2014
ANNUAL REPORT
Intermap Technologies Corporation
THIS PAGE INTENTIONALLY LEFT BLANK.
President’s Message
Financial information as discussed herein is in U.S. dollars unless otherwise noted.
1
During 2014, our focus was on the continued development of the Orion Platform®, coupled with
operational preparation to support anticipated Spatial Data Infrastructure (“SDI”) contract(s). The Orion
Platform and its SDI capabilities were designed to derive geospatial related answers for our customers.
The year 2014 was a year of investment in Intermap’s future. We continued to make major advancements in
our platform software capabilities, our NEXTMap® database, and in our professional services competencies.
This investment positions us well for the coming year to deliver on the Orion Platform promise we made
to our customers. We are currently pursuing large SDI projects which have initial delivery periods of at
least two years, and are designed to generate recurring revenue streams for years to follow. Our internal
investment during 2014 was necessary to position us for success in these areas.
Our InsitePro™ software application was introduced during the year. InsitePro is a SaaS based application
that uses our Orion Platform and is focused on the property insurance market. During the year, our InsitePro
product team talked to over 40 primary insurers, resulting in significant insight into both the needs of
property insurers and the industries competitive landscape. The combination of our software, high-
quality terrain data, and European insurance experience, provides a compelling basis to help drive further
development of our InsitePro application. No competitor has a geospatial analytical platform and access
to comparable data assets for flood insurance underwriters. The ongoing development of Intermap’s Orion
Platform presents a method for InsitePro to become a complete underwriting solution for large insurance
carriers, including some of the world’s largest multi-nationals. As an example, InsitePro’s first customer was
Swiss Re, delivering flood underwriting software for use in the Brazil property insurance market. As InsitePro
enters 2015, we remain confident in the business potential as we continue to add new functionality and
integrate new datasets into the software.
The Orion Platform was developed to provide an integrated platform, delivering customized and scalable
geospatial solutions, powered from five layers of products and services as follows:
1. 3DBI: Software applications designed to help professionals make better location-based decisions
without the need for expensive and complicated GIS software.
2.
Infrastructure: Network-based software delivered in both platform as a service (“PaaS”) and traditional
licenses.
3. Foundation Data Layer: Seamless, off-the-shelf, high resolution elevation and image data.
4. Fusion Services: Integration of geospatial and location-based content into one homogeneous,
consistent database using Intermap’s proprietary fusion processes and tools.
5. Geospatial Services: Helps a customer define their overall geospatial enterprise problem. The services
also include custom data collections using a variety of sensor types (i.e. radar, LiDAR, satellite, aerial
photography, etc.).
An SDI is the combination of several components, all working together, to allow people across
governments, organizations, and the general public to analyze and share spatial data solutions. The key
components of an SDI include technology, policies, people, processes, and resources – collectively working
together in acquiring, processing and delivering location-based intelligence answers. When designed and
implemented well, an SDI can facilitate economic development, infrastructure growth, security, and safety
to a nation. Further to this, an SDI can drive the creation of a comprehensive national base map and an
integrated geospatial data operating environment.
We believe that an SDI can be essential to the successful completion of major infrastructure projects and
economic growth in developing nations, and can enable projects such as fiber optic telecommunications
lines; expansion of hydroelectric power and build out of the power grid; planning and building of new roads
and railroads; expansion of mining and hydrocarbon exploration; national security; tax revenue growth; and
protection of the environment.
2
An SDI project can support governments with the creation of a comprehensive, three dimensional (3D)
digital infrastructure that can be used to model and plan for a number of infrastructure, economic, and
catastrophic circumstances. An SDI can enable multiple government and commercial uses, and can provide
actionable economic related decisions in the areas of natural resources exploration (agriculture, forestry,
hydroelectricity, mining, oil and gas), environment, education, transportation, communications, health, and
security.
An SDI can also provide the analysis and dissemination of information for government agencies to
proactively respond to identified needs of major development projects. A strong SDI originates with a
foundation of accurate digital geospatial layers, real-time analytics, and location-based answers.
Our adjusted EBITDA for the year was negative $12.0 million compared with positive $1.2 million for 2013.
For the year 2014, our net loss was $12.8 million, or ($0.14) per share, compared with a net loss of $13.5
million (includes a $9.2 million asset impairment charge), or ($0.16) per share, last year.
In summary, during 2014 we were in between major governmental contracts, which is the primary reason
for our decreased operational performance during the year. However, our identified sales opportunities
continued to grow throughout the year, driven primarily by the risk management needs of our customers,
as well as several SDI opportunities internationally. It is important to remember that our SDI business carries
with it significant revenue and operational variations on a quarter-to-quarter, and annual basis, as we saw
during this past year. We are working diligently to close new Orion Platform based SDI contracts during
2015 from our growing list of identified opportunities, which are expected to improve our future financial
results.
During 2014 we invested heavily in our software platform strategy so that we can bring to market a
leading geospatial analytical product that can be easily customized for our customers. This strategy should
result in recurring revenues and profitability in future periods. We have also had some success in the Risk
markets and we continue to pursue the larger SDI opportunities, which will change the entire dynamics
of the business. It’s clear that we are breaking new ground and our opportunities continue to grow. It is
our challenge to capture new opportunities as fast as possible and to drive success for Intermap and its
investors.
The merit of creating our platform-as-a-service is just starting to be experienced and is at the center of our
SDI and Risk opportunities. Today, it represents a small portion of our revenue and we have talked about
the value of this approach for the last few years. In the future, this approach will allow us to remove the
dependency on the project-based revenue that we currently rely on so heavily. In the quarters to come, you
will hear more about where this platform is being used and the new personalities that have been created
for new markets.
And finally, on behalf of myself and all of our employees, I’d like to thank our investors for their continued
support during the year and for sharing our vision. We look forward to a successful and profitable 2015.
(Signed) Todd A. Oseth
Todd A. Oseth, President and Chief Executive Officer
Intermap Technologies
Management’s Discussion and Analysis
3
For the year ended December 31, 2014
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 26, 2015, and should be
read together with the Company’s audited Consolidated Financial Statements and the accompanying
notes for the years ended December 31, 2014 and 2013. 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 Technologies® Corporation
(“Intermap” or the “Company”) with information about the Company and its subsidiaries, including
management’s assessment of Intermap’s® and its subsidiaries’ 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 these
forward-looking statements are based on assumptions that Intermap considers 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
development 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) there will be adequate liquidity available to the Company to carry
out its operations; (ii) the continued sales success of Intermap’s products and services; (iii) the continued
success of business development activities; (iv) there will be no significant delays in the development and
commercialization of the Company’s products; (v) the Company will continue to maintain sufficient and
effective production and software development capabilities to compete on the attributes and cost of its
products; (vi) there will be no significant reduction in the availability of qualified and cost-effective human
resources; (vii) the continued existence and productivity of subsidiary operations; (viii) new products and
services will continue to be added to the Company’s portfolio; (ix) demand for geospatial related products
and services will continue to grow in the foreseeable future; (x) there will be no significant barriers to the
integration of the Company’s products and services into customers’ applications; (xi) the Company will be
able to maintain compliance with applicable contractual and regulatory obligations and requirements,
and (xii) superior 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, cash available to fund operations, availability of capital, nature of government contracts,
revenue fluctuations, economic conditions, loss of key customers, retention and availability of executive
talent, competing technologies, common share price volatility, loss of proprietary information, software
functionality, internet and system infrastructure functionality, information technology security, breakdown
4
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 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 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 global location-based information company, creating a wide variety of geospatial solutions
and analytics from its NEXTMap® database. The Company uses its NEXTMap 3D digital models, together
with aggregated third party data, to create geospatial solutions for its customers. These geospatial solutions
can be used in a wide range of applications including, but not limited to, location-based information,
geographic information systems (GIS), engineering, utilities, global positioning systems (GPS) maps,
geospatial risk assessment, oil and gas, renewable energy, hydrology, environmental planning, wireless
communications, transportation, advertising, and 3D visualization. The NEXTMap data can also be used to
improve the positional accuracy of airborne and satellite images.
Intermap has the ability to create its own digital 3D geospatial data using its proprietary IFSAR radar
technology mounted in a Learjet aircraft. The Company has two IFSAR-equipped aircraft, which provide
operational flexibility related to geographical location of data collection. Intermap’s radar-based technology
allows it to collect data at any time of the day, including under conditions such as cloud cover or darkness,
which are conditions that limit most competitive technologies. The IFSAR radar technology also enables
data to be collected over larger areas, at higher collection speeds, and at accuracy levels that are difficult to
achieve with competitive systems. Once the raw digital data is collected, it is then processed to create three
different geospatial datasets: digital surface models, digital terrain models, and orthorectified radar images.
These datasets can then be further processed and/or augmented with additional data to create value-
added products.
The Company has been actively transitioning its NEXTMap program from primarily an internally created
IFSAR radar-only dataset to an aggregated dataset of IFSAR-derived data and third-party data collected by
multiple sensor technologies, including light detection and ranging (LiDAR), photogrammetry, satellite, and
other available sources. The NEXTMap database also includes information such as 3D city models, census
data, real-time traffic, outdoor advertising assets, weather related hazards, points of interest, cellular towers,
flood models and wildfire models. The Company has many years of experience aggregating data derived
from a number of different sensor technologies and data sources. In addition, the Company is combining its
mapping services capability and NEXTMap database, together with its software application development
capability and system integration expertise, to create entire spatial data infrastructure (SDI) environments
for its customers.
The Company believes the value of its NEXTMap data lies primarily in web-based application solutions for
specific vertical markets, and not solely in the data as a standalone product. 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 land development site, county, or an entire state. Subscribers
to the Company’s web-services can access NEXTMap information using their current web browsers and
through popular desktop GIS software applications.
2014 Annual Report | Management’s Discussion and Analysis 5
Unlike other geospatial companies, Intermap typically retains ownership of its data and licenses the use of
its products and services to its customers. Intermap currently has 5- meter 3D geospatial data commercially
available for 17 countries in Western Europe, the contiguous United States and Hawaii, portions of Alaska,
and significant areas in Southeast Asia. Intermap also has a 10-meter product of the entire world, called
NEXTMap World 10™.
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
2014
2013(1)
2012(1)
Revenue:
Mapping services
Professional services
Data licenses
3DBI software applications
Total revenue
$
2.9
0.9
3.3
1.2
$
18.0
1.0
3.9
1.5
$
11.0
0.9
14.1
1.8
$
8.3
$
24.4
$
27.8
Net loss before data library impairment
$
(12.8)
$
(4.3)
$
(3.1)
Data library impairment
Net loss
EPS basic and diluted
Adjusted EBITDA
Assets:
-
(9.2)
-
$
(12.8)
$
(13.5)
$
(3.1)
$
(0.14)
$
(0.16)
$
(0.04)
$
(12.0)
$
1.2
$
5.0
Cash, amounts receivable, and unbilled revenue
$
2.1
$
9.0
$
10.5
Data library
Total assets
Total long-term liabilities (including finance
lease obligations)
$
-
$
-
$
13.8
$
5.3
$
12.9
$
28.9
$
0.5
$
0.4
$
1.3
restated. See Note 5 to the Consolidated Annual Financial Statements.
(1) Net loss before data library impairment, net loss, and EPS basic and diluted amounts have been
(1) Net loss before data library impairment, net loss, and EPS basic and diluted amounts have been restated. See Note 5 to the
Consolidated Annual Financial Statements.
Revenue
Revenue
Consolidated revenue for the year ended December 31, 2014 totaled $8.3 million,
Consolidated revenue for the year ended December 31, 2014 totaled $8.3 million, compared to $24.4 million
compared to $24.4 million for the same period in 2013, representing a 66% decrease. As of
for the same period in 2013, representing a 66% decrease. As of December 31, 2014, there remained $0.5
December 31, 2014, there remained $0.5 million in 3DBI software applications revenue
million in 3DBI software applications revenue from existing contracts to be recognized in future periods.
from existing contracts to be recognized in future periods.
Mapping services revenue for the year ended December 31, 2014 totaled $2.9 million, compared to $18.0
Mapping services revenue for the year ended December 31, 2014 totaled $2.9 million,
million for the same period in 2013. During the year ended December 31, 2014, the company recognized
compared to $18.0 million for the same period in 2013. During the year ended December
revenue on a percentage of completion basis on a single contract in North America totaling $2.3 million.
31, 2014, the company recognized revenue on a percentage of completion basis on a single
For the same period in 2013, revenue was recognized on a percentage of completion basis on two contracts
contract in North America totaling $2.3 million. For the same period in 2013, revenue was
consisting of (i) a $13.4 million contract in Southeast Asia, and (ii) a $3.5 million contract in North America.
recognized on a percentage of completion basis on two contracts consisting of (i) a $13.4
Revenue generated from the Company’s mapping services work is typically contracted with government
million contract in Southeast Asia, and (ii) a $3.5 million contract in North America.
entities and includes long sales cycles measured in years. The timing of these contracts is sporadic and the
Revenue generated from the Company’s mapping services work is typically contracted
contracted amounts vary significantly. The decrease in mapping services revenue recorded during 2014 was
with government entities and includes long sales cycles measured in years. The timing of
the primary reason for the year-over-year decrease in total revenue during 2014.
these contracts is sporadic and the contracted amounts vary significantly. The decrease in
mapping services revenue recorded during 2014 was the primary reason for the year-over-
Professional services revenue was $0.9 million for the year ended December 31, 2014, a slight decrease from
year decrease in total revenue during 2014.
$1.0 million for the same period in 2013.
Professional services revenue was $0.9 million for the year ended December 31, 2014, a
slight decrease from $1.0 million for the same period in 2013.
Data licensing revenue for the years ended December 31, 2014 and 2013 totaled $3.3
million and $3.9 million, respectively. The small decrease was primarily the result of
4
2014 Annual Report | Management’s Discussion and Analysis
6
Data licensing revenue for the years ended December 31, 2014 and 2013 totaled $3.3 million and $3.9
million, respectively. The small decrease was primarily the result of increased sales from the Company’s
increased sales from the Company’s NEXTMap Asia dataset, offset by decreased sales in
NEXTMap Asia dataset, offset by decreased sales in the U.S. and Europe.
the U.S. and Europe.
3DBI software applications revenue decreased for the year ended December 31, 2014 to $1.2 million from
3DBI software applications revenue decreased for the year ended December 31, 2014 to
$1.5 million for the same period in 2013. The decrease was primarily the result of revenue recognized on
$1.2 million from $1.5 million for the same period in 2013. The decrease was primarily the
one LinkPro 3DBI software application contract in the amount of $0.5 million during 2013, with no similar
result of revenue recognized on one LinkPro 3DBI software application contract in the
amount of $0.5 million during 2013, with no similar size contract recognized during the
size contract recognized during the same period in 2014. The decrease in LinkPro revenue was partially
same period in 2014. The decrease in LinkPro revenue was partially offset by increases in
offset by increases in GeoPro and InsitePro software application revenue during 2014.
GeoPro and InsitePro software application revenue during 2014.
Classification of Operating Costs
Classification of Operating Costs
The composition of the operating costs classification on the Consolidated Statements of Profit and Loss and
The composition of the operating costs classification on the Consolidated Statements of
Other Comprehensive Income is as follows:
Profit and Loss and Other Comprehensive Income is as follows:
U.S. $ thousands
2013
2014
Personnel
Purchased services & materials
Travel
Facilities and other expenses
$
$
12,096
5,532
1,025
2,065
20,718
12,430
7,784
1,577
1,306
23,097
$
$
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, 2014 and 2013, totaled $12.1 million
Personnel expense for the years ended December 31, 2014 and 2013, totaled $12.1 million and $12.4
and $12.4 million, respectively. The 3% year-over-year decrease in personnel expense is
million, respectively. The 3% year-over-year decrease in personnel expense is primarily due to a decrease in
primarily due to a decrease in sales commission expense consistent with the decrease in
sales commission expense consistent with the decrease in revenue recognized on a year-over-year basis.
revenue recognized on a year-over-year basis.
Consolidated active employee headcount was 180 (including 73 in Jakarta, Indonesia) at December 31,
Consolidated active employee headcount was 180 (including 73 in Jakarta, Indonesia) at
2014, an 11% decrease from 202 (including 97 in Jakarta, Indonesia) at December 31, 2013. The decrease
December 31, 2014, an 11% decrease from 202 (including 97 in Jakarta, Indonesia) at
in personnel on a year-over-year basis was the result of reductions in (i) sales and marketing 27%, or 8
December 31, 2013. The decrease in personnel on a year-over-year basis was the result of
personnel; (ii) engineering 47%, or 8 personnel; (iii) operations 14%, or 17 personnel; and (iv) general and
reductions in (i) sales and marketing 27%, or 8 personnel; (ii) engineering 47%, or 8
administrative 5%, or 1 person. These reductions were offset by increases in (i) professional services 100%,
personnel; (iii) operations 14%, or 17 personnel; and (iv) general and administrative 5%,
or 3 personnel; and (ii) software development 64%, or 9 personnel.
or 1 person. These reductions were offset by increases in (i) professional services 100%, or
3 personnel; and (ii) software development 64%, or 9 personnel.
Non-cash compensation expense is included in operating costs and relates to the Company’s long-term
incentive plan, share options, and shares granted to employees and non-employees. Non-cash share-based
Non-cash compensation expense is included in operating costs and relates to the
compensation for the years ended December 31, 2014 and 2013, totaled $0.5 million in each period.
Company’s long-term incentive plan, share options, and shares granted to employees and
non-employees. Non-cash share-based compensation for the years ended December 31,
Purchased Services and Materials
2014 and 2013, totaled $0.5 million in each period.
Purchased services and materials (PS&M) includes (i) aircraft and radar related costs, including jet fuel; (ii)
Purchased Services and Materials
professional and consulting costs; (iii) third-party support services related to the collection, processing and
Purchased services and materials (PS&M) includes (i) aircraft and radar related costs,
editing of the Company’s airborne radar data collection activities; (iv) third party data collection activities
including jet fuel; (ii) professional and consulting costs; (iii) third-party support services
(i.e. LiDAR, satellite imagery, air photo, etc.); and (v) third party software expenses (including maintenance
related to the collection, processing and editing of the Company’s airborne radar data
and support).
collection activities; (iv) third party data collection activities (i.e. LiDAR, satellite imagery,
air photo, etc.); and (v) third party software expenses (including maintenance and
For the years ended December 31, 2014 and 2013, PS&M expense was $5.5 million and $7.8 million,
support).
respectively. The year-over-year decrease is primarily due to decreases in jet fuel and subcontractor costs
associated with the airborne radar collection portion of a project in Southeast Asia during 2013, with no
similar size project in place during 2014. The decreases in airborne radar collection costs were offset by
5
increases in costs associated with (i) contracted personnel used in software development activities, and (ii)
third-party data collection activities for a professional services contract during the first quarter of 2014.
U.S. $ millions
Net loss
Interest expense
Depreciation of property and equipment
Amortization of data library
Amortization of intangible assets
Income tax recovery
EBITDA
Change in value of derivative instruments
Share-based compensation
Gain on disposal of equipment
Loss on foreign currency translation
Restructuring costs recovery
Impairment of data library
Adjusted EBITDA
2014
2013(1)
$
(12.8)
$
(13.5)
$
(10.0)
$
(6.4)
2.0
1.1
-
0.1
(0.4)
(2.0)
0.5
(0.5)
-
-
-
1.0
1.4
4.6
0.1
-
(1.8)
0.5
(0.1)
0.5
(0.7)
9.2
$
(12.0)
$
1.2
(1) Net loss has been restated. See Note 5 to the Consolidated Annual Financial Statements.
Adjusted EBITDA for the year ended December 31, 2014 was negative $12.0 million,
compared to positive $1.2 million for the same period in 2013. The difference in the
adjusted EBITDA loss on a year-over-year basis is primarily attributable to a decrease in
revenue of $16.1 million, offset by a decrease in operating costs of $3.4 million.
Depreciation of Property and Equipment
Depreciation expense for the year ended December 31, 2014 totaled $1.1 million,
compared to $1.4 million for the same period in 2013. 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
current year.
Impairment of Data Library
For the years ended December 31, 2014 and 2013, amortization expense relating to the
data library was $Nil and $4.6 million, respectively. During the fourth quarter of 2013, the
data library asset balance was reduced to $Nil, resulting in no amortization during the
In December 2013, an impairment review was performed to determine if the carrying
value of the Company’s NEXTMap USA and NEXTMap Europe dataset assets were
recoverable. It was determined that the recoverable amount of the datasets was
insufficient to recover the carrying value of the assets, resulting in a pre-tax impairment
charge of $9.2 million.
Financing Costs
Financing costs for the year ended December 31, 2014 totaled $2.0 million, compared to
$1.0 million for the same period in 2013. The increase in year-over-year financing costs is
attributable to interest incurred and accretion on outstanding convertible notes issued in
February 2014 for $5.0 million, and December 2014 for $1.0 million, compared to interest
on a $2.5 million outstanding convertible note that converted during August 2013.
7
2014 Annual Report | Management’s Discussion and Analysis
7
Travel
For the years ended December 31, 2014 and 2013, travel expense was $1.0 million and $1.6 million,
respectively. The decrease during the year ended December 31, 2014 compared to the same period in 2013
is primarily due to project related travel associated with a significant mapping services contract in Southeast
Asia during 2013 where there were no similar size projects in place during the current year. This decrease
was partially offset by increases in sales and marketing related travel during the current year for training of
channel partners on the Company’s software products.
Facilities and Other Expenses
For the years ended December 31, 2014 and 2013, facilities and other expenses were $2.1 and $1.3 million,
respectively. The increase for the year ended December 31, 2014, compared to the same period in 2013
is primarily due to the reversal of a facility provision of $0.7 million (net of deposits) during 2013 with no
similar offset during 2014.
During the second quarter of 2014, the Company secured a new office facility lease in Calgary, Canada.
The lease agreement included reimbursement for leasehold improvement costs of $208 thousand and six
months of free rent that is included in deferred lease inducements and will be amortized over the term of
the 78 month lease.
Adjusted EBITDA
Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted 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 share-based compensation,
change in value of derivative instruments, gain or loss on the disposal of equipment, impairment losses or
reversals, and gain or loss on foreign currency translation. Adjusted EBITDA is included as a supplemental
disclosure because Management believes that such measurement provides a better assessment of the
Company’s operations on a continuing basis by eliminating certain non-cash charges and charges or gains
that are nonrecurring. The most directly comparable measure to adjusted EBITDA calculated in accordance
with IFRS is net income (loss). The following is a reconciliation of the Company’s net loss to adjusted EBITDA.
U.S. $ millions
Net loss
Interest expense
Depreciation of property and equipment
Amortization of data library
Amortization of intangible assets
Income tax recovery
EBITDA
Change in value of derivative instruments
Share-based compensation
Gain on disposal of equipment
Loss on foreign currency translation
Restructuring costs recovery
Impairment of data library
Adjusted EBITDA
2014
2013(1)
$
(12.8)
2.0
1.1
-
0.1
(0.4)
$
(13.5)
1.0
1.4
4.6
0.1
-
$
(10.0)
$
(6.4)
(2.0)
0.5
(0.5)
-
-
-
(1.8)
0.5
(0.1)
0.5
(0.7)
9.2
$
(12.0)
$
1.2
(1) Net loss has been restated. See Note 5 to the Consolidated Annual Financial Statements.
(1) Net loss has been restated. See Note 5 to the Consolidated Annual Financial Statements.
Adjusted EBITDA for the year ended December 31, 2014 was negative $12.0 million,
Adjusted EBITDA for the year ended December 31, 2014 was negative $12.0 million, compared to positive
compared to positive $1.2 million for the same period in 2013. The difference in the
$1.2 million for the same period in 2013. The difference in the adjusted EBITDA loss on a year-over-year basis
adjusted EBITDA loss on a year-over-year basis is primarily attributable to a decrease in
is primarily attributable to a decrease in revenue of $16.1 million, offset by a decrease in operating costs of
revenue of $16.1 million, offset by a decrease in operating costs of $3.4 million.
$3.4 million.
Depreciation of Property and Equipment
Depreciation expense for the year ended December 31, 2014 totaled $1.1 million,
compared to $1.4 million for the same period in 2013. 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
current year.
Impairment of Data Library
For the years ended December 31, 2014 and 2013, amortization expense relating to the
data library was $Nil and $4.6 million, respectively. During the fourth quarter of 2013, the
data library asset balance was reduced to $Nil, resulting in no amortization during the
In December 2013, an impairment review was performed to determine if the carrying
value of the Company’s NEXTMap USA and NEXTMap Europe dataset assets were
recoverable. It was determined that the recoverable amount of the datasets was
insufficient to recover the carrying value of the assets, resulting in a pre-tax impairment
charge of $9.2 million.
