class A common
shares of the Corporation issuable there under from 1,400,000 to 2,400,000. As of December 31, 2012,
1,106,413 Class A common shares remain available under the plan. Compensation expense for issued
shares is included in operating costs.
f.
Employee share compensation plan:
The Company established an employee share compensation plan to compensate employees for
services performed. The plan was approved by the shareholders of the Company at the Annual General
Meeting on May 12, 2009. The plan originally allowed for the issuance of up to 1,500,000 shares of
the Company’s Class A common shares to employees. At the Annual General and Special Meeting of
the Shareholders on August 3, 2011, an amendment to the share compensation plan was approved
to increase the maximum number of Class A common shares of the Corporation issuable there under
from 1,500,000 to 4,000,000. As of December 31, 2012, 2,794,812 Class A common shares remain
available for issuance under the plan. Compensation expense for issued shares is included in operating
costs.
Year ended December 31, 2012
INTERMAP TECHNOLOGIES CORPORATION
g. Share option plan:
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
The Company established a share option plan to provide long-term incentives to attract, motivate, and
retain certain key employees, officers, directors, and consultants providing services to the Company.
The plan permits the granting of options to purchase up to 10% of the outstanding Class A common
shares of the Company. As of December 31, 2012, 7,941,401 Class A common shares were authorized
granted an option which exceeds 5% of the issued and outstanding Class A common shares of the
under the plan, of which 4,846,320 share options are issued and outstanding and 3,095,081 options
Company. In addition, the exercise price of each option shall not be less than the market price of
remain available for future issuance. Under the plan, no one individual shall be granted an option
the Company’s Class A common shares on the date of grant. The options are exercisable for a
which exceeds 5% of the issued and outstanding Class A common shares of the Company. In addition,
the exercise price of each option shall not be less than the market price of the Company’s Class A
period of not greater than six years, and generally vest over a period of one to four years. Options
common shares on the date of grant. The options are exercisable for a period of not greater than six
granted to directors generally vest on the date of the grant and expire on the fifth anniversary of the
years, and generally vest over a period of one to four years. Options granted to directors generally vest
date of such grant.
on the date of the grant and expire on the fifth anniversary of the date of such grant.
Page 24
The following table summarizes information regarding share options outstanding at December 31,
The following table summarizes information regarding share options outstanding at December 31,
2012 and December 31, 2011:
2012 and December 31, 2011:
December 31, 2012
Weighted
average
exercise
under option price (CDN)
Number of
shares
December 31, 2011
Weighted
average
exercise
under option price (CDN)
Number of
shares
Options outstanding,
beginning of period
Granted
Expired
Forfeitures
Options outstanding, end of period
5,489,220
345,000
(845,550)
(142,350)
4,846,320
$
$
1.49
0.43
5.08
0.50
0.82
3,844,800
3,624,050
(1,468,875)
(510,755)
5,489,220
3.98
0.45
5.46
1.66
1.49
$
$
Options exercisable, end of period
2,917,362
$
1.01
2,114,910
$
2.97
Weighted average
remaining
contractual life
Options
exercisable
5,000
4.69 years
5.36 years -
3.63 years
4.25 years
4.19 years
4.96 years
4.01 years
3.94 years
200,000
1,009,880
325,000
240,057
112,500
225,000
Exercise
Price
(CDN$)
0.25
0.27
0.33
0.43
0.44
0.46
0.48
0.50
0.66
1.49
1.60
1.84
2.98
4.16
5.75
Options
outstanding
20,000
20,000
200,000
1,378,840
325,000
960,230
450,000
450,000
300,000
119,000
76,000
314,750
12,000
80,000
140,500
4,846,320
3.81 years
1.95 years
3.05 years
3.00 years
1.70 years
1.39 years
0.20 years
3.96 years
131,250
119,000
43,000
274,175
12,000
80,000
140,500
2,917,362
During the twelve months ended December 31, 2012, 345,000 (year ended December 31, 2011 –
3,624,050) options were granted at a weighted-average fair value of $0.43 CDN per share (year ended
December 31, 2011 – $0.43 CDN per share), determined using the Black-Scholes option pricing
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Year ended December 31, 2012
Page 24
granted an option which exceeds 5% of the issued and outstanding Class A common shares of the
Company. In addition, the exercise price of each option shall not be less than the market price of
the Company’s Class A common shares on the date of grant. The options are exercisable for a
period of not greater than six years, and generally vest over a period of one to four years. Options
granted to directors generally vest on the date of the grant and expire on the fifth anniversary of the
The following table summarizes information regarding share options outstanding at December 31,
December 31, 2012
December 31, 2011
Number of
shares
Weighted
average
exercise
Number of
shares
Weighted
average
exercise
under option price (CDN)
under option price (CDN)
date of such grant.
2012 and December 31, 2011:
Options outstanding,
beginning of period
Granted
Expired
Forfeitures
Options outstanding, end of period
$
3.98
0.45
5.46
1.66
2012 Annual Report | Consolidated Financial Statements
1.49
3,844,800
3,624,050
(1,468,875)
(510,755)
5,489,220
5,489,220
345,000
(845,550)
(142,350)
4,846,320
1.49
0.43
5.08
0.50
0.82
$
$
$
43
Options exercisable, end of period
2,917,362
$
1.01
2,114,910
$
2.97
Exercise
Price
(CDN$)
Options
outstanding
Weighted average
remaining
contractual life
Options
exercisable
5,000
0.25
0.27
0.33
0.43
0.44
0.46
0.48
0.50
0.66
1.49
1.60
1.84
INTERMAP TECHNOLOGIES CORPORATION
2.98
INTERMAP TECHNOLOGIES CORPORATION
4.16
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
5.75
(In thousands of United States dollars, except per share information)
(In thousands of United States dollars, except per share information)
4.69 years
5.36 years -
3.63 years
4.25 years
4.19 years
4.96 years
4.01 years
3.94 years
3.81 years
1.95 years
3.05 years
3.00 years
1.70 years
1.39 years
0.20 years
3.96 years
20,000
20,000
200,000
1,378,840
325,000
960,230
450,000
450,000
300,000
119,000
76,000
314,750
12,000
80,000
140,500
4,846,320
200,000
1,009,880
325,000
240,057
112,500
225,000
131,250
119,000
43,000
274,175
12,000
80,000
140,500
2,917,362
Year ended December 31, 2012
Year ended December 31, 2012
Page 25
Page 25
During the twelve months ended December 31, 2012, 345,000 (year ended December 31, 2011 –
During the twelve months ended December 31, 2012, 345,000 (year ended December 31, 2011 –
3,624,050) options were granted at a weighted-average fair value of $0.43 CDN per share (year ended
model on the date of grant with the following assumptions: expected dividend yield 0% (year ended
model on the date of grant with the following assumptions: expected dividend yield 0% (year ended
3,624,050) options were granted at a weighted-average fair value of $0.43 CDN per share (year ended
December 31, 2011 – $0.43 CDN per share), determined using the Black-Scholes option pricing
December 31, 2011 – 0%), risk-free interest rate ranging from 1.32% to 1.91% (year ended December
December 31, 2011 – 0%), risk-free interest rate ranging from 1.32% to 1.91% (year ended December
model on the date of grant with the following assumptions: expected dividend yield 0% (year ended
December 31, 2011 – $0.43 CDN per share), determined using the Black-Scholes option pricing
31, 2011 – 1.92% to 3.04%), volatilities ranging from 80.43% to 85.9% (year ended December 31,
31, 2011 – 1.92% to 3.04%), volatilities ranging from 80.43% to 85.9% (year ended December 31,
December 31, 2011 – 0%), risk-free interest rate ranging from 1.32% to 1.91% (year ended December
2011 – 68.1% to 79.9%), and expected lives of five to six years. The estimated forfeiture rate was
2011 – 68.1% to 79.9%), and expected lives of five to six years. The estimated forfeiture rate was
31, 2011 – 1.92% to 3.04%), volatilities ranging from 80.43% to 85.9% (year ended December 31, 2011
5.43% (year ended December 31, 2011 – 5.43%).