Financing Costs
Financing costs for the year ended December 31, 2014 totaled $2.0 million, compared to
$1.0 million for the same period in 2013. The increase in year-over-year financing costs is
attributable to interest incurred and accretion on outstanding convertible notes issued in
February 2014 for $5.0 million, and December 2014 for $1.0 million, compared to interest
on a $2.5 million outstanding convertible note that converted during August 2013.
7
2014 Annual Report | Management’s Discussion and Analysis
8
Depreciation of Property and Equipment
Depreciation expense for the year ended December 31, 2014 totaled $1.1 million, compared to $1.4 million
for the same period in 2013. 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, 2014 and 2013, amortization expense relating to the data library was $Nil
and $4.6 million, respectively. During the fourth quarter of 2013, the data library asset balance was reduced
to $Nil, resulting in no amortization during the current year.
Impairment of Data Library
In December 2013, an impairment review was performed to determine if the carrying value of the
Company’s NEXTMap USA and NEXTMap Europe dataset assets were recoverable. It was determined that
the recoverable amount of the datasets was insufficient to recover the carrying value of the assets, resulting
in a pre-tax impairment charge of $9.2 million.
Financing Costs
Financing costs for the year ended December 31, 2014 totaled $2.0 million, compared to $1.0 million for the
same period in 2013. The increase in year-over-year financing costs is attributable to interest incurred and
accretion on outstanding convertible notes issued in February 2014 for $5.0 million, and December 2014
for $1.0 million, compared to interest on a $2.5 million outstanding convertible note that converted during
August 2013.
Derivative Instruments
The Company has issued non-broker warrants that are considered to be derivative liabilities due to the
warrants being exercisable in a currency (Canadian dollar) other than the Company’s functional currency
(United States dollar). Accordingly, the warrants are measured at fair value at each reporting date, with
changes in fair value included in the consolidated statement of profit and loss and other comprehensive
income for the applicable reporting period. During the year ended December 31, 2014 and 2013, the
change in the fair value of derivative instruments was a gain of $2.0 million and $1.8 million, respectively.
Gain on Disposal of Equipment
During 2014, the Company (i) sold fully depreciated spare radar parts, a transmitter, and miscellaneous
computer equipment and recognized a gain of $128 thousand; (ii) exited a leased facility in Calgary and
recognized a loss on the disposal of leasehold improvements with a net book value of $64 thousand, and
recognized a gain of $76 thousand on the disposal of the remaining deferred leasehold improvements; and
(iii) recognized a gain of $316 thousand on proceeds from an insurance claim for water damaged computer
and storage related equipment.
During 2013, the Company sold fully depreciated assets and recognized a gain of $163 thousand on the
sale of the assets. The assets sold consisted of spare radar parts, a transmitter, spare aircraft parts, and
miscellaneous IT equipment.
2014 Annual Report | Management’s Discussion and Analysis 9
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. The difference between any amounts incurred in one currency and settled in a different currency is
recognized as a gain or loss in the period it is settled.
During the year ended December 31, 2014, a foreign currency translation gain of $7 thousand was
recorded, compared to a loss of $506 thousand for the same period in 2013. The decrease in losses from
the comparative period are primarily the result of the collection of receivable balances denominated in a
foreign currency.
Income Tax
Current income tax expense of $Nil was incurred during the year ended December 31, 2014, compared to
an expense of $28 thousand during the same period in 2013. The expense for the year ended December 31,
2013 relates to taxable income generated from the Company’s Czech Republic subsidiary.
During the year ended December 31, 2014, a deferred income tax recovery of $383 thousand, compared
to $Nil for the same period in 2013 was recorded. The recovery was due to the deferred tax effect of the
difference in the accounting and tax balances of the convertible notes issued in February and December
2014.
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
date over the estimated total costs to complete the contract. While an effort is made to
method of accounting based on the ratio of costs incurred to date over the estimated total costs to
schedule payments on contracts in accordance with work performed, the completion of
complete the contract. While an effort is made to schedule payments on contracts in accordance with work
milestones does not always coincide with the costs incurred on a contract, resulting in
performed, the completion of milestones does not always coincide with the costs incurred on a contract,
revenue being recognized in excess of billings. These amounts are recorded in the
resulting in revenue being recognized in excess of billings. These amounts are recorded in the consolidated
consolidated balance sheet as unbilled revenue.
balance sheet as unbilled revenue.
Amounts receivable and unbilled revenue decreased from $6.6 million at December 31,
2013, to $1.5 million at December 31, 2014. These amounts represent 112 days’ sales at
Amounts receivable and unbilled revenue decreased from $6.6 million at December 31, 2013, to $1.5
December 31, 2014, compared to 142 days’ sales at December 31, 2013, and reflect specific
million at December 31, 2014. These amounts represent 112 days’ sales at December 31, 2014, compared
project billing milestones on current contracts that were in progress on those dates. There
to 142 days’ sales at December 31, 2013, and reflect specific project billing milestones on current contracts
continues to be an amounts receivable balance greater than 90 days primarily from
that were in progress on those dates. There continues to be an amounts receivable balance greater
historically slow paying, but reliable customers. The Company reviews the amounts
than 90 days primarily from historically slow paying, but reliable customers. The Company reviews the
receivable aging monthly and monitors the payment status of each invoice. The Company
amounts receivable aging monthly and monitors the payment status of each invoice. The Company also
also communicates with slow paying or delinquent customers on a regular basis regarding
communicates with slow paying or delinquent customers on a regular basis regarding the schedule of
the schedule of future payments. At the balance sheet date, all amounts receivable
future payments. At the balance sheet date, all amounts receivable balances greater than 90 days are
balances greater than 90 days are considered to be collectible.
considered to be collectible.
Accounts Payable and Accrued Liabilities
Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities generally include trade payables, project-related
accruals, personnel-related costs, and interest on outstanding debt obligations. Accounts
Accounts payable and accrued liabilities generally include trade payables, project-related accruals,
payable and accrued liabilities decreased to $3.8 million at December 31, 2014, from $4.0
personnel-related costs, and interest on outstanding debt obligations. Accounts payable and accrued
million at December 31, 2013.
liabilities decreased to $3.8 million at December 31, 2014, from $4.0 million at December 31, 2013.
U.S. $ thousands
Accounts payable
Accrued liablities
Other taxes payable
December 31,
2014
December 31,
2013
$
$
1,513
2,259
13
3,785
1,997
1,936
20
3,953
$
$
The accounts payable balance decreased from $2.0 million at December 31, 2013 to $1.5
million at December 31, 2014. The decrease is due primarily to lower costs associated with
mapping services contracts and the timing of payments on trade payables. The accrued
liabilities balance increased from $1.9 million at December 31, 2013 to $2.3 million at
December 31, 2014. The increase is primarily due to $0.7 million of interest accrued on a
convertible note, offset by decreased personnel related accruals. Accrued interest related
to the convertible notes totaled $0.7 million and nil at December 31, 2014 and 2013,
respectively.
Notes Payable
The notes payable balance at December 31, 2014 increased to $1.3 million from $1.2
million from December 31, 2013. The increase was due to $0.1 million in reimbursable
project development funds provided by a corporation designed to enable the development
and commercialization of geomatics solutions in Canada.
Convertible Notes
The convertible notes balance of $5.3 million at December 31, 2014 is due to three private
placement convertible debt financings that closed during 2014. The first was issued on
February 7, 2014 for $5.0 million; simple interest is payable at maturity at an annual rate
9
2014 Annual Report | Management’s Discussion and Analysis
10
The accounts payable balance decreased from $2.0 million at December 31, 2013 to $1.5 million at
December 31, 2014. The decrease is due primarily to lower costs associated with mapping services contracts
and the timing of payments on trade payables. The accrued liabilities balance increased from $1.9 million
at December 31, 2013 to $2.3 million at December 31, 2014. The increase is primarily due to $0.7 million
of interest accrued on a convertible note, offset by decreased personnel related accruals. Accrued interest
related to the convertible notes totaled $0.7 million and nil at December 31, 2014 and 2013, respectively.
Notes Payable
The notes payable balance at December 31, 2014 increased to $1.3 million from $1.2 million from December
31, 2013. The increase was due to $0.1 million in reimbursable project development funds provided by a
corporation designed to enable the development and commercialization of geomatics solutions in Canada.
Convertible Notes
The convertible notes balance of $5.3 million at December 31, 2014 is due to three private placement
convertible debt financings that closed during 2014. The first was issued on February 7, 2014 for $5.0
million; simple interest is payable at maturity at an annual rate of 16%; convertible into 12,367,054 common
shares of the Company, at any time, at the option of the holder. The second was issued on December
12, 2014 for $0.5 million; simple interest is payable at maturity at an annual rate of 16%; convertible into
5,741,187 common shares of the Company, at any time, at the option of the holder. The third was issued
on December 26, 2014 for $0.5 million; simple interest is payable at maturity at an annual rate of 18%;
convertible into 8,333,333 common shares of the Company, at any time, at the option of the holder. See
“Note 8” to the Consolidated Financial Statements for further discussion of the terms of the notes.
Unearned Revenue and Deposits
The unearned revenue balance at December 31, 2014 increased to $451 thousand from $110 thousand at
December 31, 2013. 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.
Finance Lease Obligations
Finance lease obligations at December 31, 2014 decreased to $0.2 million from $0.3 million at December 31,
2013 due to recurring payments on an outstanding finance lease obligation.
2014 Annual Report | Management’s Discussion and Analysis 11
of 16%; convertible into 12,367,054 common shares of the Company, at any time, at the
option of the holder. The second was issued on December 12, 2014 for $0.5 million; simple
interest is payable at maturity at an annual rate of 16%; convertible into 5,741,187
common shares of the Company, at any time, at the option of the holder. The third was
issued on December 26, 2014 for $0.5 million; simple interest is payable at maturity at an
annual rate of 18%; convertible into 8,333,333 common shares of the Company, at any
time, at the option of the holder. See “Note 8” to the Consolidated Financial Statements
for further discussion of the terms of the notes.
Unearned Revenue and Deposits
The unearned revenue balance at December 31, 2014 increased to $451 thousand from
$110 thousand at December 31, 2013. 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.
Finance Lease Obligations
Finance lease obligations at December 31, 2014 decreased to $0.2 million from $0.3
million at December 31, 2013 due to recurring payments on an outstanding finance lease
obligation.
QUARTERLY FINANCIAL INFORMATION
QUARTERLY FINANCIAL INFORMATION
Selected Quarterly 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
The following table sets forth selected quarterly financial information for Intermap’s eight most recent fiscal
normal, recurring nature that are, in the opinion of Management, necessary to present a
quarters. This information is unaudited, but reflects all adjustments of a normal, recurring nature that are,
fair statement of Intermap’s consolidated results of operations for the periods presented.
in the opinion of Management, necessary to present a fair statement of Intermap’s consolidated results of
Quarter-to-quarter comparisons of Intermap’s financial results are not necessarily
operations for the periods presented. Quarter-to-quarter comparisons of Intermap’s financial results are not
meaningful and should not be relied on as an indication of future performance.
necessarily meaningful and should not be relied on as an indication of future performance.
U.S. $ millions, except per
share data
Q1
2013 (1)
Q2
2013 (1)
Q3
2013 (1)
Q4
2013 (1)
Q1
2014 (1)
Q2
2014 (1)
Q3
2014 (1)
Q4
2014
Total revenue
$
5.1
$
8.9
$
6.3
$
4.1
$
2.1
$
2.4
$
2.7
$
1.1
Depreciation and amortization
$
1.6
$
1.5
$
1.5
$
1.4
$
0.3
$
0.3
$
0.3
$
0.2
Interest expense
Change in fair value of
derivative intruments
Net income (loss) before data
library impairment
$
0.3
$
0.6
$
-
$
0.1
$
0.2
$
0.3
$
0.5
$
1.0
$
1.0
$
(0.1)
$
(2.0)
$
(0.7)
$
(1.2)
$
(0.2)
$
(0.4)
$
(0.2)
$
(3.1)
$
-
$
1.5
$
(2.7)
$
(2.3)
$
(3.4)
$
(2.5)
$
(4.6)
Data library impairment
$
-
$
-
$
-
$
(9.2)
$
-
$
-
$
-
$
-
Net income (loss)
$
(3.1)
$
-
$
1.5
$
(11.9)
$
(2.3)
$
(3.4)
$
(2.5)
$
(4.6)
Net income (loss) per share
- basic and diluted
$
(0.04)
$
-
$
0.01
$
(0.13)
$
(0.02)
$
(0.04)
$
(0.03)
$
(0.05)
Adjusted EBITDA
$
(0.1)
$
2.2
$
0.6
$
(1.5)
$
(3.6)
$
(2.8)
$
(2.1)
$
(3.5)
(1) Net income (loss) before data library impairment, net income (loss), and net income (loss) per share amounts have
(1) Net income (loss) before data library impairment, net income (loss), and net income (loss) per share amounts have been
restated. See Note 5 to the Consolidated Annual Financial Statements.
been restated. See Note 5 to the Consolidated Annual Financial Statements
Revenue
Consolidated revenue for the fourth quarter of 2014 totaled $1.1 million, compared to $4.1 million for the
same period in 2013, representing a 73% decrease.
10
Mapping services revenue for the quarter ended December 31, 2014 totaled $0.6 thousand, compared
to $1.0 million for the same period in 2013. The Company had no mapping services contracts during the
quarter ended December 31, 2014, compared to two contracts where revenue was recognized in the
amounts of (i) $0.6 million for a contract in Southeast Asia, and (ii) $0.4 million for a contract in North
America.
Professional services revenue was $0.1 million for the quarter ended December 31, 2014, a decrease
from $0.8 million for the same period in 2013. The majority of the decrease was the result of a project
management contract for LiDAR and digital ortho-photo work performed during 2013, with no similar
contract in place during the current year.
Data licensing revenue for the quarters ended December 31, 2014 and 2013 totaled $0.5 million and
$1.7 million, respectively. The decrease was primarily the result of two NEXTMap World 30™ sales totaling
$0.8 million during the fourth quarter of 2013 with no similar size sales in the current year. There was also
decreased revenue from the U.S. and Europe datasets during 2014.
3DBI software applications revenue decreased slightly for the quarter ended December 31, 2014 to $0.5
million from $0.6 million for the same period in 2013. The decrease was primarily the result of revenue
recognized on one LinkPro 3DBI software application contract in the amount of $0.3 million during the
fourth quarter of 2013, with no similar size contract recognized during the same period in 2014, offset by
increased in GeoPro revenue of $0.2 million during the fourth quarter of 2014.
2014 Annual Report | Management’s Discussion and Analysis
12
Personnel
Personnel expense for the three-month periods ended December 31, 2014 and 2013, totaled $3.0 million
and $2.9 million, respectively. Headcount decreased on a year-over-year basis, but was offset by a change in
the mix of wage earners.
Non-cash compensation expense for the quarters ended December 31, 2014 and 2013, totaled $0.1 million
and $0.2 million, respectively. The decrease was due to the expense incurred from options issued to the
Board of Directors during the fourth quarter of 2013 with no similar issuance during the fourth quarter of
2014.
Purchased Services and Materials
For the three-month periods ended December 31, 2014 and 2013, PS&M expense was $1.0 million and
$2.1 million, respectively. The decrease is primarily due to decreases in jet fuel and subcontractor costs
associated with the airborne radar collection portion of a project in Southeast Asia during 2013, with no
similar size contract in place during the same periods in 2014. These decreases are offset by increases in
contracted personnel used in software development activities.
Travel
Travel expense for the three-month periods ended December 31, 2014 and 2013 totaled $0.2 million for
each period. Project related travel associated with a significant mapping services contract in Southeast Asia
during 2013 were offset by increases in sales and marketing related travel during the current year related to
marketing related travel during the current year related to the Company’s new 3DBI
the Company’s new 3DBI software applications products.
software applications products.
Facilities and Other Expenses
Facilities and Other Expenses
For the three-month periods ended December 31, 2014 and 2013, facilities and other
For the three-month periods ended December 31, 2014 and 2013, facilities and other expenses were $0.5
expenses were $0.5 million for each period.
million for each period.
CONTRACTUAL OBLIGATIONS
CONTRACTUAL OBLIGATIONS
Contractual obligations include (i) operating leases on office locations; (ii) notes payable;
Contractual obligations include (i) operating leases on office locations; (ii) notes payable; and (iii) finance
and (iii) finance leases on computer equipment and software. Principal and interest
leases on computer equipment and software. Principal and interest repayments of these obligations are as
repayments of these obligations are as follows:
follows:
Payments due by Period (US $ thousands)
Contractual obligations
Operating leases
Notes payable
Finance leases
Total
Total
$
1,672
1,290
256
3,218
$
Less than 1 year
747
$
1,168
151
2,066
$
1 - 3 years
706
122
105
933
$
$
$
$
219
-
-
219
-
$
-
-
$
-
4 - 5 years After 5 years
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
the business. Net cash flow is affected by the following items: (i) operating activities, including the level
cash flow to fund the business. Net cash flow is affected by the following items: (i)
of amounts receivable, unbilled receivables, accounts payable, accrued liabilities and unearned revenue
operating activities, including the level of amounts receivable, unbilled receivables,
and deposits; (ii) investing activities, including the purchase of property and equipment; and (iii) financing
accounts payable, accrued liabilities and unearned revenue and deposits; (ii) investing
activities, including debt financing and the issuance of capital stock.
activities, including the purchase of property and equipment; and (iii) financing activities,
including debt financing and the issuance of capital stock.
Cash used in operations during the year ended December 31, 2014 totaled $7.4 million,
compared to cash generated from operations of $1.9 million during the same period in
2013. The year-over-year decrease of $9.3 million is due primarily to decreased revenue
and changes in working capital balances.
Net cash used in investing activities totaled $0.2 million for the year ended December 31,
2014, compared to $0.6 million during the same period in 2013. Net cash used in
investing activities for the year ended December 31, 2014 was primarily for the purchase of
computer related equipment of $0.6 million, offset by proceeds from the sale of property
and equipment of $0.4 million. Cash used in investing activities during the year ended
December 31, 2013, was primarily for the purchase of computer related equipment of $0.8
million, offset by proceeds from the sale of property and equipment of $0.2 million.
Net cash generated from financing activities totaled $5.8 million for the year ended
December 31, 2014, compared to net cash used in financing activities of $0.9 million
during the same period in 2013. The net cash generated from financing activities during
the year ended December 31, 2014 resulted from the closing of convertible note debt
financings totaling $6.0 million, and $0.1 million funding received on a long-term note
payable. These amounts were offset by $0.1 million of issuance costs and repayment of
12
2014 Annual Report | Management’s Discussion and Analysis
13
Cash used in operations during the year ended December 31, 2014 totaled $7.4 million, compared to cash
generated from operations of $1.9 million during the same period in 2013. The year-over-year decrease of
$9.3 million is due primarily to decreased revenue and changes in working capital balances.
Net cash used in investing activities totaled $0.2 million for the year ended December 31, 2014, compared
to $0.6 million during the same period in 2013. Net cash used in investing activities for the year ended
December 31, 2014 was primarily for the purchase of computer related equipment of $0.6 million, offset by
proceeds from the sale of property and equipment of $0.4 million. Cash used in investing activities during
the year ended December 31, 2013, was primarily for the purchase of computer related equipment of $0.8
million, offset by proceeds from the sale of property and equipment of $0.2 million.
Net cash generated from financing activities totaled $5.8 million for the year ended December 31, 2014,
compared to net cash used in financing activities of $0.9 million during the same period in 2013. The net
cash generated from financing activities during the year ended December 31, 2014 resulted from the
closing of convertible note debt financings totaling $6.0 million, and $0.1 million funding received on a
long-term note payable. These amounts were offset by $0.1 million of issuance costs and repayment of
long-term debt and capital leases of $0.2 million. The net cash used in financing activities during the same
period in 2013 was due to the payments on long-term debt and capital leases of $0.9 million.
The cash position of the Company at December 31, 2014 (cash and cash equivalents) was $0.5 million,
compared to $2.4 million at December 31, 2013. Working capital decreased to negative $8.7 million as of
December 31, 2014 from positive $2.6 million as of December 31, 2013 due primarily to an increase in short-
term liabilities from the convertible notes entered into during the year totaling $6.0 million, and a decrease
in cash and amounts receivable of $1.9 million and $5.0 million, respectively. At December 31, 2014 and
2013, working capital includes $0.2 million and $1.3 million, respectively, of warrant liabilities that are non-
cash and will be settled in equity of the Company, if exercised.
During the year ended December 31, 2014, the Company generated a net loss of $12.8 million, incurred
negative adjusted EBITDA of $12.0 million, and negative cash flow from operations of $7.4 million. Revenue
for the year ended December 31, 2014 was $8.3 million, which represents a $16.2 million decline from
revenue for the year ended December 31, 2013. In addition, the Company has a deficit of $212.1 million
and a working capital deficiency of $8.7 million. Although the Company has made significant progress in
the development of new product offerings during the year, its continuing operations are dependent on its
ability to produce future profitable operations and generate positive cash flows from operations. 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 in the aggregate raise significant doubt about the Company’s ability to continue as a
going concern. 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 further financing. Management
has taken actions to address these issues including a shift in organizational wide focus from the historical
approach of licensing raw data, to providing customers with complete geospatial solutions with a focus
on software applications. In addition, the Company obtained financing during the year and during the first
quarter of 2015 to help further the development of new product offerings. 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.
2014 Annual Report | Management’s Discussion and Analysis 14
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 of business is measured at the fair value of the
consideration received or receivable.
Software Subscriptions
Revenue from software 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 is the result of the acquisition and processing of digital
map data. Ownership rights to this data are typically retained by the Company and the data is licensed to
customers. Historically, the direct costs of acquiring and processing certain areas of data collected were
capitalized as an investment in the data library when it could be shown that such costs create material
future value to the Company. Capitalized costs included 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. Data library capitalized costs were amortized on a straight-line basis over five years.
The carrying value of the data library was reviewed for impairment whenever events or changes in
circumstances indicated that the carrying amount of the asset may not be recoverable. At December 31,
2013, the Company determined that the recoverable amount of the data library was insufficient to recover
the carrying value of the asset, resulting in a total impairment of the asset. It was determined that the
historical approach of licensing raw data from datasets was no longer a priority for the Company as the
focus for future periods will be primarily on the licensing of the Company’s 3DBI software applications.
These 3DBI software applications deliver specific answers to the end user, rather than raw data. In
accordance with IFRS, the Company will review each reporting period for indications that a reversal of the
impairment losses may be necessary.
2014 Annual Report | Management’s Discussion and Analysis 15
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.
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:
Impairment of Data Library
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.
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.
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, 2014, amounts receivable represented
27% 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.
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.
Derivative Financial Instruments
The Company has determined that its functional currency is the United States dollar and has issued (i) non-
broker warrants, and (ii) debt with a conversion option denominated in a currency other than its functional
currency. The Company measures the cost of the derivative financial instruments by reference to the fair
value of the instruments at the date at which they are granted and revalues them at each reporting date.
In determining the fair value of the non-broker warrants, the Company used the Black-Scholes option
pricing model with the following assumptions: average volatility rate; market price at the reporting date;
risk-free interest rate; the remaining expected life of the warrant; and an exchange rate at the reporting
date. The inputs used in the Black-Scholes model are taken from observable markets. In particular,
changes in estimates of the fair value of the warrants can have a material impact on the reported loss and
comprehensive loss for a given period. Any impact reported has no net effect on cash flows or the operating
results of the Company.
2014 Annual Report | Management’s Discussion and Analysis 16
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.
Other Long-Term Liabilities
The Company uses a Monte Carlo simulation model to estimate the grant date and balance sheet date
fair value of share awards allocated under the Company’s long-term incentive plan (LTIP). The following
assumptions are used in the model: dividend yield; expected volatility; risk-free interest rate; grant date of
August 8, 2014; expiration date of December 31, 2015; discount rate.
Compound Financial Instruments
The Company has issued compound financial instruments which comprise convertible notes denominated
in United States dollars that can be converted to share capital at the option of the holder. The valuation and
accounting for the notes is complex and requires the application of management estimates and judgments
with respect to the determination of appropriate valuation models, certain assumptions applied within
such valuation models, and certain aspects of the accounting method applied on initial recognition. The
assumptions and models used for estimating fair value of convertible note transactions are disclosed in
Note 8 to the Consolidated Annual Financial Statements.