– 68.1% to 79.9%), and expected lives of five to six years. The estimated forfeiture rate was 5.43% (year
5.43% (year ended December 31, 2011 – 5.43%).
ended December 31, 2011 – 5.43%).
(h) Share-based compensation expense:
(h) Share-based compensation expense:
h. Share-based compensation expense:
Non-cash compensation expense has been included in operating costs with respect to share options
Non-cash compensation expense has been included in operating costs with respect to share options
Non-cash compensation expense has been included in operating costs with respect to share options
and shares granted to employees and non-employees as follows:
and shares granted to employees and non-employees as follows:
and shares granted to employees and non-employees as follows:
Employees
Employees
Non-employees
Non-employees
Non-cash compensation
Non-cash compensation
770
770
241
241
1,011
1,011
$
$
$
$
$
$
$
$
497
497
176
176
673
673
i.
Class A common share purchase warrants:
(i) Class A common share purchase warrants:
(i) Class A common share purchase warrants:
A summary of the status of Class A common share purchase warrants is as follows:
A summary of the status of Class A common share purchase warrants is as follows:
A summary of the status of Class A common share purchase warrants is as follows:
Balance, beginning of year
Balance, beginning of year
Issued
Issued
Expired
Expired
Balance, end of year
Balance, end of year
December 31,
December 31,
2012
2012
December 31,
December 31,
2011
2011
17,375,000 575,000
17,375,000 575,000
1,700,000 17,350,000
1,700,000 17,350,000
(25,000) (550,000)
(25,000) (550,000)
19,050,000 17,375,000
19,050,000 17,375,000
j.
Each warrant entitles its holder to one Class A common share upon payment of an exercise price
Each warrant entitles its holder to one Class A common share upon payment of an exercise price
Each warrant entitles its holder to one Class A common share upon payment of an exercise price
ranging from $0.31 CDN to $0.48 CDN, with a weighted average exercise price of $0.46 CDN. Of the
ranging from $0.31 CDN to $0.48 CDN, with a weighted average exercise price of $0.46 CDN. Of
ranging from $0.31 CDN to $0.48 CDN, with a weighted average exercise price of $0.46 CDN. Of
warrants outstanding at the beginning of the year, 17,350,000 expire on April 28, 2014. The 1,700,000
the warrants outstanding at the beginning of the year, 17,350,000 expire on April 28, 2014. The
the warrants outstanding at the beginning of the year, 17,350,000 expire on April 28, 2014. The
warrants issued in connection with the convertible note (see Note 10) expire on June 26, 2015.
1,700,000 warrants issued in connection with the convertible note (see Note 10) expire on June 26,
1,700,000 warrants issued in connection with the convertible note (see Note 10) expire on June 26,
2015.
Restricted shares:
2015.
In connection with the three year employment agreement dated December 3, 2010 entered into
(j) Restricted shares:
(j) Restricted shares:
with the Company’s CEO, the Company issued 450,000 Class A common shares to him during the
In connection with the three year employment agreement dated December 3, 2010 entered into
quarter ended June 30, 2011, and such shares are held by a third party agent pursuant to an Escrow
In connection with the three year employment agreement dated December 3, 2010 entered into
with the Company’s CEO, the Company issued 450,000 Class A common shares to him during the
with the Company’s CEO, the Company issued 450,000 Class A common shares to him during the
quarter ended June 30, 2011, and such shares are held by a third party agent pursuant to an Escrow
quarter ended June 30, 2011, and such shares are held by a third party agent pursuant to an Escrow
Agreement. The Escrow Agreement provides that up to 450,000 shares are to be released only upon
Agreement. The Escrow Agreement provides that up to 450,000 shares are to be released only upon
the achievement of certain market performance conditions based on the performance of the
the achievement of certain market performance conditions based on the performance of the
Company’s share price. The grant date fair value of the restricted shares was $118 and will be
Company’s share price. The grant date fair value of the restricted shares was $118 and will be
charged to non-cash compensation expense over the vesting period, which was determined to be 28
charged to non-cash compensation expense over the vesting period, which was determined to be 28
44
2012 Annual Report | Consolidated Financial Statements
INTERMAP TECHNOLOGIES CORPORATION
INTERMAP TECHNOLOGIES CORPORATION
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
(In thousands of United States dollars, except per share information)
(In thousands of United States dollars, except per share information)
Agreement. The Escrow Agreement provides that up to 450,000 shares are to be released only
upon the achievement of certain market performance conditions based on the performance of the
Company’s share price. The grant date fair value of the restricted shares was $118 and will be charged
to non-cash compensation expense over the vesting period, which was determined to be 28 months.
months. The Board of Directors believes that this arrangement is effective in aligning the interests
months. The Board of Directors believes that this arrangement is effective in aligning the interests
months. The Board of Directors believes that this arrangement is effective in aligning the interests
The Board of Directors believes that this arrangement is effective in aligning the interests of the CEO
of the CEO with the long-term interests of the shareholders of the Company.
with the long-term interests of the shareholders of the Company.
of the CEO with the long-term interests of the shareholders of the Company.
of the CEO with the long-term interests of the shareholders of the Company.
Year ended December 31, 2012
Year ended December 31, 2012
Year ended December 31, 2012
Page 26
Page 26
Page 26
15. Income taxes:
15. Income taxes:
15. Income taxes:
15. Income taxes:
a. Current tax expense (recovery):
(a) Current tax expense (recovery):
(a) Current tax expense (recovery):
(a) Current tax expense (recovery):
December 31
December 31
December 31
Current period
Current period
Current period
Adjustment for prior periods
Adjustment for prior periods
Adjustment for prior periods
(b) Deferred tax expense:
(b) Deferred tax expense:
(b) Deferred tax expense:
Deferred tax expense:
b.
2012
2012
2012
(78)
(78)
(78)
98
98
98
20
20
20
$
$
$
$
$
$
$
$
$
$
$
$
2011
2011
2011
(147)
(147)
(147)
(23)
(23)
(23)
(170)
(170)
(170)
December 31
December 31
December 31
Origination and reversal of temporary differences
Origination and reversal of temporary differences
Origination and reversal of temporary differences
2012
2012
2012
45
45
45
$
$
$
2011
2011
2011
80
80
80
$
$
$
The Company has recognized $37 (year ended December 31, 2011 - $nil) in deferred tax expense
The Company has recognized $37 (year ended December 31, 2011 - $nil) in deferred tax expense
The Company has recognized $37 (year ended December 31, 2011 - $nil) in deferred tax expense
The Company has recognized $37 (year ended December 31, 2011 - $nil) in deferred tax expense
related to the convertible note directly in equity.
related to the convertible note directly in equity.
related to the convertible note directly in equity.
related to the convertible note directly in equity.