Revenue
Changes to the assumptions used to measure revenue could impact the amount of revenue recognized in
the consolidated financial statements.
FUTURE CHANGES IN ACCOUNTING POLICIES
Financial Instruments
In July 2014, the IASB issued the final version of IFRS 9, bringing together the classification and
measurement, impairment and hedge accounting phases of the project to replace IAS 39, Financial
Instruments: Recognition and Measurement. This standard simplifies the classification of a financial asset
as either at amortized cost or at fair value as opposed to the multiple classifications which were permitted
under IAS 39. This standard also requires the use of a single impairment method as opposed to the multiple
methods in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments
in the context of its business model and the contractual cash flow characteristics of the financial assets.
The standard also adds guidance on the classification and measurement of financial liabilities. IFRS 9 is to
be applied retrospectively for annual periods beginning on or after January 1, 2018. Early application is
permitted. The Company does not intend to adopt this standard early and is currently evaluating the impact
of adopting this standard on the consolidated financial statements.
Revenue from Contracts with Customers
In May 2014, the International Standards Board issued IFRS 15, Revenue from Contracts with Customers,
which provides a single, principles-based five-step model for revenue recognition to be applied to all
customer contracts, and requires enhanced disclosures. This standard is effective January 1, 2017 and allows
early adoption. The Company does not intend to adopt this standard early and is currently evaluating the
impact of adopting this standard on the consolidated financial statements.
2014 Annual Report | Management’s Discussion and Analysis 17
NEW ACCOUNTING STANDARDS AND INTERPRETATIONS
The Company adopted the following new accounting standards and amendments which are effective for
the Company’s interim and annual consolidated financial statements commencing January 1, 2014. The
standards and amendments did not have a significant impact on the financial statements of the Company.
IAS 32, Financial Instruments: Presentation
In December 2011, the International Accounting Standards Board amended International Accounting
Standard 32 to clarify the meaning of when an entity has a current legally enforceable right of set-off. The
amendments are effective for annual periods beginning on or after January 1, 2014 and are required to be
applied retrospectively. The adoption of IAS 32 did not have a material impact on the consolidated financial
statements.
IFRIC 21, Levies
In May 2013, the International Accounting Standards Board issued IFRIC 21 which provides guidance
on accounting for levies in accordance with the requirements of International Accounting Standard 37:
Provisions, Contingent Liabilities and Contingent Assets. The interpretation defines a levy as an outflow
from an entity imposed by a government in accordance with legislation. It also notes that levies do not arise
from executor contracts of other contractual arrangements. The interpretation also confirms that an entity
recognizes a liability for a levy only when the triggering event specified in the legislation occurs. This IFRIC
is effective for annual reporting periods beginning on or after January 1, 2014 and is required to be applied
retrospectively. The adoption of IFRIC 21 did not have a material impact on the consolidated 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 26, 2015, 91,782,665 Class A common shares were issued and outstanding. There are no
preferred shares currently issued and outstanding.
As of March 26, 2014, potential dilutive securities include (i) 7,367,400 outstanding share options in the
Company’s share option plan with a weighted average exercise price of C$0.46; (ii) 13,662,718 warrants
outstanding with a weighted average exercise price of C$0.08 and each warrant entitles the holder to
purchase one Class A common share, and (iii) 14,074,520 conversion shares associated with convertible
debt financing transactions completed in December 2014.
INTERNAL CONTROLS AND DISCLOSURE CONTROLS AND PROCEDURES
Internal Control over Financial Reporting
The Company’s President and Chief Executive Officer and the Company’s Senior Vice President and Chief
Financial Officer have designed, or have caused to be designed under their supervision, internal control
over financial reporting as defined under National Instrument 52-109 – Certification of Disclosure in Issuer’s
Annual and Interim Filings, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with IFRS. The Company’s
President and Chief Executive Officer and the Company’s Senior Vice President and Chief Financial Officer
have evaluated, or caused to be evaluated under their supervision, the effectiveness of the Company’s
internal control over financial reporting and have determined, based on the criteria established by the
Committee of Sponsoring Organizations of the Treadway Commission (2013) and on this evaluation, that
such internal controls over financial reporting were ineffective at the financial year-end.
2014 Annual Report | Management’s Discussion and Analysis 18
The Company has identified a material weakness in internal controls over financial reporting. During the
year-end audit procedures, the Company corrected the accounting for certain financial instruments that
were denominated in a foreign currency or included as foreign currency embedded derivatives - these
include all non-broker warrants. Previously, the Company accounted for the warrants as a component of
equity; however, in accordance with IAS 39, Financial Instruments: Recognition and Measurement, warrants
denominated in a foreign currency and foreign currency embedded derivatives are required to be classified
as liabilities under IFRS and marked to fair value through profit and loss each reporting period. A correction
to the accounting was made and the impact of the correction is detailed in Note 5 to the Consolidated
Financial Statements. There is no impact on total assets, revenue, costs of sales, operating loss, or total
cash flows from operating activities, as a result of the correction. As of March 26, 2015, the weakness has
been remediated. Management has updated the internal control procedures related to complex financial
instruments to ensure they are appropriately accounted for in accordance with IFRS on a quarterly basis.
Changes in Internal Control over Financial Reporting
There have been no significant changes in the design of internal control over financial reporting, other than
as disclosed above, that occurred during the year ended December 31, 2014, that have materially affected,
or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Disclosure Controls and Procedures
The Company’s President and Chief Executive Officer and the Company’s Senior Vice President and Chief
Financial Officer have designed, or have caused to be designed under their supervision, disclosure controls
and procedures to provide reasonable assurance that material information relating to the Company
has been made known to them and that information required to be disclosed in the Company’s annual
filings, interim filings or other reports filed by it or submitted by it under securities legislation is recorded,
processed, summarized and reported within the time periods specified by applicable securities legislation.
The Company’s President and Chief Executive Officer and the Company’s Senior Vice President and Chief
Financial Officer have evaluated, or caused to be evaluated under their supervision, the effectiveness of the
Company’s disclosure controls and procedures. In light of on the material weakness in internal control over
financial reporting discussed above, it has been determined that such disclosure controls and procedures
were ineffective at the financial year-end. As a result, the Company performed additional post-closing
procedures including, but not limited to, a detailed review of complex financial instruments, a review of
the Company’s compliance with its critical accounting policies and discussions with independent auditors
of the Company’s complex financial instruments to ensure the consolidated financial statements were
prepared in accordance with IFRS. Accordingly, management concluded that the consolidated financial
statements present fairly, in all material respects, the Company’s financial results, in accordance with IFRS.
RISKS AND UNCERTAINTIES
The risks and uncertainties described below are not exhaustive. Additional risks not presently known
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.
2014 Annual Report | Management’s Discussion and Analysis 19
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.
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 2014, the Company had one key customer that accounted for 35% of total revenue. During 2013,
the Company had two key customers that accounted for 74% 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 software 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. Intermap continues to evaluate its
data collection capabilities and look for improvements to the performance of its radar technology.
2014 Annual Report | Management’s Discussion and Analysis 20
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.
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 strength of the Company’s balance
sheet, (iii) the announcement of material contract(s), (iv) the low daily trading volume of the Company’s
stock, (v) announcement of technological innovations or new products by the Company or its competitors,
(vi) competition, including pricing pressures and the potential impact of competitors products on sales, (vii)
changing conditions in the digital mapping and related industries, (viii) unexpected production difficulties,
(ix) changes in financial estimates or recommendations by stock market analysts regarding Intermap or its
competitors, (x) announcements by Intermap or its competitors of acquisitions, strategic partnerships, or
joint ventures, (xi) additions or departures of senior management, and (xii) 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.
2014 Annual Report | Management’s Discussion and Analysis 21
Information Technology Security
The Company has accumulated a significant amount of data that is part of the NEXTMap database. 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.
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.
2014 Annual Report | Management’s Discussion and Analysis 22
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.
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.
Management’s Report
23
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 judgments,
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 A. Oseth
President and Chief Executive Officer
Richard L. Mohr
Senior Vice President and Chief Financial Officer
24
Independent Auditors’ Report
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, 2014, December 31,
2013 and January 1, 2013, the consolidated statements of profit and loss and other comprehensive income,
changes in equity and cash flows for the years ended December 31, 2014, and December 31, 2013, 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.
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, 2014, December 31, 2013, and
January 1, 2013, and its consolidated financial performance and its consolidated cash flows for the years
ended December 31, 2014 and December 31, 2013 in accordance with International Financial Reporting
Standards.
Emphasis of Matter
25
Opinion
Without modifying our opinion, we draw attention to Note 2(a) in the consolidated financial statements
which indicates that Intermap Technologies Corporation incurred a net loss of $12,800,000 and negative
cash flows from operations of $7,422,000 for the year ended December 31, 2014 and as at December 31,
2014 had a deficit of $212,152,000 and a working capital deficiency of $8,748,000. These conditions along
with other matters as set forth in Note 2(a) in the consolidated financial statements, indicate the existence
of a material uncertainty that may cast significant doubt about Intermap Technologies Corporation’s ability
to continue as a going concern.
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
December 31, 2009, and its consolidated results of operations and its consolidated cash flows for the
years then ended in accordance with Canadian generally accepted accounting principles.
Emphasis of Matter
Comparative Information
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 5 to the consolidated financial statements which
indicates that the comparative information presented as at and for the year ended December 31, 2013, has
been restated and that the comparative information presented as at January 1, 2013, has been derived from
the consolidated financial statements as at and for the year ended December 31, 2012.
Chartered Professional Accountants, Licensed Public Accountants
Chartered Accountants, Licensed Public Accountants
March 30, 2015
March 3, 2010
Ottawa, Canada
Ottawa, Canada
26
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INTERMAP TECHNOLOGIES CORPORATION
Consolidated Balance Sheets
(In thousands of United States dollars)
Accounts payable and accrued liabilities (Note 7)
$
3,785
$
3,953
$
4,747
Assets
Current assets:
Cash and cash equivalents
Amounts receivable
Unbilled revenue
Prepaid expenses
Work in process
Property and equipment (Note 6)
Data library
Intangible assets
Liabilities and Shareholders' Equity
Current liabilities:
Convertible notes (Note 8)
Current portion of provisions
Current portion of notes payable (Note 9)
Current portion of deferred lease inducements
Unearned revenue and deposits
Warrant liability (Notes 8 and 14)
Conversion option liability (Note 13)
Income taxes payable
Obligations under finance leases (Note 10)
Long-term notes payable (Note 9)
Deferred lease inducements
Obligations under finance leases (Note 10)
Other long-term liabilities (Note 13(g))
Shareholders' equity:
Share capital (Note 13(a))
Accumulated other comprehensive income
Contributed surplus (Note 13(b))
Deficit
Going concern (Note 2(a))
Commitments (Note 16)
Subsequent events (Note 21)
December 31,
2013
January 1,
2013 (1)
December 31,
(as restated -
(as restated -
2014
Note 5)
Note 5)
$
537
$
2,420
$
2,055
$
5,311
$
12,939
$
28,901
1,453
63
412
2,465
2,833
-
-
13
5,313
-
1,168
137
451
226
-
2
131
122
311
96
6
11,213
6,434
151
407
33
9,445
3,378
-
116
-
-
-
-
-
1,188
188
110
1,286
12
115
6,852
202
192
5,735
2,709
625
10
11,134
3,703
13,829
235
1,918
720
892
97
145
3,083
1,994
10
262
13,868
923
390
-
-
11,748
7,246
15,181
194,377
(57)
11,395
(212,152)
(6,437)
194,337
37
10,671
(199,352)
5,693
189,263
58
10,222
(185,823)
13,720
$
5,311
$
12,939
$
28,901
(1) Derived from December 31, 2012 (see Note 5)
See accompanying notes to consolidated financial statements.
On behalf of the Board:
(Signed) Larry G. Garberding
(Signed) Donald R. Gardner
Larry G. Garberding
Director
Donald R. Gardner
Director
Consolidated Financial Statements
27
INTERMAP TECHNOLOGIES CORPORATION
CONSOLIDATED BALANCE SHEETS
Consolidated Balance Sheets
(In thousands of United States dollars)
(In thousands of United States dollars)
Assets
Current assets:
Cash and cash equivalents
Amounts receivable
Unbilled revenue
Prepaid expenses
Work in process
Property and equipment (Note 6)
Data library
Intangible assets
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities (Note 7)
Convertible notes (Note 8)
Current portion of provisions
Current portion of notes payable (Note 9)
Current portion of deferred lease inducements
Unearned revenue and deposits
Warrant liability (Notes 8 and 14)
Conversion option liability (Note 13)
Income taxes payable
Obligations under finance leases (Note 10)
Long-term notes payable (Note 9)
Deferred lease inducements
Obligations under finance leases (Note 10)
Other long-term liabilities (Note 13(g))
Shareholders' equity:
Share capital (Note 13(a))
Accumulated other comprehensive income
Contributed surplus (Note 13(b))
Deficit
Going concern (Note 2(a))
Commitments (Note 16)
Subsequent events (Note 21)
December 31,
2013
(as restated -
Note 5)
January 1,
2013 (1)
(as restated -
Note 5)
December 31,
2014
$
537
1,453
63
412
-
2,465
$
2,420
6,434
151
407
33
9,445
$
2,055
5,735
2,709
625
10
11,134
3,378
-
116
12,939
3,703
13,829
235
28,901
$
$
$
$
2,833
-
13
5,311
3,785
5,313
-
1,168
137
451
226
-
2
131
11,213
122
311
96
6
11,748
$
3,953
-
-
1,188
188
110
1,286
-
12
115
6,852
-
202
192
-
7,246
$
4,747
1,918
720
892
97
145
3,083
1,994
10
262
13,868
923
390
-
-
15,181
189,263
58
10,222
(185,823)
13,720
194,377
(57)
11,395
(212,152)
(6,437)
194,337
37
10,671
(199,352)
5,693
$
5,311
$
12,939
$
28,901
(1) Derived from December 31, 2012 (see Note 5)
See accompanying notes to consolidated financial statements.
See accompanying notes to consolidated financial statements.
On behalf of the Board:
On behalf of the Board:
(Signed) Larry G. Garberding
(Signed) Donald R. Gardner
Larry G. Garberding
Director
(Signed) Larry G. Garberding
Larry G. Garberding
Director
Donald R. Gardner
Director
(Signed) Donald R. Gardner
Donald R. Gardner
Director
28
INTERMAP TECHNOLOGIES CORPORATION
Consolidated Statements of Profit and Loss and Other 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 years ended December 31,
Revenue (Note 11)
Expenses:
Operating costs (Note 12)
Depreciation of property and equipment
Amortization of data library
Impairment of data library
Amortization of intangible assets
(as restated
- Note 5)
2013
2014
$
8,254
$
24,442
20,718
1,123
-
-
103
21,944
23,097
1,421
4,610
9,219
119
38,466
Operating loss
(13,690)
(14,024)
Gain on disposal of equipment
Change in fair value of derivative instruments
Financing costs (Note 12)
Financing income
Gain (loss) on foreign currency translation
Loss before income taxes
Income tax (expense) recovery:
Current
Deferred
Net loss for the period
Other comprehensive loss:
456
2,035
(2,006)
15
7
(13,183)
-
383
383
163
1,817
(951)
-
(506)
(13,501)
(28)
-
(28)
$
(12,800)
$
(13,529)
Items that are or may be reclassified subsequently to profit or loss:
Foreign currency translation differences
(94)
(21)
Comprehensive loss for the period
$
(12,894)
$
(13,550)
Basic and diluted loss per share
$
(0.14)
$
(0.16)
Weighted average number of Class A common
shares - basic & diluted (Note 13(c))
91,707,540
84,566,288
See accompanying notes to consolidated financial statements.
See accompanying notes to consolidated financial statements.
2014 Annual Report | Consolidated Financial Statements
29
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, 2013 (as restated - Note 5)
$
189,263
$
10,222
$
58
$
(185,823)
$
13,720
Comprehensive loss for the period
Share-based compensation
Convertible note conversion
Conversion option of convertible note
Issuance costs
-
81
3,025
1,974
(6)
-
449
-
-
-
(21)
-
-
-
-
(13,529)
-
-
-
-
(13,550)
530
3,025
1,974
(6)
Balance at December 31, 2013 (as restated - Note 5)
$
194,337
$
10,671
$
37
$
(199,352)
$
5,693
Comprehensive loss for the period
Share-based compensation
Conversion option of convertible note
Issuance costs
Deferred tax effect of convertible note
40
-
-
-
-
-
408
704
(5)
(383)
(94)
-
-
-
-
(12,800)
-
-
-
-
(12,894)
448
704
(5)
(383)
Balance at December 31, 2014
$
194,377
$
11,395
$
(57)
$
(212,152)
$
(6,437)
See accompanying notes to consolidated financial statements.
See accompanying notes to consolidated financial statements.
2014 Annual Report | Consolidated Financial Statements
30
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)
For the years ended December 31,
Cash flows provided by:
Operating activities:
Net loss for the period
Adjusted for the following non-cash items:
Depreciation of property and equipment
Amortization of data library
Impairment of data library
Amortization of intangible assets
Share-based compensation expense
Gain on disposal of equipment
Amortization of deferred lease inducements
Extinguishment of facility closure provision
Deferred taxes
Change in fair value of derivative instruments
Financing costs
Current income tax expense
Interest paid
Income tax paid
Changes in working capital:
Amounts receivable
Work in process and other assets
Accounts payable
Accrued liabilities
Unearned revenue and deposits
Gain on foreign currency translation
Investing activities:
Purchase of property and equipment
Proceeds from sale of equipment
Financing activities:
Proceeds from issuance of convertible notes
Financing costs of convertible notes
Proceeds from reimbursable project funding
Repayment of obligations under finance lease
Repayment of long-term debt and notes payable
Effect of foreign exchange on cash
(Decrease) increase in cash and cash equivalents
Cash and cash equivalents, beginning of period
(as restated
- Note 5)
2013
2014
$
(12,800)
$
(13,529)
1,123
-
-
103
454
(456)
(41)
-
(383)
(2,035)
2,006
-
(22)
(10)
5,008
116
(421)
(363)
341
(42)
(7,422)
(609)
360
(249)
6,000
(158)
130
(115)
(65)
5,792
(4)
(1,883)
2,420
1,421
4,610
9,219
119
530
(163)
(97)
(720)
-
(1,817)
951
28
(72)
(60)
(699)
2,755
(114)
(401)
(35)
(12)
1,914
(780)
162
(618)
-
(6)
-
(271)
(636)
(913)
(18)
365
2,055
Cash and cash equivalents, end of period
$
537
$
2,420
See accompanying notes to consolidated financial statements.
See accompanying notes to consolidated financial statements.
2014 Annual Report | Consolidated Financial Statements INTERMAP TECHNOLOGIES CORPORATION
Consolidated Statements of Cash Flows
(In thousands of United States dollars)
(In thousands of United States dollars, except per share information)
1. Reporting entity:
Notes to Consolidated Financial Statements
31
For the years ended December 31,
Cash flows provided by:
Operating activities:
Net loss for the period
Adjusted for the following non-cash items:
Depreciation of property and equipment
Amortization of data library
Impairment of data library
Amortization of intangible assets
Share-based compensation expense
Gain on disposal of equipment
Amortization of deferred lease inducements
Extinguishment of facility closure provision
Deferred taxes
Change in fair value of derivative instruments
Financing costs
Current income tax expense
Interest paid
Income tax paid
Changes in working capital:
Amounts receivable
Work in process and other assets
Accounts payable
Accrued liabilities
Unearned revenue and deposits
Gain on foreign currency translation
Investing activities:
Purchase of property and equipment
Proceeds from sale of equipment
Financing activities:
Proceeds from issuance of convertible notes
Financing costs of convertible notes
Proceeds from reimbursable project funding
Repayment of obligations under finance lease
Repayment of long-term debt and notes payable
Effect of foreign exchange on cash
(Decrease) increase in cash and cash equivalents
Cash and cash equivalents, beginning of period
(as restated
- Note 5)
2013
2014
$
(12,800)
$
(13,529)
1,123
-
-
-
-
103
454
(456)
(41)
(383)
(2,035)
2,006
(22)
(10)
5,008
116
(421)
(363)
341
(42)
(7,422)
(609)
360
(249)
6,000
(158)
130
(115)
(65)
5,792
(4)
(1,883)
2,420
1,421
4,610
9,219
119
530
(163)
(97)
(720)
-
951
28
(72)
(60)
(1,817)
(699)
2,755
(114)
(401)
(35)
(12)
1,914
(780)
162
(618)
-
-
(6)
(271)
(636)
(913)
(18)
365
2,055
Cash and cash equivalents, end of period
$
537
$
2,420
See accompanying notes to consolidated financial statements.
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 Livingston Place, Suite 1000, 250 – 2nd Street Southwest, Calgary,
Alberta, Canada, T2P 0C1.
Intermap is a global location-based information company, creating a wide variety of geospatial solutions
and analytics from its NEXTMap® database. The Company uses its NEXTMap 3D digital models, together
with aggregated third party data, to create geospatial solutions for its customers. These geospatial solutions
can be used in a wide range of applications including, but not limited to, location-based information,
geographic information systems, engineering, utilities, global positioning systems maps, geospatial risk
assessment, oil and gas, renewable energy, hydrology, environmental planning, wireless communications,
transportation, advertising, and 3D visualization.
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, 2014, the Company incurred a
net loss of $12,800 and negative cash flows from operating activities of $7,422. Revenue for the year
ended December 31, 2014 was $8,254, which represents a $16,188 decline from revenue for the year
ended December 31, 2013. In addition, the Company has a deficit of $212,152 and a working capital
deficiency of $8,748.
The above factors in the aggregate raise significant doubt about the Company’s ability to continue as a
going concern. 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.
Management has taken actions to address these issues including a shift in organization wide focus
from the historical approach of licensing raw data, to providing customers with complete geospatial
solutions with a focus on software applications. In addition, the Company obtained financing in 2015
(see Note 21) to help further the development and sales efforts of new product offerings. 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’s future capital requirements will depend on many factors, including, but not limited
to, the market acceptance of its products and services and the timing of working capital payments
associated with such products and services. 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. 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 was 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 (IASB). The
32
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 26, 2015, the date the Board of Directors approved the consolidated financial statements.
c. Measurement basis:
The financial statements have been prepared mainly on the historical cost 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(g) –
Leases, Note 3(k) – Impairment and Note 8 – Convertible Notes.
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.
Impairment of Data Library:
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.
ii. 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.
iii. 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,
2014, amounts receivable represented 27% 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.
iv. 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
2014 Annual Report | Consolidated Financial Statements 33
awards can affect the amounts recognized in the consolidated financial statements.
v. Derivative financial instruments:
The Company has determined that its functional currency is the United States dollar and has
issued (i) non-broker warrants, and (ii) debt with a conversion option denominated in a currency
other than its functional currency. The Company measures the cost of the derivative financial
instruments by reference to the fair value of the instruments at the date at which they are
granted and revalues them at each reporting date. In determining the fair value of the non-
broker warrants, the Company used the Black-Scholes option pricing model with the following
assumptions: average volatility rate; market price at the reporting date; risk-free interest rate; the
remaining expected life of the warrant; and an exchange rate at the reporting date. The inputs
used in the Black-Scholes model are taken from observable markets. In particular, changes in
estimates of the fair value of the warrants can have a material impact on the reported loss and
comprehensive loss for a given period. Any impact reported has no net effect on cash flows or the
operating results of the Company.
vi. 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)).
vii. Other long-term liabilities:
The Company uses a Monte Carlo simulation model to estimate the grant date and balance sheet
date fair value of share awards allocated under its long-term incentive plan (LTIP). The following
assumptions are used in the model: dividend yield; expected volatility; risk-free interest rate; grant
date of August 8, 2014; expiration date of December 31, 2015; discount rate (see Note 13(h)).
viii. Compound financial instruments:
The Company has issued compound financial instruments which comprise convertible notes
denominated in United States dollars that can be converted to share capital at the option of
the holder. The valuation and accounting for the notes is complex and requires the application
of management estimates and judgments with respect to the determination of appropriate
valuation models, certain assumptions applied within such valuation models, and certain aspects
of the accounting method applied on initial recognition. The assumptions and models used for
estimating fair value of convertible note transactions are disclosed in Note 8.
ix. 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
2014 Annual Report | Consolidated Financial Statements 34
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).
With respect to PT ExsaMap Asia (a 90% owned subsidiary), the non-controlling shareholder owns
a written put option for which the Company has recognized as a liability in the financial statements
in accordance with IAS 32, Financial Instruments: Presentation. The Company has elected to use the
anticipated acquisition method to account for the arrangement, in which the recognition of the liability
implies that the interests subject to the put option are deemed to have already been acquired, even
though legally they are still non-controlling interests. Therefore, PT ExsaMap Asia is presented in the
financial statements as fully owned by the Company for accounting purposes, and profits and losses
attributable to the holder of the non-controlling interest subject to the put option are presented as
attributable to the owners of the parent and not as attributable to those non-controlling shareholders.
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
are capitalized and depreciated over the period until the next overhaul. When parts of an item
of property and equipment have different useful lives, they are accounted for as separate items.
2014 Annual Report | Consolidated Financial Statements INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Years ended December 31, 2014 and 2013
Page 6
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 are capitalized and depreciated over the period until the next
overhaul. When parts of an item of property and equipment have different useful lives,
they are accounted for as separate items. Depreciation is calculated over the
Depreciation is calculated over the depreciable amount which is the cost of an asset, less its residual
depreciable amount which is the cost of an asset, less its residual value. Depreciation is
value. Depreciation is provided on the straight-line basis over the following useful lives of the assets:
provided on the straight-line basis over the following useful lives of the assets:
Assets
Years
35
Aircraft
Aircraft engines
Mapping equipment and software
Radar equipment
Furniture and fixtures
Leasehold improvements
10
7
3
5
5
Shorter of useful life or term of lease
Depreciation methods, useful lives and residual values are reviewed at each financial
Depreciation methods, useful lives and residual values are reviewed at each financial year end and
year end and adjusted, if appropriate.
adjusted, if appropriate.
Assets under construction are not depreciated until available for use by the Company.
Expenditures for maintenance and repairs are expensed when incurred.
Assets under construction are not depreciated until available for use by the Company. 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 item if it is probable that the future economic benefits embodied within
The cost of replacing an item of property and equipment is recognized in the carrying amount of
the part will flow to the Company, and its cost can be measured reliably. The carrying
the item if it is probable that the future economic benefits embodied within the part will flow to
amount of the replaced part is derecognized. The costs of the day-to-day servicing of
the Company, and its cost can be measured reliably. The carrying amount of the replaced part is
property and equipment are recognized in profit or loss as incurred.
derecognized. The costs of the day-to-day servicing of property and equipment are recognized in profit
Gains and losses on disposal of property and equipment are determined by comparing
or loss as incurred.
the proceeds from disposal with the carrying amount, and are recognized net of costs
Gains and losses on disposal of property and equipment are determined by comparing the proceeds
associated with the disposal within other income in net loss for the period.
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:
e. Data library:
The Company maintains an extensive world-wide data library, which results from the
acquisition and processing of IFSAR-derived data and third-party data collected by
The Company maintains an extensive world-wide data library, which results from the acquisition and
multiple sensor technologies, including light detection and ranging (LiDAR),
processing of IFSAR-derived data and third-party data collected by multiple sensor technologies,
photogrammetry, satellite, and other available sources. The NEXTMap database also
including light detection and ranging (LiDAR), photogrammetry, satellite, and other available sources.
The NEXTMap database also includes information such as 3D city models, census data, real-time
traffic, outdoor advertising assets, weather related hazards, points of interest, cellular towers, and
flood models. 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. All related expenditures were expensed as incurred.
The data library amounts shown on the Company’s consolidated balance sheet included only elevation
related data and imagery from the Company’s original NEXTMap USA and NEXTMap Europe radar
mapping programs. Historically, the Company had capitalized costs associated with its NEXTMap USA
and NEXTMap Europe datasets. Capitalized costs included direct costs of acquiring and processing
the digital map data, direct overhead associated with the acquisition and processing of the data
and depreciation of the property and equipment used in the production of the data. Data library
capitalized costs were amortized on a straight-line basis over five years. The data library was fully
impaired during the year ended December 31, 2013.
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.
2014 Annual Report | Consolidated Financial Statements
36
The intangible assets internally developed represent Web site development costs, which 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. Management exercises judgment
to determine whether substantially all the risks and rewards incidental to ownership have been
transferred to the Company.
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.
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.
2014 Annual Report | Consolidated Financial Statements 37
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).
Management exercises judgment to determine whether there are factors that would indicate that an
asset or a CGU is impaired. The determination of CGUs is also based on management’s judgment and is
an assessment of the smallest group of assets that generate cash inflows independently of other assets.
Factors considered include whether an active market exists for the output produced by the asset or
group of assets as well as how management monitors and makes decisions about the Company’s
operations.
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.
2014 Annual Report | Consolidated Financial Statements 38
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 equity-settled 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.
The grant date fair value of the equity-settled portion of the LTIP is recognized as an employee
expense, with a corresponding increase in equity, over the service period, and the liability is re-
measured at each reporting date. The fair value of the optional settlement portion of the LTIP is
recognized as an employee expense, with a corresponding increase in liabilities, over the service
period, and is re-measured to the current fair value at each reporting date.
2014 Annual Report | Consolidated Financial Statements 39
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.
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.
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. Financial liabilities at fair value through profit or loss:
Financial liabilities at fair value through profit or loss include financial liabilities held for trading
and financial liabilities designated upon initial recognition at fair value through profit or loss. The
Company has issued non-broker warrants that are considered to be derivative liabilities due to the
warrants being exercisable in a currency (Canadian dollar) other than the Company’s functional
currency (United States dollar). Accordingly, the warrants are measured at fair value at each
reporting date, with changes in fair value included in the consolidated statement of profit and loss
and other comprehensive income for the applicable reporting period.
iv. Other 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.
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
amortized cost using the effective interest method.
2014 Annual Report | Consolidated Financial Statements 40
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Years ended December 31, 2014 and 2013
Page 12
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.
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held
for trading and financial liabilities designated upon initial recognition at fair value
through profit or loss. The Company has issued non-broker warrants that are
considered to be derivative liabilities due to the warrants being exercisable in a
currency (Canadian dollar) other than the Company’s functional currency (United
States dollar). Accordingly, the warrants are measured at fair value at each reporting
date, with changes in fair value included in the consolidated statement of profit and
loss and other comprehensive income for the applicable reporting period.
iv. Other 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.
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 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 notes
Notes payable
Other long-term liabilities
Warrant liability
Conversion option liability
Classification:
Loans and receivables
Loans and receivables
Loans and receivables
Other liabilities
Other liabilities
Other liabilities
Other liabilities
Other liabilities
Financial liability at fair value
through profit and loss
Financial liability at fair value
through profit and loss
v. 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.
vi. 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 re-measured 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:
a. New accounting standards:
The Company adopted the following new accounting standards and amendments which are effective
for the Company’s interim and annual consolidated financial statements commencing January 1, 2014.
i.
IAS 32, Financial Instruments: Presentation
In December 2011, the International Accounting Standards Board amended International
Accounting Standard 32 to clarify the meaning of when an entity has a current legally enforceable
right of set-off. The amendments are effective for annual periods beginning on or after January
1, 2014 and are required to be applied retrospectively. The adoption of IAS 32 did not have a
material impact on the consolidated financial statements.
2014 Annual Report | Consolidated Financial Statements
41
ii.
IFRIC 21, Levies
In May 2013, the International Accounting Standards Board issued IFRIC 21 which provides
guidance on accounting for levies in accordance with the requirements of International
Accounting Standard 37: Provisions, Contingent Liabilities and Contingent Assets. The interpretation
defines a levy as an outflow from an entity imposed by a government in accordance with
legislation. It also notes that levies do not arise from executor contracts of other contractual
arrangements. The interpretation also confirms that an entity recognizes a liability for a levy
only when the triggering event specified in the legislation occurs. This IFRIC is effective for
annual reporting periods beginning on or after January 1, 2014 and is required to be applied
retrospectively. The adoption of IFRIC 21 did not have a material impact on the consolidated
financial statements.
b. Future pronouncements:
The IASB and International Financial Reporting Interpretations Committee (IFRIC) issued the following
standards that have not been applied in preparing these Consolidated Financial Statements, as their
effective dates fall within annual periods beginning subsequent to the current reporting period.
i.
IFRS 9, Financial Instruments
In July 2014, the IASB issued the final version of IFRS 9, bringing together the classification
and measurement, impairment and hedge accounting phases of the project to replace IAS 39,
Financial Instruments: Recognition and Measurement. This standard simplifies the classification
of a financial asset as either at amortized cost or at fair value as opposed to the multiple
classifications which were permitted under IAS 39. This standard also requires the use of a single
impairment method as opposed to the multiple methods in IAS 39. The approach in IFRS 9 is
based on how an entity manages its financial instruments in the context of its business model and
the contractual cash flow characteristics of the financial assets. The standard also adds guidance
on the classification and measurement of financial liabilities. IFRS 9 is to be applied retrospectively
for annual periods beginning on or after January 1, 2018. Early application is permitted. The
Company does not intend to adopt this standard early and is currently evaluating the impact of
adopting this standard on the consolidated financial statements.
ii.
IFRS 15, Revenue from Contracts with Customers
In May 2014, the International Standards Board issued IFRS 15, Revenue from Contracts with
Customers, which provides a single, principles-based five-step model for revenue recognition to
be applied to all customer contracts, and requires enhanced disclosures. This standard is effective
January 1, 2017 and allows early adoption. The Company does not intend to adopt this standard
early and is currently evaluating the impact of adopting this standard on the consolidated
financial statements.
5. Restatement of prior years:
During the year ended December 31, 2014, the Company corrected the accounting for certain financial
instruments that were denominated in a foreign currency or included as foreign currency embedded
derivatives - these include all non-broker warrants. Previously the Company accounted for the warrants
as a component of equity; however, in accordance with IAS 39, Financial Instruments: Recognition and
Measurement, warrants denominated in a foreign currency and foreign currency embedded derivatives
are required to be classified as liabilities under IFRS and marked to fair value through profit and loss each
reporting period. There is no impact on total assets, revenue, costs of sales, operating loss, or total cash
flows from operating activities, as a result of this restatement.
2014 Annual Report | Consolidated Financial Statements 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
(In thousands of United States dollars, except per share information)
Years ended December 31, 2014 and 2013
Years ended December 31, 2014 and 2013
5. Restatement of prior years:
Page 15
Page 15
5. Restatement of prior years:
During the year ended December 31, 2014, the Company corrected the accounting for
certain financial instruments that were denominated in a foreign currency or included as
During the year ended December 31, 2014, the Company corrected the accounting for
foreign currency embedded derivatives - these include all non-broker warrants. Previously
certain financial instruments that were denominated in a foreign currency or included as
the Company accounted for the warrants as a component of equity; however, in accordance
foreign currency embedded derivatives - these include all non-broker warrants. Previously
with IAS 39, Financial Instruments: Recognition and Measurement, warrants
the Company accounted for the warrants as a component of equity; however, in accordance
denominated in a foreign currency and foreign currency embedded derivatives are required
with IAS 39, Financial Instruments: Recognition and Measurement, warrants
to be classified as liabilities under IFRS and marked to fair value through profit and loss
denominated in a foreign currency and foreign currency embedded derivatives are required
each reporting period. There is no impact on total assets, revenue, costs of sales, operating
to be classified as liabilities under IFRS and marked to fair value through profit and loss
loss, or total cash flows from operating activities, as a result of this restatement.
each reporting period. There is no impact on total assets, revenue, costs of sales, operating
loss, or total cash flows from operating activities, as a result of this restatement.
The financial statement impact of the change in accounting at January 1, 2013, which has
been derived from the consolidated financial statements as at and for the year ended
The financial statement impact of the change in accounting at January 1, 2013, which has
December 31, 2012, is as follows:
The financial statement impact of the change in accounting at January 1, 2013, which has been derived
been derived from the consolidated financial statements as at and for the year ended
from the consolidated financial statements as at and for the year ended December 31, 2012, is as follows:
December 31, 2012, is as follows:
January 1, 2013
Consolidated Balance Sheet
January 1, 2013
Consolidated Balance Sheet
Convertible note
Conversion option liability
Convertible note
Warrant liability
Conversion option liability
Share capital
Warrant liability
Contributed surplus
Share capital
Deficit
Contributed surplus
Deficit
2,357
-
2,357
-
-
194,144
-
10,354
194,144
(186,198)
10,354
(186,198)
1,918
1,994
1,918
3,083
1,994
189,263
3,083
10,222
189,263
(185,823)
10,222
(185,823)
(439)
1,994
(439)
3,083
1,994
(4,881)
3,083
(132)
(4,881)
375
(132)
375
As previously
reported
As previously
reported
Effect of
restatement
Effect of
restatement
As restated
As restated
$
$
$
$
$
$
42
Effect of
restatement
Effect of
restatement
As previously
reported
As previously
reported
$
-
The financial statement impact of the change in accounting at December 31, 2013 is as
The financial statement impact of the change in accounting at December 31, 2013 is as follows:
follows:
The financial statement impact of the change in accounting at December 31, 2013 is as
follows:
December 31, 2013
Consolidated Balance Sheet
December 31, 2013
Consolidated Balance Sheet
Warrant liability
1,286
Share capital
(3,039)
Warrant liability
1,286
Contributed surplus
-
Share capital
(3,039)
Deficit
1,753
Contributed surplus
-
Deficit
1,753
December 31, 2013
Effect of
Consolidated Statement of Comprehensive Income
restatement
December 31, 2013
Effect of
Consolidated Statement of Comprehensive Income
restatement
INTERMAP TECHNOLOGIES CORPORATION
Financing costs
Change in fair value of derivative instruments
Notes to Consolidated Financial Statements
Financing costs
$
Net loss for the period
(In thousands of United States dollars, except per share information)
Change in fair value of derivative instruments
Comprehensive loss for the period
Net loss for the period
Basic and diluted loss per share
Comprehensive loss for the period
Basic and diluted loss per share
December 31, 2013
Consolidated Statement of Changes in Equity
197,376
-
$
10,671
197,376
(201,105)
10,671
(201,105)
As previously
reported
As previously
reported
$
(512)
-
(512)
(14,907)
-
(14,928)
(14,907)
(0.18)
(14,928)
(0.18)
Years ended December 31, 2014 and 2013
(439)
1,817
(439)
1,378
1,817
1,378
1,378
0.02
1,378
0.02
As previously
reported
Effect of
restatement
Page 16
$
$
$
$
$
$
As restated
As restated
$
As restated
As restated
$
As restated
1,286
194,337
1,286
10,671
194,337
(199,352)
10,671
(199,352)
(951)
1,817
(951)
(13,529)
1,817
(13,550)
(13,529)
(0.16)
(13,550)
(0.16)
Comprehensive loss for the period
Share capital
Contributed surplus
Deficit
$
(14,928)
197,376
10,671
(201,105)
$
1,378
(3,039)
-
1,753
$
(13,550)
194,337
10,671
(199,352)
December 31, 2013
Consolidated Statement of Cash Flows
As previously
reported
Effect of
restatement
As restated
Net loss for the period
Financing costs
Change in fair value of derivative instruments
(14,907)
512
-
1,378
439
(1,817)
(13,529)
951
(1,817)
6. Property and equipment:
Property and equipment
Aircraft
Mapping
equipment
Furniture,
fixtures &
auto
Under
construction
Leases
Total
Balance at December 31, 2012
$
2,617
$
873
$
6
$
187
$
20
$
3,703
Additions
Finance Lease
Depreciation
Transfer from under construction
39
-
(650)
95
384
316
(654)
256
Balance at December 31, 2013
2,101
1,175
Additions
Finance Lease
Disposals
Depreciation
Transfer from under construction
95
-
-
(488)
-
276
35
(2)
(544)
-
-
-
-
-
-
-
(6)
-
8
(2)
26
-
(111)
-
102
112
-
(64)
(89)
118
331
-
-
(351)
780
316
(1,421)
-
-
3,378
118
-
-
-
(118)
609
35
(66)
(1,123)
-
Balance at December 31, 2014
$
1,708
$
940
$
6
$
179
$
-
$
2,833
2014 Annual Report | Consolidated Financial Statements
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Years ended December 31, 2014 and 2013
Page 16
December 31, 2013
Consolidated Statement of Changes in Equity
As previously
reported
Effect of
restatement
As restated
Comprehensive loss for the period
$
(14,928)
$
1,378
$
(13,550)
Share capital
Contributed surplus
Deficit
197,376
10,671
(201,105)
(3,039)
-
1,753
194,337
10,671
(199,352)
December 31, 2013
Consolidated Statement of Cash Flows
As previously
reported
Effect of
restatement
As restated
Net loss for the period
Financing costs
Change in fair value of derivative instruments
(14,907)
512
-
1,378
439
(1,817)
(13,529)
951
(1,817)
43
6. Property and equipment:
6. Property and equipment:
Property and equipment
Aircraft
Mapping
equipment
Furniture,
fixtures &
auto
Under
construction
Leases
Total
Balance at December 31, 2012
$
2,617
$
873
$
6
$
187
$
20
$
3,703
Additions
Finance Lease
Depreciation
Transfer from under construction
39
-
(650)
95
384
316
(654)
256
-
-
-
(6)
26
-
(111)
-
331
-
-
(351)
780
316
(1,421)
-
-
3,378
Balance at December 31, 2013
2,101
INTERMAP TECHNOLOGIES CORPORATION
95
-
-
Notes to Consolidated Financial Statements
INTERMAP TECHNOLOGIES CORPORATION
-
-
(In thousands of United States dollars, except per share information)
Notes to Consolidated Financial Statements
(2)
(488)
(In thousands of United States dollars, except per share information)
-
Years ended December 31, 2014 and 2013
Additions
Finance Lease
Disposals
Depreciation
Transfer from under construction
276
35
(2)
(544)
-
112
-
(64)
(89)
118
1,175
102
8
-
-
118
-
-
-
(118)
Page 17
609
35
(66)
(1,123)
-
Years ended December 31, 2014 and 2013
1,708
Balance at December 31, 2014
$
Property and equipment
Property and equipment
Cost
Aircraft
Aircraft
$
10,856
940
$
Mapping
equipment
Mapping
equipment
$
27,748
6
Furniture,
$
fixtures &
Furniture,
auto
fixtures &
auto
555
$
Leases
Leases
1,537
$
$
Under
construction
Under
construction
-
$
Total
Total
40,696
$
$
179
Page 17
-
$
2,833
Accumulated depreciation
Cost
$
(8,755)
10,856
$
(26,573)
27,748
$
(555)
555
(1,435)
$
1,537
$
-
-
(37,318)
$
40,696
Balance at December 31, 2013
Accumulated depreciation
$
2,101
(8,755)
$
1,175
(26,573)
$
-
(555)
$
102
(1,435)
$
-
Cost
Balance at December 31, 2013
$
$
10,951
2,101
$
$
27,393
1,175
$
$
372
-
Accumulated depreciation
Cost
(9,243)
10,951
$
(26,453)
27,393
$
$
(366)
372
$
$
921
102
(742)
$
921
$
$
-
-
$
Balance at December 31, 2014
Accumulated depreciation
$
1,708
(9,243)
$
940
(26,453)
$
6
(366)
$
179
$
-
(742)
-
-
-
-
$
3,378
(37,318)
$
39,637
$
3,378
(36,804)
$
39,637
$
2,833
(36,804)
-
6
$
179
940
$
$
1,708
2,833
$
$
$
Balance at December 31, 2014
During the year ended December 31, 2014, the Company disposed of fully depreciated
During the year ended December 31, 2014, the Company disposed of fully depreciated assets of $1,638,
assets of $1,638, recognized a gain of $128 on the sale of those assets, and received cash
recognized a gain of $128 on the sale of those assets, and received cash proceeds of $44.
During the year ended December 31, 2014, the Company disposed of fully depreciated
proceeds of $44.
assets of $1,638, recognized a gain of $128 on the sale of those assets, and received cash
In May 2014, the Company exited a leased facility in Calgary and recognized a loss on the
In May 2014, the Company exited a leased facility in Calgary and recognized a loss on the disposal of
proceeds of $44.
disposal of leasehold improvements with a net book value of $64 and recognized a gain of
leasehold improvements with a net book value of $64 and recognized a gain of $76 on the disposal of the
$76 on the disposal of the remaining deferred leasehold inducement.
In May 2014, the Company exited a leased facility in Calgary and recognized a loss on the
remaining deferred leasehold inducement.
disposal of leasehold improvements with a net book value of $64 and recognized a gain of
Additionally, a gain of $316 was recognized on the settlement of an insurance claim for
Additionally, a gain of $316 was recognized on the settlement of an insurance claim for damaged computer
$76 on the disposal of the remaining deferred leasehold inducement.
damaged computer and storage equipment. The damaged assets were fully depreciated at
and storage equipment. The damaged assets were fully depreciated at the time of the claim.
the time of the claim.
Additionally, a gain of $316 was recognized on the settlement of an insurance claim for
7. Accounts payable and accrued liabilities:
damaged computer and storage equipment. The damaged assets were fully depreciated at
7. Accounts payable and accrued liabilities:
the time of the claim.
7. Accounts payable and accrued liabilities:
December 31,
2014
December 31,
2013
$
$
1,513
December 31,
2,259
2014
13
3,785
1,997
December 31,
1,936
2013
20
3,953
Accounts payable
Accrued liablities (1)
Other taxes payable
Accounts payable
Accrued liablities (1)
(1) Accrued liabilities include $737 of accrued interest on convertible notes for the twelve months ended December 31, 2014.
(1) Accrued liabilities include $737 of accrued interest on convertible notes for the twelve
Other taxes payable
$
$
$
$
months ended December 31, 2014.
$
$
1,997
1,936
20
3,953
1,513
2,259
13
3,785
(1) Accrued liabilities include $737 of accrued interest on convertible notes for the twelve
months ended December 31, 2014.
2014 Annual Report | Consolidated Financial Statements
44
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Years ended December 31, 2014 and 2013
Page 18
8. Convertible notes:
8. Convertible notes:
The following table details the liability and equity components of each convertible note, and
The following table details the liability and equity components of each convertible note, and the
the convertible note balance at December 31, 2014:
convertible note balance at December 31, 2014:
December 26,
2014
December 12,
2014
February 7,
2014
Proceeds from convertible note
Transaction costs
Net proceeds
$
$
500
(31)
469
Contributed surplus-conversion option
Warrant liability
Effective interest incurred on note discount
(83)
(100)
9
$
500
(34)
466
(16)
(57)
6
$
5,000
(93)
4,907
(598)
(673)
983
Total
6,000
(158)
5,842
(697)
(830)
998
Carrying amount of convertible notes
$
295
$
399
$
4,619
$
5,313
a. February 7, 2014, convertible promissory note:
(a) February 7, 2014 convertible promissory note:
On February 7, 2014, the Company issued convertible promissory notes totaling $5,000. Simple
interest is payable at maturity at an annual rate of 16%. The notes are convertible into 12,367,054
On February 7, 2014, the Company issued convertible promissory notes totaling $5,000.
common shares of the Company at any time at the option of the holders. Under the terms of the
Simple interest is payable at maturity at an annual rate of 16%. The notes are convertible
notes, the accrued interest payable on any converted principal balances will be waived at the time
into 12,367,054 common shares of the Company at any time at the option of the holders.
of conversion. The notes also include 3,091,572 detachable warrants to purchase Class A common
Under the terms of the notes, the accrued interest payable on any converted principal
shares at a per share price of C$0.56 that expire on February 7, 2017. The notes are secured by a second
balances will be waived at the time of conversion. The notes also include 3,091,572
priority security interest in the Company’s amounts receivable and its two aircraft. The noteholder
detachable warrants to purchase Class A common shares at a per share price of C$0.56
has a general security interest in the remaining assets of the Company on a pari pasu basis with the
that expire on February 7, 2017. The notes are secured by a second priority security
December 12, 2014 and December 26, 2014 convertible note holder. Any unconverted principal and
interest in the Company’s amounts receivable and its two aircraft. The noteholder has a
accrued interest balance is payable at maturity on February 6, 2015. The Company has the option, after
general security interest in the remaining assets of the Company on a pari pasu basis with
six months from the closing date of the notes, and upon sixty days’ notice, to repay the note at 116% of
the December 12, 2014 and December 26, 2014 convertible note holder. Any unconverted
the outstanding principal balance. The fair value of the prepayment option at December 31, 2014 was
principal and accrued interest balance is payable at maturity on February 6, 2015. The
$Nil. At December 31, 2014, $733 of accrued interest is included in accrued liabilities.
Company has the option, after six months from the closing date of the notes, and upon
sixty days’ notice, to repay the note at 116% of the outstanding principal balance. The fair
value of the prepayment option at December 31, 2014 was $Nil. At December 31, 2014,
$733 of accrued interest is included in accrued liabilities.