(c) Reconciliation of effective tax rate:
(c) Reconciliation of effective tax rate:
(c) Reconciliation of effective tax rate:
c. Reconciliation of effective tax rate:
Income tax expense varies from the amount that would be computed by applying the basic federal
Income tax expense varies from the amount that would be computed by applying the basic federal
Income tax expense varies from the amount that would be computed by applying the basic federal
Income tax expense varies from the amount that would be computed by applying the basic federal
and provincial income tax rates to the net loss before taxes as follows:
and provincial income tax rates to the net loss before taxes as follows:
and provincial income tax rates to the net loss before taxes as follows:
and provincial income tax rates to the net loss before taxes as follows:
December 31,
December 31,
December 31,
Losses, excluding income tax
Losses, excluding income tax
Losses, excluding income tax
Tax rate
Tax rate
Tax rate
Expected Canadian income tax recovery
Expected Canadian income tax recovery
Expected Canadian income tax recovery
Decrease resulting from:
Decrease resulting from:
Decrease resulting from:
Change in unrecognized temporary differences
Change in unrecognized temporary differences
Change in unrecognized temporary differences
Change in Canadian statutory rate
Change in Canadian statutory rate
Change in Canadian statutory rate
Difference between Canadian statutory
Difference between Canadian statutory
Difference between Canadian statutory
rate and those applicable to U.S.
rate and those applicable to U.S.
rate and those applicable to U.S.
and other foreign subsidiaries
and other foreign subsidiaries
and other foreign subsidiaries
Security issuance costs recorded in equity
Security issuance costs recorded in equity
Security issuance costs recorded in equity
Non-deductible expenses and
Non-deductible expenses and
Non-deductible expenses and
non-taxable income
non-taxable income
non-taxable income
Foreign exchange
Foreign exchange
Foreign exchange
Adjustment for prior years income
Adjustment for prior years income
Adjustment for prior years income
tax matters
tax matters
tax matters
Other
Other
Other
$
$
$
$
$
$
2012
2012
2012
(2,991)
(2,991)
(2,991)
25.0%
25.0%
25.0%
748
748
748
2011
2011
2011
(13,506)
(13,506)
(13,506)
26.5%
26.5%
26.5%
3,579
3,579
3,579
$
$
$
$
$
$
(619)
(619)
(619)
-
-
-
257
257
257
-
-
-
(128)
(128)
(128)
-
-
-
(5,176)
(5,176)
(5,176)
(44)
(44)
(44)
1,870
1,870
1,870
172
172
172
(139)
(139)
(139)
(12)
(12)
(12)
(145)
(145)
(145)
(48)
(48)
(48)
65
65
65
$
$
$
(340)
(340)
(340)
-
-
-
(90)
(90)
(90)
$
$
$
d. Recognized deferred tax assets and liabilities:
(d) Recognized deferred tax assets and liabilities:
(d) Recognized deferred tax assets and liabilities:
(d) Recognized deferred tax assets and liabilities:
Deferred income taxes reflect the impact of temporary differences between amounts of assets and
liabilities for financial reporting purposes and such amounts as measured by tax laws. Deferred tax
assets and liabilities recognized at December 31, 2012 and 2011, are as follows:
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Year ended December 31, 2012
Page 27
Deferred income taxes reflect the impact of temporary differences between amounts of assets and
2012 Annual Report | Consolidated Financial Statements
liabilities for financial reporting purposes and such amounts as measured by tax laws. Deferred tax
45
assets and liabilities recognized at December 31, 2012 and 2011, are as follows:
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
December 31,
Liabilities
Assets
2012
2011
2012
2011
Net
2011
2012
Year ended December 31, 2012
-
-
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
-
-
-
-
19
(5)
(697)
(375)
375
-
692
8
356
-
692
13
692
(5)
$
2012
(375)
-
-
(692)
-
(692)
64,032
135,033
-
-
-
(375)
Page 28
19
(375)
(e) Unrecognized deferred tax assets:
8
Page 28
Page 28
Page 28
-
8
2011
The deferred tax asset is recognized when it is probable that future taxable profit will be available to
Property and equipment
356
$
INTERMAP TECHNOLOGIES CORPORATION
Intangible assets
-
INTERMAP TECHNOLOGIES CORPORATION
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
Convertible note
(In thousands of United States dollars, except per share information)
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
Tax loss carryforwards
(e) Unrecognized deferred tax assets:
(In thousands of United States dollars, except per share information)
(In thousands of United States dollars, except per share information)
705
Tax (assets) liabilities
375
Year ended December 31, 2012
Year ended December 31, 2012
Year ended December 31, 2012
Deferred tax assets have not been recognized in respect of the following items:
(692)
Set off of tax
(e) Unrecognized deferred tax assets:
Net tax (assets) liabilities
13
$
(e) Unrecognized deferred tax assets:
December 31
e. Unrecognized deferred tax assets:
Deferred tax assets have not been recognized in respect of the following items:
Deductible temporary differences
Deferred tax assets have not been recognized in respect of the following items:
Deferred tax assets have not been recognized in respect of the following items:
Deferred tax assets have not been recognized in respect of the following items:
Tax loss carryforwards
December 31
December 31
December 31
Deductible temporary differences
Deductible temporary differences
Tax loss carryforwards
Deductible temporary differences
Tax loss carryforwards
Tax loss carryforwards
70,037
127,214
2011
2011
197,251
2011
70,037
70,037
127,214
70,037
127,214
127,214
197,251
197,251
197,251
utilize the benefits. The Company has not recognized deferred tax assets with respect to these items
The deferred tax asset is recognized when it is probable that future taxable profit will be available to
The deferred tax asset is recognized when it is probable that future taxable profit will be available to
The deferred tax asset is recognized when it is probable that future taxable profit will be available to
The deferred tax asset is recognized when it is probable that future taxable profit will be available to
utilize the benefits. The Company has not recognized deferred tax assets with respect to these items
utilize the benefits. The Company has not recognized deferred tax assets with respect to these items
utilize the benefits. The Company has not recognized deferred tax assets with respect to these items
utilize the benefits. The Company has not recognized deferred tax assets with respect to these items
due to the uncertainty of future Company earnings.
due to the uncertainty of future Company earnings.
due to the uncertainty of future Company earnings.
Loss carry forwards:
Loss carry forwards:
i.
Loss carry forwards:
Loss carry forwards:
At December 31, 2012 approximately $136,056 of loss carry forwards and $1,967 of tax credits were
At December 31, 2012 approximately $136,056 of loss carry forwards and $1,967 of tax credits were
At December 31, 2012 approximately $136,056 of loss carry forwards and $1,967 of tax credits
At December 31, 2012 approximately $136,056 of loss carry forwards and $1,967 of tax credits were
available in various jurisdictions. A summary of losses by year of expiry are as follows:
available in various jurisdictions. A summary of losses by year of expiry are as follows:
were available in various jurisdictions. A summary of losses by year of expiry are as follows:
available in various jurisdictions. A summary of losses by year of expiry are as follows:
2014
Twelve months ended December 31,
2015
Twelve months ended December 31,
2014
2018
2015
2014
2020-2032
2018
2015
2020-2032
2018
2020-2032
At December 31, 2012 approximately $136,056 of loss carry forwards and $1,967 of tax credits were
available in various jurisdictions. A summary of losses by year of expiry are as follows:
due to the uncertainty of future Company earnings.
2012
2012
2012
64,032
64,032
135,033
64,032
135,033
135,033
199,065
199,065
199,065
due to the uncertainty of future Company earnings.
$
$
$
$
$
$
2014
2015
2018
2020-2032
$
$
$
$
$
$
Twelve months ended December 31,
Twelve months ended December 31,
Loss carry forwards:
199,065
$
$
$
(f) Movement in deferred tax balances during the year:
1,614
2,816
1,614
1,614
3,135
2,816
2,816
1,614
128,491
3,135
3,135
2,816
136,056
128,491
128,491
3,135
136,056
136,056
128,491
136,056
$
$
$
16. Commitments:
$
f.
(f) Movement in deferred tax balances during the year:
(f) Movement in deferred tax balances during the year:
Movement in deferred tax balances during the year:
Recognized in
Balance at
(f) Movement in deferred tax balances during the year:
Profit and Loss
December 31, 2011
Balance at
Recognized in
Recognized in
Balance at
December 31, 2011
Profit and Loss
Profit and Loss
December 31, 2011
Recognized in
Balance at
$
$
(336)
692
(336)
692
$
$
Profit and Loss
December 31, 2011
(13)
13
(336)
$
$
692
(13)
13
(18)
-
(13)
13
(336)
$
$
692
(18)
-
322
(697)
(18)
-
(13)
13
322
(697)
322
(697)
(18)
-
$
$
(45)
8
$
(45)
$
8
322
(697)
(45)
$
$
8
(45)
$
$
8
Property and equipment
Property and equipment
Intangible assets
Property and equipment
Intangible assets
Convertible note
Intangible assets
Property and equipment
Convertible note
Tax loss carryforwards
Convertible note
Intangible assets
Tax loss carryforwards
Tax loss carryforwards
Convertible note
$
Net tax (assets) liabilities
Tax loss carryforwards
Net tax (assets) liabilities
Net tax (assets) liabilities
16. Commitments:
Net tax (assets) liabilities
Recognized
in Equity
-
-
Recognized
Recognized
in Equity
in Equity
Recognized
$
-
in Equity
$
-
-
37
-
-
$
37
37
-
-
-
37
37
$
37
$
-
$
37
$
37
-
Balance at
December 31, 2012
Balance at
Balance at
December 31, 2012
December 31, 2012
Balance at
$
356
356
$
December 31, 2012
-
$
356
-
19
-
356
$
19
(375)
19
-
(375)
(375)
19
-
$
-
(375)
$
-
$
-
2013
2014
2015
2016
2013
2014
2015
2016
16. Commitments:
16. Commitments:
The Company has commitments related to operating leases for office space and equipment which
The Company has commitments related to operating leases for office space and equipment which
16. Commitments:
The Company has commitments related to operating leases for office space and equipment which require
The Company has commitments related to operating leases for office space and equipment which
require the following payments for each year ending December 31:
require the following payments for each year ending December 31:
the following payments for each year ending December 31:
The Company has commitments related to operating leases for office space and equipment which
require the following payments for each year ending December 31:
959
959
require the following payments for each year ending December 31:
772
959
2013
772
546
772
2014
959
2013
547
370
546
2015
772
2014
370
2,648
370
2016
2015
546
2,648
2,648
370
2016
2,648
During the year ended December 31, 2012, the Company recognized $976 (year ended December 31, 2011 -
$1,767) in operating lease expense for office space.
$
$
$
$
$
$
$
$
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
INTERMAP TECHNOLOGIES CORPORATION
(In thousands of United States dollars, except per share information)
Notes to Consolidated Financial Statements
Year ended December 31, 2012
(In thousands of United States dollars, except per share information)
2012 Annual Report | Consolidated Financial Statements
Page 30
17. Restructuring:
Year ended December 31, 2012
Page 30
46
In January 2011, the Company announced and completed an organizational restructuring. Total
17. Restructuring:
employee headcount was decreased by 30% in the Company’s North American and European
17. Restructuring:
In January 2011, the Company announced and completed an organizational restructuring. Total
offices and 42% in its Indonesian office.
In January 2011, the Company announced and completed an organizational restructuring. Total employee
employee headcount was decreased by 30% in the Company’s North American and European
headcount was decreased by 30% in the Company’s North American and European offices and 42% in its
In June 2011, in an effort to continue to transform into a sales- and marketing-driven organization,
offices and 42% in its Indonesian office.
Indonesian office.
the Company announced the closure and liquidation of its Munich, Germany operations. The
In June 2011, in an effort to continue to transform into a sales- and marketing-driven organization,
In June 2011, in an effort to continue to transform into a sales- and marketing-driven organization, the
closure allows the Company to increase its sales agility on a distributed basis throughout Europe in
the Company announced the closure and liquidation of its Munich, Germany operations. The
Company announced the closure and liquidation of its Munich, Germany operations. The closure allows
the short-term while reducing fixed operating costs for the long-term.
closure allows the Company to increase its sales agility on a distributed basis throughout Europe in
the Company to increase its sales agility on a distributed basis throughout Europe in the short-term while
reducing fixed operating costs for the long-term.
A summary of the cost related to the restructuring events is as follows:
the short-term while reducing fixed operating costs for the long-term.
A summary of the cost related to the restructuring events is as follows:
A summary of the cost related to the restructuring events is as follows:
Workforce
Reduction
Excess
Facility
Total
Amounts recorded for the twelve months ended December 31, 2011
Amounts recorded for the twelve months ended December 31, 2012
Amounts recorded for the twelve months ended December 31, 2011
Total
Amounts recorded for the twelve months ended December 31, 2012
Workforce
$
1,266
Reduction
$
Excess
Facility
349
$
$
-
1,266
1,266
-
$
349
$
259
$
1,615
$
1,525
(90)
(90)
(90)
$
1,615
Total
(90)
Total
At December 31, 2012, the provision associated with the restructuring and other related charges
At December 31, 2012, the provision associated with the restructuring and other related charges consisted
consisted of the following:
of the following:
At December 31, 2012, the provision associated with the restructuring and other related charges
$
1,266
$
$
1,525
259
consisted of the following:
Workforce
Reduction
Excess
Facility
Total
Total
Excess
Facility
(90)
(122)
(90)
720
(122)
720
(90)
(301)
(90)
720
(301)
720
Year ended December 31, 2012
Year ended December 31, 2012
$ 812
349
(229)
$ 812
932
349
(229)
932
$ 1,640
1,615
(2,144)
$ 1,640
1,111
1,615
(2,144)
1,111
Workforce
$ 828
Reduction
1,266
(1,915)
$ 828
179
1,266
(1,915)
-
179
(179)
-
-
(179)
-
INTERMAP TECHNOLOGIES CORPORATION
-
INTERMAP TECHNOLOGIES CORPORATION
-
Notes to Consolidated Financial Statements
-
$
-
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
-
(In thousands of United States dollars, except per share information)
$
-
Balance at January 1, 2011
2011 provisions
Payments
Balance at January 1, 2011
Balance at December 31, 2011
2011 provisions
Payments
2012 adjustments
Balance at December 31, 2011
Payments
2012 adjustments
Balance at December 31, 2012
Payments
Balance at December 31, 2012
Current portion of provisions
Long-term provisions
Current portion of provisions
Long-term provisions
$
The excess facility accrual of $720 is scheduled to be relieved by November 2013, the Ottawa,
The excess facility accrual of $720 is scheduled to be relieved by November 2013, the Ottawa, Canada lease
Canada lease termination date.
The excess facility accrual of $720 is scheduled to be relieved by November 2013, the Ottawa,
termination date.
Canada lease termination date.
18. Segmented information:
The operations of the Company are in one industry segment: digital mapping and related services.
The operations of the Company are in one industry segment: digital mapping and related services.
The operations of the Company are in one industry segment: digital mapping and related services.
Geographic segments of revenue are as follows:
Geographic segments of revenue are as follows:
Geographic segments of revenue are as follows:
Contract
Contract
Services
Services
2012
2012
6,564
6,564
5,338
5,338
-
-
11,902
11,902
Year ended December 31,
Year ended December 31,
United States
United States
Asia/Pacific
Asia/Pacific
Europe
Europe
720
-
720
720
-
720
Page 31
Page 31
Data
Data
Licenses
Licenses
2012
2012
1,909
1,909
11,489
11,489
2,453
2,453
15,851
15,851
Data
Data
Licenses
Licenses
2011
2011
7,548
7,548
2,193
2,193
3,513
3,513
13,254
13,254
Contract
Contract
Services
Services
2011
2011
780
780
8,611
8,611
1,422
1,422
10,813
10,813
18. Segmented information:
18. Segmented information:
720
-
720
720
-
720
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
Property and equipment of the Company are located as follows:
Property and equipment of the Company are located as follows:
Property and equipment of the Company are located as follows:
December 31,
December 31,
Canada
Canada
United States
United States
Asia/Pacific
Asia/Pacific
Europe
Europe
$
$
$
$
2012
2012
168
168
3,447
3,447
83
83
5
5
3,703
3,703
2011
2011
258
258
4,774
4,774
218
218
23
23
5,273
5,273
$
$
$
$
The data library is located in the United States; the intangible assets are located in the Czech
The data library is located in the United States; the intangible assets are located in the Czech
Republic and United States.