The convertible notes represent hybrid instruments that need to be bifurcated between their liability
and equity components. The warrants and notes are considered liabilities and the conversion option
is equity. In determining the fair value of the warrant liability, the Company used the Black-Scholes
The convertible notes represent hybrid instruments that need to be bifurcated between
option pricing model with the following assumptions: average volatility rate of 109.3%; risk-free
their liability and equity components. The warrants and notes are considered liabilities
interest rate of 0.98%; expected life of three years; and an exchange rate of 0.904. The value of $673
and the conversion option is equity. In determining the fair value of the warrant liability,
was established on February 7, 2014. The fair value of the convertible notes at February 7, 2014 was
the Company used the Black-Scholes option pricing model with the following assumptions:
determined to be $3,636 net of transaction costs of $93. The estimated discount rate is 29% which is
average volatility rate of 109.3%; risk-free interest rate of 0.98%; expected life of three
subject to estimation uncertainty. The discount to the convertible notes is being amortized over the
years; and an exchange rate of 0.904. The value of $673 was established on February 7,
term of the notes using the effective interest method. The amount of the convertible note classified as
2014. The fair value of the convertible notes at February 7, 2014 was determined to be
equity is $598 and has been recorded in contributed surplus.
$3,636 net of transaction costs of $93. The estimated discount rate is 29% which is subject
to estimation uncertainty. The discount to the convertible notes is being amortized over
b. December 12, 2014, convertible promissory note:
On December 12, 2014, the Company issued a convertible promissory note for $500. Simple interest is
payable at maturity at an annual rate of 16%. The note is convertible into 5,741,187 common shares of
the Company at any time at the option of the holder. 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 1,137,202 detachable warrants to purchase Class A common shares at a per share price of
C$0.10 that expire on December 12, 2017. The note is secured by a first priority security interest in
the Company’s amounts receivable and its two aircraft. The noteholder has a general security interest
in the remaining assets of the Company on a pari pasu basis with the February 2014 convertible
2014 Annual Report | Consolidated Financial Statements
45
note holders. Any unconverted principal and accrued interest balance is payable at maturity on
June 12, 2015. The Company has the option upon sixty days’ notice, to repay the note at 108% of the
outstanding principal balance. The fair value of the prepayment option at December 31, 2014 was $Nil.
At December 31, 2014, $3 of accrued interest is included in accrued liabilities.
The convertible note represents a hybrid instrument that needs to be bifurcated between its liability
and equity components. The warrant and note are considered liabilities and the conversion option
is equity. In determining the fair value of the warrant liability, the Company used the Black-Scholes
option pricing model with the following assumptions: average volatility rate of 109.4%; risk-free
interest rate of 1.02%; expected life of three years; and an exchange rate of 0.871. The value of $57
was established on December 12, 2014. The fair value of the convertible note at December 12, 2014
was determined to be $394 net of transaction costs of $34. The estimated discount rate is 17% which
is subject to estimation uncertainty. The discount to the convertible note is being amortized over the
term of the note using the effective interest method. The amount of the convertible note classified as
equity is $16 and has been recorded in contributed surplus.
c. December 26, 2014, convertible promissory note:
On December 26, 2014, the Company issued a convertible promissory note for $500 to the same
note holder as the December 12, 2014 convertible note. Simple interest is payable at maturity at
an annual rate of 18%. The note is convertible into 8,333,333 common shares of the Company at
any time at the option of the holder. 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
1,666,667 detachable warrants to purchase Class A common shares at a per share price of C$0.07 that
expire on December 26, 2017. The note is secured by a first priority position security interest in the
Company’s amounts receivable and its two aircraft. The noteholder has a general security interest in
the remaining assets of the Company on a pari pasu basis with the February 2014 convertible note
holders. Any unconverted principal and accrued interest balance is payable at maturity on March
31, 2015. The Company has the option upon thirty days’ notice, to repay the note at 105% of the
outstanding principal balance. The fair value of the prepayment option at December 31, 2014 was $Nil.
At December 31, 2014, $1 of accrued interest is included in accrued liabilities.
The convertible note represents a hybrid instruments that needs to be bifurcated between its liability
and equity components. The warrant and note are considered liabilities and the conversion option
is equity. In determining the fair value of the warrant liability, the Company used the Black-Scholes
option pricing model with the following assumptions: average volatility rate of 114.8%; risk-free
interest rate of 1.02%; expected life of three years; and an exchange rate of 0.863. The value of $100
was established on December 26, 2014. The fair value of the convertible note at December 26, 2014
was determined to be $286 net of transaction costs of $31. The estimated discount rate is 47% which
is subject to estimation uncertainty. The discount to the convertible note is being amortized over the
term of the note using the effective interest method. The amount of the convertible note classified as
equity is $83 and has been recorded in contributed surplus.
9. Notes payable:
Notes payable includes a promissory note with a service provider. The note bears interest at 8% per
annum and is secured by a last priority lien on an aircraft owned by the Company. As of December 31,
2014, the balance of the note is $1,168.
Additionally, the notes payable balance includes reimbursable project development funds provided
by a corporation designed to enable the development and commercialization of geomatics solutions
in Canada. The funding will be received in quarterly installments through the second quarter of 2016.
2014 Annual Report | Consolidated Financial Statements INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Years ended December 31, 2014 and 2013
Page 20
unconverted principal and accrued interest balance is payable at maturity on March 31,
2015. The Company has the option upon thirty days’ notice, to repay the note at 105% of
the outstanding principal balance. The fair value of the prepayment option at December
31, 2014 was $Nil. At December 31, 2014, $1 of accrued interest is included in accrued
liabilities.
The convertible note represents a hybrid instruments that needs to be bifurcated between
its liability and equity components. The warrant and note are considered liabilities and the
conversion option is equity. In determining the fair value of the warrant liability, the
Company used the Black-Scholes option pricing model with the following assumptions:
average volatility rate of 114.8%; risk-free interest rate of 1.02%; expected life of three
years; and an exchange rate of 0.863. The value of $100 was established on December 26,
2014. The fair value of the convertible note at December 26, 2014 was determined to be
$286 net of transaction costs of $31. The estimated discount rate is 47% which is subject to
estimation uncertainty. The discount to the convertible note is being amortized over the
term of the note using the effective interest method. The amount of the convertible note
classified as equity is $83 and has been recorded in contributed surplus.
9. Notes payable:
Notes payable includes a promissory note with a service provider. The note bears interest
at 8% per annum and is secured by a last priority lien on an aircraft owned by the
Company. As of December 31, 2014, the balance of the note is $1,168.
Additionally, the notes payable balance includes reimbursable project development funds
provided by a corporation designed to enable the development and commercialization of
geomatics solutions in Canada. The funding will be received in quarterly installments
through the second quarter of 2016. During the nine months ended December 31, 2014,
the first three quarterly installments totaling $130 were received. The funding is repayable
During the nine months ended December 31, 2014, the first three quarterly installments totaling $130
upon the completion of a specific development project and the first sale of any of the
were received. The funding is repayable upon the completion of a specific development project and
resulting product(s). Repayment is to be made in quarterly installments equal to the lesser
the first sale of any of the resulting product(s). Repayment is to be made in quarterly installments equal
of 20% of the funding amount or 25% of the prior quarter’s sales.
to the lesser of 20% of the funding amount or 25% of the prior quarter’s sales.
December 31,
2014
December 31,
2013
46
Promissory note payable
Reimbursable project funding
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)
$
Years ended December 31, 2014 and 2013
Years ended December 31, 2014 and 2013
Less current portion
$
(1,168)
1,290
122
1,188
(1,188)
$
$
1,168
122
1,120
68
Page 21
-
Page 21
10. Finance lease liabilities:
10. Finance lease liabilities:
10. Finance lease liabilities:
Finance lease liabilities are payable as follows:
Finance lease liabilities are payable as follows:
Finance lease liabilities are payable as follows:
December 31, 2014
December 31, 2014
Future
Future
minimum
minimum
lease
lease
payments
payments
$
$
150
150
Interest (1)
Interest (1)
$
19
$
19
105
105
255
255
$
$
9
9
$
28
28
$
Less than one year
Less than one year
(current portion)
(current portion)
Between one and five years
Between one and five years
(long-term portion)
(long-term portion)
Present
Present
value of
value of
minimum
minimum
lease
lease
payments
payments
December 31, 2013
December 31, 2013
Future
Future
minimum
minimum
lease
lease
payments
payments
Interest (2)
Interest (2)
Present
Present
value of
value of
minimum
minimum
lease
lease
payments
payments
$
$
131
131
$
$
142
142
96
96
227
227
$
$
212
354
212
354
$
$
$
27
$
27
$
115
$
115
20
$
47
$
20
47
192
$
307
$
192
307
(1) Interest rate ranging from 7.48% to 8.20%.
(1) Interest rate ranging from 7.48% to 8.20%.
(1) Interest rate ranging from 7.48% to 8.20%.
(2) Interest rate ranging from 8.20% to 12.93%.
(2) Interest rate ranging from 8.20% to 12.93%.
(2) Interest rate ranging from 8.20% to 12.93%.
In December 2014, the Company entered into a finance lease to purchase $35 of new
In December 2014, the Company entered into a finance lease to purchase $35 of new
In December 2014, the Company entered into a finance lease to purchase $35 of new telephone equipment
telephone equipment (computer hardware). The lease bears interest at an implicit rate of
telephone equipment (computer hardware). The lease bears interest at an implicit rate of
(computer hardware). The lease bears interest at an implicit rate of 7.48% and is secured by the underlying
7.48% and is secured by the underlying assets. The lease matures in December 2019.
7.48% and is secured by the underlying assets. The lease matures in December 2019.
assets. The lease matures in December 2019.
In December 2013, the Company entered into a finance lease to purchase $382 of data
In December 2013, the Company entered into a finance lease to purchase $382 of data
In December 2013, the Company entered into a finance lease to purchase $382 of data storage equipment
storage equipment and software (mapping equipment). The lease bears interest at an
storage equipment and software (mapping equipment). The lease bears interest at an
and software (mapping equipment). The lease bears interest at an implicit rate of 8.20% and is secured by
implicit rate of 8.20% and is secured by the underlying assets. The lease matures in June
implicit rate of 8.20% and is secured by the underlying assets. The lease matures in June
the underlying assets. The lease matures in June 2016.
2016.
2016.
In September 2011, the Company entered into a finance lease to purchase $614 of data storage equipment
In September 2011, the Company entered into a finance lease to purchase $614 of data
In September 2011, the Company entered into a finance lease to purchase $614 of data
and software. The lease bears interest at an implicit rate of 12.93% and was secured by the underlying
storage equipment and software. The lease bears interest at an implicit rate of 12.93% and
storage equipment and software. The lease bears interest at an implicit rate of 12.93% and
assets. The lease matured in September 2013.
was secured by the underlying assets. The lease matured in September 2013.
was secured by the underlying assets. The lease matured in September 2013.
11. Revenue:
11. Revenue:
11. Revenue:
Details of revenue are as follows:
Details of revenue are as follows:
Details of revenue are as follows:
For the twelve months ended December 31,
For the twelve months ended December 31,
Mapping services
Mapping services
Professional services
Professional services
Data licenses
Data licenses
3DBI software applications
3DBI software applications
2014
2014
2013
2013
$
$
$
$
2,886
2,886
869
869
3,275
3,275
1,224
1,224
8,254
8,254
18,041
1,034
3,915
1,452
24,442
18,041
1,034
3,915
1,452
24,442
$
$
$
$
2014 Annual Report | Consolidated Financial Statements
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Years ended December 31, 2014 and 2013
Page 22
Years ended December 31, 2014 and 2013
12. Operating costs:
Details of operating costs are as follows:
12. Operating costs:
12. Operating costs:
For the twelve months ended December 31,
Details of operating costs are as follows:
Details of operating costs are as follows:
Page 22
2014
2013
47
For the twelve months ended December 31,
Personnel
Purchased services & materials (1)
Travel
Facilities and other expenses (2)
Personnel
Purchased services & materials (1)
Travel
Facilities and other expenses (2)
12,430
7,784
1,577
1,306
(1) Purchased services and materials include aircraft costs, project costs, professional and
23,097
12,096
5,532
1,025
2,065
20,718
$
$
$
$
$
$
consulting fees, and selling and marketing costs.
(1) Purchased services and materials include aircraft costs, project costs, professional and consulting fees, and selling and
(1) Purchased services and materials include aircraft costs, project costs, professional and
(2) Includes a facility closure provision reversal of $678 during the twelve months ended
marketing costs.
(2) Includes a facility closure provision reversal of $678 during the twelve months ended December 31, 2013.
December 31, 2013.
(2) Includes a facility closure provision reversal of $678 during the twelve months ended
consulting fees, and selling and marketing costs.
$
$
2014
12,096
5,532
1,025
2,065
20,718
2013
12,430
7,784
1,577
1,306
23,097
Details of finance costs are as follows:
Details of finance costs are as follows:
December 31, 2013.
Details of finance costs are as follows:
Year ended December 31,
2014
(as restated
- Note 5)
2013
$
(as restated
- Note 5)
2013
839
64
48
$
951
839
64
48
951
$
1,878
29
99
2,006
$
$
$
2014
1,878
29
99
$
2,006
$
Year ended December 31,
Convertible note
Notes payable
Finance lease
Convertible note
Notes payable
Finance lease
13. Share capital:
13. Share capital:
INTERMAP TECHNOLOGIES CORPORATION
(a) Authorized:
a. Authorized:
13. Share capital:
Notes to Consolidated Financial Statements
The authorized share capital of the Company consists of an unlimited number of Class A
The authorized share capital of the Company consists of an unlimited number of Class A common
(a) Authorized:
(In thousands of United States dollars, except per share information)
common shares and an unlimited number of Class A participating preferred shares. There
shares and an unlimited number of Class A participating preferred shares. There are no Class A
The authorized share capital of the Company consists of an unlimited number of Class A
are no Class A participating preferred shares outstanding.
participating preferred shares outstanding.
Page 23
Years ended December 31, 2014 and 2013
common 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, 2014
Number of
(as restated - Note 5)
December 31, 2013
Number of
Balance, beginning of period:
Unrestricted shares
Restricted shares held in escrow
Share-based compensation
Restricted shares released from
escrow and cancelled
Issuance of common shares for
conversion of convertible note
Securities issuance costs
Balance, end of period:
Components of issued shares:
Unrestricted shares
Restricted shares held in escrow
91,613,401
526,098
$
194,337
-
78,887,915
526,098
$
189,263
-
169,264
(526,098)
40
-
210,010
-
81
-
-
-
91,782,665
-
-
194,377
$
12,515,476
-
92,139,499
4,999
(6)
194,337
$
$
91,782,665
194,377
- -
194,377
91,782,665
$
$
91,613,401
194,337
526,098 -
194,337
92,139,499
$
On June 11, 2014, 169,264 Class A common shares were issued to directors of the Company as
On June 11, 2014, 169,264 Class A common shares were issued to directors of the
compensation for services. Compensation expense of $40 for these Class A common shares is included
Company as compensation for services. Compensation expense of $40 for these Class A
in operating costs (see Note 13(i)).
common shares is included in operating costs (see Note 13(i)).
On March 13, 2014, 526,098 Class A common shares originally issued in 2011, pursuant to
the five year employment agreement with the Company’s Chief Executive Officer and held
in escrow for release upon achievement of certain market performance conditions, were
released from escrow and cancelled.
On August 28, 2013, 5,000,000 Class A common shares were issued upon conversion to
the holder of a convertible promissory note. The value attributed to the conversion was
$1,997 and includes the accrued interest of $209 attributable to the principal balance
converted of $999, and $789 for the proportionate share of the conversion option liability.
On June 27, 2013, 7,515,476 Class A common shares were issued upon conversion to the
holder of a convertible promissory note. The value attributed to the conversion was $3,002
and includes the accrued interest of $316 attributable to the principal balance converted of
$1,501, and $1,185 for the proportionate share of the conversion option.
On June 13, 2013, 210,010 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 13(i)).
2014 Annual Report | Consolidated Financial Statements
48
On March 13, 2014, 526,098 Class A common shares originally issued in 2011, pursuant to the five
year employment agreement with the Company’s Chief Executive Officer and held in escrow for
release upon achievement of certain market performance conditions, were released from escrow and
cancelled.
On August 28, 2013, 5,000,000 Class A common shares were issued upon conversion to the holder of
a convertible promissory note. The value attributed to the conversion was $1,997 and includes the
accrued interest of $209 attributable to the principal balance converted of $999, and $789 for the
proportionate share of the conversion option liability.
On June 27, 2013, 7,515,476 Class A common shares were issued upon conversion to the holder of
a convertible promissory note. The value attributed to the conversion was $3,002 and includes the
accrued interest of $316 attributable to the principal balance converted of $1,501, and $1,185 for the
proportionate share of the conversion option.
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
On June 13, 2013, 210,010 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
Page 24
in operating costs (see Note 13(i)).
Years ended December 31, 2014 and 2013
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
Balance, end of period
d. Earnings (loss) per share:
(d) Earnings (loss) per share:
December 31,
2014
(as restated)
December 31,
2013
$
10,671
408
704
(5)
(383)
$
10,222
449
-
-
-
$
11,395
$
10,671
The calculation of earnings (loss) per share is based on the weighted average number of
The calculation of earnings (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,
Class A common shares outstanding. Where the impact of the exercise of options or
they are not included in the calculation of diluted loss per share. The Company has incurred a net loss
warrants is anti-dilutive, they are not included in the calculation of diluted loss per share.
for each period presented and the inclusion of the outstanding options and warrants in the loss per
The Company has incurred a net loss for each period presented and the inclusion of the
share calculation are considered to be anti-dilutive and are therefore not included in the calculation.
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 7,427,400 outstanding share options and
The underlying Class A common shares pertaining to 7,427,400 outstanding share options
7,595,441 outstanding warrants could potentially dilute earnings.
and 7,595,441 outstanding warrants could potentially dilute earnings.
e. Director’s share compensation plan:
(e) Director’s share compensation plan:
The Company has a director’s share compensation plan which originally allowed for the issuance
The Company has a director’s share compensation plan which originally allowed for the
of up to 400,000 shares of the Company’s Class A common shares to non-employee directors of the
issuance of up to 400,000 shares of the Company’s Class A common shares to non-
Company as part of their annual compensation and was amended in 2011 to 1,400,000 shares. At the
employee directors of the Company as part of their annual compensation and was
Annual General and Special Meeting of the Shareholders on August 9, 2012, an amendment to the
amended in 2011 to 1,400,000 shares. At the Annual General and Special Meeting of the
share compensation plan was approved to increase the maximum number of Class A common shares
Shareholders on August 9, 2012, an amendment to the share compensation plan was
of the Corporation issuable thereunder from 1,400,000 to 2,400,000. As of December 31, 2014, 727,139
approved to increase the maximum number of Class A common shares of the Corporation
Class A common shares remain available under the plan. Compensation expense for issued shares is
issuable thereunder from 1,400,000 to 2,400,000. As of December 31, 2014, 727,139 Class
included in operating costs.
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 thereunder from 1,500,000
to 4,000,000. At the Annual General and Special Meeting of the Shareholders on August
2014 Annual Report | Consolidated Financial Statements
f.
Employee share compensation plan:
49
Years ended December 31, 2014 and 2013
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
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
Page 25
increase the maximum number of Class A common shares of the Corporation issuable thereunder from
14, 2014, an amendment to the share compensation plan was approved to increase the
1,500,000 to 4,000,000. At the Annual General and Special Meeting of the Shareholders on August 14,
maximum number of Class A common shares of the Corporation issuable thereunder from
2014, an amendment to the share compensation plan was approved to increase the maximum number
4,000,000 to 8,000,000. As of December 31, 2014, 6,794,812 Class A common shares
of Class A common shares of the Corporation issuable thereunder from 4,000,000 to 8,000,000. As of
remain available for issuance under the plan. Compensation expense for issued shares is
December 31, 2014, 6,794,812 Class A common shares remain available for issuance under the plan.
included in operating costs.
Compensation expense for issued shares is included in operating costs.
(g) Share option plan:
g. Share option plan:
The Company established a share option plan to provide long-term incentives to attract,
The Company established a share option plan to provide long-term incentives to attract, motivate, and
motivate, and retain certain key employees, officers, directors, and consultants providing
retain certain key employees, officers, directors, and consultants providing services to the Company.
services to the Company. The plan permits the granting of options to purchase up to 10%
The plan permits the granting of options to purchase up to 10% of the outstanding Class A common
of the outstanding Class A common shares of the Company. As of December 31, 2014,
shares of the Company. As of December 31, 2014, 9,178,267 Class A common shares were authorized
9,178,267 Class A common shares were authorized under the plan, of which 7,427,400 share
under the plan, of which 7,427,400 share options are issued and outstanding and 1,750,867 options
options are issued and outstanding and 1,750,867 options remain available for future
remain available for future issuance. Under the plan, no one individual shall be granted an option
issuance. Under the plan, no one individual shall be granted an option resulting in
resulting in cumulative grants in excess of 5% of the issued and outstanding Class A common shares
cumulative grants in excess of 5% of the issued and outstanding Class A common shares of
of the Company. In addition, the exercise price of each option shall not be less than the market price
the Company. In addition, the exercise price of each option shall not be less than the
of the Company’s Class A common shares on the date of grant. The options are exercisable for a period
market price of the Company’s Class A common shares on the date of grant. The options
of not greater than six years, and generally vest over a period of one to four years. Options granted to
are exercisable for a period of not greater than six years, and generally vest over a period of
directors generally vest on the date of the grant and expire on the fifth anniversary of the date of such
one to four years. Options granted to directors generally vest on the date of the grant and
grant.
expire on the fifth anniversary of the date of such grant.
The following table summarizes information regarding share options outstanding:
The following table summarizes information regarding share options outstanding:
Options outstanding,
beginning of period
Granted
Expired
Forfeitures
Options outstanding, end of period
December 31, 2014
December 31, 2013
Number of
shares
under option
Weighted
average
exercise
price (CDN)
Number of
shares
under option
Weighted
average
exercise
price (CDN)
6,287,320
1,839,630
(462,550)
(237,000)
7,427,400
$
$
0.55
0.28
1.04
0.33
0.46
4,846,320
1,930,000
(373,625)
(115,375)
6,287,320
$
$
0.82
0.40
3.18
0.56
0.55
Options exercisable, end of period
4,398,592
$
0.53
3,850,154
$
0.62
2014 Annual Report | Consolidated Financial Statements
50
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Years ended December 31, 2014 and 2013
Page 26
Exercise
Price
(CDN$)
0.17
0.24
0.25
0.27
0.29
0.33
0.38
0.43
0.44
0.46
0.48
0.50
0.66
1.60
1.84
Options
outstanding
25,000
50,000
134,630
20,000
1,505,000
700,000
40,000
1,142,240
1,535,000
778,230
450,000
450,000
300,000
51,000
246,300
7,427,400
Weighted average
remaining
contractual life
5.62 years
5.44 years
4.12 years
3.36 years
5.17 years
3.84 years
4.37 years
2.25 years
3.78 years
2.96 years
2.01 years
1.93 years
1.81 years
0.98 years
0.99 years
3.36 years
Options
exercisable
-
-
129,630
10,000
25,000
550,000
10,000
1,134,240
627,500
583,672
337,500
450,000
243,750
51,000
246,300
4,398,592
During the twelve months ended December 31, 2014, 1,839,630 (year ended December 31,
During the twelve months ended December 31, 2014, 1,839,630 (year ended December 31, 2013 –
2013 – 1,930,000) options were granted at a weighted-average grant date fair value of
1,930,000) options were granted at a weighted-average grant date fair value of C$0.22 per share (year
C$0.22 per share (year ended December 31, 2013 – C$0.31), determined using the Black-
ended December 31, 2013 – C$0.31), determined using the Black-Scholes option pricing model on the
Scholes option pricing model on the date of grant with the following assumptions: share
date of grant with the following assumptions: share price equal to the TSX closing price on the date of
price equal to the TSX closing price on the date of grant, expected dividend yield 0% (year
grant, expected dividend yield 0% (year ended December 31, 2013 – 0%), risk-free interest rate ranging
ended December 31, 2013 – 0%), risk-free interest rate ranging from 1.02% to 1.97% (year
from 1.02% to 1.97% (year ended December 31, 2013 – 1.41% to 2.13%), volatilities ranging from 98.9%
ended December 31, 2013 – 1.41% to 2.13%), volatilities ranging from 98.9% to 108.9%
to 108.9% (year ended December 31, 2013 – 94.6% to 103.0%), and expected lives of five to six years.