Republic and United States.
A summary of sales to major customers that exceeded 10% of total sales during each period are as
A summary of sales to major customers that exceeded 10% of total sales during each period are as
Year ended December 31,
Year ended December 31,
follows:
follows:
Customer A
Customer A
Customer B
Customer B
Customer C
Customer C
19. Financial risk management:
19. Financial risk management:
$
$
$
$
-
-
$
$
$
$
2012
2012
8,056
8,056
5,993
5,993
4,165
4,165
18,214
18,214
2011
2011
247
247
8,817
8,817
9,064
9,064
The Company has exposure to the following risks from its use of financial instruments: credit risk,
The Company has exposure to the following risks from its use of financial instruments: credit risk,
market risk, liquidity risk, and capital risk. Management, the Board of Directors, and the Audit
market risk, liquidity risk, and capital risk. Management, the Board of Directors, and the Audit
Committee monitor risk management activities and review the adequacy of such activities. This
Committee monitor risk management activities and review the adequacy of such activities. This
note presents information about the Company’s exposure to each of the risks as well as the
note presents information about the Company’s exposure to each of the risks as well as the
objectives, policies and processes for measuring and managing those risks.
objectives, policies and processes for measuring and managing those risks.
The Company’s risk management policies are established to identify and analyze the risks faced by
The Company’s risk management policies are established to identify and analyze the risks faced by
the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to
the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to
limits. Risk management policies and systems are reviewed regularly to reflect changes in market
limits. Risk management policies and systems are reviewed regularly to reflect changes in market
conditions and the Company’s activities. The Company, through its training and management
conditions and the Company’s activities. The Company, through its training and management
standards and procedures, aims to develop a disciplined and constructive control environment in
standards and procedures, aims to develop a disciplined and constructive control environment in
which all employees understand their roles and obligations.
which all employees understand their roles and obligations.
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Year ended December 31, 2012
18. Segmented information:
Page 31
The operations of the Company are in one industry segment: digital mapping and related services.
Geographic segments of revenue are as follows:
Year ended December 31,
United States
Asia/Pacific
Europe
Contract
Services
2012
5,338
-
Data
Licenses
2012
11,489
2,453
Contract
Services
2011
8,611
1,422
Data
Licenses
2011
2,193
3,513
$
6,564
$
1,909
$
780
$
7,548
$
11,902
$
15,851
$
10,813
$
13,254
Property and equipment of the Company are located as follows:
December 31,
Canada
United States
Asia/Pacific
Europe
2012
2011
$
258
4,774
2012 Annual Report | Consolidated Financial Statements
218
23
5,273
168
3,447
83
5
3,703
$
$
$
47
The data library is located in the United States; the intangible assets are located in the Czech
Republic and United States.
The data library is located in the United States; the intangible assets are located in the Czech Republic and
United States.
A summary of sales to major customers that exceeded 10% of total sales during each period are as
follows:
A summary of sales to major customers that exceeded 10% of total sales during each period are as follows:
Year ended December 31,
2012
2011
Customer A
Customer B
Customer C
$
$
8,056
5,993
4,165
18,214
$
-
247
8,817
9,064
$
19. Financial risk management:
19. Financial risk management:
The Company has exposure to the following risks from its use of financial instruments: credit risk,
The Company has exposure to the following risks from its use of financial instruments: credit risk, market
risk, liquidity risk, and capital risk. Management, the Board of Directors, and the Audit Committee monitor
market risk, liquidity risk, and capital risk. Management, the Board of Directors, and the Audit
risk management activities and review the adequacy of such activities. This note presents information about
Committee monitor risk management activities and review the adequacy of such activities. This
the Company’s exposure to each of the risks as well as the objectives, policies and processes for measuring
note presents information about the Company’s exposure to each of the risks as well as the
and managing those risks.
objectives, policies and processes for measuring and managing those risks.
The Company’s risk management policies are established to identify and analyze the risks faced by the
The Company’s risk management policies are established to identify and analyze the risks faced by
Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk
the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to
management policies and systems are reviewed regularly to reflect changes in market conditions and the
Company’s activities. The Company, through its training and management standards and procedures, aims
limits. Risk management policies and systems are reviewed regularly to reflect changes in market
to develop a disciplined and constructive control environment in which all employees understand their
conditions and the Company’s activities. The Company, through its training and management
roles and obligations.
standards and procedures, aims to develop a disciplined and constructive control environment in
a. Credit risk
which all employees understand their roles and obligations.
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. Such risks arise principally from certain financial
assets held by the Company consisting of outstanding trade receivables and investment securities.
The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each
customer. However, management also considers the demographics of the Company’s customer base,
including the default risk of the industry and country in which customers operate, as these factors may
have an influence on credit risk.
Approximately 66 percent of the Company’s revenue is attributable to transactions with three key
customers (year ended December 31, 2011 - 38 percent of the revenue was attributable to these three
key customers); however, geographically there is no concentration of credit risk.
The Company has established a credit policy under which each new customer is analyzed individually
for creditworthiness before the Company’s standard payment and delivery terms and conditions are
offered.
A significant portion of the Company’s customers have transacted with the Company in the past or are
reputable large Companies and losses have occurred infrequently.
The maximum exposure to credit risk of the Company at period end is the carrying value of these
financial assets.
i.
Trade receivables
Provisions for doubtful accounts are made on a customer-by-customer basis. All write downs
against receivables are recorded within sales, general and administrative expense in the
statement of operations. The Company is exposed to credit-related losses on sales to customers
outside North America due to potentially higher risks of collectability.
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Year ended December 31, 2012
Page 32
(a) Credit risk
securities.
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. Such risks arise principally from certain
financial assets held by the Company consisting of outstanding trade receivables and investment
The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each
customer. However, management also considers the demographics of the Company’s customer
base, including the default risk of the industry and country in which customers operate, as these
factors may have an influence on credit risk.
Approximately 66 percent of the Company’s revenue is attributable to transactions with three key
customers (year ended December 31, 2011 - 38 percent of the revenue was attributable to these
three key customers); however, geographically there is no concentration of credit risk.
The Company has established a credit policy under which each new customer is analyzed
individually for creditworthiness before the Company’s standard payment and delivery terms and
conditions are offered.
A significant portion of the Company’s customers have transacted with the Company in the past or
are reputable large Companies and losses have occurred infrequently.
The maximum exposure to credit risk of the Company at period end is the carrying value of these
financial assets.
i. Trade receivables
Provisions for doubtful accounts are made on a customer-by-customer basis. All write downs
48
2012 Annual Report | Consolidated Financial Statements
against receivables are recorded within sales, general and administrative expense in the
statement of operations. The Company is exposed to credit-related losses on sales to customers
outside North America due to potentially higher risks of collectability.
Amounts receivable as of December 31, 2012, and December 31, 2011, consist of:
Amounts receivable as of December 31, 2012, and December 31, 2011, consist of:
December 31, December 31,
2011
2012
INTERMAP TECHNOLOGIES CORPORATION
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
(In thousands of United States dollars, except per share information)
Trade amounts receivable
Employee receivables
Other miscellaneous receivables
5,487
16
232
$
$
5,222
16
274
$
5,735
$
5,512
Page 33
Page 33
Year ended December 31, 2012
Year ended December 31, 2012
Trade amounts receivable by geography consist of:
Trade amounts receivable by geography consist of:
Trade amounts receivable by geography consist of:
United States
United States
Canada
Canada
Asia/Pacific
Asia/Pacific
Europe
Europe
December 31, December 31,
2011
December 31, December 31,
2011
2012
2012
$
$
$
$
1,795
1,795
15
15
3,286
3,286
391
391
5,487
5,487
$
$
1,704
1,704
22
22
2,005
2,005
1,491
1,491
$
$
5,222
5,222
An aging of the Company’s trade amounts receivable are as follows:
An aging of the Company’s trade amounts receivable are as follows:
An aging of the Company’s trade amounts receivable are as follows:
December 31, December 31,
2011
December 31, December 31,
2011
2012
2012
Current
Current
31-60 days
31-60 days
61-90 days
61-90 days
Over 91 days
Over 91 days
$
$
4,253
870
130
234
4,253
870
130
234
$
$
3,612
1,034
112
464
3,612
1,034
112
464
$
$
5,487
5,487
$
$
5,222
5,222
As of December 31, 2012, $364 of trade amounts receivable (year ended December 31, 2011 - $576)
As of December 31, 2012, $364 of trade amounts receivable (year ended December 31, 2011 - $576)
were past due. The balance of the past due amounts relate to reoccurring, and historically slow
As of December 31, 2012, $364 of trade amounts receivable (year ended December 31, 2011 - $576)
were past due. The balance of the past due amounts relate to reoccurring, and historically slow
were past due. The balance of the past due amounts relate to reoccurring, and historically slow paying
paying customers and are considered collectible.
paying customers and are considered collectible.
customers and are considered collectible.
ii. Investments in securities
ii. Investments in securities
Investments in securities
ii.
The Company manages its credit risk surrounding cash and cash equivalents by dealing solely
The Company manages its credit risk surrounding cash and cash equivalents by dealing solely
The Company manages its credit risk surrounding cash and cash equivalents by dealing solely
with what management believes to be reputable banks and financial institutions, and limiting
with what management believes to be reputable banks and financial institutions, and limiting
with what management believes to be reputable banks and financial institutions, and limiting
the allocation of excess funds into financial instruments that management believes to be highly
the allocation of excess funds into financial instruments that management believes to be highly
the allocation of excess funds into financial instruments that management believes to be highly
liquid, low risk investments. The balance at December 31, 2012, is held in cash at banks within the
liquid, low risk investments. The balance at December 31, 2012, is held in cash at banks within
liquid, low risk investments. The balance at December 31, 2012, is held in cash at banks within
United States, Canada, Europe, Asia, and Australia to facilitate the payment of operations in those
the United States, Canada, Europe, Asia, and Australia to facilitate the payment of operations in
jurisdictions.
the United States, Canada, Europe, Asia, and Australia to facilitate the payment of operations in
those jurisdictions.
those jurisdictions.
b. Market risk
i.
i.
Foreign exchange risk
Foreign exchange risk
Foreign exchange risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates,
(b) Market risk
(b) Market risk
will affect the Company’s income or the value of its holding of financial instruments.
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest
i.
rates, will affect the Company’s income or the value of its holding of financial instruments.
rates, will affect the Company’s income or the value of its holding of financial instruments.
The Company operates internationally and is exposed to foreign exchange risk from various
currencies, primarily the Canadian dollar, Euro, British pound, Indonesian rupiah, Czech Republic
koruna, and Australian dollar. Foreign exchange risk arises from sales and purchase transactions
The Company operates internationally and is exposed to foreign exchange risk from various
The Company operates internationally and is exposed to foreign exchange risk from various
as well as recognized financial assets and liabilities that are denominated in a currency other than
currencies, primarily the Canadian dollar, Euro, British pound, Indonesian rupiah, Czech
the United States dollar, which is the functional currency of the Company and its subsidiaries.
currencies, primarily the Canadian dollar, Euro, British pound, Indonesian rupiah, Czech
Republic koruna, and Australian dollar. Foreign exchange risk arises from sales and purchase
Republic koruna, and Australian dollar. Foreign exchange risk arises from sales and purchase
transactions as well as recognized financial assets and liabilities that are denominated in a
transactions as well as recognized financial assets and liabilities that are denominated in a
49
INTERMAP TECHNOLOGIES CORPORATION
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
(In thousands of United States dollars, except per share information)
Year ended December 31, 2012
Year ended December 31, 2012
Page 34
Page 34
2012 Annual Report | Consolidated Financial Statements
currency other than the United States dollar, which is the functional currency of the Company
currency other than the United States dollar, which is the functional currency of the Company
and its subsidiaries.
and its subsidiaries.
The Company’s primary objective in managing its foreign exchange risk is to preserve sales
The Company’s primary objective in managing its foreign exchange risk is to preserve sales
The Company’s primary objective in managing its foreign exchange risk is to preserve sales values
values and cash flows and reduce variations in performance. Although management monitors
values and cash flows and reduce variations in performance. Although management monitors
and cash flows and reduce variations in performance. Although management monitors exposure
exposure to such fluctuations, it does not employ any external hedging strategies to counteract
exposure to such fluctuations, it does not employ any external hedging strategies to counteract
to such fluctuations, it does not employ any external hedging strategies to counteract the foreign
the foreign currency fluctuations.
the foreign currency fluctuations.
currency fluctuations.
The balances in foreign currencies at December 31, 2012, are as follows:
The balances in foreign currencies at December 31, 2012, are as follows:
The balances in foreign currencies at December 31, 2012, are as follows:
(in USD)
(in USD)
Cash and cash equivalents
Cash and cash equivalents
Amounts receivable
Amounts receivable
Accounts payable
Accounts payable
and accrued liabilities
and accrued liabilities
Bank, term loans, and
Bank, term loans, and
finance leases
finance leases
Canadian
Canadian
Dollar
Dollar
101
101
149
149
$
$
$
$
Euro British Pound
Euro British Pound
22
22
106
106
$
$
39
39
167
167
Indonesian
Indonesian
Rupiah
Rupiah
13
13
7
7
$
$
Czech
Czech
Republic
Republic
Koruna
Koruna
307
307
197
197
$
$
Australian
Australian
Dollar
Dollar
$
-
-
$
-
-
(1,368)
(1,368)
(432)
(432)
(636)
(636)
(191)
(191)
(221)
(221)
(3)
(3)
-
-
(1,118)
(1,118)
$
$
-
-
(226)
(226)
$
$
-
-
(508)
(508)
$
$
-
-
(171)
(171)
$
$
-
-
283
283
$
$
-
-
$
$
(3)
(3)
The balances in foreign currencies at December 31, 2011, are as follows:
The balances in foreign currencies at December 31, 2011, are as follows:
The balances in foreign currencies at December 31, 2011, are as follows:
(in USD)
(in USD)
Cash and cash equivalents
Cash and cash equivalents
Amounts receivable
Amounts receivable
Accounts payable
Accounts payable
and accrued liabilities
and accrued liabilities
Bank, term loans, and
Bank, term loans, and
finance leases
finance leases
Canadian
Canadian
Dollar
Dollar
$
6
6
$
229
229
$
$
Euro British Pound
Euro British Pound
$
-
147
-
147
$
146
1,109
146
1,109
Indonesian
Indonesian
Rupiah
Rupiah
$
4
4
$
50
50
Czech
Czech
Republic
Republic
Koruna
Koruna
49
49
220
220
$
$
Australian
Australian
Dollar
Dollar
(5)
(5)
$
$
-
-
(709)
(709)
(602)
(602)
(426)
(426)
(181)
(181)
(194)
(194)
(6)
(6)
(643)
(643)
(1,117)
(1,117)
$
$
-
-
$
654
$
654
-
-
(280)
(280)
$
$
-
-
(127)
(127)
$
$
-
-
$
75
$
75
-
-
$
(11)
$
(11)
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
The Company is exposed to currency risks primarily from the fluctuation of future cash flows of its
The Company is exposed to currency risks primarily from the fluctuation of future cash flows of
Canadian-dollar-denominated long-term debt and obligations under capital lease due to changes
The Company is exposed to currency risks primarily from the fluctuation of future cash flows of
its Canadian-dollar-denominated long-term debt and obligations under capital lease due to
in foreign exchange rates.
its Canadian-dollar-denominated long-term debt and obligations under capital lease due to
changes in foreign exchange rates.
changes in foreign exchange rates.