Volatilities are calculated based on the actual historical trading statistics of the Company’s Class A
(year ended December 31, 2013 – 94.6% to 103.0%), and expected lives of five to six years.
common shares for the period commensurate with the expected option term. The estimated forfeiture
Volatilities are calculated based on the actual historical trading statistics of the Company’s
rate was 5.43% (year ended December 31, 2013 – 5.43%).
Class A common shares for the period commensurate with the expected option term. The
estimated forfeiture rate was 5.43% (year ended December 31, 2013 – 5.43%).
h. Long-term incentive plan:
(h) Long-term incentive plan:
During the third quarter of 2014, the Board of Directors approved the terms of a long-term incentive
plan (LTIP) intended to retain and compensate senior management of the Company. The LTIP is a share-
During the third quarter of 2014, the Board of Directors approved the terms of a long-term
based payments plan, based on the average stock price of the Company during the last quarter of
incentive plan (LTIP) intended to retain and compensate senior management of the
the year ended December 31, 2015, and includes the award of up to 2,398,000 common shares to be
Company. The LTIP is a share-based payments plan, based on the average stock price of the
issued as equity-settled share-based compensation and up to 3,597,000 common shares to be settled
Company during the last quarter of the year ended December 31, 2015, and includes the
in either cash or common shares, at the discretion of the Board of Directors. Any awards settled in
award of up to 2,398,000 common shares to be issued as equity-settled share-based
cash will be paid 50% of the earned award on March 31, 2016 and 50% of the earned award on March
compensation and up to 3,597,000 common shares to be settled in either cash or common
31, 2017, subject to predetermined working capital thresholds. To receive the awards, the eligible
shares, at the discretion of the Board of Directors. Any awards settled in cash will be paid
employees must be employed by the Company on the scheduled payment dates.
50% of the earned award on March 31, 2016 and 50% of the earned award on March 31,
The fair value of the awards is subject to estimation uncertainty and was calculated using a Monte
2017, subject to predetermined working capital thresholds. To receive the awards, the
Carlo simulation model with the following assumptions: expected dividend yield 0%, risk-free interest
eligible employees must be employed by the Company on the scheduled payment dates.
rate of 1.02%, volatility of 94.35%, grant date of August 8, 2014 and expiration date of December 31,
The fair value of the awards is subject to estimation uncertainty and was calculated using a
2015. Volatilities are calculated based on the actual historical trading statistics of the Company’s Class A
Monte Carlo simulation model with the following assumptions: expected dividend yield 0%,
common shares with a 1.4 year historical look back, commensurate with the term of the LTIP.
risk-free interest rate of 1.02%, volatility of 94.35%, grant date of August 8, 2014 and
The grant date fair value of the equity-settled portion of the LTIP was $133 and is charged to non-cash
compensation expense over the service period, which ends March 31, 2016, with a corresponding
charge to contributed surplus. For the year ending December 31, 2014, $31 has been charged to non-
cash compensation expense and as of December 31, 2014, $31 is included in contributed surplus.
2014 Annual Report | Consolidated Financial Statements
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Years ended December 31, 2014 and 2013
Page 27
expiration date of December 31, 2015. Volatilities are calculated based on the actual
historical trading statistics of the Company’s Class A common shares with a 1.4 year
historical look back, commensurate with the term of the LTIP.
The grant date fair value of the equity-settled portion of the LTIP was $133 and is charged
to non-cash compensation expense over the service period, which ends March 31, 2016,
with a corresponding charge to contributed surplus. For the year ending December 31,
2014, $31 has been charged to non-cash compensation expense and as of December 31,
2014, $31 is included in contributed surplus.
The grant date fair value of the optional settlement portion of the LTIP was $88 for the 50%
that will be paid in 2016 and $81 for the 50% that will be paid in 2017, subject to
The grant date fair value of the optional settlement portion of the LTIP was $88 for the 50% that will
predetermined working capital thresholds, and was determined using a discount rate of
be paid in 2016 and $81 for the 50% that will be paid in 2017, subject to predetermined working
8.97%. The fair value of the amount estimated to be payable to employees under the
capital thresholds, and was determined using a discount rate of 8.97%. The fair value of the amount
optional settlement portion of the LTIP is charged to non-cash compensation expense with
estimated to be payable to employees under the optional settlement portion of the LTIP is charged to
a corresponding increase in liabilities, over the service period, and will be re-measured to
non-cash compensation expense with a corresponding increase in liabilities, over the service period,
the current fair value at each reporting date. Any changes in the liability are recognized in
and will be re-measured to the current fair value at each reporting date. Any changes in the liability are
profit or loss. For the year ended December 31, 2014, $6 has been charged to non-cash
recognized in profit or loss. For the year ended December 31, 2014, $6 has been charged to non-cash
compensation expense and as of December 31, 2014, $6 is included in other long-term
compensation expense and as of December 31, 2014, $6 is included in other long-term liabilities.
liabilities.
i.
(i) Share-based compensation expense:
Share-based compensation expense:
Non-cash compensation expense has been included in operating costs with respect to the
Non-cash compensation expense has been included in operating costs with respect to the LTIP, share
LTIP, share options and shares granted to employees and non-employees as follows:
options and shares granted to employees and non-employees as follows:
51
For the twelve months ended December 31,
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Employees
Non-employees
$
2014
389
65
$
2013
353
177
Years ended December 31, 2014 and 2013
Non-cash compensation
$
454
$
530
Page 28
14. Class A common share purchase warrants:
14. Class A common share purchase warrants:
The following table details the number of Class A common share purchase warrants
The following table details the number of Class A common share purchase warrants outstanding at each
outstanding at each balance sheet date.
balance sheet date.
Grant Date Expiry Date
Exercise
Price
(CDN)
Granted
Expired
January 1, 2013
December 31, 2013
Number of
Warrants
Outstanding
19,050,000
19,050,000
2/7/2014
2/7/2017
$
0.56
3,091,572
- 3,091,572
4/28/2011
4/28/2014
$
0.40
- (1,225,000) (1,225,000)
4/28/2011
4/28/2014
12/12/2014
12/12/2017
12/26/2014
12/26/2017
$
$
$
0.48
- (16,125,000) (16,125,000)
0.10
1,137,202
- 1,137,202
0.07
1,666,667
- 1,666,667
December 31, 2014
5,895,441
(17,350,000)
7,595,441
The following table details the value of the broker and non-broker Class A common share
purchase warrants outstanding at each balance sheet date.
Non-Broker
Broker
Number of
Warrants
Value
Number of
Warrants
Value1
Total
Number of
Warrants
Value
Balance at January 1, 2013
17,825,000
$
3,083
1,225,000
$
-
19,050,000
$
3,083
Revaluation
-
(1,797)
-
-
-
(1,797)
Balance at December 31, 2013
17,825,000
$
1,286
1,225,000
$
-
19,050,000
$
1,286
Issued
Expired
Revaluation
5,895,441
830
-
(16,125,000)
(34)
(1,225,000)
5,895,441
830
(17,350,000)
(34)
-
-
-
-
(1,856)
-
-
(1,856)
Balance at December 31, 2014
7,595,441
$
226
-
$
-
7,595,441
$
226
1Non-broker warrants were accounted for as part of share capital.
Each warrant entitles its holder to purchase one Class A common share. The warrants are
denominated in Canadian dollars, a currency different from the Company’s functional
2014 Annual Report | Consolidated Financial Statements
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Years ended December 31, 2014 and 2013
Page 28
14. Class A common share purchase warrants:
The following table details the number of Class A common share purchase warrants
outstanding at each balance sheet date.
Grant Date Expiry Date
Granted
Expired
Exercise
Price
(CDN)
Number of
Warrants
Outstanding
19,050,000
19,050,000
January 1, 2013
December 31, 2013
2/7/2014
2/7/2017
$
0.56
3,091,572
- 3,091,572
4/28/2011
4/28/2014
$
0.40
- (1,225,000) (1,225,000)
4/28/2011
4/28/2014
12/12/2014
12/12/2017
12/26/2014
12/26/2017
$
$
$
0.48
- (16,125,000) (16,125,000)
0.10
1,137,202
- 1,137,202
0.07
1,666,667
- 1,666,667
December 31, 2014
5,895,441
(17,350,000)
7,595,441
52
The following table details the value of the broker and non-broker Class A common share purchase warrants
The following table details the value of the broker and non-broker Class A common share
purchase warrants outstanding at each balance sheet date.
outstanding at each balance sheet date.
Non-Broker
Broker
Number of
Warrants
Value
Number of
Warrants
Value1
Total
Number of
Warrants
Value
Balance at January 1, 2013
17,825,000
$
3,083
1,225,000
$
-
19,050,000
$
3,083
Revaluation
-
(1,797)
-
-
-
(1,797)
Balance at December 31, 2013
17,825,000
$
1,286
1,225,000
$
-
19,050,000
$
1,286
Issued
Expired
Revaluation
5,895,441
830
-
(16,125,000)
(34)
(1,225,000)
-
(1,856)
-
-
-
-
5,895,441
830
(17,350,000)
(34)
-
(1,856)
Balance at December 31, 2014
7,595,441
$
226
-
$
-
7,595,441
$
226
(1) Non-broker warrants were accounted for as part of share capital.
1Non-broker warrants were accounted for as part of share capital.
Each warrant entitles its holder to purchase one Class A common share. The warrants are denominated in
Canadian dollars, a currency different from the Company’s functional currency. The non-broker warrants are
Each warrant entitles its holder to purchase one Class A common share. The warrants are
recognized as a financial liability at fair value through profit and loss.
denominated in Canadian dollars, a currency different from the Company’s functional
On December 31, 2013, the non-broker warrants issued in 2011 and 2012 were re-valued to $1,286 using
the Black-Scholes option pricing model with the following assumptions: exercise price of $0.31-$0.48;
average volatility rate of 89.2%-120.2%; risk-free interest rate of 1.07%; expected life of 5-18 months; and
an exchange rate of 0.940. On January 1, 2013, the non-broker warrants issued in 2011 and 2012 were
re-valued to $3,083 using the Black-Scholes option pricing model with the following assumptions: exercise
price of $0.31-$0.48; average volatility rate of 113.7%-123.9%; risk-free interest rate of 1.10%; expected life of
17-30 months; and an exchange rate of 1.005.
In determining the fair value of the non-broker warrants issued on February 7, 2014, the Company used
the Black-Scholes option pricing model with the following assumptions: exercise price of $0.56; average
volatility rate of 109.3%; risk-free interest rate of 0.98%; expected life of three years; and an exchange
rate of 0.904. The value of $673 was established on February 7, 2014 and subsequently revalued to $97
on December 31, 2014 utilizing the Black-Scholes option pricing model with the following assumptions:
exercise price of $0.08; average volatility rate of 115.8%; risk-free interest rate of 1.02%; expected life of three
years; and an exchange rate of 0.862.
In determining the fair value of the non-broker warrants issued on December 12, 2014, the Company used
the Black-Scholes option pricing model with the following assumptions: exercise price of $0.10; average
volatility rate of 109.4%; risk-free interest rate of 1.02%; expected life of three years; and an exchange rate
of 0.871. The value of $57 was established on December 12, 2014 and subsequently revalued on to $39
December 31, 2014 utilizing the Black-Scholes option pricing model with the following assumptions:
exercise price of $0.10; average volatility rate of 116.7%; risk-free interest rate of 1.02%; expected life of three
years; and an exchange rate of 0.862.
In determining the fair value of the non-broker warrants issued on December 26, 2014, the Company used
the Black-Scholes option pricing model with the following assumptions: exercise price of $0.07; average
volatility rate of 114.8%; risk-free interest rate of 1.02%; expected life of three years; and an exchange rate
of 0.863. The value of $100 was established on December 26, 2014 and subsequently revalued to $63
on December 31, 2014 utilizing the Black-Scholes option pricing model with the following assumptions:
exercise price of $0.07; average volatility rate of 116.0%; risk-free interest rate of 1.02%; expected life of three
years; and an exchange rate of 0.862.
2014 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)
Years ended December 31, 2014 and 2013
Years ended December 31, 2014 and 2013
Years ended December 31, 2014 and 2013
Page 30
Page 30
Page 30
53
15. Income taxes:
a. Current tax (expense) recovery:
15. Income Taxes:
15. Income Taxes:
15. Income Taxes:
(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
2014
2014
2014
$
-
$
-
-
$
-
-
-
$
-
$
-
$
-
2013
2013
2013
$
(28)
$
(28)
(28)
$
-
-
-
$
(28)
$
(28)
$
(28)
b. Deferred tax recovery:
c. Reconciliation of effective tax rate:
2014
2014
2014
383
383
383
$
$
$
2013
2013
2013
$
-
$
-
$
-
(b) Deferred tax recovery:
(b) Deferred tax recovery:
(b) Deferred tax recovery:
December 31
December 31
December 31
Origination and reversal of temporary differences
Origination and reversal of temporary differences
Origination and reversal of temporary differences
During 2014, the Company recognized $383 (2013 - nil) in deferred tax expense related to the
During 2014, the Company recognized $383 (2013 - nil) in deferred tax expense related to
During 2014, the Company recognized $383 (2013 - nil) in deferred tax expense related to
During 2014, the Company recognized $383 (2013 - nil) in deferred tax expense related to
the convertible note directly in equity.
convertible note directly in equity.
the convertible note directly in equity.
the convertible note directly in equity.
(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
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
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:
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:
federal and provincial income tax rates to the net loss before taxes as follows:
December 31,
2013
December 31,
2013
December 31,
2013
Losses, excluding income tax
(12,420)
Losses, excluding income tax
(12,420)
Losses, excluding income tax
(12,420)
Tax rate
25.0%
Tax rate
25.0%
Tax rate
25.0%
Expected Canadian income tax recovery
3,105
Expected Canadian income tax recovery
3,105
Expected Canadian income tax recovery
3,105
Decrease resulting from:
Decrease resulting from:
Decrease resulting from:
2013
2013
2013
(13,501)
(13,501)
(13,501)
25.0%
25.0%
25.0%
3,375
3,375
3,375
$
$
$
$
$
$
$
$
$
$
$
$
Change in unrecognized temporary differences
Change in unrecognized temporary differences
Change in unrecognized temporary differences
Difference between Canadian statutory rate and those
Difference between Canadian statutory rate and those
Difference between Canadian statutory rate and those
applicable to U.S. and other foreign subsidiaries
applicable to U.S. and other foreign subsidiaries
applicable to U.S. and other foreign subsidiaries
Non-deductible expenses and non-taxable income
Non-deductible expenses and non-taxable income
Non-deductible expenses and non-taxable income
Adjustment for prior years income tax matters
Adjustment for prior years income tax matters
Adjustment for prior years income tax matters
Other
Other
Other
(4,417)
(4,417)
(4,417)
1,595
1,595
1,595
183
183
183
2
2
2
(85)
(85)
(85)
383
383
383
INTERMAP TECHNOLOGIES CORPORATION
INTERMAP TECHNOLOGIES CORPORATION
d. Recognized deferred tax assets and liabilities:
(d) Recognized deferred tax assets and liabilities:
(d) Recognized deferred tax assets and liabilities:
Notes to Consolidated Financial Statements
(d) Recognized deferred tax assets and liabilities:
Notes to Consolidated Financial Statements
Deferred income taxes reflect the impact of temporary differences between amounts of assets and
(In thousands of United States dollars, except per share information)
Deferred income taxes reflect the impact of temporary differences between amounts of
(In thousands of United States dollars, except per share information)
Deferred income taxes reflect the impact of temporary differences between amounts of
Deferred income taxes reflect the impact of temporary differences between amounts of
liabilities for financial reporting purposes and such amounts as measured by tax laws. Deferred tax
assets and liabilities for financial reporting purposes and such amounts as measured by tax
assets and liabilities for financial reporting purposes and such amounts as measured by tax
Page 31
Page 31
assets and liabilities for financial reporting purposes and such amounts as measured by tax
assets and liabilities recognized at December 31, 2014 and 2013, are as follows:
laws. Deferred tax assets and liabilities recognized at December 31, 2014 and 2013, are as
laws. Deferred tax assets and liabilities recognized at December 31, 2014 and 2013, are as
laws. Deferred tax assets and liabilities recognized at December 31, 2014 and 2013, are as
follows:
follows:
follows:
December 31,
December 31,
(4,946)
(4,946)
(4,946)
1,752
1,752
1,752
(207)
(207)
(207)
(4)
(4)
(4)
2
2
2
(28)
(28)
(28)
Years ended December 31, 2014 and 2013
Years ended December 31, 2014 and 2013
$
$
$
$
$
$
Liabilities
Liabilities
Assets
Assets
2013
2013
2013
2013
2013
2013
Net
Net
2014
2014
2014
2014
2014
2014
Property and equipment
Property and equipment
Convertible note
Convertible note
Tax loss carryforwards
Tax loss carryforwards
Tax (assets) liabilities
Tax (assets) liabilities
Set off of tax
Set off of tax
Net tax (assets) liabilities
Net tax (assets) liabilities
$
$
$
$
$
$
$
$
$
$
$
$
-
-
-
-
(341)
(341)
(341)
(341)
341
341
-
-
-
-
-
-
(677)
(677)
(677)
(677)
677
677
-
-
209
209
132
132
-
-
341
341
(341)
(341)
-
-
677
677
-
-
-
-
677
677
(677)
(677)
-
-
209
209
132
132
(341)
(341)
-
-
-
-
-
-
677
677
-
-
(677)
(677)
-
-
-
-
-
-
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
e. Unrecognized deferred tax assets:
(e) Unrecognized deferred tax assets:
(e) Unrecognized deferred tax assets:
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:
December 31
December 31
Deductible temporary differences
Deductible temporary differences
Tax loss carryforwards
Tax loss carryforwards
2014
2014
2013
2013
$
$
$
$
18,327
18,327
205,521
205,521
223,848
223,848
$
$
$
$
19,222
19,222
194,237
194,237
213,459
213,459
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
The deferred tax asset is recognized when it is probable that future taxable profit will be
utilize the benefits. The Company has not recognized deferred tax assets with respect to these items
available to utilize the benefits. The Company has not recognized deferred tax assets with
available to 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.
respect to these items due to the uncertainty of future Company earnings.
Loss carry forwards:
Loss carry forwards:
At December 31, 2014 approximately $206,600 of loss carry forwards and $2,210 of tax
At December 31, 2014 approximately $206,600 of loss carry forwards and $2,210 of tax
credits were available in various jurisdictions. A summary of losses by year of expiry are as
credits were available in various jurisdictions. A summary of losses by year of expiry are as
follows:
follows:
Twelve months ended December 31,
Twelve months ended December 31,
2015
2015
2018
2018
2020-2034
2020-2034
2,816
2,816
3,135
3,135
200,649
200,649
206,600
206,600
$
$
(f) Movement in deferred tax balances during the year:
(f) Movement in deferred tax balances during the year:
Balance at
Balance at
December 31, 2013
December 31, 2013
Recognized in
Recognized in
Profit and Loss
Profit and Loss
Recognized
Recognized
in Equity
in Equity
Balance at
Balance at
December 31, 2014
December 31, 2014
Property and equipment
Property and equipment
$
$
677
677
$
$
(468)
(468)
$
$
$
$
Convertible note
Convertible note
Tax loss carryforwards
Tax loss carryforwards
-
-
(677)
(677)
132
132
336
336
209
209
132
132
(341)
(341)
Net tax (assets) liabilities
Net tax (assets) liabilities
$
$
-
-
$
$
-
-
$
$
$
$
-
-
-
-
-
-
-
-
-
-
2014 Annual Report | Consolidated Financial Statements
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
(In thousands of United States dollars, except per share information)
Years ended December 31, 2014 and 2013
Years ended December 31, 2014 and 2013
Page 31
Page 31
Net
Net
2013
2014
2014
$
209
$
209
132
2013
$
677
$
677
-
132
(341)
(341)
-
(677)
(677)
Assets
Liabilities
2014
Assets
2013
2014
Liabilities
2013
2014
2013
$
-
$
-
$
-
-
(341)
-
$
-
-
(677)
-
2014
$
209
$
209
132
2013
$
677
$
677
132
-
-
-
-
-
-
(341)
(677)
$
(341)
$
(677)
$
341
$
(341)
$
(677)
341
677
$
-
$
-
341
$
-
677
$
-
$
341
(341)
(341)
$
-
$
-
$
677
$
677
$
-
$
-
(677)
(677)
$
-
$
-
-
-
$
-
$
-
$
-
$
-
-
-
$
-
$
-
(e) Unrecognized deferred tax assets:
(e) Unrecognized deferred tax assets:
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:
2014
2014
2013
2013
December 31,
December 31,
Property and equipment
Convertible note
Property and equipment
Tax loss carryforwards
Convertible note
Tax loss carryforwards
Tax (assets) liabilities
Tax (assets) liabilities
Set off of tax
Set off of tax
Net tax (assets) liabilities
Net tax (assets) liabilities
December 31
December 31
Deductible temporary differences
Tax loss carryforwards
Deductible temporary differences
Tax loss carryforwards
$
$
$
$
18,327
18,327
205,521
205,521
223,848
223,848
$
$
$
$
19,222
19,222
194,237
194,237
213,459
213,459
54
The deferred tax asset is recognized when it is probable that future taxable profit will be
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
available to utilize the benefits. The Company has not recognized deferred tax assets with
respect to these items due to the uncertainty of future Company earnings.
respect to these items due to the uncertainty of future Company earnings.
Loss carry forwards:
Loss carry forwards:
i.
Loss carry forwards:
At December 31, 2014 approximately $206,600 of loss carry forwards and $2,210 of tax
At December 31, 2014 approximately $206,600 of loss carry forwards and $2,210 of tax
credits were available in various jurisdictions. A summary of losses by year of expiry are as
credits were available in various jurisdictions. A summary of losses by year of expiry are as
At December 31, 2014 approximately $206,600 of loss carry forwards and $2,210 of tax credits
follows:
follows:
were available in various jurisdictions. A summary of losses by year of expiry are as follows:
Twelve months ended December 31,
Twelve months ended December 31,
2015
2018
2020-2034
2015
2018
2020-2034
2,816
2,816
3,135
3,135
200,649
200,649
206,600
206,600
$
$
(f) Movement in deferred tax balances during the year:
(f) Movement in deferred tax balances during the year:
f. Movement in deferred tax balances during the year:
Balance at
December 31, 2013
Recognized in
Profit and Loss
Balance at
December 31, 2013
INTERMAP TECHNOLOGIES CORPORATION
Property and equipment
(468)
$
677
INTERMAP TECHNOLOGIES CORPORATION
INTERMAP TECHNOLOGIES CORPORATION
Property and equipment
677
Notes to Consolidated Financial Statements
Convertible note
132
-
Convertible note
-
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Tax loss carryforwards
336
(677)
Tax loss carryforwards
(677)
(In thousands of United States dollars, except per share information)
(In thousands of United States dollars, except per share information)
Net tax (assets) liabilities
-
Years ended December 31, 2014 and 2013
$
Years ended December 31, 2014 and 2013
Years ended December 31, 2014 and 2013
$
-
-
-
$
-
Recognized in
Profit and Loss
$
$
-
Net tax (assets) liabilities
(468)
132
336
-
$
$
$
$
$
$
-
-
-
-
-
Balance at
Balance at
December 31, 2014
December 31, 2014
$
$
209
209
132
132
(341)
(341)
$
-
Page 32
$
-
Page 32
Page 32
Recognized
Recognized
in Equity
in Equity
$
16. Commitments:
16. Commitments:
16. Commitments:
16. Commitments:
The Company has commitments related to operating leases for office space and equipment
The Company has commitments related to operating leases for office space and equipment
The Company has commitments related to operating leases for office space and equipment
The Company has commitments related to operating leases for office space and equipment which require
which require the following payments for each year ending December 31:
which require the following payments for each year ending December 31:
which require the following payments for each year ending December 31:
the following payments for each year ending December 31:
2015
2015
2015
2016
2016
2016
2017
2017
2017
2018
2018
2018
2019
2019
2019
2020
2020
2020
$
795
795
795
$
482
482
482
117
117
117
118
118
118
120
120
120
100
100
100
$
1,732
1,732
$
1,732
During the twelve months ended December 31, 2014, the Company recognized $1,114
During the twelve months ended December 31, 2014, the Company recognized $1,114
During the twelve months ended December 31, 2014, the Company recognized $1,114
During the twelve months ended December 31, 2014, the Company recognized $1,114 (December 31, 2013
(December 31, 2013 - $413, which included a facility closure provision reversal of $678) in
(December 31, 2013 - $413, which included a facility closure provision reversal of $678) in
(December 31, 2013 - $413, which included a facility closure provision reversal of $678) in
- $413, which included a facility closure provision reversal of $678) in operating lease expense for office
operating lease expense for office space.
operating lease expense for office space.
operating lease expense for office space.
space.
17. Segmented information:
17. Segmented information:
17. Segmented information:
17. Segmented information:
The operations of the Company are in one industry segment: digital mapping and related
The operations of the Company are in one industry segment: digital mapping and related
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.
services.
services.
Geographic segments of revenue are as follows:
Geographic segments of revenue are as follows:
Geographic segments of revenue are as follows:
Geographic segments of revenue are as follows:
Year ended December 31,
Year ended December 31,
Year ended December 31,
United States
United States
Asia/Pacific
United States
Asia/Pacific
Europe
Asia/Pacific
Europe
Europe
$
$
$
$
7,317
15,544
1,581
24,442
4,499
2,424
1,331
8,254
$
$
$
$
$
2013
2014
$
$
$
$
2014
2014
4,499
2,424
4,499
1,331
2,424
8,254
1,331
8,254
2014
2013
$
$
$
$
$
$
$
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:
Property and equipment of the Company are located as follows:
December 31,
December 31,
December 31,
Canada
Canada
United States
Canada
United States
Asia/Pacific
United States
Asia/Pacific
Europe
Asia/Pacific
Europe
Europe
Intangible assets are located in the United States.
Intangible assets are located in the United States.
Intangible assets are located in the United States.
A summary of sales to major customers that exceeded 10% of total sales during each period
A summary of sales to major customers that exceeded 10% of total sales during each period
A summary of sales to major customers that exceeded 10% of total sales during each period
are as follows:
are as follows:
are as follows:
Year ended December 31,
Year ended December 31,
Year ended December 31,
Customer A
Customer A
Customer B
Customer A
Customer B
Customer C
Customer B
Customer C
Customer C
2014
2014
200
$
200
2,609
200
$
2,609
7
2,609
7
17
7
17
$
2,833
2,833
17
2,833
2013
2013
96
96
3,263
96
3,263
9
3,263
9
10
9
10
3,378
3,378
10
3,378
2013
2013
4,580
4,580
24
4,580
24
13,453
24
13,453
18,057
13,453
18,057
18. Financial risk management:
18. Financial risk management:
18. Financial risk management:
The Company has exposure to the following risks from its use of financial instruments:
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
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
credit risk, market risk, liquidity risk, and capital risk. Management, the Board of
$
$
$
3,873
$
18,057
2014
2014
2,873
2,873
986
2,873
986
14
986
14
3,873
14
3,873
$
$
$
$
$
$
$
$
$
$
2014
2013
2013
2013
7,317
15,544
7,317
1,581
15,544
24,442
1,581
24,442
2014 Annual Report | Consolidated Financial Statements
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Years ended December 31, 2014 and 2013
Page 32
16. Commitments:
The Company has commitments related to operating leases for office space and equipment
which require the following payments for each year ending December 31:
2015
2016
2017
2018
2019
2020
$
795
482
117
118
120
100
$
1,732
During the twelve months ended December 31, 2014, the Company recognized $1,114
(December 31, 2013 - $413, which included a facility closure provision reversal of $678) in
The operations of the Company are in one industry segment: digital mapping and related
operating lease expense for office space.
17. Segmented information:
Geographic segments of revenue are as follows:
services.
Year ended December 31,
United States
Asia/Pacific
Europe
Property and equipment of the Company are located as follows:
$
4,499
$
7,317
2014
2,424
1,331
2013
15,544
1,581
$
8,254
$
24,442
December 31,
Canada
United States
Asia/Pacific
Europe
2014
2013
$
$
200
2,609
7
17
2,833
96
3,263
9
10
3,378
$
$
55
Intangible assets are located in the United States.
Intangible assets are located in the 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,
2014
2013
Customer A
Customer B
Customer C
$
$
2,873
986
14
3,873
4,580
24
13,453
18,057
$
$
18. Financial risk management:
18. Financial risk management:
The Company has exposure to the following risks from its use of financial instruments:
The Company has exposure to the following risks from its use of financial instruments: credit risk, market
credit risk, market risk, liquidity risk, and capital risk. Management, the Board of
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 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.
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 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 standards and procedures, aims
to develop a disciplined and constructive control environment in which all employees understand their
roles and obligations.
a. Credit risk:
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial
instrument fails to meet its contractual obligations. 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 35 percent of the Company’s revenue is attributable to transactions with one key
customer (year ended December 31, 2013 - 19 percent of the revenue was attributable to the same
customer), and approximately 45 percent of the Company’s trade amounts receivable at year end are
attributable to customers located in Asia/Pacific (December 31, 2013 – approximately 76 percent).
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.
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Years ended December 31, 2014 and 2013
Page 32
16. Commitments:
The Company has commitments related to operating leases for office space and equipment
which require the following payments for each year ending December 31:
$
795
482
117
118
120
100
$
1,732
During the twelve months ended December 31, 2014, the Company recognized $1,114
(December 31, 2013 - $413, which included a facility closure provision reversal of $678) in
operating lease expense for office space.
17. Segmented information:
The operations of the Company are in one industry segment: digital mapping and related
Geographic segments of revenue are as follows:
Property and equipment of the Company are located as follows:
2015
2016
2017
2018
2019
2020
services.
Year ended December 31,
United States
Asia/Pacific
Europe
December 31,
Canada
United States
Asia/Pacific
Europe
are as follows:
Year ended December 31,
Customer A
Customer B
Customer C
$
4,499
$
7,317
$
8,254
$
24,442
2014
2,424
1,331
2014
2,609
7
17
2013
15,544
1,581
2013
3,263
9
10
$
200
$
96
$
2,833
$
3,378
$
2,873
$
4,580
2014
986
14
2013
24
13,453
$
3,873
$
18,057
Intangible assets are located in the United States.
A summary of sales to major customers that exceeded 10% of total sales during each period
18. Financial risk management:
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
2014 Annual Report | Consolidated Financial Statements
56
i.
2014
$
$
$
$
$
1,453
2014
$
$
$
Page 34
Page 34
Page 34
$
$
$
$
Trade receivables:
2014
1,386
9
2014
1,386
70
9
(12)
1,386
70
1,453
9
(12)
70
1,453
(12)
Years ended December 31, 2014 and 2013
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
INTERMAP TECHNOLOGIES CORPORATION
(In thousands of United States dollars, except per share information)
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
Provisions for doubtful accounts are made on a customer-by-customer basis. All write downs
(In thousands of United States dollars, except per share information)
Years ended December 31, 2014 and 2013
Notes to Consolidated Financial Statements
against receivables are recorded within sales, general and administrative expense in the
(In thousands of United States dollars, except per share information)
statement of operations. The Company is exposed to credit-related losses on sales to customers
Years ended December 31, 2014 and 2013
losses on sales to customers outside North America due to potentially higher risks of
outside North America due to potentially higher risks of collectability.
collectability.
losses on sales to customers outside North America due to potentially higher risks of
collectability.
Amounts receivable as of December 31, 2014, and December 31, 2013, consist of:
Amounts receivable as of December 31, 2014, and December 31, 2013, consist of:
losses on sales to customers outside North America due to potentially higher risks of
December 31, December 31,
collectability.
Amounts receivable as of December 31, 2014, and December 31, 2013, consist of:
2013
December 31, December 31,
Amounts receivable as of December 31, 2014, and December 31, 2013, consist of:
2013
Trade amounts receivable
6,245
$
December 31, December 31,
9
Employee receivables
2013
Trade amounts receivable
6,245
Other miscellaneous receivables
180
9
Employee receivables
-
Allowance for doubtful accounts
Trade amounts receivable
6,245
Other miscellaneous receivables
180
6,434
9
Employee receivables
Allowance for doubtful accounts
-
Other miscellaneous receivables
180
Trade amounts receivable by geography consist of:
6,434
$
-
Allowance for doubtful accounts
December 31, December 31,
Trade amounts receivable by geography consist of:
Trade amounts receivable by geography consist of:
6,434
$
2013
December 31, December 31,
2013
414
$
December 31, December 31,
214
2013
414
4,765
214
852
414
4,765
6,245
214
852
4,765
6,245
852
Trade amounts receivable by geography consist of:
2014
United States
454
Canada
59
2014
United States
454
Asia/Pacific
620
Canada
59
Europe
253
United States
454
Asia/Pacific
620
1,386
Canada
59
Europe
253
Asia/Pacific
620
An aging of the Company’s trade amounts receivable are as follows:
1,386
Europe
253
December 31, December 31,
An aging of the Company’s trade amounts receivable are as follows:
1,386
2013
2014
An aging of the Company’s trade amounts receivable are as follows:
December 31, December 31,
An aging of the Company’s trade amounts receivable are as follows:
2013
2014
Current
4,782
$
760
December 31, December 31,
88
31-60 days
48
2013
2014
Current
4,782
760
61-90 days
104
14
31-60 days
88
48
1,271
Over 91 days
564
4,782
Current
760
61-90 days
104
14
88
31-60 days
6,245
48
1,386
1,271
Over 91 days
564
61-90 days
104
14
6,245
1,386
As of December 31, 2014, $578 of trade amounts receivable (December 31, 2013 -
1,271
Over 91 days
564
$1,375) were past due. The balance of the past due amounts relates to reoccurring, and
6,245
As of December 31, 2014, $578 of trade amounts receivable (December 31, 2013 -
historically slow paying customers and are considered collectible.
$1,375) were past due. The balance of the past due amounts relates to reoccurring, and
As of December 31, 2014, $578 of trade amounts receivable (December 31, 2013 -
As of December 31, 2014, $578 of trade amounts receivable (December 31, 2013 - $1,375) were
historically slow paying customers and are considered collectible.
$1,375) were past due. The balance of the past due amounts relates to reoccurring, and
past due. The balance of the past due amounts relates to reoccurring, and historically slow paying
historically slow paying customers and are considered collectible.
The Company manages its credit risk surrounding cash and cash equivalents by
customers and are considered collectible.
dealing solely with what management believes to be reputable banks and financial
The Company manages its credit risk surrounding cash and cash equivalents by
Investments in securities:
institutions, and limiting the allocation of excess funds into financial instruments that
dealing solely with what management believes to be reputable banks and financial
The Company manages its credit risk surrounding cash and cash equivalents by
The Company manages its credit risk surrounding cash and cash equivalents by dealing solely
management believes to be highly liquid, low risk investments. The balance at
institutions, and limiting the allocation of excess funds into financial instruments that
dealing solely with what management believes to be reputable banks and financial
with what management believes to be reputable banks and financial institutions, and limiting
December 31, 2014, is held in cash at banks within the United States, Canada, Europe,
management believes to be highly liquid, low risk investments. The balance at
institutions, and limiting the allocation of excess funds into financial instruments that
the allocation of excess funds into financial instruments that management believes to be highly
Asia, and Australia to facilitate the payment of operations in those jurisdictions.
December 31, 2014, is held in cash at banks within the United States, Canada, Europe,
management believes to be highly liquid, low risk investments. The balance at
liquid, low risk investments. The balance at December 31, 2014, is held in cash at banks within the
Asia, and Australia to facilitate the payment of operations in those jurisdictions.
December 31, 2014, is held in cash at banks within the United States, Canada, Europe,
United States, Canada, Europe, Asia, and Australia to facilitate the payment of operations in those
Asia, and Australia to facilitate the payment of operations in those jurisdictions.
(b)Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and
jurisdictions.
interest rates, will affect the Company’s income or the value of its holding of financial
(b)Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and
instruments.
interest rates, will affect the Company’s income or the value of its holding of financial
Market risk is the risk that changes in market prices, such as foreign exchange rates and
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates,
instruments.
interest rates, will affect the Company’s income or the value of its holding of financial
will affect the Company’s income or the value of its holding of financial instruments.
instruments.
ii. Investments in securities
ii. Investments in securities
ii. Investments in securities
(b)Market risk
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
1,386
6,245
ii.
b. Market risk
2014 Annual Report | Consolidated Financial Statements
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
INTERMAP TECHNOLOGIES CORPORATION
(In thousands of United States dollars, except per share information)
Years ended December 31, 2014 and 2013
Notes to Consolidated Financial Statements
Page 34
(In thousands of United States dollars, except per share information)
Years ended December 31, 2014 and 2013
losses on sales to customers outside North America due to potentially higher risks of
Page 34
Years ended December 31, 2014 and 2013
collectability.
losses on sales to customers outside North America due to potentially higher risks of
Page 34
collectability.
Amounts receivable as of December 31, 2014, and December 31, 2013, consist of:
losses on sales to customers outside North America due to potentially higher risks of
collectability.
Amounts receivable as of December 31, 2014, and December 31, 2013, consist of:
December 31, December 31,
Amounts receivable as of December 31, 2014, and December 31, 2013, consist of:
December 31, December 31,
Trade amounts receivable
Employee receivables
Trade amounts receivable
Other miscellaneous receivables
Employee receivables
Allowance for doubtful accounts
Trade amounts receivable
Other miscellaneous receivables
Employee receivables
Allowance for doubtful accounts
Other miscellaneous receivables
Trade amounts receivable by geography consist of:
Allowance for doubtful accounts
$
180
$
6,434
Trade amounts receivable by geography consist of:
Trade amounts receivable by geography consist of:
An aging of the Company’s trade amounts receivable are as follows:
An aging of the Company’s trade amounts receivable are as follows:
$
1,386
An aging of the Company’s trade amounts receivable are as follows:
2014
2014
1,386
9
2014
1,386
70
9
(12)
70
1,453
9
(12)
70
1,453
(12)
2014
454
59
2014
454
620
59
253
454
620
1,386
59
253
620
1,386
253
2013
2013
6,245
180
9
9
-
-
-
2013
414
214
2013
214
852
414
4,765
6,245
214
852
4,765
6,245
852
$
December 31, December 31,
$
2013
6,245
$
$
$
1,386
$
$
$
6,245
180
6,434
9
December 31, December 31,
$
1,453
2014
$
6,434
2013
December 31, December 31,
$
December 31, December 31,
$
$
$
414
4,765
$
$
$
$
$
$
December 31, December 31,
2014
$
6,245
2013
December 31, December 31,
$
December 31, December 31,
$
$
$
$
$
$
$
2014
760
48
2014
760
14
48
564
760
14
1,386
48
564
14
2013
4,782
88
2013
4,782
104
88
1,271
4,782
104
88
6,245
1,271
104
United States
Canada
United States
Asia/Pacific
Canada
Europe
United States
Asia/Pacific
Canada
Europe
Asia/Pacific
Europe
Current
31-60 days
Current
61-90 days
31-60 days
Over 91 days
Current
61-90 days
31-60 days
Over 91 days
61-90 days
As of December 31, 2014, $578 of trade amounts receivable (December 31, 2013 -
Over 91 days
1,271
564
$
1,386
$
6,245
$1,375) were past due. The balance of the past due amounts relates to reoccurring, and
As of December 31, 2014, $578 of trade amounts receivable (December 31, 2013 -
$
$
historically slow paying customers and are considered collectible.
$1,375) were past due. The balance of the past due amounts relates to reoccurring, and
As of December 31, 2014, $578 of trade amounts receivable (December 31, 2013 -
6,245
1,386
ii. Investments in securities
historically slow paying customers and are considered collectible.
$1,375) were past due. The balance of the past due amounts relates to reoccurring, and
ii. Investments in securities
historically slow paying customers and are considered collectible.
The Company manages its credit risk surrounding cash and cash equivalents by
ii. Investments in securities
dealing solely with what management believes to be reputable banks and financial
The Company manages its credit risk surrounding cash and cash equivalents by
institutions, and limiting the allocation of excess funds into financial instruments that
dealing solely with what management believes to be reputable banks and financial
The Company manages its credit risk surrounding cash and cash equivalents by
management believes to be highly liquid, low risk investments. The balance at
institutions, and limiting the allocation of excess funds into financial instruments that
dealing solely with what management believes to be reputable banks and financial
December 31, 2014, is held in cash at banks within the United States, Canada, Europe,
management believes to be highly liquid, low risk investments. The balance at
institutions, and limiting the allocation of excess funds into financial instruments that
Asia, and Australia to facilitate the payment of operations in those jurisdictions.
December 31, 2014, is held in cash at banks within the United States, Canada, Europe,
management believes to be highly liquid, low risk investments. The balance at
(b)Market risk
Asia, and Australia to facilitate the payment of operations in those jurisdictions.
December 31, 2014, is held in cash at banks within the United States, Canada, Europe,
Asia, and Australia to facilitate the payment of operations in those jurisdictions.
Market risk is the risk that changes in market prices, such as foreign exchange rates and
(b)Market risk
(b)Market risk
interest rates, will affect the Company’s income or the value of its holding of financial
Market risk is the risk that changes in market prices, such as foreign exchange rates and
instruments.
interest rates, will affect the Company’s income or the value of its holding of financial
Market risk is the risk that changes in market prices, such as foreign exchange rates and
instruments.
interest rates, will affect the Company’s income or the value of its holding of financial
instruments.
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)
Years ended December 31, 2014 and 2013
Years ended December 31, 2014 and 2013
Page 35
Page 35
57
i.
i.
i.
Foreign exchange risk
Foreign exchange risk
Foreign exchange risk:
The Company operates internationally and is exposed to foreign exchange risk from
The Company operates internationally and is exposed to foreign exchange risk from
The Company operates internationally and is exposed to foreign exchange risk from various
various currencies, primarily the Canadian dollar, Euro, British pound, Indonesian
various currencies, primarily the Canadian dollar, Euro, British pound, Indonesian
currencies, primarily the Canadian dollar, Euro, British pound, Indonesian rupiah, Czech Republic
rupiah, Czech Republic koruna, Philippines peso, Malaysian ringgit and Australian
rupiah, Czech Republic koruna, Philippines peso, Malaysian ringgit and Australian
koruna, Philippines peso, Malaysian ringgit and Australian dollar. Foreign exchange risk arises
dollar. Foreign exchange risk arises from sales and purchase transactions as well as
dollar. Foreign exchange risk arises from sales and purchase transactions as well as
from sales and purchase transactions as well as recognized financial assets and liabilities that are
recognized financial assets and liabilities that are denominated in a currency other
recognized financial assets and liabilities that are denominated in a currency other
than the United States dollar, which is the functional currency of the Company and the
denominated in a currency other than the United States dollar, which is the functional currency of
than the United States dollar, which is the functional currency of the Company and the
majority of its subsidiaries.
the Company and the majority of its subsidiaries.
majority of its subsidiaries.
The Company’s primary objective in managing its foreign exchange risk is to preserve
The Company’s primary objective in managing its foreign exchange risk is to preserve sales values
The Company’s primary objective in managing its foreign exchange risk is to preserve
sales values and cash flows and reduce variations in performance. Although
and cash flows and reduce variations in performance. Although management monitors exposure
sales values and cash flows and reduce variations in performance. Although
management monitors exposure to such fluctuations, it does not employ any external
to such fluctuations, it does not employ any external hedging strategies to counteract the foreign
management monitors exposure to such fluctuations, it does not employ any external
hedging strategies to counteract the foreign currency fluctuations.
currency fluctuations.
hedging strategies to counteract the foreign currency fluctuations.
The balances in foreign currencies at December 31, 2014, are as follows:
The balances in foreign currencies at December 31, 2014, are as follows:
The balances in foreign currencies at December 31, 2014, are as follows:
Australian
Dollar
Australian
Dollar
Canadian
Dollar
Canadian
Dollar
Euro
Euro
British
Pound
British
Pound
Indonesian
Rupiah
Indonesian
Rupiah
Czech
Republic
Czech
Koruna
Republic
Koruna
(in USD)
(in USD)
Cash and
cash equivalents
Cash and
Amounts receivable
cash equivalents
Accounts payable and
Amounts receivable
accrued liabilities
Accounts payable and
accrued liabilities
-
-
$
$
$
$
$
$
(4)
81
(4)
81
(478)
(478)
(401)
(401)
The balances in foreign currencies at December 31, 2013, are as follows:
The balances in foreign currencies at December 31, 2013, are as follows:
The balances in foreign currencies at December 31, 2013, are as follows:
$
-
$
-
(152)
(152)
(139)
(139)
5
17
5
17
(188)
(188)
(166)
(166)
-
139
-
139
(725)
(725)
(586)
(586)
53
53
(11)
(11)
42
42
$
$
$
$
$
$
$
$
$
$
$
$
13
13
$
$
$
$
23
80
23
80
(124)
(124)
(21)
(21)
Malaysian
Ringgit
Malaysian
Ringgit
$
$
-
-
66
66
-
-
$
$
66
66
Philippines
Peso
Philippines
Peso
Canadian
Dollar
Canadian
Dollar
Euro
Euro
British
Pound
British
Pound
Indonesian
Rupiah
Indonesian
Rupiah
Czech
Republic
Czech
Koruna
Republic
Koruna
Malaysian
Ringgit
Malaysian
Ringgit
(in USD)
(in USD)
Cash and
cash equivalents
Cash and
Amounts receivable
cash equivalents
Accounts payable and
Amounts receivable
accrued liabilities
Accounts payable and
accrued liabilities
-
-
$
$
$
$
$
$
$
$
$
$
$
$
7
144
7
144
(413)
(413)
(262)
(262)
-
2,743
-
2,743
-
-
2,743
2,743
24
47
24
47
(354)
(354)
(283)
(283)
Based on the net exposures at December 31, 2014 and 2013, and assuming that all other variables
Based on the net exposures at December 31, 2014 and 2013, and assuming that all
remain constant, a 10% depreciation or appreciation of the United States dollar against the
Based on the net exposures at December 31, 2014 and 2013, and assuming that all
other variables remain constant, a 10% depreciation or appreciation of the United
following currencies would result in an increase / (decrease) in net earnings by the amounts
other variables remain constant, a 10% depreciation or appreciation of the United
States dollar against the following currencies would result in an increase / (decrease)
Page 36
shown below:
States dollar against the following currencies would result in an increase / (decrease)
in net earnings by the amounts shown below:
in net earnings by the amounts shown below:
December 31, 2014
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Years ended December 31, 2014 and 2013
17
4
17
4
(189)
(189)
(168)
(168)
15
159
15
159
(177)
(177)
(3)
(3)
43
43
(665)
(665)
(622)
(622)
-
390
-
390
-
-
390
390
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
(in USD)
United States dollar:
Depreciates 10%
Appreciates 10%
December 31, 2013
(in USD)
United States dollar:
Depreciates 10%
Appreciates 10%
Australian
Dollar
Canadian
Dollar
Euro
British
Pound
Indonesian
Rupiah
Czech
Republic
Koruna
Malaysian
Ringgit
$
(4)
4
$
40
(40)
$
17
(17)
$
59
(59)
$
14
(14)
$
2
(2)
$
(7)
7
Philippines
Peso
Canadian
Dollar
Euro
British
Pound
Indonesian
Rupiah
Czech
Republic
Koruna
Malaysian
Ringgit
$
(274)
274
$
26
(26)
$
28
(28)
$
62
(62)
$
17
(17)
-
$
-
$
39
(39)
ii.
Interest rate risk
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.
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, 2014, or December 31, 2013.
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.
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, 2014, the Company has a cash and cash equivalent balance of $537 (year
ended December 31, 2013 – $2,420) and working capital of negative $8,748 (year ended
December 31, 2013 – positive $2,593). All of the Company’s financial liabilities, other than
2014 Annual Report | Consolidated Financial Statements
58
ii.
Interest rate risk:
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.
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, 2014, or December 31, 2013.
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
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
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, 2014, the
Company has a cash and cash equivalent balance of $537 (year ended December 31, 2013 – $2,420)
and working capital of negative $8,748 (year ended December 31, 2013 – positive $2,593). All of the
notes payable, obligations under finance leases, and other long-term liabilities have a
Company’s financial liabilities, other than notes payable, obligations under finance leases, and other
contractual maturity of less than 45 days.
long-term liabilities have a contractual maturity of less than 45 days.