Based on the net exposures at December 31, 2012 and 2011, and assuming that all other variables
Based on the net exposures at December 31, 2012 and 2011, and assuming that all other
remain constant, a 10% depreciation or appreciation of the United States dollar against the
Based on the net exposures at December 31, 2012 and 2011, and assuming that all other
variables remain constant, a 10% depreciation or appreciation of the United States dollar
following currencies would result in an increase / (decrease) in net earnings by the amounts
variables remain constant, a 10% depreciation or appreciation of the United States dollar
Page 35
shown below:
against the following currencies would result in an increase / (decrease) in net earnings by the
against the following currencies would result in an increase / (decrease) in net earnings by the
amounts shown below:
amounts shown below:
Year ended December 31, 2012
Canadian
Dollar
Euro British Pound
Indonesian
Rupiah
Czech
Republic
Koruna
Australian
Dollar
(in USD)
United States dollar:
Depreciates 10%
Appreciates 10%
December 31, 2011
(in USD)
United States dollar:
Depreciates 10%
Appreciates 10%
$
112
(112)
$
23
(23)
$
51
(51)
$
17
(17)
$
(28)
28
-
$
-
Canadian
Dollar
Euro British Pound
Indonesian
Rupiah
Czech
Republic
Koruna
Australian
Dollar
$
112
(112)
$
(65)
65
$
28
(28)
$
13
(13)
$
(7)
7
1
$
(1)
ii.
Interest rate risk
ii.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market interest rates.
fluctuate because of changes in market interest rates.
Financial assets and financial liabilities with variable interest rates expose the Company to cash
flow interest rate risk. The Company’s cash and cash equivalents include short-term highly
liquid investments that earn interest at market rates. The Company does not have any debt
instruments outstanding with variable interest rates at December 31, 2012, or December 31,
2011.
principle payments.
Financial liabilities that bear interest at fixed rates are subject to fair value interest rate risk. No
currency hedging relationships have been established for the related monthly interest and
The Company manages its interest rate risk by minimizing financing costs on its borrowings
and maximizing interest income earned on excess funds while maintaining the liquidity
necessary to conduct operations on a day-to-day basis.
(c) Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its obligations as they become
due. The Company’s approach to managing capital is to ensure, as far as possible, that it will have
sufficient liquidity to meets its obligations.
The Company manages its liquidity risk by evaluating working capital availability and forecasting
cash flows from operations and anticipated investing and financing activities. At December 31,
50
2012 Annual Report | Consolidated Financial Statements
Financial assets and financial liabilities with variable interest rates expose the Company to cash
flow interest rate risk. The Company’s cash and cash equivalents include short-term highly liquid
investments that earn interest at market rates. The Company does not have any debt instruments
outstanding with variable interest rates at December 31, 2012, or December 31, 2011.
Financial liabilities that bear interest at fixed rates are subject to fair value interest rate risk. No
currency hedging relationships have been established for the related monthly interest and
principle payments.
The Company manages its interest rate risk by minimizing financing costs on its borrowings and
maximizing interest income earned on excess funds while maintaining the liquidity necessary to
conduct operations on a day-to-day basis.
c.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its obligations as they become due.
The Company’s approach to managing capital is to ensure, as far as possible, that it will have sufficient
liquidity to meets its obligations.
INTERMAP TECHNOLOGIES CORPORATION
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Year ended December 31, 2012
The Company manages its liquidity risk by evaluating working capital availability and forecasting cash
flows from operations and anticipated investing and financing activities. At December 31, 2012, the
Company has a cash and cash equivalent balance of $2,055 (year ended December 31, 2011 – $597)
and working capital of $1,904 (year ended December 31, 2011 – negative $993). All of the Company’s
financial liabilities, other than notes payable, provisions, long-term debt and obligations under finance
leases, have a contractual maturity of less than 45 days.
The following are the contractual maturities of the undiscounted cash flows of financial liabilities as
The following are the contractual maturities of the undiscounted cash flows of financial liabilities as
of December 31, 2012:
The following are the contractual maturities of the undiscounted cash flows of financial liabilities as of
of December 31, 2012:
December 31, 2012:
Year ended December 31, 2012
Page 37
Page 37
Payment due:
and accrued liabilities
$
and accrued liabilities
$
Accounts payable
Accounts payable
Convertible Note
Note payable
Convertible Note
Provisions
Note payable
Obligations under
Provisions
finance leases
Obligations under
Long-term debt
finance leases
Long-term debt
In less than 3
months
In less than 3
months
3,066
-
3,066
228
-
-
228
-
95
-
95
-
3,389
$
$
$
Between
3 months and 6
Between
months
3 months and 6
months
667
2,757
667
234
2,757
-
234
-
93
-
93
-
3,751
$
$
$
Between
Payment due:
6 months and 1
Between
year
6 months and 1
year
1,014
-
1,014
494
-
720
494
720
88
-
88
-
2,316
$
Between
1 year and 2
Between
years
1 year and 2
years
$
-
-
-
$
912
-
-
912
-
-
-
-
-
912
$
Between
2 years and 5
Between
years
2 years and 5
years
$
-
-
-
$
31
-
-
31
-
-
-
-
-
31
$
$
3,389
$
3,751
$
2,316
$
912
$
31
The following are the contractual maturities of the undiscounted cash flows of financial liabilities as
The following are the contractual maturities of the undiscounted cash flows of financial liabilities as of
The following are the contractual maturities of the undiscounted cash flows of financial liabilities as
of December 31, 2011:
December 31, 2011:
of December 31, 2011:
Payment due:
and accrued liabilities
$
and accrued liabilities
$
Accounts payable
Accounts payable
Convertible Note
Note payable
Convertible Note
Provisions
Note payable
Obligations under
Provisions
finance leases
Obligations under
Long-term debt
finance leases
Long-term debt
In less than 3
months
In less than 3
months
4,307
-
4,307
-
-
470
-
470
95
143
95
143
5,015
$
$
$
Between
3 months and 6
Between
months
3 months and 6
months
790
-
790
7
-
174
7
174
95
143
95
143
1,209
$
Between
Payment due:
6 months and 1
Between
year
6 months and 1
year
$
-
-
$
-
112
-
244
112
244
191
287
191
287
834
$
Between
1 year and 2
Between
years
1 year and 2
years
$
-
-
-
$
914
-
223
914
223
276
96
276
96
1,509
$
Between
2 years and 5
Between
years
2 years and 5
years
$
-
-
-
$
836
-
-
836
-
-
-
-
-
836
$
$
5,015
$
1,209
$
834
$
1,509
$
836
(d) Capital risk
(d) Capital risk
The Company’s objectives when managing its capital risk is to safeguard its assets, while at the same
The Company’s objectives when managing its capital risk is to safeguard its assets, while at the same
time maintaining investor, creditor, and market confidence, and to sustain future development of
time maintaining investor, creditor, and market confidence, and to sustain future development of
the business and ultimately protect shareholder value. The Company manages its risks and
the business and ultimately protect shareholder value. The Company manages its risks and
exposures by implementing the strategies below.
exposures by implementing the strategies below.
The Company includes shareholders’ equity, long-term debt, long-term notes payable and long-
The Company includes shareholders’ equity, long-term debt, long-term notes payable and long-
term portion of obligations under finance leases in the definition of capital. Total capital at
term portion of obligations under finance leases in the definition of capital. Total capital at
December 31, 2012, was $19,281 (December 31, 2011 - $22,415). To maintain or adjust the capital
December 31, 2012, was $19,281 (December 31, 2011 - $22,415). To maintain or adjust the capital
structure, the Company may issue new shares, issue new debt with different characteristics, acquire
structure, the Company may issue new shares, issue new debt with different characteristics, acquire
or dispose of assets, or adjust the amount of cash and short-term investment balances held.
or dispose of assets, or adjust the amount of cash and short-term investment balances held.