Years ended December 31, 2014 and 2013
Page 37
The following are the contractual maturities of the undiscounted cash flows of financial
The following are the contractual maturities of the undiscounted cash flows of financial liabilities as of
liabilities as of December 31, 2014:
December 31, 2014:
Payment due:
In less than 3
months
Between
3 months and 6
months
Between
6 months and 1
year
Between
1 year and 2
years
Between
2 years and 5
years
Accounts payable
and accrued liabilities
Warrant liabilities(1)
Convertible Note
Note payable
Other long-term liabilities
Obligations under
finance leases
$
2,749
226
5,500
1,168
-
38
$
-
$
-
500
-
-
38
1,036
-
-
-
-
75
$
-
-
-
122
3
$
-
-
-
-
3
79
26
$
9,681
$
538
$
1,111
$
204
$
29
(1) The warrant liabilities are 100% vested and can be exercised by the holders at any time; however, the obligation is non-
(1) The warrant liabilities are 100% vested and can be exercised by the holders at any
cash and will be settled in equity (see Note 14).
time; however, the obligation is non-cash and will be settled in equity (see Note 14).
The following are the contractual maturities of the undiscounted cash flows of financial
liabilities as of December 31, 2013:
Payment due:
In less than 3
months
Between
3 months and 6
months
Between
6 months and 1
year
Between
1 year and 2
years
Between
2 years and 5
years
Accounts payable
and accrued liabilities
$
Warrant liabilities(1)
Note payable
Obligations under
finance leases
2,962
1,286
600
35
$
200
-
228
35
$
791
-
380
71
$
-
-
-
$
-
-
-
142
71
$
4,883
$
463
$
1,242
$
142
$
71
(1) The warrant liabilities are 100% vested and can be exercised by the holders at any
time; however, the obligation is non-cash and will be settled in equity (see Note 14).
(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 notes payable and long-term
portion of obligations under finance leases in the definition of capital. Total capital at
December 31, 2014, was negative $6,219 (December 31, 2013 – positive $5,885). To
2014 Annual Report | Consolidated Financial Statements
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Years ended December 31, 2014 and 2013
Page 37
notes payable, obligations under finance leases, and other long-term liabilities have a
contractual maturity of less than 45 days.
The following are the contractual maturities of the undiscounted cash flows of financial
liabilities as of December 31, 2014:
and accrued liabilities
$
2,749
$
-
$
1,036
$
-
$
-
Payment due:
Between
Between
Between
Between
In less than 3
3 months and 6
6 months and 1
1 year and 2
2 years and 5
months
months
year
years
years
226
5,500
1,168
-
38
500
-
-
-
38
-
-
-
-
75
-
-
3
122
79
-
-
-
3
26
Accounts payable
Warrant liabilities(1)
Convertible Note
Note payable
Other long-term liabilities
Obligations under
finance leases
$
9,681
$
538
$
1,111
$
204
$
29
59
(1) The warrant liabilities are 100% vested and can be exercised by the holders at any
time; however, the obligation is non-cash and will be settled in equity (see Note 14).
The following are the contractual maturities of the undiscounted cash flows of financial
The following are the contractual maturities of the undiscounted cash flows of financial liabilities as of
liabilities as of December 31, 2013:
December 31, 2013:
Payment due:
In less than 3
months
Between
3 months and 6
months
Between
6 months and 1
year
Between
1 year and 2
years
Between
2 years and 5
years
Accounts payable
and accrued liabilities
$
Warrant liabilities(1)
Note payable
Obligations under
finance leases
2,962
1,286
600
35
$
200
-
228
35
$
791
-
380
71
$
-
-
-
$
-
-
-
142
71
$
4,883
$
463
$
1,242
$
142
$
71
(1) The warrant liabilities are 100% vested and can be exercised by the holders at any time; however, the obligation is
(1) The warrant liabilities are 100% vested and can be exercised by the holders at any
non-cash and will be settled in equity (see Note 14).
time; however, the obligation is non-cash and will be settled in equity (see Note 14).
d. Capital risk:
(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
The Company’s objectives when managing its capital risk is to safeguard its assets, while at
business and ultimately protect shareholder value. The Company manages its risks and exposures by
the same time maintaining investor, creditor, and market confidence, and to sustain future
INTERMAP TECHNOLOGIES CORPORATION
implementing the strategies below.
development of the business and ultimately protect shareholder value. The Company
Notes to Consolidated Financial Statements
manages its risks and exposures by implementing the strategies below.
(In thousands of United States dollars, except per share information)
The Company includes shareholders’ equity, long-term notes payable and long-term portion of
The Company includes shareholders’ equity, long-term notes payable and long-term
Years ended December 31, 2014 and 2013
obligations under finance leases in the definition of capital. Total capital at December 31, 2014, was
portion of obligations under finance leases in the definition of capital. Total capital at
negative $6,219 (December 31, 2013 – positive $5,885). To maintain or adjust the capital structure, the
maintain or adjust the capital structure, the Company may issue new shares, issue new
December 31, 2014, was negative $6,219 (December 31, 2013 – positive $5,885). To
Company may issue new shares, issue new debt with different characteristics, acquire or dispose of
debt with different characteristics, acquire or dispose of assets, or adjust the amount of
assets, or adjust the amount of cash and short-term investment balances held.
cash and short-term investment balances held.
Page 38
The Company has established a budgeting and planning process with a focus on cash,
The Company has established a budgeting and planning process with a focus on cash, working
working capital, and operational expenditures and continuously assesses its capital
capital, and operational expenditures and continuously assesses its capital structure in light of current
structure in light of current economic conditions and changes in the Company’s short-term
economic conditions and changes in the Company’s short-term and long-term plans. Neither the
and long-term plans. Neither the Company nor any of its subsidiaries are subject to
Company nor any of its subsidiaries are subject to externally imposed capital requirements.
externally imposed capital requirements.
19. Fair values:
19. Fair values:
a. Fair value:
(a) Fair value:
Set out below is a comparison by class of the carrying amounts and fair value of the
Set out below is a comparison by class of the carrying amounts and fair value of the Company’s
Company's financial instruments that are carried in the Consolidated Balance Sheet:
financial instruments that are carried in the Consolidated Balance Sheet:
December 31, 2014
Carrying
Amount
Fair
Value
December 31, 2013
Carrying
Amount
Fair
Value
January 1, 2013
Fair
Value
Carrying
Amount
Financial assets
Loans and receivables:
Cash and cash equivalents
Accounts receivable
Financial liabilities
Derivative financial liabilities at fair value
through profit and loss:
Non-broker warrants
Conversion option liability
Other financial liabilities:
$
$
537
1,453
1,990
$
$
537
1,453
1,990
$
$
2,420
6,434
8,854
$
$
2,420
6,434
8,854
$
$
2,055
5,735
7,790
$
$
2,055
5,735
7,790
$
226
-
$
226
-
$
1,286
-
$
1,286
-
$
3,083
1,994
$
3,083
1,994
Convertible notes
Accounts payable and accrued liabilities
5,313
3,785
9,324
$
5,313
3,785
9,324
$
-
3,953
5,239
$
-
3,953
5,239
$
1,918
4,747
11,742
$
1,918
4,747
11,742
$
The fair values of the financial assets and liabilities are shown at the amount at which the
instrument could be exchanged in a current transaction between willing parties, other than in
a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values:
Cash and cash equivalents, accounts receivable, accounts payable and accrued
liabilities and provisions approximate their carrying amounts largely due to the short-
term maturities of these instruments.
Convertible notes are evaluated by the Company based on parameters such as interest
rates and the risk characteristics of the instrument.
The fair value of the non-broker warrants are estimated using the Black-Scholes option
pricing model incorporating various inputs including the underlying price volatility
and discount rate (see Note 14).
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
Years ended December 31, 2014 and 2013
Page 37
notes payable, obligations under finance leases, and other long-term liabilities have a
contractual maturity of less than 45 days.
The following are the contractual maturities of the undiscounted cash flows of financial
liabilities as of December 31, 2014:
Payment due:
Between
Between
Between
Between
In less than 3
3 months and 6
6 months and 1
1 year and 2
2 years and 5
months
months
year
years
years
and accrued liabilities
$
2,749
$
-
$
1,036
$
-
$
-
Accounts payable
Warrant liabilities(1)
Convertible Note
Note payable
Other long-term liabilities
Obligations under
finance leases
226
5,500
1,168
-
38
500
-
-
-
38
-
-
-
-
75
-
-
3
122
79
$
9,681
$
538
$
1,111
$
204
$
29
(1) The warrant liabilities are 100% vested and can be exercised by the holders at any
time; however, the obligation is non-cash and will be settled in equity (see Note 14).
The following are the contractual maturities of the undiscounted cash flows of financial
liabilities as of December 31, 2013:
Payment due:
Between
Between
Between
Between
In less than 3
3 months and 6
6 months and 1
1 year and 2
2 years and 5
months
months
year
years
years
Accounts payable
Warrant liabilities(1)
Note payable
Obligations under
finance leases
and accrued liabilities
$
2,962
$
200
$
791
$
-
$
-
1,286
600
35
-
228
35
-
380
71
-
-
142
$
4,883
$
463
$
1,242
$
142
$
71
(1) The warrant liabilities are 100% vested and can be exercised by the holders at any
time; however, the obligation is non-cash and will be settled in equity (see Note 14).
(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 notes payable and long-term
portion of obligations under finance leases in the definition of capital. Total capital at
December 31, 2014, was negative $6,219 (December 31, 2013 – positive $5,885). To
-
-
-
3
26
-
-
71
2014 Annual Report | Consolidated Financial Statements
60
The fair values of the financial assets and liabilities are shown at the amount at which the instrument
could be exchanged in a current transaction between willing parties, other than in a forced or
liquidation sale.
The following methods and assumptions were used to estimate the fair values:
•
•
Cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities and
provisions approximate their carrying amounts largely due to the short-term maturities of these
instruments.
Convertible notes are evaluated by the Company based on parameters such as interest rates and
the risk characteristics of the instrument.
•
INTERMAP TECHNOLOGIES CORPORATION
Notes to Consolidated Financial Statements
(In thousands of United States dollars, except per share information)
The fair value of the non-broker warrants are estimated using the Black-Scholes option pricing
model incorporating various inputs including the underlying price volatility and discount rate (see
Note 14).
Years ended December 31, 2014 and 2013
The fair value of the conversion option liability at January 1, 2013 was estimated using the
•
The fair value of the conversion option liability at January 1, 2013 was estimated using
Black-Scholes option pricing model incorporating various inputs including the underlying
the Black-Scholes option pricing model incorporating various inputs including the
price volatility and discount rate and considering the impact of the interest being waved upon
underlying price volatility and discount rate and considering the impact of the interest
conversion. In determining the fair value of the conversion option, the Company used the Black-
being waved upon conversion. In determining the fair value of the conversion option,
Scholes option pricing model with the following assumptions: average volatility rate of 128.8%;
the Company used the Black-Scholes option pricing model with the following
risk-free interest rate of 1.10%; expected life of half a year; and a strike price of $0.21.
assumptions: average volatility rate of 128.8%; risk-free interest rate of 1.10%;
expected life of half a year; and a strike price of $0.21.
b. Fair value hierarchy:
Page 39
(b)Fair value hierarchy:
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
Financial instruments recorded at fair value on the Consolidated Balance Sheet are
fair value hierarchy has the following levels:
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
Level 1 – valuations based on quoted prices (unadjusted) in active markets for identical
liabilities;
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 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
Level 3 – valuation techniques using inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
observable market data (unobservable inputs).
The fair value hierarchy of financial instruments recorded at fair value on the Consolidated Balance
The fair value hierarchy of financial instruments recorded at fair value on the Consolidated
Balance Sheet are as follows:
Sheet are as follows:
December 31, 2014
Level 1 Level 2 Level 3
December 31, 2013
Level 1 Level 2 Level 3
January 1, 2013
Level 1 Level 2 Level 3
Financial liabilities
Non-broker warrants
Conversion option liability
-
$
-
$
226
-
-
$
-
$
-
-
$
1,286
-
-
$
-
$
-
-
$
3,083
1,994
-
$
-
During the reporting periods, there were no transfers between Level 1 and Level 2 fair
During the reporting periods, there were no transfers between Level 1 and Level 2 fair value
value measurements.
measurements.
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
13).
As of December 31, 2014, the Chief Executive Officer and Chief Financial Officer are each
entitled to an amount equal to one year’s annual base salary in the event the Company
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
(In thousands of United States dollars, except per share information)
Years ended December 31, 2014 and 2013
Page 40
Years ended December 31, 2014 and 2013
were to terminate their employment agreement, other than due to a material breach of the
Page 40
employment agreement or in the event the Company becomes insolvent.
were to terminate their employment agreement, other than due to a material breach of the
employment agreement or in the event the Company becomes insolvent.
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
The compensation of non-employee directors consists of a cash component and a share
compensation plan (Note 13).
component. Directors participate in the Company’s share option plan and director’s share
compensation plan (Note 13).
The following summarizes key management personnel and directors compensation for the
years ended December 31, 2014 and 2013:
The following summarizes key management personnel and directors compensation for the
years ended December 31, 2014 and 2013:
Year ended December 31,
Short-term employee benefits
Year ended December 31,
Share-based payments
Short-term employee benefits
Share-based payments
LTIP
LTIP
$
1,414
2014
$
1,658
2013
$
1,414
$
1,658
$
$
2014
204
37
204
1,655
37
2013
323
323
1,981
-
-
2013
1,854,652
2013
2.01%
1,854,652
2.01%
The following summarizes key management personnel and directors share ownership of
$
1,981
$
1,655
the Company as of December 31, 2014 and 2013:
The following summarizes key management personnel and directors share ownership of
the Company as of December 31, 2014 and 2013:
December 31,
Number of Class A Common shares held
December 31,
Percentage of total Class A Common shares issued
Number of Class A Common shares held
Percentage of total Class A Common shares issued
2014
1,931,679
2014
2.10%
1,931,679
2.10%
21. Subsequent events:
21. Subsequent events:
On January 6, 2015, the Company issued warrants to purchase up to 4,597,443 common
shares of the Company to certain holders of previously-issued promissory notes and warrants.
On January 6, 2015, the Company issued warrants to purchase up to 4,597,443 common
The warrant issuance was in consideration for the release by the note holders of a first priority
shares of the Company to certain holders of previously-issued promissory notes and warrants.
lien in certain of the Company’s secured assets and the sharing of security on the remainder of
The warrant issuance was in consideration for the release by the note holders of a first priority
the Company’s assets, on a pro-rata basis, with a new lender under a debt financing completed
lien in certain of the Company’s secured assets and the sharing of security on the remainder of
December 26, 2014. The new warrants are exercisable into common shares at $0.08 per share
the Company’s assets, on a pro-rata basis, with a new lender under a debt financing completed
until February 6, 2017.
December 26, 2014. The new warrants are exercisable into common shares at $0.08 per share
until February 6, 2017.
On January 14, 2015, the Company issued a promissory note for $500. Simple interest is
payable at maturity at an annual rate of 18%. The note also includes 6,000,000 detachable
On January 14, 2015, the Company issued a promissory note for $500. Simple interest is
warrants to purchase Class A common shares of the Company, of which 1,469,834 warrants
payable at maturity at an annual rate of 18%. The note also includes 6,000,000 detachable
have been issued at a per share price of C$0.08 and expire on January 21, 2018. The note is
warrants to purchase Class A common shares of the Company, of which 1,469,834 warrants
secured on a pari pasu basis with the other note holders by a general security interest in all of
have been issued at a per share price of C$0.08 and expire on January 21, 2018. The note is
the assets of the Company. The principal and accrued interest balance is payable at maturity
secured on a pari pasu basis with the other note holders by a general security interest in all of
on January 14, 2016. The Company has the option upon sixty days’ notice, to repay the note at
the assets of the Company. The principal and accrued interest balance is payable at maturity
118% of the outstanding principal balance.
on January 14, 2016. The Company has the option upon sixty days’ notice, to repay the note at
118% of the outstanding principal balance.
On January 15, 2015, the Company amended the exercise price to C$0.08 per share for
outstanding warrants to purchase 4,791,572 common shares of the Company. The original
On January 15, 2015, the Company amended the exercise price to C$0.08 per share for
number of underlying shares and exercise price of these warrants was (i) 3,091,572 common
outstanding warrants to purchase 4,791,572 common shares of the Company. The original
shares with an exercise price of C$0.56 per share, and (ii) 1,700,000 common shares with an
number of underlying shares and exercise price of these warrants was (i) 3,091,572 common
exercise price of C$0.31 per share. Other than the exercise price, the original terms of these
shares with an exercise price of C$0.56 per share, and (ii) 1,700,000 common shares with an
exercise price of C$0.31 per share. Other than the exercise price, the original terms of these
2014 Annual Report | Consolidated Financial Statements
20. Key management personnel and director compensation:
61
Years ended December 31, 2014 and 2013
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 13).
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)
Years ended December 31, 2014 and 2013
As of December 31, 2014, the Chief Executive Officer and Chief Financial Officer are each entitled to
an amount equal to one year’s annual base salary in the event the Company were to terminate their
were to terminate their employment agreement, other than due to a material breach of the
employment agreement, other than due to a material breach of the employment agreement or in the event
employment agreement or in the event the Company becomes insolvent.
were to terminate their employment agreement, other than due to a material breach of the
the Company becomes insolvent.
employment agreement or in the event the Company becomes insolvent.
The compensation of non-employee directors consists of a cash component and a share
The compensation of non-employee directors consists of a cash component and a share component.
component. Directors participate in the Company’s share option plan and director’s share
The compensation of non-employee directors consists of a cash component and a share
Directors participate in the Company’s share option plan and director’s share compensation plan (Note 13).
compensation plan (Note 13).
component. Directors participate in the Company’s share option plan and director’s share
compensation plan (Note 13).
The following summarizes key management personnel and directors compensation for the
The following summarizes key management personnel and directors compensation for the years ended
years ended December 31, 2014 and 2013:
December 31, 2014 and 2013:
The following summarizes key management personnel and directors compensation for the
years ended December 31, 2014 and 2013:
Year ended December 31,
Page 40
Page 40
2013
2014
Short-term employee benefits
Year ended December 31,
Share-based payments
Short-term employee benefits
LTIP
Share-based payments
LTIP
The following summarizes key management personnel and directors share ownership of
the Company as of December 31, 2014 and 2013:
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
December 31, 2014 and 2013:
the Company as of December 31, 2014 and 2013:
December 31,
1,658
2013
323
1,658
-
323
1,981
-
1,981
1,414
2014
204
1,414
37
204
1,655
37
1,655
$
$
$
$
$
$
$
$
2014
2013
Number of Class A Common shares held
December 31,
Percentage of total Class A Common shares issued
Number of Class A Common shares held
Percentage of total Class A Common shares issued
21. Subsequent events:
1,931,679
2014
2.10%
1,931,679
2.10%
1,854,652
2013
2.01%
1,854,652
2.01%
21. Subsequent events:
21. Subsequent events:
On January 6, 2015, the Company issued warrants to purchase up to 4,597,443 common
shares of the Company to certain holders of previously-issued promissory notes and warrants.
On January 6, 2015, the Company issued warrants to purchase up to 4,597,443 common
On January 6, 2015, the Company issued warrants to purchase up to 4,597,443 common shares of the
The warrant issuance was in consideration for the release by the note holders of a first priority
shares of the Company to certain holders of previously-issued promissory notes and warrants.
Company to certain holders of previously-issued promissory notes and warrants. The warrant issuance was
lien in certain of the Company’s secured assets and the sharing of security on the remainder of
The warrant issuance was in consideration for the release by the note holders of a first priority
in consideration for the release by the note holders of a first priority lien in certain of the Company’s secured
the Company’s assets, on a pro-rata basis, with a new lender under a debt financing completed
lien in certain of the Company’s secured assets and the sharing of security on the remainder of
assets and the sharing of security on the remainder of the Company’s assets, on a pro-rata basis, with a
December 26, 2014. The new warrants are exercisable into common shares at $0.08 per share
the Company’s assets, on a pro-rata basis, with a new lender under a debt financing completed
new lender under a debt financing completed December 26, 2014. The new warrants are exercisable into
until February 6, 2017.
December 26, 2014. The new warrants are exercisable into common shares at $0.08 per share
common shares at $0.08 per share until February 6, 2017.
until February 6, 2017.
On January 14, 2015, the Company issued a promissory note for $500. Simple interest is
On January 14, 2015, the Company issued a promissory note for $500. Simple interest is payable at
payable at maturity at an annual rate of 18%. The note also includes 6,000,000 detachable
On January 14, 2015, the Company issued a promissory note for $500. Simple interest is
maturity at an annual rate of 18%. The note also includes 6,000,000 detachable warrants to purchase Class
warrants to purchase Class A common shares of the Company, of which 1,469,834 warrants
payable at maturity at an annual rate of 18%. The note also includes 6,000,000 detachable
A common shares of the Company, of which 1,469,834 warrants have been issued at a per share price of
have been issued at a per share price of C$0.08 and expire on January 21, 2018. The note is
warrants to purchase Class A common shares of the Company, of which 1,469,834 warrants
C$0.08 and expire on January 21, 2018. The note is secured on a pari pasu basis with the other note holders
secured on a pari pasu basis with the other note holders by a general security interest in all of
have been issued at a per share price of C$0.08 and expire on January 21, 2018. The note is
by a general security interest in all of the assets of the Company. The principal and accrued interest balance
the assets of the Company. The principal and accrued interest balance is payable at maturity
secured on a pari pasu basis with the other note holders by a general security interest in all of
is payable at maturity on January 14, 2016. The Company has the option upon sixty days’ notice, to repay
on January 14, 2016. The Company has the option upon sixty days’ notice, to repay the note at
the assets of the Company. The principal and accrued interest balance is payable at maturity
the note at 118% of the outstanding principal balance.
118% of the outstanding principal balance.
on January 14, 2016. The Company has the option upon sixty days’ notice, to repay the note at
118% of the outstanding principal balance.
On January 15, 2015, the Company amended the exercise price to C$0.08 per share for outstanding
On January 15, 2015, the Company amended the exercise price to C$0.08 per share for
warrants to purchase 4,791,572 common shares of the Company. The original number of underlying shares
outstanding warrants to purchase 4,791,572 common shares of the Company. The original
On January 15, 2015, the Company amended the exercise price to C$0.08 per share for
and exercise price of these warrants was (i) 3,091,572 common shares with an exercise price of C$0.56 per
number of underlying shares and exercise price of these warrants was (i) 3,091,572 common
outstanding warrants to purchase 4,791,572 common shares of the Company. The original
share, and (ii) 1,700,000 common shares with an exercise price of C$0.31 per share. Other than the exercise
shares with an exercise price of C$0.56 per share, and (ii) 1,700,000 common shares with an
number of underlying shares and exercise price of these warrants was (i) 3,091,572 common
price, the original terms of these warrants remain unchanged. The amendment to the warrant exercise
exercise price of C$0.31 per share. Other than the exercise price, the original terms of these
shares with an exercise price of C$0.56 per share, and (ii) 1,700,000 common shares with an
exercise price of C$0.31 per share. Other than the exercise price, the original terms of these
2014 Annual Report | Consolidated Financial Statements
62
price was given as consideration for the release by the warrant holders of a first priority lien in certain of the
Company’s secured assets and the sharing of security on the remainder of the Company’s assets on a pro-
rata basis with the new lender under the Company’s debt financing completed on December 26, 2014.
On February 25, 2015, the Company entered into promissory note totaling $7,300 that will mature 12
months from the date of issuance. Simple interest is payable at maturity at an annual rate of 25.0%. As
additional consideration for the note, the Company entered into a royalty agreement, pursuant to which
the Company agreed to pay a 17.5% royalty on its net revenues. Under the terms of the financing, the debt
holder assumed the obligations of an outstanding $5,000 convertible note (plus accrued interest of $800),
which was issued on February 6, 2014, and became due on February 6, 2015. The debt holder subsequently
retired the February 6, 2014 note obligation, and the 12,367,054 conversion shares associated with the note
were cancelled. The note is subject to a prepayment right by the Company at 125% of the principal amount
at any time, subject to a 30 day notice period.
2014 Annual Report | Consolidated Financial Statements Corporate Information
63
BOARD OF DIRECTORS
Todd A. Oseth
President and CEO
Intermap Technologies
Colorado, USA
Larry G. Garberding
Chairman
Michigan, USA
Donald R. Gardner
Director
Alberta, Canada
Dr. John C. Curlander
Director
Colorado, USA
L. David Sikes
Director
California, USA
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 AND KEY PERSONNEL
Todd A. Oseth
President and CEO
Richard L. Mohr
Senior Vice President and CFO
2014 Annual Report | Consolidated Financial Statements 64
Corporate Information
OFFICES
Canadian Corporate Office
Intermap Technologies Corp.
840–6th Avenue SW
Suite 200
Calgary, AB T2P 3E5
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
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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