2012 Annual Report | Consolidated Financial Statements
51
d. Capital risk
The Company’s objectives when managing its capital risk is to safeguard its assets, while at the same
time maintaining investor, creditor, and market confidence, and to sustain future development of the
business and ultimately protect shareholder value. The Company manages its risks and exposures by
implementing the strategies below.
The Company includes shareholders’ equity, long-term debt, long-term notes payable and long-term
portion of obligations under finance leases in the definition of capital. Total capital at December 31,
2012, was $19,281 (December 31, 2011 - $22,415). To maintain or adjust the capital structure, the
Company may issue new shares, issue new debt with different characteristics, acquire or dispose of
assets, or adjust the amount of cash and short-term investment balances held.
The Company has established a budgeting and planning process with a focus on cash, working
capital, and operational expenditures and continuously assesses its capital structure in light of current
economic conditions and changes in the Company’s short-term and long-term plans. Neither the
Company nor any of its subsidiaries are subject to externally imposed capital requirements.
e. Fair values
The carrying values of cash and cash equivalents, amounts receivable, unbilled revenue, accounts
payable, accrued liabilities, obligations under finance leases, convertible note and other long-term
liabilities approximate their fair value given their relatively short period to maturity. The carrying value
of long-term notes payable and obligations under finance leases approximates their fair value, as
current market rates available to the Company are similar to those on the long-term notes payable and
obligations under finance leases.
Financial instruments recorded at fair value on the Consolidated Balance Sheet are classified using a
fair value hierarchy that reflects the significance of the inputs used in making the measurements. The
fair value hierarchy has the following levels:
Level 1 – valuations based on quoted prices (unadjusted) in active markets for identical assets or
liabilities;
Level 2 – valuation techniques based on inputs other than quoted prices included in Level 1 that are
observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices;
Level 3 – valuation techniques using inputs for the asset or liability that are not based on observable
market data (unobservable inputs).
The fair value hierarchy requires the use of observable market inputs whenever such inputs exist. A
financial instrument is classified to the lowest level of the hierarchy for which a significant input has
been considered in measuring fair value.
There are no financial instruments measured at fair value. During the year, there have been no transfers
of amounts between any categories. There are no items classified in Level 2 or Level 3 as of December
31, 2012.
20. Key management personnel and director compensation:
The Company’s compensation program specifically provides for total compensation for executive officers,
which is a combination of base salary, performance-based incentives and benefit programs that reflect
aggregated competitive pay in light of business achievement, fulfillment of individual objectives and overall
job performance. Executive officers participate in the Company’s share compensation and share option
plans (Note 14).
52
Page 39
Page 39
INTERMAP TECHNOLOGIES CORPORATION
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Year ended December 31, 2012
Year ended December 31, 2012
2012 Annual Report | Consolidated Financial Statements
objectives and overall job performance. Executive officers participate in the Company’s share
objectives and overall job performance. Executive officers participate in the Company’s share
compensation and share option plans (Note 14).
compensation and share option plans (Note 14).
As of December 31, 2012, the Chief Executive Officer and Chief Financial Officer are each entitled
As of December 31, 2012, the Chief Executive Officer and Chief Financial Officer are each entitled an amount
As of December 31, 2012, the Chief Executive Officer and Chief Financial Officer are each entitled
an amount equal to one year’s annual base salary in the event the Company were to terminate their
equal to one year’s annual base salary in the event the Company were to terminate their employment
an amount equal to one year’s annual base salary in the event the Company were to terminate their
employment agreement, other than due to a material breach of the employment agreement or in the
agreement, other than due to a material breach of the employment agreement or in the event the
employment agreement, other than due to a material breach of the employment agreement or in the
event the Company becomes insolvent.
Company becomes insolvent.
event the Company becomes insolvent.
The compensation of non-employee directors consists of a cash component and a share component.
The compensation of non-employee directors consists of a cash component and a share component.
The compensation of non-employee directors consists of a cash component and a share component.
Directors participate in the Company’s share option plan and director’s share compensation plan
Directors participate in the Company’s share option plan and director’s share compensation plan (Note 14).
Directors participate in the Company’s share option plan and director’s share compensation plan
(Note 14).
(Note 14).
The following summarizes key management personnel and directors compensation for the years ended
The following summarizes key management personnel and directors compensation for the years
December 31, 2012 and 2011:
The following summarizes key management personnel and directors compensation for the years
ended December 31, 2012 and 2011:
ended December 31, 2012 and 2011:
Year ended December 31,
2011
2012
Year ended December 31,
Short-term employee benefits
Share-based payments
Short-term employee benefits
Share-based payments
The following summarizes key management personnel and directors share ownership of the
The following summarizes key management personnel and directors share ownership of the Company as of
The following summarizes key management personnel and directors share ownership of the
Company as of December 31, 2012 and 2011:
December 31, 2012 and 2011:
Company as of December 31, 2012 and 2011:
December 31,
2012
1,527
381
1,527
1,908
381
1,908
$
$
$
$
2011
1,620
620
1,620
2,240
620
2,240
$
$
$
$
2012
2011
December 31,
Number of Class A Common shares held
Percentage of total Class A Common shares issued
Number of Class A Common shares held
Percentage of total Class A Common shares issued
2012
1,750,642
2.20%
1,750,642
2.20%
2011
1,206,168
1.53%
1,206,168
1.53%
Corporate Information
53
OFFICES
Canadian Corporate Office
Intermap Technologies Corp.
#500, 635 – 6th Ave. S.W.
Calgary, Alberta T2P 0T5
Canada
Phone: (403) 266-0900
Fax: (403) 265-0499
Denver Worldwide Headquarters
Intermap Technologies, Inc.
8310 South Valley Highway
Suite 400
Englewood, CO 80112-5809
United States
Phone: (303) 708-0955
Fax: (303) 708-0952
P.T. ExsaMap Asia
Plaza City View - 2nd Floor
Jl. Kemang Timur No.22
Pejaten Barat, Jakarta
Selatan 12510
Phone: +62 21 719 3808
Fax: +62 21 719 3818
Intermap Technologies s.r.o.
Novodvorska 1010/14
142 00 Prague 4
Czech Republic
Phone: +420 261 341 411
Fax +420 261 341 414
TRANSFER AGENT
Computershare Trust
Company of Canada
600, 530 - 8th Avenue S.W.
Calgary, Alberta T2P 3S8
Canada
AUDITORS
KPMG LLP
160 Elgin Street
Suite 2000
Ottawa, ON K2P 3S8
Canada
STOCK ExCHANGE
INTERMAP STOCK IS LISTED ON THE
TORONTO STOCK EXCHANGE UNDER THE
SYMBOL “IMP.”
OFFICERS & KEY PERSONNEL
Todd A. Oseth
President and CEO
Richard L. Mohr
Senior Vice President and CFO
BOARD OF DIRECTORS
Todd A. Oseth
President and CEO
Intermap Technologies
Colorado, USA
Larry G. Garberding
Chairman
Retired – Executive Vice President and CFO
DTE Energy Company
Donald R. Gardner
Corporate Director
Alberta, Canada
Howard J. Nellor
Retired – President and CEO
Peerless Systems
Florida, USA
Benjamin A. Burditt
Managing Partner
Princeton Strategic Advisors, LLC
New Jersey, USA
Dr. John C. Curlander
President and CEO
Pindrop, Inc.
Colorado, USA
Intermap Technologies
8310 South Valley Highway, Suite 400
Englewood, Colorado 80112-5809
United States
Phone: +1 (303) 708-0955
+1 (303) 708-0952
Fax:
info@intermap.com
E-mail:
www.Intermap.com
Web:
Denver · Calgary · Jakarta · Prague · Washington D.C.